CHARTER COMMUNICATIONS SOUTHEAST LP, S-4/A, 1996-06-26

CHARTER COMMUNICATIONS SOUTHEAST LP
S-4/A, 1996-06-26
CABLE & OTHER PAY TELEVISION SERVICES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 25, 1996

REGISTRATION NO. 333-3772

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

CHARTER COMMUNICATIONS SOUTHEAST, L.P.
CHARTER COMMUNICATIONS SOUTHEAST
CAPITAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
43-1740131
DELAWARE 4841 43-1722376
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
ORGANIZATION)
</TABLE>

12444 POWERSCOURT DRIVE, SUITE 400
ST. LOUIS, MISSOURI 63131
(314) 965-0555
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

JEFFREY C. SANDERS
12444 POWERSCOURT DRIVE, SUITE 400
ST. LOUIS, MISSOURI 63131
(314) 965-0555
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

COPIES TO:

NEIL A. TORPEY, ESQ.
PAUL, HASTINGS, JANOFSKY & WALKER
399 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 318-6000
------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /

CALCULATION OF REGISTRATION FEE

<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
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11 1/4% Series B Senior Notes
due 2006.................... $125,000,000 100% $125,000,000 $43,104(1)
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</TABLE>

(1) Previously paid.

THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

CHARTER COMMUNICATIONS SOUTHEAST CAPITAL CORPORATION

CROSS-REFERENCE SHEET

PURSUANT TO ITEM 501(b) OF REGULATION S-K AND RULE 404(a)
SHOWING LOCATION IN PROSPECTUS OF
INFORMATION REQUIRED BY ITEMS IN S-4

<TABLE>
<CAPTION>
REGISTRATION STATEMENT ITEM AND HEADING PROSPECTUS CAPTION
------------------------------------------------ --------------------------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus................ Forepart of the Registration Statement; Outside
Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus.................................... Inside Front and Outside Back Cover Pages of
Prospectus
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information......................... Prospectus Summary; Risk Factors; Summary
Historical and Pro Forma Combined Financial Data;
Selected Historical and Pro Forma Combined
Financial Data
4. Terms of the Transaction........................ Prospectus Summary; The Exchange Offer
5. Pro Forma Financial Information................. Summary Historical and Pro Forma Combined
Financial Data; Selected Historical and Pro Forma
Combined Financial Statements
6. Material Contracts with Company Being
Acquired...................................... Not Applicable
7. Additional Information Required for Reoffering
by Persons and Parties Deemed to be
Underwriters.................................. Not Applicable
8. Interests of Named Experts and Counsel.......... Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................... Not Applicable
10. Information With Respect to S-3 Registrants..... Not Applicable
11. Incorporation of Certain Information by
Reference..................................... Not Applicable
12. Information with Respect to S-2 or S-3
Registrants................................... Not Applicable
13. Incorporation of Certain Information by
Reference..................................... Not Applicable
14. Information with Respect to Registrants Other
than S-2 or S-3 Registrants................... Prospectus Summary; Summary Historical and Pro
Forma Combined Financial Data; The Company;
Selected Historical and Pro Forma Combined
Financial Data; Management's Discussion and
Analysis of Financial Condition and Results of
Operations; Business
15. Information with Respect to S-3 Companies....... Not Applicable
16. Information with Respect to S-2 or S-3
Companies..................................... Not Applicable
17. Information with Respect to Companies Other than
S-2 or S-3 Companies.......................... Not Applicable
18. Information if Proxies, Consents or
Authorizations are to be Solicited............ Not Applicable
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or in
an Exchange Offer............................. Management; Principal Security Holders; Certain
Relationships and Related Transactions; The
Exchange Offer
</TABLE>
<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES BY ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

SUBJECT TO COMPLETION, JUNE 25, 1996

PRELIMINARY PROSPECTUS

LOGO

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

CHARTER COMMUNICATIONS SOUTHEAST CAPITAL CORPORATION

OFFER TO EXCHANGE ITS
11 1/4% SERIES B SENIOR NOTES DUE 2006
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
FOR ANY AND ALL OF ITS OUTSTANDING
11 1/4% SENIOR NOTES DUE 2006

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1996, UNLESS EXTENDED (THE "EXPIRATION DATE").
------------------------

Charter Communications Southeast, L.P., a Delaware limited partnership
("Charter Southeast"), and Charter Communications Southeast Capital Corporation,
a Delaware corporation and a wholly-owned subsidiary of Charter Southeast
("Southeast Capital" and, together with Charter Southeast, the "Issuers"),
hereby offer, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying Letter of Transmittal, as the same may be
amended or supplemented from time to time (which together constitute the
"Exchange Offer"), to issue an aggregate of up to $125,000,000 aggregate
principal amount of their 11 1/4% Series B Senior Notes due 2006 (the "New
Notes") in exchange for an identical face amount of outstanding 11 1/4% Senior
Notes due 2006 (the "Old Notes" and, together with the New Notes, the "Notes").
The terms of the New Notes are identical in all material respects to the terms
of the Old Notes except that the registration and other rights relating to the
exchange of Old Notes for New Notes and the restrictions on transfer set forth
on the face of the Old Notes will not apply to or appear on the New Notes. See
"The Exchange Offer." The New Notes are being offered hereunder in order to
satisfy certain obligations of the Issuers under a Registration Rights Agreement
dated as of March 28, 1996. Based on an interpretation by the staff of the
Securities and Exchange Commission set forth in no-action letters issued to
third parties unrelated to the Issuers, New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold, and
otherwise transferred by a holder thereof (other than a holder which is an
"affiliate" of the Issuer within the meaning of Rule 405 under the Securities
Act of 1933, as amended (the "Securities Act")), without compliance with the
registration and (except as provided in the second following paragraph) the
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holder's business and such
holder has no arrangement with any person to participate in and is not engaged
in and is not planning to be engaged in the distribution of such New Notes. The
Notes are the joint and several obligations of the Issuers, which are the sole
obligors with respect to the Notes.

Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. The Letter of Transmittal states
that by so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of New Notes
received in exchange for Old Notes where such Old Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Issuers have agreed that, for a period of 180 days after the
effective date hereof, it will make the Prospectus available to any
broker-dealer for use in connection with any such resale. See "The Exchange
Offer."

The Issuers will not receive any proceeds from the Exchange Offer and will
pay all the expenses incident to the Exchange Offer. Tenders of Old Notes
pursuant to the Exchange Offer may be withdrawn at any time on or prior to the
Expiration Date. If the Issuers terminate the Exchange Offer and do not accept
for exchange any Old Notes, they will promptly return the Old Notes to the
holders thereof. See "The Exchange Offer."

Prior to this Exchange Offer, there has been no public market for the Old
Notes or the New Notes. To the extent that Old Notes are tendered and accepted
in the Exchange Offer, a holder's ability to sell untendered Old Notes could be
adversely affected. If a market for the New Notes should develop, the New Notes
could trade at a discount from their principal amount. The Issuers do not
currently intend to list the New Notes on any securities exchange or on any
automated quotation system; however, the Notes have been designated for trading
in the PORTAL market. There can be no assurance that an active public market for
the New Notes will develop.

The Exchange Agent for the Exchange Offer is Harris Trust and Savings Bank.

SEE "RISK FACTORS" ON PAGE 16 FOR A DESCRIPTION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED IN CONNECTION WITH THE EXCHANGE OFFER.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

The date of this Prospectus is , 1996.

<PAGE> 4

LOGO

2
<PAGE> 5

STATEMENT OF AVAILABLE INFORMATION

The Issuers have filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-4 with respect to the New Notes
being offered hereby (including all exhibits and amendments thereto, the
"Registration Statement"). This Prospectus, which constitutes a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain portions
of which have been omitted pursuant to the rules and regulations of the
Commission. For further information with respect to the Issuers and the
securities offered hereby, reference is made to the Registration Statement and
to the exhibits filed therewith. Statements made in this Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and where applicable reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement is qualified by such reference.

As a result of the filing of the Registration Statement, the Company will
become subject to the periodic reporting requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith will
be required to file reports and other information with the Commission. Such
reports, the Registration Statement and other information may be inspected and
copied, at prescribed rates, at the public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at the regional offices of the Commission located at
Seven World Trade Center, New York, New York 10048, and at 500 West Madison
Street, Suite 1400 Northwestern Atrium Center, Chicago, Illinois 60611. Copies
of such material may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.

In the event the Issuers are not subject to the reporting requirements of
the Exchange Act at any time following the consummation of the Exchange Offer,
the Company will be required under the Indenture, dated as of March 15, 1996
(the "Indenture"), among the Issuers and Harris Trust and Savings Bank, as
trustee (the "Trustee"), pursuant to which the Old Notes were, and the New Notes
will be, issued, to continue to file with the Commission to the extent
permitted, and furnish to holders of the Notes and the Trustee, the annual
reports, quarterly reports and other documents that the Issuers would have been
required to file with the Commission pursuant to Sections 13(a) and 15(d) of the
Exchange Act if the Issuers were subject to such Sections. In addition, so long
as the Issuers are subject to the reporting requirements of Section 13 or 15 of
the Exchange Act and any of the Old Notes are outstanding, the Issuers have
agreed to make available to any prospective purchaser of the Old Notes or
beneficial owner of the Old Notes in connection with a sale thereof the
information required by Rule 144A(d)(4) under the Securities Act upon request.
Any such request should be directed to the Secretary of the Company at 12444
Powerscourt Drive, Suite 400, St. Louis, Missouri 63131 (telephone number: (314)
965-0555).

3
<PAGE> 6

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. As used in this Prospectus, unless the context
otherwise requires, the term (i) "Issuers" refers, collectively, to Charter
Communications Southeast, L.P. ("Charter Southeast") and Charter Communications
Southeast Capital Corporation, a wholly-owned subsidiary of Charter Southeast
("Southeast Capital") and (ii) "Company" refers to Charter Southeast and its
direct and indirect operating subsidiaries, including Charter Communications,
L.P. ("CC-I") and Charter Communications II, L.P. and its direct and indirect
subsidiaries (collectively, "CC-II"). See "Business -- Company's Background and
Ownership Structure." Since the cable television systems comprising the
Company's operations were acquired, from time to time, during the period 1994
through 1996, the financial information contained herein with respect to periods
prior to such acquisitions does not reflect any changes in the operation or
management of such systems that the Company has made since the date of
acquisition or that it intends to make in the future; thus, this financial
information is not necessarily indicative of the results of operation that would
have been achieved had the systems been operated by the Company during all of
the periods with respect to which financial information is presented herein or
which may be achieved in the future. A glossary of certain terms appearing
herein has been included in this Prospectus. See "Glossary."

THE COMPANY

The Company owns, operates and develops cable television systems in the
southeastern region of the United States, primarily in suburban communities
which have experienced higher than average rates of population growth. These
communities have generally experienced a rate of population growth, in the
aggregate, which exceeded the national average by approximately 55% during the
period from 1980 to 1994. See "Business -- Description of the Southeast
Systems -- Demographic Profile." As of March 31, 1996, the Company owned and
operated cable television systems in Alabama, Georgia, Kentucky, Louisiana,
North Carolina, South Carolina and Tennessee passing approximately 460,000 homes
and serving approximately 310,000 basic subscribers. Through strategic
acquisitions and internal growth, the Company seeks to own and operate cable
television systems serving, in the aggregate, at least 400,000 to 500,000 basic
subscribers in the southeastern region of the United States within the next five
years.

The Company's operations are managed under the direction of Charter
Communications, Inc. ("Charter"), a privately-held owner and manager of cable
television systems. Charter, which has an indirect equity investment in the
Company (see "Principal Security Holders"), currently manages cable television
systems which serve approximately 900,000 basic subscribers (including the
Company's subscribers). Assuming completion of all publicly announced cable
television industry transactions, management believes that Charter would be the
13th largest multiple system operator ("MSO") in the United States based on
number of basic subscribers.

The eight individuals principally responsible for the Company's operations
(including Barry L. Babcock, Jerald L. Kent and Howard L. Wood, the co-founders
of Charter) have more than 100 years of collective experience in the cable
television industry. Messrs. Babcock, Kent and Wood formerly served as members
of the senior management team of Cencom Cable Associates, Inc. ("Cencom"), which
during the nine year period prior to its sale in 1991, purchased and developed a
group of cable television systems serving approximately 550,000 basic
subscribers and realized average annual growth in basic subscribers and EBITDA
of approximately 34% and 39%, respectively. See "Business -- Business
Strategy -- Maximize Benefits Provided by Relationship with Charter." In
addition, Charterhouse Group International, Inc., a privately-owned investment
firm (together with its affiliates, "Charterhouse"), has invested, through its
affiliates, over $77.5 million (of the total equity of approximately $126.9
million invested) in the Company. As a result of such investment, Charterhouse
owns directly or indirectly approximately 60% of the outstanding preferred and
common equity interests in the Company. Charterhouse's association with senior
management of Charter began in 1983, with Charterhouse's initial investment in
Cencom. See "Risk Factors -- Control of the Issuers

4
<PAGE> 7

and the Company by Charterhouse; Possible Control of Issuers by Preferred
Limited Partners of CharterComm Holdings."

The Company owns and operates systems which lie principally within five
clusters in the southeastern region of the United States: the
Greenville-Spartanburg/Asheville areas of South Carolina and North Carolina (the
"Greenville-Spartanburg/Asheville Cluster"); the suburban corridor south of
Atlanta (the "Atlanta Cluster"); northern Alabama near Huntsville and Birmingham
(the "Northern Alabama Cluster"); the suburban areas north of New Orleans (the
"New Orleans Cluster"); and the suburban areas northwest of Nashville (the
"Nashville Cluster" and, collectively with the Greenville-Spartanburg/Asheville
Cluster, the Atlanta Cluster, the Northern Alabama Cluster and the New Orleans
Cluster, the "Southeast Clusters"). The Company has sought to "cluster" its
cable systems in concentrated geographic areas because management believes that
such clustering offers significant opportunities to increase operating
efficiencies and to improve operating margins and cash flow by spreading the
Company's fixed costs over an expanding subscriber base. By establishing such
clusters, the Company is typically able to create regional customer service
centers and establish centralized administration and technological support for
local management, which enables the Company to eliminate duplicative management
personnel and operations. See "Business -- Business Strategy -- Realize
Operating Efficiencies", "The Company" and "Business."

As part of its commitment to customer service, the Company emphasizes high
technical standards in all of its cable television systems. As of March 31,
1996, the Company's cable systems had an average channel capacity of
approximately 52 channels, and approximately 88% of the Company's subscribers
were served by systems that offered addressable technology. Addressable
technology enables the Company, from its office or at the headend (which
processes and combines signals for distribution within the cable network), to
change the premium channels being delivered to subscribers or to activate
pay-per-view services. The Company's systems are selectively upgraded to
increase channel capacity and to improve picture quality and reliability for the
delivery of additional programming and new services. The Company is currently
installing fiber optic technology (which is capable of carrying significantly
more video, data and voice channels than co-axial technology) in certain of its
systems. The Company believes that the use of fiber optic technology improves
system reliability and lowers operational costs, provides a platform for the
further development and diversification of revenues from existing video services
(such as pay-per-view and home shopping) and advertising sales, and also
provides the potential to develop new and additional services, such as
competitive access, interactive services and data services, such as Internet
access. The Company expects to continue selectively upgrading its systems with
fiber optic cable so that, by the year 2000, average channel capacity in the
Company's systems will increase to 78 channels and approximately 95% of the
Company's customers will be served by systems that offer addressable technology.

BUSINESS STRATEGY

Management believes the southeastern region of the United States offers
significant growth opportunities, with its principal objective being to increase
the Company's operating cash flow by capitalizing upon such opportunities. To
achieve its objective, the Company has pursued the following business
strategies:

Target Clusters in Southeast Suburban Markets. The Company has developed
clusters of cable television systems located in the southeastern region of the
United States primarily in suburban markets that have experienced, in the
aggregate, higher than average population growth rates. Management believes that
the population growth, new housing construction and continuing outward expansion
of the metropolitan areas located near the Southeast Clusters will enable the
Company to achieve favorable growth in its subscriber base. See
"Business -- Description of the Southeast Systems."

By concentrating on suburban markets, the Company believes that (i) it will
be, for the foreseeable future, better positioned to avoid direct competition
with certain of its larger competitors and potential competitors which
management believes are generally concentrating their acquisition and expansion
efforts on major urban markets, (ii) its subscribers will have available to them
fewer competing entertainment alternatives than may exist in larger urban
markets and (iii) its operating and plant costs per subscriber

5
<PAGE> 8

(including real estate and labor costs) will continue to be generally lower than
those that exist in major markets.

Grow Through Strategic Acquisitions. The Company has grown rapidly through
acquisitions and continues to seek acquisitions in high-growth areas in the
southeastern region of the United States either by direct purchase or through
strategic swaps of cable systems. In determining whether to acquire a particular
system, the Company evaluates, among other things, the (i) location, size and
strategic fit of the system with the Company's existing operations, (ii)
technical quality of the system and anticipated capital expenditures which may
be necessary to comply with franchising requirements or to upgrade systems to
satisfy the Company's operating standards, (iii) demographic trends of the
market, (iv) existing and potential competition in the market, (v) price of the
system relative to other characteristics of the system and (vi) number of years
remaining until the system's franchises must be renewed, along with the seller's
relationship with the relevant franchising authorities. By virtue of the
Company's growth and its relationship with Charter, management believes that the
Company has greater acquisition opportunities than would otherwise be available
to the Company. Except as described below under "Pending Acquisitions", the
Company is not currently a party to any letter of intent or definitive agreement
with respect to any acquisitions. The Company regularly reviews and analyzes
potential acquisitions, which may include the acquisition of other cable systems
managed by Charter or as to which Charter has secured purchase rights. The
Company anticipates that future acquisitions would be financed with additional
debt, or, depending on the size and circumstances of the acquisition, possibly
with additional equity.

Realize Operating Efficiencies. After consummating an acquisition, the
Company centralizes operational and organizational functions to reduce the
operating costs of the systems it acquires; such centralization also permits the
Company to spread its fixed costs over an expanded subscriber base and thereby
improve operating cash flow and margins. In making any operational or
organizational changes, the Company attempts to ensure that customer service and
strong community relations will be maintained and enhanced. As part of the
Company's ongoing consolidation efforts, the Company plans to eliminate five
duplicative office locations and to eliminate 11 of its 36 headends through
headend consolidation during the next two years. Management believes that
headend consolidation will reduce maintenance costs, improve system reliability,
enable the Company to expand the number of channels it can offer its subscribers
and increase average revenue per subscriber.

Focus on the Customer. The Company continually seeks to improve its
understanding of, and relationships with, its customers. Management believes
this focus will, over time, increase both subscriber penetration and revenue per
subscriber. The Company seeks to provide a high level of customer service by
employing a well-trained staff of customer service representatives and
experienced field technicians. Upon acquisition of a new system, the Company
implements a 24-hour customer service hotline, provides completed repair service
in 24 hours (with in excess of 90% of "no picture" problems solved on the same
day as reported) and also offers an installation and service guarantee.
Management believes that the level of customer service provided by the Company
to subscribers gained through acquisitions is generally better than that
provided by previous owners. The Company's programming packages offer different
pricing options, including special value packages and add-on services. From a
technological standpoint, the Company focuses on its customers through its
emphasis on service reliability, improved picture quality and expanded channel
capacity. The Company is also working with Charter to develop a database that
will assist management with its evaluation of the potential demand by existing
and prospective customers for home entertainment, educational services and data
transmission.

Maximize Benefits Provided by Relationship with Charter. The Company
receives significant benefits from its relationship with Charter. The Company
benefits from Charter's principals (including Messrs. Babcock, Kent and Wood,
who are former members of the senior management team of Cencom) and their
familiarity with those of the Company's systems which were previously owned by
Cencom. As of March 31, 1996, approximately 39% of the Company's subscribers
were served by systems formerly owned and operated by Cencom. The Company also
benefits from Charter's access to more varied programming, as well as Charter's
financial and operational expertise. The Company believes it will benefit from
Charter's membership in the TeleSynergy programming cooperative, which Charter
joined in October 1995 and which

6
<PAGE> 9

offers its members certain programming benefits. The Company's relationship with
Charter has also increased the Company's acquisition opportunities and its
ability to access debt financing and equity capital, as well as its ability to
obtain marketing, accounting and regulatory support and discounts on cable
system equipment. See "Risk Factors -- Potential Conflicts of Interest."

RECENT ACQUISITION

On March 29, 1996, the Company, through CC-II, acquired five additional
cable television systems (the "CCIP Systems") from Cencom Cable Income Partners,
L.P., a Delaware limited partnership ("CCIP"), for an aggregate purchase price
of approximately $115.0 million, including related acquisition fees and expenses
(the "CCIP Acquisition"). As of March 31, 1996, the CCIP Systems served
approximately 41,600 basic subscribers in Tennessee and Kentucky (which
established the Nashville Cluster); approximately 4,100 basic subscribers in
Fort Gordon, Georgia; approximately 6,100 basic subscribers in Camp LeJeune,
North Carolina and approximately 2,100 basic subscribers in Tryon, North
Carolina. The purchase price for the CCIP Acquisition was determined within the
context of two independent appraisals of all of CCIP's cable assets (which
included systems other than the CCIP Systems) conducted in accordance with the
terms of the agreement of limited partnership of CCIP. A purported class action
lawsuit on behalf of the CCIP limited partners was filed in 1995 (the "Action").
Each of the defendants in the Action, including Charter and CC-II, believes the
Action, which remains pending, to be without merit and is contesting it
vigorously. There can be no assurance, however, that the plaintiffs will not be
awarded damages, some or all of which may be payable by CC-II, in connection
with the Action. See "Business -- Description of the Southeast Systems -- CCIP
Systems Acquisition" and "Business -- Legal Proceedings."

PENDING ACQUISITIONS

In February 1996, in connection with the liquidation of Cencom Cable Income
Partners II, L.P. ("CCIP II"), Charter submitted a successful bid to acquire,
for a purchase price of $36.7 million, CCIP II's cable television system located
in Anderson County, South Carolina (the "Anderson System"). The Anderson System
serves approximately 20,600 subscribers. Charter has assigned its purchase
rights to the Anderson System to CC-II. CC-II's acquisition of the Anderson
System from CCIP II is subject to the prior approval of the holders of a
majority of the outstanding limited partnership interests of CCIP II. Subject to
the receipt of such approval and to the satisfaction of certain other terms and
conditions, the acquisition of the Anderson System is expected to be consummated
in 1997.

On May 29, 1996, an affiliate of Charter entered into an asset purchase
agreement with Masada Cable Partners, L.P. to acquire multiple systems,
including a system serving both Alabama and Tennessee with approximately 13,400
subscribers (the "Masada III System"). On June 18, 1996, the purchase rights to
the Masada III System, for which the purchase price is $22.0 million, were
assigned to CC-I. Subject to the satisfaction of certain terms and conditions,
the acquisition of the Masada III System is expected to be consummated in late
1996.

On May 30, 1996, CC-I entered into separate asset purchase agreements with
Cencom Partners, L.P. ("CPLP") to acquire the assets of certain cable television
systems located in Lincolnton and Sanford, North Carolina, for a purchase price
of $27.5 million and $20.8 million, respectively (the "Lincolnton Systems"). The
Lincolnton and Sanford systems serve approximately 14,600 and 12,700
subscribers, respectively. CPLP, the general partner of which is an affiliate of
Charter, is currently in liquidation. Subject to the satisfaction of certain
terms and conditions, the acquisition of the Lincolnton Systems is expected to
be consummated in late 1996.

In May 1996, Charter entered into a letter of intent to acquire certain
cable television systems, serving approximately 36,800 subscribers, located in
Hickory, North Carolina (the "Hickory Systems"). The letter of intent provides
for a purchase price of $68.0 million. Under the terms of such letter of intent,
Charter is permitted to assign its rights thereunder to an affiliate. Charter
and CC-I are negotiating the terms of an assignment with respect to this
transaction. Subject to the satisfaction of certain terms and conditions, the

7
<PAGE> 10

acquisition of the Hickory Systems is expected to be consummated in late 1996
(the pending acquisitions of the Anderson System, Masada III System, Lincolnton
System and the Hickory Systems are, collectively, referred to as the "Pending
Acquisitions").

CERTAIN REGULATORY AND LEGISLATIVE DEVELOPMENTS

The cable television industry is subject to extensive regulation by
Federal, local and, in some instances, state government agencies. The Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act") significantly expanded the scope of cable television regulation on an
industry-wide basis by imposing rate regulation, requirements related to the
carriage of local broadcast stations, customer service obligations and other
requirements. Under the FCC's initial rate regulations pursuant to the 1992
Cable Act, regulated cable systems (i.e., those systems not subject to effective
competition) were required to apply a benchmark formula to determine their
maximum permitted rates. Those systems whose rates were above the benchmark on
September 30, 1992, were required to reduce their rates to the benchmark or by
10%, whichever was less. Under revised rate regulations adopted in February
1994, regulated cable systems were required to set their rates so that regulated
revenues per subscriber did not exceed September 30, 1992 levels, reduced by 17%
(taking into account the previous 10% reduction).

On June 5, 1995, the FCC released new rules to reduce the substantive and
procedural burdens of rate regulation applicable to small cable systems (i.e.,
cable systems serving 15,000 or fewer subscribers that are owned by or
affiliated with a cable company which served, in the aggregate, 400,000 or fewer
subscribers at the time such rules went into effect). Cable companies falling
outside of this definition may petition the FCC for small company treatment if
they can demonstrate similar circumstances. The FCC's new small cable systems
rules amended the FCC's previous definitions of small cable entities to
encompass a broader range of cable systems that are eligible for special rate
and administrative treatment. Specifically, the new rules create a streamlined
cost-of-service approach for the purpose of determining the rate applicable to a
small cable system that involves a five-element calculation based on a system's
costs. The Company believes that some of the systems owned by the Company and
Charter may qualify as "small cable systems" under these rules. The Company has
applied, or is in the process of applying, to the FCC for small cable system
rate relief with regard to approximately 80% of the Company's franchises. Such
systems' status as small cable systems may be challenged by other parties and
could be denied by the FCC. As of the date of this Prospectus, the FCC has not
ruled on whether any of such systems qualify as small cable systems, although
management believes that the failure to obtain such qualification would not be
reasonably likely to have a material adverse effect on the Company. Furthermore,
as described below, new Federal telecommunications legislation was recently
enacted which exempts from certain rate regulation a certain defined class of
"small cable operators." See "Risk Factors -- Regulation in the Cable Television
Industry" and "Business -- Regulation in the Cable Television Industry."

On February 1, 1996, Congress passed the Telecommunications Act of 1996
(the "Telecommunications Act"), which substantially amends the Communications
Act of 1934 (the "Communications Act") (including the re-regulation of
subscriber rates under the 1992 Cable Act). The Telecommunications Act alters
Federal, state and local laws and regulations pertaining to cable television,
telecommunications and other services.

Certain provisions of the Telecommunications Act could materially affect
the growth and operation of the cable television industry and the cable services
provided by the Company. Although the new legislation is expected to
substantially lessen regulatory burdens, the cable television industry may be
subject to additional competition as a result thereof. There are numerous
rulemakings to be undertaken by the FCC which will interpret and implement the
Telecommunications Act's provisions. In addition, certain provisions of the Act
(such as the deregulation of cable programming rates) generally are not
immediately effective. Furthermore, certain of the Telecommunications Act's
provisions have been, and are likely to continue to be, judicially challenged.
The Company is unable at this time to predict the outcome of such rulemakings or
litigation or the substantive effect (financial or otherwise) of the new
legislation and the rulemakings on the Company. See

8
<PAGE> 11

"Risk Factors -- Regulation in the Cable Television Industry" and
"Business -- Regulation in the Cable Television Industry."

REFINANCING PLAN

In connection with the Offering of the Old Notes (the "Offering"), Charter
Communications Southeast Holdings, L.P. ("Charter Holdings"), a Delaware limited
partnership which directly or indirectly owns 100% of the equity of Charter
Southeast, and Charter Holdings' wholly-owned subsidiary Charter Communications
Southeast Holdings Capital Corporation, a Delaware corporation ("Holdings
Capital"), issued $146,820,000 aggregate principal amount at maturity of Senior
Secured Discount Debentures due 2007 (the "Debentures"). The net proceeds of
approximately $72.0 million from the issuance of the Debentures (the "Debentures
Offering" and, together with the Offering, the "Offerings") were contributed by
Charter Holdings as equity capital to Charter Southeast.

In connection with the Offerings, the Company amended and restated the
credit facility of CC-I and amended and restated the credit facility of CC-II
(the "Old CC-I Credit Facility" and the "Old CC-II Credit Facility",
respectively, and, collectively, the "Old Credit Facilities"). The Offerings and
the concurrent amendment of the Old Credit Facilities were the final steps of a
refinancing plan intended to increase the borrowing availability under, and
improve the terms and interest rates of, the Old Credit Facilities and to extend
the maturity of the Company's outstanding indebtedness, thereby enhancing the
Company's liquidity and operational flexibility. Each of CC-I and CC-II, Charter
Communications III, L.P., a Delaware limited partnership ("CC-III"), and
Peachtree Cable TV, Inc., a Nevada corporation which is a wholly-owned
subsidiary of CC-III ("Peachtree" and, together with CC-II and CC-III, the
"CC-II Borrowers") amended and restated the Old CC-I Credit Facility and the Old
CC-II Credit Facility, respectively (as so amended, the "New CC-I Credit
Facility" and the "New CC-II Credit Facility", and, collectively, the "New
Credit Facilities") pursuant to agreements with the financial institutions party
to the Old CC-I Credit Facility (the "CC-I Bank Group") and the Old CC-II Credit
Facility (the "CC-II Bank Group"), respectively. See "Description of Other
Indebtedness -- The New Credit Facilities."

9
<PAGE> 12

THE EXCHANGE OFFER

Registration Rights
Agreement..................... The Old Notes were sold by the Issuers on March
28, 1996. In connection therewith, the Issuers
executed and delivered for the benefit of the
holders of the Old Notes a Registration Rights
Agreement dated as of March 28, 1996 (the
"Registration Rights Agreement") which
provided, among other things, for the Exchange
Offer.

The Exchange Offer............ New Notes are being offered in exchange for a
like principal amount of Old Notes. As of the
date hereof, $125.0 million aggregate principal
amount of Old Notes are outstanding. The
Issuers will issue the New Notes to holders
promptly following the Expiration Date. See
"Risk Factors -- Consequences of Failure to
Exchange."

Based on interpretations by the staff of the
Commission set forth in no-action letters
issued to third parties unrelated to the
Issuers, the Issuers believe that New Notes
issued pursuant to the Exchange Offer in
exchange for Old Notes may be offered for
resale, resold and otherwise transferred by any
holder thereof (other than any such holder
which is an "affiliate" of the Issuers within
the meaning of Rule 405 under the Securities
Act) without compliance with the registration
and prospectus delivery provisions of the
Securities Act, provided that such New Notes
are acquired in the ordinary course of such
holder's business and that such holder is not
engaged in, and does not intend to engage in,
and has no arrangement or understanding with
any person to participate in, the distribution
of such New Notes. Each broker or dealer that
receives New Notes for its own account in
exchange for Old Notes, where such Old Notes
were acquired by such broker or dealer as a
result of market-making activities or other
trading activities, must acknowledge that it
will deliver a prospectus in connection with
any resale of such New Notes. See "Plan of
Distribution."

The Exchange Offer is not conditioned upon any
minimum aggregate principal amount of Old Notes
being tendered for exchange.

Tax Consequences.............. Neither the substitution of Old Notes for New
Notes, nor the filing of a registration
statement with respect to the New Notes, should
result in a taxable event for the holders of
Notes for Federal income tax purposes. A
holder's basis and holding period should not
change upon the substitution. Holders, however,
are strongly urged to consult their own tax
advisors.

Expiration Date............... 5:00 p.m., New York City Time, on ,
1996, unless the Exchange Offer is extended, in
which case the term "Expiration Date" means the
latest date and time to which the Exchange
Offer is extended.

Conditions to the Exchange
Offer......................... The Exchange Offer is subject to certain
conditions, which may be waived by the Company.
See "The Exchange Offer -- Conditions."

Procedures for Tendering Old
Notes......................... Each holder of Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof,
in accordance with the instructions contained
herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such
facsimile, together with the Old Notes and any
other required documentation to the exchange
agent (the "Exchange Agent") at the address set
forth herein. Old Notes may

10
<PAGE> 13

be physically delivered, but physical delivery
is not required if a confirmation of a
book-entry of such Old Notes to the Exchange
Agent's account at The Depository Trust Company
("DTC" or the "Depositary") is delivered in a
timely fashion. By executing the Letter of
Transmittal, each holder will make certain
representations to the Issuer. See "The
Exchange Offer -- Procedures for Tendering" and
"Plan of Distribution."

Special Procedures for
Beneficial Owners............. Any beneficial owner whose Old Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and who wishes to tender should contact such
registered holder promptly and instruct such
registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes
to tender on such owner's own behalf, such
owner must, prior to completing and executing
the Letter of Transmittal and delivering the
Old Notes, either make appropriate arrangements
to register ownership of the Old Notes in such
owner's name or obtain a properly completed
bond power from the registered holder. The
transfer of registered ownership may take
considerable time. See "The Exchange
Offer -- Procedures for Tendering."

Guaranteed Delivery
Procedures.................... Holders of Old Notes who wish to tender their
Old Notes and whose Old Notes are not entirely
available or who cannot deliver their Old
Notes, the Letter of Transmittal or any other
documents required by the Letter of Transmittal
to the Exchange Agent prior to the Expiration
Date must tender their Old Notes according to
the guaranteed delivery procedures set forth in
"The Exchange Offer -- Guaranteed Delivery
Procedures."

Withdrawal Rights............. Tenders may be withdrawn at any time prior to
5:00 p.m., New York City time, on the
Expiration Date. See "The Exchange
Offer -- Withdrawal of Tenders."

Acceptance of Old Notes and
Delivery of New Notes......... The Issuers will accept for exchange any and
all Old Notes which are properly tendered in
the Exchange Offer prior to 5:00 p.m., New York
City time, on the Expiration Date. The New
Notes issued pursuant to the Exchange Offer
will be delivered promptly following the
Expiration Date. See "The Exchange
Offer -- Terms of the Exchange Offer."

Exchange Agent................ Harris Trust and Savings Bank is serving as
Exchange Agent in connection with the Exchange
Offer. See "The Exchange Offer -- Exchange
Agent."

THE NEW NOTES

The Exchange Offer applies to the $125,000,000 aggregate principal amount
of the Old Notes outstanding as of the date hereof. The form and the terms of
the New Notes will be identical in all material respects to the form and the
terms of the Old Notes except that the New Notes will have been registered under
the Securities Act and, therefore, will not contain legends restricting the
transfer thereof. The New Notes evidence the same debt as the Old Notes
exchanged for the New Notes and will be entitled to the benefits of the same
Indenture under which the Old Notes were issued. See "Description of the Notes."
Certain capitalized terms listed below are defined under the caption
"Description of the Notes -- Certain Definitions."

11
<PAGE> 14

Notes Offered................. $125,000,000 aggregate principal amount of
11 1/4% Series B Senior Notes due 2006.

Issuers....................... The Notes are joint and several obligations of
Charter Southeast and Southeast Capital, who
are the sole obligors with respect to the
Notes.

Maturity Date................. March 15, 2006.

Interest Payment Dates........ Interest will accrue from the last March 15 or
September 15 on which interest was paid on the
Old Notes, or, if no interest has been paid on
such Old Notes, from March 28, 1996.

Optional Redemption........... The Notes are redeemable at the Issuers'
option, in whole or in part, at any time on or
after March 15, 2001 at the redemption prices
set forth herein, together with accrued and
unpaid interest, if any, to the date of
redemption, provided that the Notes may be
earlier redeemed, in whole but not in part, at
any time from January 1, 2000 through and
including March 14, 2001, at the Issuers'
option, at a redemption price equal to the
Applicable Premium (as defined herein) together
with accrued and unpaid interest, if any, to
the date of redemption. In addition, at any
time prior to March 15, 1999, the Issuers may
redeem up to 35.0% of the aggregate principal
amount of the Notes originally issued with the
net proceeds of one or more Public Equity
Offerings (as defined herein), at a price equal
to 111.25% of the principal amount thereof,
together with accrued and unpaid interest, if
any, to the date of redemption; provided that
not less than $81.3 million aggregate principal
amount of Notes is outstanding immediately
after giving effect to any such redemption.

Change of Control............. Upon the occurrence of a Change of Control (as
defined herein), the Issuers are required to
make an offer to purchase all of the Notes at a
purchase price equal to 101% of the principal
amount thereof, together with accrued and
unpaid interest, if any, to the date of
purchase. See "Description of Notes -- Change
of Control" and "Risk Factors -- Purchase of
Notes Upon a Change of Control."

Ranking....................... The Notes are senior, unsecured obligations of
the Issuers and rank pari passu in right and
priority of payment to all existing and future
indebtedness of the Issuers, other than
indebtedness that by its terms is expressly
subordinated in right and priority of payment
to the Notes. Charter Southeast is a holding
company that conducts substantially all of its
business through its subsidiaries, and the
Notes are effectively subordinated to the
claims of such subsidiaries' creditors. As of
March 31, 1996, after giving effect to the
applicable Pro Forma Adjustments, the aggregate
consolidated indebtedness (including trade
payables) of Charter Southeast and its
subsidiaries would have been approximately
$555.0 million. All of such indebtedness, other
than the Notes, would have been indebtedness
incurred by Charter Southeast's subsidiaries.
The Issuers do not have, and, upon consummation
of this Exchange Offer, will not have, any
indebtedness expressly subordinated by its
terms in right and priority of payment to the
Notes.

12
<PAGE> 15

Certain Covenants............. The Indenture contains certain covenants,
including, but not limited to, covenants with
respect to the following matters: (i)
limitations on the incurrence of additional
Indebtedness and Disqualified Equity Interests;
(ii) limitations on Restricted Payments; (iii)
limitations on transactions with Affiliates;
(iv) application of the proceeds of certain
Asset Sales; (v) limitations on the incurrence
of Liens to secure Indebtedness; (vi)
limitations on the creation of restrictions on
the ability of certain subsidiaries to make
certain distributions and payments to Charter
Southeast; (vii) limitations on the designation
of Unrestricted Subsidiaries; (viii)
limitations on the ability of Charter Southeast
to sell or issue stock of its Subsidiaries; and
(ix) restrictions on mergers, consolidations
and the transfer of all or substantially all of
the assets of the Issuers to another person.
These covenants are subject to important
exceptions and qualifications. Each of the
foregoing capitalized terms has the meaning
assigned to it in the Indenture. See
"Description of Notes -- Certain Covenants."

RISK FACTORS

The information set forth under "Risk Factors", as well as other
information set forth in this Prospectus, should be carefully considered in
evaluating the Notes and the Company.

13
<PAGE> 16

SUMMARY HISTORICAL AND PRO FORMA COMBINED FINANCIAL DATA

The Summary Historical and Pro Forma Combined Financial Data set forth
below presents (i) summary historical financial and operating data for the
McDonald Systems (as defined) (the Company's predecessor) through April 30, 1994
(which was the date on which the McDonald Systems were acquired by the Company),
(ii) summary historical financial and operating data for the Company since May
1, 1994 (the date on which the Company commenced operations), and (iii) pro
forma financial and operating data assuming certain transactions described in
Note (a) below. The financial data set forth below has been derived from the
audited and unaudited historical financial statements of the Company and its
predecessor, and the Selected Historical and Pro Forma Financial Data appearing
elsewhere in this Prospectus, and should be read in conjunction with the
historical financial statements and the notes thereto, and reports of
independent auditors. The pro forma financial and operating data include data
derived from certain cable systems owned by entities other than the Company
prior to their acquisition by the Company. Accordingly, the financial
information contained herein with respect to periods prior to such acquisition
does not reflect any changes in the operation or management of such systems that
the Company has made since the date of acquisition or that it intends to make in
the future; thus, this financial information is not necessarily indicative of
the results of operations that would have been achieved had the systems been
operated by the Company during all the periods with respect to which financial
information is presented herein or that may be achieved in the future. The
unaudited financial data for the three month periods ended March 31, 1995 and
1996, respectively, include all adjustments, consisting of normal recurring
adjustments, which management considers necessary for the fair presentation of
the financial position and the results of operations of the Company for such
periods. The results for the three month periods are not necessarily indicative
of the results to be expected for the full year. Southeast Capital, a
wholly-owned subsidiary of Charter Southeast, was formed solely for the purpose
of serving as a co-issuer of the Notes and has no operations or assets from
which it will be able to repay the Notes.

<TABLE>
<CAPTION>
UNAUDITED
--------------------------------------------------------------------------------------------
THE COMPANY
PREDECESSOR -----------------------------------------
------------------------------------------------
PERIOD FROM PERIOD FROM YEAR ENDED DECEMBER 31,
YEAR ENDED DECEMBER 31, JANUARY 1, 1994 MAY 1, 1994 -----------------------
------------------------------ TO APRIL 30, TO DECEMBER 31, PRO FORMA(A)
1991 1992 1993 1994 1994 1995 1995
-------- -------- -------- --------------- --------------- -------- ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SUBSCRIBER DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.......................... $ 22,650 $ 26,135 $ 28,488 $ 10,587 $ 21,561 $ 72,831 $146,902
Operating expenses:
Operating, general and
administrative................. 11,648 12,053 13,981 6,184 11,152 37,248 74,434
Management fees.................. 655(b) 620(b) 760(b) 273(b) 1,078 3,642 7,345(c)
Depreciation and amortization.... 8,382 7,336 6,851 2,476 14,320 40,148 67,582
-------- -------- -------- -------- -------- -------- --------
Total operating expenses....... 20,685 20,009 21,592 8,933 26,550 81,038 149,361
-------- -------- -------- -------- -------- -------- --------
Operating income (loss)........... 1,965 6,126 6,896 1,654 (4,989) (8,207) (2,459)
Interest expense................. (5,570) (2,827) (3,049) (1,220) (4,655) (18,671) (45,463)
Interest income.................. 54 744 793 169 35 198 515
Other income..................... 1 (220) (286) (329) -- (856) 874
-------- -------- -------- -------- -------- -------- --------
Net income (loss)................. $ (3,550) $ 3,823 $ 4,354 $ 274 $ (9,609) $(27,536) $(46,533)
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed
charges.......................... --(d) 2.35 2.43 1.22 --(d) --(d) --(d)

THREE MONTHS ENDED
MARCH 31,
----------------------------------
PRO FORMA(A)
1995 1996 1996
-------- -------- ------------

<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.......................... $ 14,323 $ 23,844 $ 39,128
Operating expenses:
Operating, general and
administrative................. 7,137 11,889 19,667
Management fees.................. 716 1,192 1,957(c)
Depreciation and amortization.... 7,886 10,924 16,305
-------- -------- --------
Total operating expenses....... 15,739 24,005 37,929
-------- -------- --------
Operating income (loss)........... (1,416) (161) 1,199
Interest expense................. (3,713) (6,658) (11,515)
Interest income.................. 18 29 84
Other income..................... 4 2 (19)
-------- -------- --------
Net income (loss)................. $ (5,107) $ (6,788) $(10,251)
======== ======== ========
Ratio of earnings to fixed
charges.......................... --(d) --(d) --(d)
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets...................... $425,611 $729,803
Total debt (including current
maturities)...................... 274,125 519,165
Special limited partners and
preferred limited partners....... 98,080 --
Partners' capital................. 31,648 182,346
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(e)......................... $ 11,002 $ 14,082 $ 14,507 $ 4,403 $ 10,409 $ 35,583 $ 72,468
EBITDA margin..................... 48.6% 53.9% 50.9% 41.6% 48.3% 48.9% 49.3%
Capital expenditures(f)........... $ 4,626 $ 4,626 $ 13,577 $ 5,376 $ 4,996 $ 20,011 $ 31,545
Annualized EBITDA(g).............. 42,268 75,224
Total debt to annualized EBITDA... 6.49x 6.90x
Annualized EBITDA to interest
expense.......................... 2.26x 1.65x

<CAPTION>
BALANCE SHEET DATA (AT END OF PERI
<S> <C> <C> <C>
Total assets...................... $550,389 $732,093
Total debt (including current
maturities)...................... 375,800 528,877
Special limited partners and
preferred limited partners....... -- --
Partners' capital................. 152,072 177,072
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(e)......................... $ 7,186 $ 11,955 $ 19,461
EBITDA margin..................... 50.2% 50.1% 49.7%
Capital expenditures(f)........... $ 2,003 $ 5,242 $ 7,390
Annualized EBITDA(g).............. 47,820 77,844
Total debt to annualized EBITDA... 7.86x 6.79x
Annualized EBITDA to interest
expense.......................... 1.80x 1.69x
</TABLE>

14
<PAGE> 17

THREE MONTHS ENDED
MARCH 31,
----------------------------------
PRO FORMA(A)
1995 1996 1996
-------- -------- ------------

<S> <C> <C> <C>
OPERATING STATISTICAL DATA
(AT END OF PERIOD, EXCEPT AVERAGE
Homes passed...................... 241,130 386,549 612,869
Basic subscribers................. 163,699 256,440 408,430
Basic penetration................. 67.9% 66.3% 66.6%
Premium service units............. 77,433 125,621 203,631
Premium penetration............... 47.3% 49.0% 49.9%
Average monthly revenue per basic
subscriber(h).................... $ 29.17 $ 30.99 $ 31.93
</TABLE>

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

(a) The pro forma information assumes the (i) consummation of the acquisitions
described under "Business -- Historical Acquisitions", the CCIP Acquisition
and the Pending Acquisitions, (ii) sale of the Old Notes and the
contribution of $72.0 million from Charter Holdings and the application of
the combined net proceeds therefrom in the manner described under "Use of
Proceeds" and (iii) effectiveness of the New Credit Facilities
(collectively, the "Pro Forma Adjustments"), as if the applicable Pro Forma
Adjustments had occurred on January 1 of the respective period for the
operating data and on December 31, 1995 and March 31, 1996, respectively,
for the balance sheet data.

(b) Represents combined management fees for the Southeast Systems (as defined
herein) during periods prior to their acquisition by the Company, for those
systems which paid management fees. These fees are not necessarily
indicative of the management fees that would have been charged had the
Southeast Systems been operated by the Company or that may be expected for
any future periods.

(c) Management fees payable to Charter are based on 5.0% of the Company's annual
revenues. The Indenture prohibits the payment of 40.0% of such management
fees until repayment in full of the Notes. See "Certain Relationships and
Related Transactions" and"Description of Notes."

(d) The combined earnings of the Predecessor were inadequate to cover fixed
charges by $3.6 million for the year ended December 31, 1991. The combined
earnings of the Company's systems were inadequate to cover fixed charges by
$9.6 million and $27.5 million for the periods ended December 31, 1994 and
1995, respectively, and $5.1 million and $6.8 million for the three months
ended March 31, 1995 and 1996, respectively. On a pro forma basis, after
giving effect to the applicable Pro Forma Adjustments, the combined earnings
of the Company's systems would have been inadequate to cover fixed charges
by $46.5 million for the year ended December 31, 1995 and $10.3 million for
the three months ended March 31, 1996.

(e) EBITDA represents income (loss) before interest expense, income taxes,
depreciation and amortization, management fees and other income (expense).
EBITDA is calculated before payment of management fees so as to be
consistent with certain financial terms contained in the New Credit
Facilities and the Indenture. Management believes that EBITDA is a
meaningful measure of performance because it is commonly used in the cable
television industry to analyze and compare cable television companies on the
basis of operating performance, leverage and liquidity. EBITDA is not
presented in accordance with generally accepted accounting principles and
should not be considered an alternative to, or more meaningful than,
operating income or operating cash flows as an indicator of the Company's
operating performance. EBITDA does not include the Company's debt
obligations or other significant commitments.

(f) Capital expenditures exclude cash consideration paid in connection with the
acquisition of cable systems.

(g) EBITDA of the respective three month period multiplied by four.

(h) Revenues divided by basic subscribers divided by the number of months in the
period.

15
<PAGE> 18

RISK FACTORS

In addition to the other information set forth in this Prospectus, the
following risk factors should be carefully considered in connection with the
Exchange Offer and an investment in the New Notes.

HIGH DEGREE OF LEVERAGE

The Company is, and will continue to be, highly leveraged as a result of
the substantial indebtedness it has incurred, and intends to incur, to finance
acquisitions and expand its operations. As of March 31, 1996, the Company's
aggregate consolidated indebtedness was approximately $375.8 million. See
"Unaudited Pro Forma Financial Statements." As of March 31, 1996, on a pro forma
basis, after giving effect to the applicable Pro Forma Adjustments, the
aggregate consolidated indebtedness of Charter Southeast and its subsidiaries
(including trade payables) would have been approximately $555.0 million, and the
aggregate consolidated Indebtedness (as such term is defined in the Indenture
governing the Notes) of Charter Southeast and its subsidiaries would have been
approximately $528.9 million. All of the Company's indebtedness, other than the
Notes, represents indebtedness incurred by Charter Southeast's subsidiaries. The
Issuers do not have any indebtedness expressly subordinated by its terms in
right and priority of payment to the Notes.

The Company anticipates that, in light of the amount of its existing
indebtedness, it will continue to be highly leveraged for the foreseeable
future. The Company's highly leveraged capital structure could adversely affect
the Issuers' ability to service the Notes and could significantly limit the
Company's ability to finance its operations and fund its capital expenditure
requirements (which the Company currently anticipates will be within the range
of approximately $20.0 to $50.0 million per year in the period from 1996 to
2000), to compete effectively, to expand its business, to comply with its
obligations under its franchise agreements, or to operate under adverse economic
conditions. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."

DEFICIENCY OF EARNINGS AVAILABLE TO COVER FIXED CHARGES; HOLDING COMPANY
STRUCTURE

The combined historical earnings of the Company's systems were inadequate
to cover its fixed charges by $9.6 million and $27.5 million for the periods
ended December 31, 1994 and December 31, 1995, respectively, and $5.1 million
and $6.8 million for the three months ended March 31, 1995 and 1996,
respectively. On a pro forma basis, after giving effect to the applicable Pro
Forma Adjustments, the combined historical earnings of the Company's systems for
the year ended December 31, 1995, and the three months ended March 31, 1996
would have been inadequate to cover its fixed charges by approximately $46.5
million and $10.3 million, respectively.

Charter Southeast is a holding company which has no significant assets
other than its direct and indirect investments in CC-I and CC-II and its right
to receive certain payments under its management agreements with CC-I and CC-II.
Southeast Capital, a wholly-owned subsidiary of Charter Southeast, was formed
solely for the purpose of serving as a co-issuer of the Notes and has no
operations or assets from which it will be able to repay the Notes. Accordingly,
the Issuers must rely entirely upon distributions and the payment of management
fees from CC-I and the CC-II Borrowers to generate the funds necessary to meet
their obligations, including the payment of principal and interest on the Notes.
The Issuers expect to make interest payments on the Notes from funds distributed
and management fees paid to them by CC-I and the CC-II Borrowers to the extent
permitted under the terms of the New Credit Facilities. Under the terms of the
New CC-I Credit Facility, to the extent that a default has not occurred
thereunder, CC-I will be permitted to make distributions to Charter Southeast of
not more than $3.0 million in 1996, $5.5 million annually during the period from
1997 to 2000, $6.5 million in 2001, $8.5 million in 2002 and 2003 and $11.0
million in 2004, subject to increase after April 30, 1999 based upon excess cash
flow. Under the terms of the New CC-II Credit Facility, to the extent that a
default has not occurred, the CC-II Borrowers will be permitted to make
distributions to Charter Southeast of not more than $5.0 million in 1996, $10.0
million annually during the period from 1997 to 2000, $20.5 million in 2001 and
$27.5 million annually thereafter, subject to increase after April 30, 1999
based upon excess cash flow. Annual interest payments on the Notes are expected
to be $14.1 million. In addition, the Debentures begin to accrue cash interest
in March 2001. Charter Holdings is a

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holding company and will rely on distributions from Charter Southeast and its
subsidiaries in order to make cash interest payments on the Debentures beginning
in September 2001. If there was an event of default under the indenture
governing the Debentures (the "Debenture Indenture") which resulted in a
foreclosure upon the collateral pledged as security thereunder, such foreclosure
would likely constitute a change of control under the Indenture (which change of
control could result in an event of default if Charter Southeast did not have
sufficient funds to repurchase all of the outstanding Notes pursuant to a Change
of Control Offer (as defined in the Indenture)) and an event of default under
the New Credit Facilities, which are secured by a pledge of the partnership
interest in CC-I and the CC-II Borrowers. To the extent that the Issuers are
dependent upon the receipt of distributions and payment of management fees from
CC-I and the CC-II Borrowers to provide them with funds to make interest
payments on the Notes, the Issuers will not have sufficient funds available to
make such interest payments in the event that either CC-I or the CC-II
Borrowers, as the case may be, is prevented for any reason from making such
distributions or paying such management fees. It is possible that CC-I may
default under the terms of the New CC-I Credit Facility or its management
agreement with Charter Southeast without a concurrent default by the CC-II
Borrowers under the terms of the New CC-II Credit Facility or its management
agreement with Charter Southeast; similarly, it is possible that the CC-II
Borrowers may default under the terms of the New CC-II Credit Facility or its
management agreement with Charter Southeast without a concurrent default by CC-I
under the terms of the New CC-I Credit Facility or its management agreement with
Charter Southeast. Any such default by either CC-I or the CC-II Borrowers would
adversely affect the Issuers' ability to service the Notes. See "Description of
Other Indebtedness."

In addition, the Company expects to service its other indebtedness and to
fund general working capital needs and capital expenditure requirements with
cash generated by CC-I and CC-II and borrowings from other sources. In the event
that the Company were unable to meet its working capital needs and capital
expenditure requirements with cash generated from operations or borrowings from
other sources, the Company would have to consider various options, such as
selling certain assets, refinancing outstanding indebtedness or obtaining
additional equity capital. There can be no assurance that the Company will be
able to raise new equity capital, refinance its outstanding indebtedness, or
obtain new financing in the future, or that, if the Company is able to do so,
the terms available will be favorable to the Company.

STRUCTURAL SUBORDINATION

The Notes are senior unsecured obligations of the Issuers and rank pari
passu in right and priority of payment to all existing and future indebtedness
of the Issuers, other than indebtedness that by its terms is expressly
subordinated in right and priority of payment to the Notes. The Notes are
effectively subordinated to claims of creditors of Charter Southeast's
subsidiaries, including the lenders under the New Credit Facilities. The lenders
under the New Credit Facilities, who have a security interest in the partnership
interests of CC-I and the CC-II Borrowers held by Charter Southeast, have
available to them all of the remedies available to a secured creditor under
applicable law. See "-- High Degree of Leverage" and "Description of Other
Indebtedness." The rights of the Issuers and their creditors, including the
holders of the Notes, to realize upon the assets of any of the Company's
subsidiaries upon any such subsidiary's liquidation or reorganization (and the
consequent rights of the holders of the Notes to participate in the realization
of those assets) will be subject to the prior claims of such subsidiary's
respective creditors, including the lenders under the New Credit Facilities. In
such event, there may not be sufficient assets remaining to pay amounts due on
any or all of the Notes then outstanding. See "Description of Notes -- Ranking"
and "Description of Other Indebtedness." The Indenture permits the Company's
subsidiaries to incur additional indebtedness under certain circumstances. See
"Description of Notes."

Approximately $176.4 million of net proceeds from the Offerings was used by
the Issuers to make capital contributions to CC-I and CC-II. Because these
investments were in the form of "equity" contributions rather than "loans" to
CC-I and CC-II, the Issuers do not have any claim as creditors against the
assets of CC-I or CC-II arising from such investments, and the interest of the
Issuers in the assets of CC-I and CC-II are subject to the prior satisfaction of
any claims that creditors of such subsidiary entities may have. In the event

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<PAGE> 20

of a default upon the Notes by the Issuers, the amount that holders of the Notes
can expect to recover will be limited to the aggregate equity interest of the
Issuers in CC-I and CC-II, if any, at the time of recovery.

RESTRICTIONS IMPOSED BY LENDERS

The Indenture and the New Credit Facilities impose restrictions that, among
other things, limit the amount of additional indebtedness that may be incurred
by Charter Southeast and its subsidiaries, and impose limitations on, among
other things, investments, loans and other payments, certain transactions with
affiliates and certain mergers and acquisitions. The New Credit Facilities
require each of CC-I and the CC-II Borrowers to maintain specified financial
ratios and meet certain financial tests and provide for scheduled principal
amortization beginning in March 1998. The ability of each of Charter Southeast,
CC-I and the
CC-II Borrowers to comply with the applicable covenants and restrictions
contained in the Indenture and the New Credit Facilities to which it is a party
can be affected by events beyond its respective control, and there can be no
assurance that CC-I or the CC-II Borrowers will achieve operating results that
would permit compliance with such provisions. The breach of any of the
provisions of the New Credit Facilities would, under certain circumstances,
result in defaults thereunder, permitting the lenders under the New Credit
Facilities to prevent distributions to Charter Southeast and to accelerate the
indebtedness under the New Credit Facilities. If CC-I or the CC-II Borrowers
were unable to pay the amounts due in respect of the New CC-I Credit Facility or
the New CC-II Credit Facility, as the case may be, the lenders thereunder could
foreclose upon the assets pledged to secure such payment or otherwise prevent
the distribution of funds to Charter Southeast. In such event, the holders of
the Notes might not be able to receive any payments, if ever, until the payment
default was cured or waived, any such acceleration was rescinded, or the
indebtedness under either the New CC-I Credit Facility or New CC-II Credit
Facility, as the case may be, was discharged or paid in full. Any of such events
would adversely affect the Issuers' ability to service the Notes.

CONTROL OF THE ISSUERS AND THE COMPANY BY CHARTERHOUSE; POSSIBLE CONTROL OF
ISSUERS BY PREFERRED LIMITED PARTNERS OF CHARTERCOMM HOLDINGS

Charter Southeast is a holding company which has no significant assets
other than its direct and indirect investments in CC-I and CC-II and its right
to receive certain payments under management agreements with CC-I and CC-II.
Charter Holdings owns a 99.0% limited partnership interest in, and, through a
wholly-owned subsidiary, a 1.0% general partnership interest in, Charter
Southeast. Like Charter Southeast, Charter Holdings is a holding company which
has no significant assets other than its direct and indirect investments in, and
its management agreement with, Charter Southeast.

CharterComm Holdings, L.P., a Delaware limited partnership ("CharterComm
Holdings"), holds a 99.0% limited partnership interest in, and, through a
wholly-owned subsidiary, a 1.0% general partnership interest in Charter
Holdings. CharterComm Holdings is capitalized with three classes of partnership
interests: preferred limited partner interests, common limited partner interests
and general partner interests. Because Charterhouse indirectly controls both
general partners of CharterComm Holdings, Charterhouse can, subject to
applicable law, exercise effective control over the management and affairs of
the Issuers and the Company.

The prior consent of a majority of the preferred limited partner interests
of CharterComm Holdings is required for certain significant partnership
transactions, including, among others, the dissolution of CharterComm Holdings,
certain sales or transfers of the assets of CharterComm Holdings or its
subsidiaries, and certain acquisitions of assets by CharterComm Holdings or its
subsidiaries. In addition, each of the limited partners of CharterComm Holdings
has certain rights to require CharterComm Holdings to purchase all or any
portion of its limited partnership interests upon the earliest to occur of (x)
January 18, 2000 or (y) the occurrence of a Change of Control (as defined in the
agreement of limited partnership of CharterComm Holdings (the "CharterComm
Holdings L.P. Agreement")) or (z) the occurrence of an Event of Default (as
defined in the CharterComm Holdings L.P. Agreement), at a redemption price
calculated in accordance with the CharterComm Holdings L.P. Agreement. The
redemption price for CharterComm Holdings' (i) preferred interests is equal to
the accreted value of such interests at the time of redemption and (ii) common
interests is equal to the fair market value of such interests at the time of
redemption. Under the terms of the CharterComm Holdings L.P. Agreement, a
"Change of Control" is deemed to occur in the event

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<PAGE> 21

of, among other things, the voluntary departure of all of Messrs. Babcock, Kent
and Wood from active engagement in the management of CharterComm Holdings.

The CharterComm Holdings L.P. Agreement includes certain events of default,
including, without limitation, events relating to the bankruptcy of either
general partner of CharterComm Holdings or CharterComm Holdings itself, the
failure of CharterComm Holdings to make any payment of principal or interest
under the terms of any Senior Securities (as defined in the CharterComm Holdings
L.P. Agreement), the failure of CharterComm Holdings to comply with material
provisions of the CharterComm Holdings L.P. Agreement and certain other
agreements, the failure to redeem partnership interests of CharterComm Holdings
when required. Following the occurrence of an event of default (x) subject to
the prior consent of a majority of the preferred limited partners of CharterComm
Holdings, such preferred limited partners have the right to (i) replace the
general partners of CharterComm Holdings, (ii) replace the management of
CharterComm Holdings (other than during a certain specified period following the
occurrence of an event of default, during which the unanimous prior consent of
preferred limited partners is required), or (iii) require the liquidation of
CharterComm Holdings (subject to the consent of the common limited partners),
and (y) as discussed in the preceding paragraph, each of the preferred limited
partners has the right to require CharterComm Holdings to purchase all or any
portion of its partnership units. An event of default under the terms of the
CharterComm Holdings L.P. Agreement could therefore result in a change of
management of Charter Holdings, and, as result thereof, Charter Southeast. Any
of such events could adversely affect the Issuers' ability to service the Notes
and may constitute a Change of Control under the Indenture and each of the New
Credit Facilities. See "-- Purchase of Notes Upon a Change of Control" and "The
Partnership Agreements."

NONRECOURSE NATURE OF NOTES AS TO THE GENERAL PARTNERS, CHARTER AND OTHERS

The Old Notes were, and the New Notes will be, issued solely by the
Issuers, which are the sole obligors thereunder. None of the general partners of
Charter Southeast or of CC-I or CC-II (collectively, the "General Partners"),
the direct and indirect investors in Charter Southeast (including Charter,
Charterhouse and Charter Holdings), or any of their respective directors,
officers, partners, stockholders, employees or affiliates is or will be an
obligor under the Notes, and the Indenture expressly provides that the General
Partners, the investors in Charter Southeast (including Charter, Charterhouse
and Charter Holdings), together with their respective directors, officers,
partners, stockholders, employees or affiliates shall not have any liability for
any obligations of the Issuers under the Notes or such Indenture or any claim
based on, in respect of, or by reason of, such obligations, and that by
accepting the Notes, each holder of Notes waives and releases all such
liability, which waiver and release are part of the consideration for issuance
of the Notes. There should be no expectation that the General Partners, the
direct and indirect investors in Charter Southeast (including Charter,
Charterhouse and Charter Holdings), or any person other than the Issuers, will,
in the future, fund the operations or deficits of the Issuers or any of their
subsidiaries. See "Description of Notes."

DEPENDENCE ON CHARTER AND KEY PERSONNEL OF CHARTER

The Company's success depends on the management of its cable systems by
Charter and, therefore, on Charter's ability to attract, motivate and retain
highly qualified management, sales and technical personnel. In the event Charter
is unable to continue to do so, the operations and growth prospects of the
Company could be adversely affected. Charter is dependent upon the services of
certain key personnel, including Messrs. Babcock, Kent and Wood. In the event
Charter were to lose the services of any of Messrs. Babcock, Kent or Wood, or
certain other key personnel, its ability to conduct its business, which includes
management of the Company's systems, as well as management of other cable
systems, could be adversely affected. In addition, Charter's management of cable
systems other than the Company's systems may limit the availability and
accessibility of certain Charter personnel, including the personnel who service
the Company's systems as well as other Charter-managed systems in the area,
which could adversely affect Charter's ability to manage the Company's systems.

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In the event the Company's relationship with Charter were to terminate for
any reason, the Company would no longer benefit from, among other things,
advantageous programming opportunities, acquisition opportunities and financial
relationships which are made available to the Company through Charter. See
"Business -- Business Strategy -- Maximize Benefits Provided by Relationship
with Charter." In such event, the Company's operating expenses and access to
capital could be adversely affected.

LIMITED OPERATING HISTORY

Charter Southeast was formed in October 1995 to act as a holding company
for CC-I, which commenced its cable television operations in April 1994 after
completing an acquisition, and for CC-II, which commenced its cable television
operations in January 1995 after completing its first acquisition. The Company
has grown principally through acquisitions. See "Business -- Description of the
Southeast Systems." Investors, therefore, have limited historical financial
information about the Company, and about the results that can be achieved by
Charter in managing the Southeast Systems not previously managed by Charter,
upon which to base an evaluation of its performance. In addition, as a result of
the Company's rapid growth through acquisitions, past operating history is not
necessarily indicative of future results. Further, there can be no assurance
that the Company will be able to successfully implement its business strategy.

RISKS RELATING TO ACQUISITION STRATEGY

A significant element of the Company's acquisition strategy is to expand in
the southeastern region of the United States by acquiring cable television
systems located in reasonable proximity to existing systems or of a sufficient
size to enable the acquired system to serve as the basis for a new local
cluster. There can be no assurance that the Company will be able to identify and
acquire such systems or that it will be able to finance such acquisitions in the
future. Furthermore, any acquisition, including any of the Pending Acquisitions,
may have an adverse effect upon the Company's operating results or cash flow,
particularly for acquisitions of new systems which must be integrated with the
Company's existing operations. There can be no assurance that the Company will
be able to integrate successfully any acquired business with its existing
operations or realize any efficiencies therefrom. There can also be no assurance
that any such acquisitions (including any of the Pending Acquisitions), if
consummated, will be profitable or that the Company will be able to obtain any
required financing to acquire additional systems in the future. See
"Business -- Description of the Southeast Systems -- CCIP Acquisition." See
"Summary -- Recent Acquisition" and "Business -- Business Strategy."

POTENTIAL CONFLICTS OF INTEREST

In addition to managing the Company's systems, Charter also manages
numerous cable systems owned by certain affiliated entities which are located
principally in California, Connecticut, Illinois, Massachusetts, Missouri, North
Carolina, South Carolina and Texas, including systems within or near the
Southeast Clusters but not owned by the Company. Although the Company's
acquisition strategy calls for the acquisition of additional cable systems in
the southeastern region of the United States, such systems may become available
for sale in tandem with systems located in other portions of the country, for
aggregate amounts which exceed the Company's purchasing ability, or which
otherwise do not fit the Company's business strategy. It is possible, therefore,
that systems identified for sale in the southeastern region of the United States
may be acquired by Charter itself or other Charter-affiliated entities. There
can be no assurance that such systems, if acquired by Charter or a
Charter-affiliated entity, would ultimately be sold or otherwise transferred to
the Company, or that the Company will be able to take advantage of any other
opportunity which becomes available to Charter or any of its affiliates. It is
also possible that the Company may acquire other cable systems which are being
managed by Charter.

PURCHASE OF NOTES UPON A CHANGE OF CONTROL

Upon the occurrence of a Change of Control (as defined herein), the Issuers
are required to make an offer to purchase all outstanding Notes at a purchase
price equal to 101% of the principal amount thereof, together with accrued and
unpaid interest, if any, to the date of purchase. There can be no assurance that
the Issuers will have available funds sufficient to purchase the Notes upon a
Change of Control. In addition, any

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<PAGE> 23

Change of Control, and any repurchase of the Notes required under the Indenture
upon a Change of Control, would constitute an event of default under the New
Credit Facilities, with the result that the obligations of the borrowers
thereunder could be declared due and payable by the lenders. Any acceleration of
the obligations under the New Credit Facilities would make it unlikely that CC-I
and CC-II could make adequate distributions to the Issuers so as to permit the
Issuers to effect a purchase of the Notes upon a Change of Control. See
"Description of Other Indebtedness." In addition, in the event Charterhouse were
to replace management of the Issuers, or the preferred limited partners of
CharterComm Holdings were to replace management of CharterComm Holdings or
require the liquidation of CharterComm Holdings as described above, a change of
control will be deemed to have occurred under the New Credit Facilities. See
"The Partnership Agreements."

REGULATION IN THE CABLE TELEVISION INDUSTRY

The cable television industry is subject to extensive regulation by
Federal, local and, in some instances, state governmental agencies. The Cable
Communications Policy Act of 1984 (the "1984 Cable Act") and the 1992 Cable Act
(together with the 1984 Cable Act, the "Cable Acts"), both of which amended the
Communications Act, established a national policy to guide the development and
regulation of cable television systems. The Communications Act was recently
substantially amended by the Telecommunications Act. Principal responsibility
for implementing the policies of the Cable Acts has been allocated between the
FCC and state or local franchising authorities. The 1992 Cable Act significantly
expanded the scope of cable television regulation on an industry-wide basis by
imposing rate regulation, carriage requirements for local broadcast stations,
customer service obligations and other requirements. The Cable Acts and
implementing FCC rules have established, among other things, (i) rate
regulations, (ii) "must carry" and "retransmission consent" requirements that
may require a cable system to carry a local station or obtain consent to carry a
distant or local station, (iii) rules for franchise renewals and transfers and
(iv) other regulations covering a variety of operational areas such as equal
employment, public inspection files, technical standards and customer service.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business -- Regulation in 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 1992 Cable Act and FCC regulations
have imposed rate requirements for basic services and equipment, including rate
roll-backs. Under the 1992 Cable Act, a local franchising authority in a
community not subject to "effective competition" may become authorized to
regulate basic cable service rates by certifying with the FCC. Upon
certification, the franchising authority obtains the right to approve the basic
rates charged by the cable system operator. Certified local franchise
authorities may also order a rate refund of previously paid rates determined to
be in excess of the permitted reasonable rates. At this time, approximately 17%
of the franchise authorities which oversee the franchises under which the
Company's systems operate are certified to regulate basic tier rates. However,
because the 1992 Cable Act permits communities to certify at any time, it is
possible that additional localities served by the Company's systems may choose
to certify and regulate rates in the future. Additionally, the FCC has the
authority to rule on complaints regarding rates for tiers of service above the
basic tier ("cable programming services"). The FCC's review of cable programming
rates is circumscribed under the Telecommunications Act. See
"Business -- Regulation in the Cable Television Industry -- Recent
Telecommunications Legislation." If the FCC were to determine that the Company's
cable programming service tier rates are unreasonable, it would have the
authority to order the Company to reduce such rates and to refund to customers
any overcharges occurring from the date of filing of the rate complaint with the
FCC.

Under the FCC's initial rate regulations pursuant to the 1992 Cable Act,
regulated cable systems were required to apply a benchmark formula to determine
their maximum permitted rates. Those systems whose rates were above the
benchmark on September 30, 1992 were required to reduce their rates to the
benchmark or by 10%, whichever was less. Under revised rate regulations adopted
in February 1994, regulated cable systems were required to set their rates so
that regulated revenues per subscriber did not exceed September 30, 1992 levels,
reduced by 17% (taking into account the previous 10% reduction).

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The FCC has implemented rules to reduce the substantive and procedural
burdens of rate regulation applicable to small cable systems (i.e., cable
systems serving 15,000 or fewer subscribers that are owned by or affiliated with
a cable company which served, in the aggregate, 400,000 or fewer subscribers at
the time such rules went into effect). Cable companies falling outside of this
definition may petition the FCC for small company treatment if they can
demonstrate similar circumstances. Under these new rules, the regulatory
benefits accruing to such small cable systems remain effective even if such
small cable systems are later acquired by cable companies which serve in excess
of 400,000 subscribers. The Company believes that some of the systems owned by
the Company and Charter may qualify as "small cable systems" under these rules.
The Company has applied, or is in the process of applying, to the FCC for small
cable system rate relief with regard to approximately 80% of the Company's
franchises. Such systems' status as small cable systems may be challenged by
other parties and could be denied by the FCC. As of the date of this Prospectus,
the FCC has not ruled on whether any of such systems qualify as small cable
systems, although management believes that the failure to obtain such
qualification would not be reasonably likely to have a material adverse effect
on the Company. See "Business -- Regulation in the Cable Television Industry."

Recent Telecommunications Legislation. On February 1, 1996, Congress
passed the Telecommunications Act, which substantially amends the Communications
Act. The Telecommunications Act alters Federal, state and local laws and
regulations pertaining to cable television, telecommunications and other
services.

Telephone Company Provision of Video Programming. Under the
Telecommunications Act, telephone companies can compete directly with cable
operators in the provision of video programming. The new legislation recognizes
several multiple entry options for telephone companies to provide competitive
video programming, including over their telephone facilities, through either
common carrier transport or an "open video system," by radio communications, or
as a regular cable system. Local exchange carriers ("LECs"), including the
Regional Bell Operating Companies ("RBOCs"), will be allowed to compete with
cable operators both inside and outside the LECs' telephone service areas. The
Telecommunications Act repeals the statutory ban on telephone company provision
of video programming services in the telephone company's service areas. The
FCC's video dialtone regulations have also been repealed, but such repeal does
not affect the status of any video dialtone service offered before certain FCC
regulations on "open video systems" become effective.

Buyouts. The Telecommunications Act generally prohibits LEC buyouts of
cable systems (which includes any ownership interest exceeding 10 percent)
within the LEC's telephone service area, cable operator buyouts of LEC systems
within the cable operator's franchise area, and joint ventures between cable
operators and LECs in the same markets. There are some statutory exceptions,
including a rural exemption which permits buyouts where the purchased system
serves an area with fewer than 35,000 inhabitants outside an urban area. Also,
the FCC may grant waivers of the buyout provisions in cases where (1) the cable
operator or LEC would be subject to undue economic distress; (2) the system or
facilities would not be economically viable; or (3) the anticompetitive effects
of the proposed transaction are clearly outweighed by the effect of the
transaction in meeting community needs. The respective local franchising
authority must approve any such waiver.

Public Utility Competition. The Telecommunications Act also authorizes
another potential competitor, registered utility holding companies and their
subsidiaries, to provide video programming services, notwithstanding the Public
Utility Holding Company Act. Utilities must establish separate subsidiaries and
must apply to the FCC for operating authority.

Pole Attachments. The Telecommunications Act also alters the scheme
pertaining to pole attachment rates (rates charged by telephone and utility
companies for delivery of cable and non-cable services). The current method for
determining rates will continue for five years. The FCC will establish a new
formula for poles used by cable operators for telecommunications services, which
could result in higher pole rental rates for cable operators. Any increases
pursuant to this new formula may not begin until February 2001, and will be
phased in by equal increments from February 2001 through February 2006. However,
this new FCC formula does not apply in states which certify that they regulate
pole rates.

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COMPETITION IN THE CABLE TELEVISION BUSINESS

Cable television companies generally operate under non-exclusive franchises
granted by local authorities that are subject to renewal and renegotiation from
time to time. The 1992 Cable Act prohibits franchising authorities from granting
exclusive cable television franchises and from unreasonably refusing to award
additional competitive franchises. Cable system operators may therefore
experience competition from other operators building a cable television system
in a franchise area in which such a system had previously been constructed
(i.e., an "overbuild"). The 1992 Cable Act also permits municipal authorities to
operate cable television systems in their communities without franchises.

Cable television systems also face competition from alternative methods of
receiving and distributing television signals and from other sources of home
entertainment. Within the home video programming market, the Company competes
primarily with home satellite and wireless cable providers and, when existing
franchises become available for renewal (or new franchises become available in
the southeastern region of the United States), with other cable operators. In
addition, the Telecommunications Act allows LECs to provide a wide variety of
video services competitive with services provided by cable systems and to
provide cable services directly to customers in the telephone companies' service
areas, with some regulatory safeguards. Some video programming services provided
by telephone companies (e.g., "open video systems") do not require local
franchises and are to be subject to less stringent regulatory requirements than
those imposed on the Company. Management cannot predict the extent to which
competition will materialize from other cable television operators, telephone
companies, other distribution systems for delivering video programming to the
home, or other potential competitors, including those from technologies not yet
available in the marketplace, and, if such competition materializes, the extent
of its effect on the Company. Many of the Company's competitors or potential
competitors have greater technical, financial and other resources than the
Company. See "Business -- Competition in the Cable Television Business."

ABSENCE OF PUBLIC MARKET; RESTRICTIONS ON RESALE

There is currently no established public market for the Notes. There can be
no assurance as to (i) the liquidity of any market that may develop, (ii) the
ability of the holders of Notes to sell their Notes or (iii) the price at which
the holders of Notes would be able to sell their Notes. If such a market were to
exist, the Notes could trade at prices that may be higher or lower than their
principal amount or purchase price, depending on many factors, including
prevailing interest rates, the market for similar securities and the financial
performance of the Issuers. The Issuers do not presently intend to apply for the
listing of the Notes on any national securities exchange or on the National
Association of Securities Dealers Automated Quotation System; however, the Notes
have been designated for trading in the PORTAL market. Accordingly, no assurance
can be given as to the development or liquidity of any market for the Notes.

CONSEQUENCES OF FAILURE TO EXCHANGE

Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes as set forth in the legend thereon as a
consequence of the issuance of the Old Notes pursuant to exemptions from, or in
transactions not subject to, the registration requirements of the Securities Act
and applicable state securities laws. In general, the Old Notes may not be
offered or sold, unless registered under the Securities Act, except pursuant to
an

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exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Issuers do not currently anticipate that
they will register the Old Notes under the Securities Act. New Notes issued
pursuant to the Exchange Offer in exchange for Old Notes may be offered for
resale, resold or otherwise transferred by Holders thereof (other than any such
holder which is an "affiliate" of the Issuers within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act provided that such New
Notes are acquired in the ordinary course of such holders' business and such
holders have no arrangement with any person to participate in the distribution
of such Notes. Each broker-dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. The Letter of
Transmittal states that, by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Notes received in exchange for Old Notes where such Old
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Issuers have agreed that, for a
period of 180 days after the effective date of this Prospectus, it will make
this Prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution." However, to comply with the securities
laws of certain jurisdictions, if applicable, the New Notes may not be offered
or sold unless they have been registered or qualified for sale in such
jurisdictions or an exemption from registration or qualification is available
and is complied with. To the extent that Old Notes are tendered and accepted in
the Exchange Offer, the trading market for untendered and tendered but
unaccepted Old Notes will be adversely affected.

THE EXCHANGE OFFER

PURPOSE AND EFFECT OF THE EXCHANGE OFFER

The Old Notes were sold by the Issuers on March 28, 1996 to certain initial
purchasers (the "Initial Purchasers"), who resold the Old Notes to "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act) and
other institutional "accredited investors" (as defined in Rule 501(a) under the
Securities Act). In connection with the sale of the Old Notes, the Issuers and
the Initial Purchasers entered into a Registration Rights Agreement dated as of
March 28, 1996 (the "Registration Rights Agreement") pursuant to which the
Issuers agreed to file with the Commission a registration statement (the
"Exchange Offer Registration Statement") with respect to an offer to exchange
the Old Notes for New Notes. In addition, the Issuers agreed to use their
reasonable best efforts to cause the Exchange Offer Registration Statement to
become effective under the Securities Act and to issue the New Notes pursuant to
the Exchange Offer.

The Exchange Offer is being made pursuant to the Registration Rights
Agreement to satisfy the Issuer's obligations thereunder. The term "Holder,"
with respect to the Exchange Offer, means any person in whose name Old Notes are
registered on the books of the Company or any other person who has obtained a
properly completed bond power from the registered Holder, or any person whose
Old Notes are held of record by The Depository Trust Company (the "Depositary").
The Issuers are not required to file any registration statement to register any
outstanding Old Notes. Holders of Old Notes who do not tender their Old Notes or
whose Old Notes are tendered but not accepted would have to rely on exemptions
to registration requirements under the securities laws, including the Securities
Act, if they wish to sell their Old Notes.

Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties unrelated to the Issuers New Notes
issued pursuant to the Exchange Offer in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by any holder of such New Notes
(other than a person that is an "affiliate" of the Issuers within the meaning of
Rule 405 under the Securities Act and except as set forth in the next paragraph)
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such New Notes are acquired in the ordinary
course of such Holder's business and such Holder is not participating, and has
no arrangement or understanding with any person to participate, in the
distribution of such New Notes.

If any person were to be participating in the Exchange Offer for the
purpose of distributing securities in a manner not permitted by the staff's
interpretation (i) the position of the staff of the Commission enunciated in

24
<PAGE> 27

interpretive letters would be inapplicable to such person and (ii) such person
would be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
Each broker-dealer that receives New Notes for its own account in exchange for
Old Notes, where such Old Notes were acquired by such broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such New Notes.
See "Plan of Distribution."

Except as aforesaid, this Prospectus may not be used for any offer to
resell, resale or other transfer of New Notes.

The Exchange Offer is not being made to, nor will the Exchange Agent accept
surrenders for exchange from, Holders of Old Notes in any jurisdiction in which
the Exchange Offer or the acceptance thereof would not be in compliance with the
securities or Blue Sky laws of such jurisdiction. Prior to the Exchange Offer,
however, the Issuers will use their reasonable best efforts to register or
qualify the New Notes for offer and sale under the securities or Blue Sky laws
of such jurisdictions as any such Holder requests in writing and do any and all
other acts or things necessary or advisable to enable the offer and sale in such
jurisdictions of the New Notes.

TERMS OF THE EXCHANGE OFFER

Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal, the Company will accept any and
all Old Notes validly tendered prior to 5:00 p.m., New York time, on the
Expiration Date (as defined below). The Issuers will issue up to $125,000,000
aggregate principal amount of New Notes in exchange for a like principal amount
of outstanding Old Notes which are validly tendered and accepted in the Exchange
Offer. Subject to the conditions of the Exchange Offer described below, the
Issuers will accept any and all Old Notes which are so tendered. Holders may
tender some or all of their Old Notes pursuant to the Exchange Offer.

The form and terms of the New Notes will be the same in all material
respects as the form and terms of the Old Notes, except that the New Notes will
be registered under the Securities Act and hence will not bear legends
restricting the transfer thereof.

Holders of Old Notes do not have any appraisal or dissenters' rights under
the General Corporation Law of the State of Delaware or the Indenture in
connection with the Exchange Offer. The Issuers intend to conduct the Exchange
Offer in accordance with the provisions of the Registration Rights Agreement.
Old Notes which are not tendered for exchange or are tendered but not accepted
in the Exchange Offer will remain outstanding and be entitled to the benefits of
the Indenture, but will not be entitled to any registration rights under the
Registration Rights Agreement.

The Issuers shall be deemed to have accepted validly tendered Old Notes
when, as and if the Issuers have given oral or written notice thereof to Harris
Trust and Savings Bank acting in its capacity as the exchange agent (the
"Exchange Agent") for the Exchange Offer. The Exchange Agent will act as agent
for the tendering Holders for the purposes of receiving the New Notes from the
Issuers.

If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering Holder thereof as promptly as practicable
after the Expiration Date.

Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes described below, in connection with the
Exchange Offer. See "--Fees and Expenses."

25
<PAGE> 28

EXPIRATION DATE; EXTENSIONS; CLOSING

The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1996, unless the Issuers, in their sole discretion, extend the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.

In order to extend the Exchange Offer, the Issuers will notify the Exchange
Agent of any extension by oral or written notice and will announce such
extension on the next business day after the previously scheduled Expiration
Date. Such announcement will state that the Issuers are extending the Exchange
Offer for a specified period of time. Without limiting the manner in which the
Issuers may choose to make a public announcement of any extension of the
Exchange Offer, the Issuers shall have no obligation to publish, advertise or
otherwise communicate any such public announcement, other than by making a
timely release to an appropriate news agency.

CONDITIONS

Notwithstanding any other term of the Exchange Offer, the Issuers will not
be required to accept for exchange, or exchange, any New Notes for any Old
Notes, and may terminate or amend the Exchange Offer before the acceptance of
any Old Notes for exchange, if the Exchange Offer violates any applicable law or
interpretation by the staff of the Commission.

If the Issuers determine in their sole discretion that the foregoing
condition exists, the Issuers may (i) refuse to accept any Old Notes and return
all tendered Old Notes to the tendering Holders, (ii) extend the Exchange Offer
and retain all Old Notes tendered prior to the expiration of the Exchange Offer,
subject, however, to the rights of Holders who tendered such Old Notes to
withdraw their tendered Old Notes, or (iii) waive such condition, if
permissible, with respect to the Exchange Offer and accept all properly tendered
Old Notes which have not been withdrawn. If such waiver constitutes a material
change to the Exchange Offer, the Issuers will promptly disclose such waiver by
means of a prospectus supplement that will be distributed to the Holders, and
the Issuers will extend the Exchange Offer as required by applicable law.

PROCEDURES FOR TENDERING

Only a Holder of Old Notes may tender such Old Notes in the Exchange Offer.
To tender in the Exchange Offer, a Holder must complete, sign and date the
Letter of Transmittal or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the Old
Notes (unless such tender is being effected pursuant to the procedure for
book-entry transfer described below) and any other required documents, to the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.

Any financial institution that is a participant in the Depositary's
Book-Entry Transfer Facility system may make book-entry delivery of the Old
Notes by causing the Depositary to transfer such Old Notes into the Exchange
Agent's account in accordance with the Depositary's procedure for such transfer.
Although delivery of Old Notes may be effected through book-entry transfer into
the Exchange Agent's account at the Depositary, the Letter of Transmittal (or
facsimile thereof), with any required signature guarantees and any other
required documents, must, in any case, be transmitted to and received or
confirmed by the Exchange Agent at its addresses set forth in "Exchange Agent"
below prior to 5:00 p.m., New York City time, on the Expiration Date. DELIVERY
OF DOCUMENTS TO THE DEPOSITARY IN ACCORDANCE WITH ITS PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

The tender by a Holder of Old Notes will constitute an agreement between
such Holder and the Issuers in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.

The method of delivery of Old Notes and the Letter of Transmittal and all
other required documents to the Exchange Agent is at the election and risk of
the Holders. Instead of delivery by mail it is recommended that Holders use an
overnight or hand delivery service. In all cases sufficient time should be
allowed to assure delivery to the Exchange Agent before the Expiration Date. No
Letter of Transmittal or Old Notes should be

26
<PAGE> 29

sent to the Issuers. Holders may request their respective brokers, dealers,
commercial banks, trust companies or nominees to effect the tenders for such
Holders.

Signatures on a Letter of Transmittal or a notice of withdrawal as the case
may be, must be guaranteed by an Eligible Institution (as defined below) unless
the Old Notes tendered pursuant thereto are tendered (i) by a registered Holder
who has not completed the box entitled "Special Payment Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. In the event that signatures on a Letter of
Transmittal or a notice of withdrawal as the case may be, are required to be
guaranteed, such guarantee must be by a member of a signature guarantee program
within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible
Institution").

If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, owners of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Issuers,
evidence satisfactory to the Issuers of their authority to so act must be
submitted with the Letter of Transmittal.

All questions as to the validity, form, eligibility (including time of
receipt) and acceptance and withdrawal of tendered Old Notes will be determined
by the Issuers in their sole discretion, which determination will be final and
binding. The Issuers reserve the absolute right to reject any and all Old Notes
not properly tendered or any Old Notes the Issuer's acceptance of which would,
in the opinion of counsel for the Issuers, be unlawful. The Issuers also reserve
the right to waive any defects, irregularities or conditions of tender as to
particular Old Notes. The Issuers' interpretation of the terms and conditions of
the Exchange Offer (including the instructions in the Letter of Transmittal)
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes must be cured within such
times as the Issuers shall determine. Although the Issuers intend to request the
Exchange Agent to notify Holders of defects or irregularities with respect to
tenders of Old Notes, neither the Issuers, the Exchange Agent nor any other
person shall incur any liability for failure to give such notification. Tenders
of Old Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Old Notes received by the Exchange
Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holders, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.

In addition, the Issuers reserve the right in their sole discretion
(subject to limitations contained in the Indenture) (i) to purchase or make
offers for any Old Notes that remain outstanding subsequent to the Expiration
Date and (ii) to the extent permitted by applicable law, purchase Old Notes in
the open market, in privately negotiated transactions or otherwise. The terms of
any such purchases or offers could differ from the terms of the Exchange Offer.

By tendering, each Holder will represent to the Issuers that, among other
things, the New Notes acquired pursuant to the Exchange Offer are being obtained
in the ordinary course of business of the person receiving such New Notes,
whether or not such person is the Holder, and that neither the Holder nor any
such other person (i) has an arrangement or understanding with any person to
participate in the distribution of such New Notes, (ii) is an "affiliate", as
defined in Rule 405 under the Securities Act, of the Issuers or (iii) is engaged
in, or intends to engage in, a distribution of the New Notes. If the Holder is a
broker-dealer that will receive New Notes for its own account in exchange for
Old Notes that were acquired as a result of market-making activities or other
trading activities, such Holder by tendering will acknowledge that it will
deliver a prospectus in connection with any resale of such New Notes. See "Plan
of Distribution."

27
<PAGE> 30

GUARANTEED DELIVERY PROCEDURES

Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver their Old Notes and other
required documents to the Exchange Agent, or cannot complete the procedure for
book-entry transfer prior to the Expiration Date, may effect a tender if:

(a) The tender is made through an Eligible Institution;

(b) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder, the certificate number(s)
of such Old Notes (if available) and the principal amount of Old Notes
tendered together with a duly executed Letter of Transmittal (or a
facsimile thereof), stating that the tender is being made thereby and
guaranteeing that, within five business days after the Expiration Date, the
certificate(s) representing the Old Notes to be tendered in proper form for
transfer (or a confirmation of a book-entry transfer into the Exchange
Agent's account at the Depositary of Old Notes delivered electronically)
and any other documents required by the Letter of Transmittal will be
deposited by the Eligible Institution with the Exchange Agent; and

(c) Such certificate(s) representing all tendered Old Notes in proper
form for transfer (or confirmation of a book-entry transfer into the
Exchange Agent's account at the Depositary of Old Notes delivered
electronically) and all other documents required by the Letter of
Transmittal are received by the Exchange Agent within five business days
after the Expiration Date.

Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to Holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.

WITHDRAWAL OF TENDERS

Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date,
unless previously accepted for exchange.

To withdraw a tender of Old Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date, and prior to acceptance for exchange thereof by the
Issuers. Any such notice of withdrawal must (i) specify the name of the person
having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify
the Old Notes to be withdrawn (including the certificate number or numbers and
principal amount of such Old Notes), (iii) be signed by the Depositor in the
same manner as the original signature on the Letter of Transmittal by which such
Old Notes were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Trustee with respect
to the Old Notes register the transfer of such Old Notes into the name of the
person withdrawing the tender, and (iv) specify the name in which any such Old
Notes are to be registered, if different from that of the Depositor. All
questions as to the validity, form and eligibility (including time of receipt)
of such withdrawal notices will be determined by the Issuers, whose
determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no New Notes will be issued with respect thereto unless the
Old Notes so withdrawn are validly re-tendered. Any Old Notes which have been
tendered but which are not accepted for exchange or which are withdrawn will be
returned to the Holder thereof without cost to such Holder as soon as
practicable after withdrawal, rejection of tender or termination of the Exchange
Offer. Properly withdrawn Old Notes may be re-tendered by following one of the
procedures described above under "Procedures for Tendering" at any time prior to
the Expiration Date.

28
<PAGE> 31

EXCHANGE AGENT

Harris Trust and Savings Bank has been appointed as Exchange Agent for the
Exchange Offer. Questions and requests for assistance, requests for additional
copies of this Prospectus or of the Letter of Transmittal and requests for
Notices of Guaranteed Delivery should be directed to the Exchange Agent
addressed as follows:

By Registered or Certified Mail:

[ ]

Facsimile Transmission Number:

[ ]

By Hand/Overnight Delivery:

[ ]

FEES AND EXPENSES

The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Issuers. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail; however, additional solicitation may be
made by facsimile, telephone or in person by officers and regular employees of
the Issuers and their affiliates.

The Issuers have not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Issuers, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith. The
Issuers may also pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding
copies of this Prospectus, Letters of Transmittal and related documents to the
beneficial owners of the Old Notes and in handling or forwarding tenders for
exchange. The Issuers will pay the other expenses to be incurred in connection
with the Exchange Offer, including fees and expenses of the Trustee, accounting
and legal fees and printing costs.

The Issuers will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Exchange Offer. If, however, certificates
representing New Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered Holder of the Old Notes tendered, or if
tendered Old Notes are registered in the name of any person other than the
person signing the Letter of Transmittal, or if a transfer tax is imposed for
any reason other than the exchange of Old Notes pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
Holder or any other persons) will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering Holder.

CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES

Generally, a Holder (other than any Holder who is an "affiliate" of the
Issuers within the meaning of Rule 405 under the Securities Act) who exchanges
Old Notes for New Notes pursuant to the Exchange Offer may offer such New Notes
for resale, resell such New Notes, and otherwise transfer such New Notes without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided such New Notes are acquired in the ordinary course of
the Holders' business, and such Holder has no arrangement with any person to
participate in and is not engaged in and is not planning to be engaged in the
distribution of such New Notes. Each broker-dealer that receives New Notes for
its own account in exchange for Old Notes, where such Old Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. See "Plan of Distribution." To comply with
the securities laws of certain jurisdictions, it may be

29
<PAGE> 32

necessary to qualify for sale or register the New Notes prior to offering or
selling such New Notes. Upon request by Holders prior to the Exchange Offer, the
Issuers will register or qualify the New Notes in certain jurisdictions subject
to the conditions in the Registration Rights Agreement. If a Holder does not
exchange such Old Notes for New Notes pursuant to the Exchange Offer, such Old
Notes will continue to be subject to the restrictions on transfer contained in
the legend thereon and will not have the benefit of any covenant regarding
registration under the Securities Act. In general the Old Notes may not be
offered or sold, unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. To the extent that Old Notes are tendered and
accepted in the Exchange Offer, a Holder's ability to sell untendered Old Notes
could be adversely affected.

ACCOUNTING TREATMENT

The New Notes will be recorded at the same carrying value as the Old Notes,
as reflected in the Issuers' accounting records on the date of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized by the
Issuers upon the consummation of the Exchange Offer. The expenses of the
Exchange Offer will be amortized by the Issuers over the term of the New Notes
under generally accepted accounting principles.

TAX CONSEQUENCES

Under current Federal law, which is subject to retroactive change, neither
the substitution of Old Notes pursuant to the Exchange Offer, nor the filing of
a registration statement with respect to a resale of the New Notes, should be
treated as a sale, exchange, disposition or other taxable event for the holders
of Notes for Federal income tax purposes. Holders should not recognize any
taxable gain or loss or any interest income as a result of substituting Old
Notes for New Notes pursuant to the Exchange Offer, and a holder should have the
same adjusted tax basis and holding period in the New Notes as it had in the Old
Notes immediately before the Exchange Offer. Holders, however, are strongly
urged to consult their own tax advisors regarding the consequences of the
Exchange Offer, including the effect under Federal, state, local and any
applicable foreign laws.

30
<PAGE> 33

THE COMPANY

The Company owns, operates and develops cable television systems in the
southeastern region of the United States, primarily in suburban communities
which have experienced higher than average rates of population growth. These
communities generally experienced a rate of population growth, in the aggregate,
which exceeded the national average by approximately 55% during the period from
1980 to 1994. As of March 31, 1996, the Company owned and operated cable
television systems in Alabama, Georgia, Kentucky, Louisiana, North Carolina,
South Carolina and Tennessee passing approximately 460,000 homes and serving
approximately 310,000 basic subscribers. Through strategic acquisitions and
internal growth, the Company seeks to own and operate cable television systems
serving, in the aggregate, at least 400,000 to 500,000 basic subscribers in the
southeastern region of the United States within the next five years.

The Company's operations are managed under the direction of Charter, a
privately-held manager of cable television systems. Charter, which has an
indirect common equity investment in the Company (see "Principal Security
Holders"), currently manages cable television systems which serve approximately
900,000 basic subscribers (including the Company's subscribers). Assuming
completion of all publicly-announced cable television industry transactions,
management believes that Charter would be the 13th largest MSO in the United
States based on number of basic subscribers.

The eight individuals principally responsible for the Company's day-to-day
operations (including Barry L. Babcock, Jerald L. Kent and Howard L. Wood, the
co-founders of Charter) have more than 100 years of collective experience in the
cable television industry. Messrs. Babcock, Kent and Wood formerly served as the
senior management team of Cencom, which during the nine-year period prior to its
sale in 1991, purchased and developed a group of cable television systems
serving approximately 550,000 basic subscribers and realized average annual
growth in basic subscribers and EBITDA of approximately 34% and 39%,
respectively. See "Business -- Business Strategy -- Maximize Benefits Provided
by Relationship with Charter." In addition, Charterhouse has invested over $77.5
million (of the total equity of approximately $126.9 million invested in the
Company). As a result of such investment, Charterhouse owns directly or
indirectly approximately 60% of the outstanding preferred and common equity
interests in the Company. Charterhouse's association with senior management of
Charter began in 1983, with Charterhouse's initial investment in Cencom. See
"Risk Factors -- Control of the Issuers and the Company by Charterhouse;
Possible Control of Issuers by Preferred Limited Partners of CharterComm
Holdings."

The Company owns and operates systems which lie principally within five
clusters in the southeastern region of the United States: the
Greenville-Spartanburg/Asheville Cluster, the Atlanta Cluster, the Northern
Alabama Cluster, the New Orleans Cluster and the Nashville Cluster. Of the
Company's 310,000 total subscribers, approximately 84% are in the Southeast
Clusters. Management believes that the Company is well-positioned to enhance the
concentration of its systems within the southeastern region of the United States
(both through the expansion of its existing clusters and the acquisition of new
clusters) and to realize internal subscriber growth through population increases
in the areas served by its systems.

The principal executive offices of the Issuers are located at 12444
Powerscourt Drive, Suite 400, St. Louis, Missouri 63131. Their telephone number
is (314) 965-0555.

31
<PAGE> 34

A summary of the organizational structure of the Company is set forth
below.

ORGANIZATIONAL STRUCTURE OF
CHARTER SOUTHEAST AND SOUTHEAST CAPITAL

32
<PAGE> 35

USE OF PROCEEDS

The gross proceeds to the Issuers from the Offering, along with the equity
capital contributed to Charter Southeast by Charter Holdings, were approximately
$197.0 million (with the net proceeds therefrom, after deducting estimated fees
and expenses, being approximately $192.5 million).

The following table sets forth, as of June 1, 1996, the uses of the net
proceeds of the Offerings, including funds contributed as equity capital to CC-I
and CC-II and then applied by those entities for use as set forth below.

<TABLE>
<CAPTION>
(IN MILLIONS)
<S> <C>
SOURCES OF FUNDS:
11 1/4% Senior Notes due 2006.................................................. $ 125.0
Equity capital contributed by Charter Holdings................................. 72.0
------
Total sources of funds................................................. $ 197.0
======
USES OF FUNDS:
Repayment of short-term intercompany note to CC-I(a)........................... $ 1.1
Repayment of Charterhouse Bridge Notes(b)...................................... 15.0
------
Total repayment of debt at Charter Southeast........................... 16.1
------
Capital contribution to CC-I, applied as follows:
Repayment of Old CC-I Credit Facility(c).................................... 17.5
Redemption of CC-I special limited partnership interests(d)................. 43.3
------
Total capital contribution to CC-I..................................... 60.8
------
Capital contribution to CC-II, applied as follows:
CCIP Acquisition(e)......................................................... 115.0
Repayment of Old CC-II Credit Facility(f)................................... 0.6
------
Total capital contribution to CC-II.................................... 115.6
------
Estimated fees and expenses relating to Offering............................... 4.5
------
Total uses of funds.................................................... $ 197.0
======
</TABLE>

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

(a) The short-term intercompany note was made by CharterComm, Inc., a Delaware
corporation which is affiliated with Charterhouse and Charter
("CharterComm"), in connection with the acquisition of shares of common
stock of CCP One, Inc. (formerly known as LEB Communications, Inc.), the
general partner of CC-I, by CharterComm. Upon the closing of the Offering,
CharterComm contributed to Charter Holdings all of the issued and
outstanding shares of common stock of CCP One, Inc., along with its
obligations under such note; upon such contribution, Charter Holdings
contributed such shares and obligations to Charter Southeast. As a result of
such transactions, CCP One, Inc. became a wholly-owned subsidiary of Charter
Southeast.

(b) In November 1995, Charter Holdings issued the Charterhouse Bridge Notes to
an affiliate of Charterhouse. In connection with its organization, Charter
Southeast assumed the Charterhouse Bridge Notes from Charter Holdings. The
Charterhouse Bridge Notes, which were due November 29, 1996, were repaid
using proceeds from the Offering. See "Certain Relationships and Affiliated
Transactions -- Charterhouse Bridge Notes."

(d) Represents redemption of interests issued to sellers of the McDonald Systems
(as defined herein) as partial consideration for the sale of such systems to
CC-I in April 1994. See "Business -- Description of the Southeast
Systems -- Historical Acquisitions."

(e) The Company used the capital contribution to consummate the CCIP
Acquisition. However, these proceeds were temporarily used to repay
outstanding borrowings under the Old CC-II Credit Facility in the
approximate amount of $115.3 million, of which approximately $115.0 million
was reborrowed to consummate the CCIP Acquisition and pay related
transaction costs.

(f) Prior to payment of bank amendment and related transaction fees of $0.3
million.

33
<PAGE> 36

CAPITALIZATION

The following table sets forth the consolidated capitalization of Charter
Southeast as of March 31, 1996, and as adjusted to give effect to the applicable
Pro Forma Adjustments. This table should be read in conjunction with the
Financial Statements of Charter Southeast, the related Notes thereto included
elsewhere in this Prospectus and the unaudited Pro Forma Financial Statements.

<TABLE>
<CAPTION>
UNAUDITED
------------------------
AT MARCH 31, 1996
------------------------
AS
ACTUAL ADJUSTED(A)
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
DEBT:
New CC-I Credit Facility............................................ $ 76,900(b) $ 168,277
New CC-II Credit Facility........................................... 173,900(c) 235,600
11 1/4% Senior Notes................................................ 125,000 125,000
-------- --------
Total debt.................................................. 375,800 528,877
Total partnership capital........................................... 152,072 177,072
-------- --------
Total capitalization................................................ $527,872 $ 705,949
======== ========
</TABLE>

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

(a) The Pro Forma Adjustments assume that the Pending Acquisitions were
consummated.

(b) As of May 31, 1996, $76.9 million was outstanding, and $28.1 million was
unused and available for borrowing, under the New CC-I Credit Facility.

(c) As of May 31, 1996, $173.9 million was outstanding, and $31.1 million was
unused and available for borrowing, under the New CC-II Credit Facility.

34
<PAGE> 37

SELECTED HISTORICAL AND PRO FORMA COMBINED FINANCIAL DATA

The unaudited combined statement of operations, balance sheet, and
financial ratios and other data for the years ended December 31, 1991, 1992,
1993, and for the period from January 1, 1994 through April 30, 1994 set forth
below have been derived from the unaudited financial statements of the cable
television systems acquired from Citation Cablevision, Inc. (Citation),
Subscriber Cablevision, Ltd., LaGrange Cablevision, Inc. (LaGrange) and the
Jefferson Trust Partnership (collectively, the "McDonald Systems," which
represent the Company's predecessor) and the unaudited financial statements of
Chattahoochee Cablevision, Inc. (which was the predecessor of Citation and
LaGrange). The unaudited consolidated statement of operations, balance sheet,
and financial ratios and other data for the period from May 1, 1994 through
December 31, 1994, and for the year ended December 31, 1995 set forth below have
been derived from the consolidated financial statements of Charter Southeast,
which have been audited by Arthur Andersen LLP.

The unaudited financial data for the three month periods ended March 31,
1995 and 1996, include all adjustments, consisting of normal recurring
adjustments, which management considers necessary for the fair presentation of
the financial position and the results of operations of the Company for such
periods. The results for the three month periods are not necessarily indicative
of the results to be expected for the full year. The data set forth below should
be read in conjunction with the historical financial statements, reports of the
independent auditors, the notes related thereto and the other financial
information included elsewhere in the Prospectus.

The unaudited pro forma financial statements are based upon the historical
consolidated financial statements of the Company, the Southeast Systems (prior
to their acquisition by the Company) and the Pending Acquisitions. The unaudited
pro forma consolidated statements of operations data and balance sheets have
been derived from the audited and unaudited financial statements of operations
and balance sheets included elsewhere in this Prospectus.

The following unaudited pro forma statements of operations for the year
ended December 31, 1995 and for the three months ended March 31, 1996 give
effect to the applicable Pro Forma Adjustments, as if such Pro Forma Adjustments
had occurred on January 1, 1995 and 1996, respectively. The following unaudited
pro forma balance sheet data as of December 31, 1995 gives effect to the
applicable Pro Forma Adjustments, as if such Pro Forma Adjustments had occurred
on December 31, 1995. The following unaudited pro forma balance sheet as of
March 31, 1996 gives effect to the Pending Acquisitions as if such Pending
Acquisitions had occurred on March 31, 1996. The acquisitions of the Southeast
Systems have been, and the Pending Acquisitions will be, accounted for under the
purchase method of accounting. The terms of the Pending Acquisitions have not
been finalized, and actual adjustments that reflect other evaluations of the
purchased assets and assumed liabilities may, therefore, differ from the Pro
Forma Adjustments presented herein. The unaudited pro forma financial
information may therefore not be indicative of the actual results of operations
of the Company had the transactions been completed on the dates assumed, nor are
such financial statements necessarily indicative of the results of operations of
the Company that may exist in the future. The unaudited pro forma financial
information should be read in conjunction with the Unaudited Pro Forma Financial
Statements and the Notes thereto and with the historical financial statements
and the related Notes thereto appearing elsewhere in this Prospectus.

35
<PAGE> 38

<TABLE>
<CAPTION>
UNAUDITED
------------------------------------------------------------------------------------------------
THE COMPANY
PREDECESSOR -------------------------------------------
--------------------------------------------------
PERIOD FROM PERIOD FROM YEAR ENDED DECEMBER 31,
YEAR ENDED DECEMBER 31, JANUARY 1, 1994 MAY 1, 1994 ------------------------
-------------------------------- TO APRIL 30, TO DECEMBER 31, PRO FORMA(A)
1991 1992 1993 1994 1994 1995 1995
-------- -------- -------- --------------- --------------- -------- ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SUBSCRIBER DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................... $ 22,650 $ 26,135 $ 28,488 $ 10,587 $ 21,561 $ 72,831 $146,902
Operating expenses:
Operating, general and
administrative............. 11,648 12,053 13,981 6,184 11,152 37,248 74,434
Management fees.............. 655(b) 620(b) 760(b) 273(b) 1,078 3,642 7,345(c)
Depreciation and
amortization............... 8,382 7,336 6,851 2,476 14,320 40,148 67,582
-------- -------- -------- -------- -------- -------- --------
Total operating expenses... 20,685 20,009 21,592 8,933 26,550 81,038 149,361
-------- -------- -------- -------- -------- -------- --------
Operating income (loss)....... 1,965 6,126 6,896 1,654 (4,989) (8,207) (2,459)
Interest expense............. (5,570) (2,827) (3,049) (1,220) (4,655) (18,671) (45,463)
Interest income.............. 54 744 793 169 35 198 515
Other income................. 1 (220) (286) (329) -- (856) 874
-------- -------- -------- -------- -------- -------- --------
Net income (loss)............. $ (3,550) $ 3,823 $ 4,354 $ 274 $ (9,609) $(27,536) $(46,533)
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed
charges...................... --(d) 2.35 2.43 1.22 --(d) --(d) --(d)
BALANCE SHEET DATA
(AT END OF PERIOD):
Total assets.................. $425,611 $729,803
Total debt (including current
maturities).................. 274,125 519,165
Special limited partners and
preferred limited partners... 98,080 --
Partners' capital............. 31,648 182,346
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(e)..................... $ 11,002 $ 14,082 $ 14,507 $ 4,403 $ 10,409 $ 35,583 $ 72,468
EBITDA margin................. 48.6% 53.9% 50.9% 41.6% 48.3% 48.9% 49.3%
Capital expenditures(f)....... $ 4,626 $ 4,626 $ 13,577 $ 5,376 $ 4,996 $ 20,011 $ 31,545
Annualized EBITDA(g).......... 42,268 75,224
Total debt to annualized
EBITDA....................... 6.49x 6.90x
Annualized EBITDA to interest
expense...................... 2.26x 1.65x
OPERATING STATISTICAL DATA
(AT END OF PERIOD, EXCEPT AVERAGES):
Homes passed.................. 129,040 133,547 145,079 149,477 147,792 377,857 603,256
Basic subscribers............. 80,996 85,592 92,983 100,236 99,012 249,106 398,740
Basic penetration............. 62.8% 64.1% 64.1% 67.1% 67.0% 65.9% 66.1%
Premium service units......... 28,514 28,108 30,535 36,176 49,023 128,900 206,747
Premium penetration........... 35.2% 32.8% 32.8% 36.1% 49.5% 51.7% 51.9%
Average monthly revenue per
basic subscriber(h).......... $ 23.30 $ 25.45 $ 25.53 $ 26.41 $ 27.06 $ 29.64 $ 30.70

THREE MONTHS ENDED
MARCH 31,
---------------------------------
PRO FORMA
1995 1996 1996(A)
-------- -------- ---------

<S> <<C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................... $ 14,323 $ 23,844 $ 39,128
Operating expenses:
Operating, general and
administrative............. 7,137 11,889 19,667
Management fees.............. 716 1,192 1,957 (c)
Depreciation and
amortization............... 7,886 10,924 16,305
-------- -------- --------
Total operating expenses... 15,739 24,005 37,929
-------- -------- --------
Operating income (loss)....... (1,416) (161) 1,199
Interest expense............. (3,713) (6,658) (11,515 )
Interest income.............. 18 29 84
Other income................. 4 2 (19 )
-------- -------- --------
Net income (loss)............. $ (5,107) $ (6,788) $(10,251 )
======== ======== ========
Ratio of earnings to fixed
charges...................... --(d) --(d) -- (d)
BALANCE SHEET DATA
(AT END OF PERIOD):
Total assets.................. $550,389 $732,093
Total debt (including current
maturities).................. 375,800 528,877
Special limited partners and
preferred limited partners... -- --
Partners' capital............. 152,072 177,072
FINANCIAL RATIOS AND OTHER DAT
EBITDA(e)..................... $ 7,186 $ 11,955 $ 19,461
EBITDA margin................. 50.2% 50.1% 49.7 %
Capital expenditures(f)....... $ 2,003 $ 5,242 $ 7,390
Annualized EBITDA(g).......... 47,820 77,844
Total debt to annualized
EBITDA....................... 7.86x 6.79 x
Annualized EBITDA to interest
expense...................... 1.80x 1.69 x
OPERATING STATISTICAL DATA
(AT END OF PERIOD, EXCEPT AVE
Homes passed.................. 241,130 386,549 612,869
Basic subscribers............. 163,699 256,440 408,430
Basic penetration............. 67.9% 66.3% 66.6 %
Premium service units......... 77,433 125,621 203,631
Premium penetration........... 47.3% 49.0% 49.9 %
Average monthly revenue per
basic subscriber(h).......... $ 29.17 $ 30.99 $ 31.93
</TABLE>

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

(Footnotes continue on following page)

36
<PAGE> 39

(b) Represents combined management fees for the Southeast Systems during periods
prior to their acquisition by the Company, for those systems which paid
management fees. These fees are not necessarily indicative of the management
fees that would have been charged had the Southeast Systems been operated by
the Company or that may be expected for any future periods.

(c) Management fees payable to Charter are based on 5.0% of the Company's
annual revenues. The Indenture prohibits the payment of 40% of such
management fees until repayment in full of the Notes. See "Certain
Relationships and Related Transactions" and "Description of Notes."

(e) EBITDA represents income (loss) before interest expense, income taxes,
depreciation and amortization, management fees and other income (expense).
EBITDA is calculated before payment of management fees so as to be
consistent with certain financial terms contained in the New Credit
Facilities and the Indenture. Management believes EBITDA is a meaningful
measure of performance because it is commonly used in the cable television
industry to analyze and compare cable television companies on the basis of
operating performance, leverage and liquidity. EBITDA is not presented in
accordance with generally accepted accounting principles and should not be
considered an alternative to, or more meaningful than, operating income or
operating cash flows as an indicator of the Company's operating
performance. EBITDA does not include the Company's debt obligations or
other significant commitments.

(f) Capital expenditures exclude cash consideration paid in connection with the
acquisition of cable systems.

(g) EBITDA of the respective three month period multiplied by four.

(h) Revenues divided by basic subscribers divided by the number of months in the
period.

37
<PAGE> 40

THE FOLLOWING DATA HAS NOT BEEN PREPARED IN ACCORDANCE

WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND DOES NOT

COMPLY WITH ARTICLE 11 OF REGULATION S-X

SUPPLEMENTAL SELECTED HISTORICAL

AND PRO FORMA COMBINED FINANCIAL DATA

The supplemental table set forth below has not been prepared in accordance
with generally accepted accounting principles or Article 11 of Regulation S-X
and is included for the purpose of providing supplemental information to assist
investors in comparing the historical financial performance of the Company.

CC-I had no operations prior to its acquisition of the McDonald Systems in
April 1994. CC-II had no operations prior to its acquisition of the Crown
Systems (as defined below) in January 1995. The combined historical results of
operations, selected financial ratios and operating statistical data set forth
below (which have been derived by combining historical results of operations of
systems acquired by the Company during 1994 through March 1996, and which
therefore reflect results of periods prior to the Company's management of such
systems) do not purport to represent what the Company's actual results of
operations would have been had the systems been owned by the Company throughout
the periods indicated. The combined historical results include the operations of
the Southeast Systems prior to their acquisition by the Company.

The unaudited combined statement of operations data for the year ended
December 31, 1992 set forth below have been derived from the unaudited financial
statements of the McDonald Systems, the CCIP Systems, and cable television
systems acquired from Crown Media, Inc. (the "Crown Systems"), CableSouth, Inc.
(the "CableSouth Systems"), Peachtree (the "Peachtree Systems"), Masada Cable
Partners, L.P. (the "Masada I Systems"), and Masada Cable Partners II, L.P. (the
"Masada II Systems" and together with the Masada I Systems, the "Masada
Systems"). The unaudited combined statement of operations data for the year
ended December 31, 1993 set forth below have been derived from the unaudited
financial statements of the McDonald Systems, the Crown Systems, the CCIP
Systems, the CableSouth Systems, the Peachtree Systems and the Masada Systems
for the year ended December 31, 1993. The unaudited combined statement of
operations data for the year ended December 31, 1994 have been derived from the
unaudited financial statements of CC-I, the McDonald Systems, Crown Systems, the
CCIP Systems, the CableSouth Systems, the Peachtree Systems and the Masada
Systems for the year ended December 31, 1994. The unaudited combined statement
of operations data for the year ended December 31, 1995 has been derived from
the unaudited financial statements of Charter Southeast and CCIP Systems for the
year ended December 31, 1995, the unaudited financial statements of the
CableSouth Systems for the period ended May 31, 1995, the unaudited financial
statements of the Peachtree Systems for the period ended April 30, 1995, the
unaudited financial statements of the Masada I Systems for the period ended July
31, 1995 and the unaudited financial statements of the Masada II Systems for the
period ended November 30, 1995.

The unaudited financial data for the three month periods ended March 31,
1995 and 1996, respectively, include all adjustments, consisting of normal
recurring adjustments, which management considers necessary for the fair
presentation of the financial position and the results of operations of the
Company for such periods. The results for the three month periods are not
necessarily indicative of the results to be expected for the full year. The data
should be read in conjunction with the historical financial statements, the
reports of independent auditors, the Notes related thereto and the other
financial information included elsewhere in the Prospectus.

38
<PAGE> 41

The following unaudited pro forma financial statements are based upon the
historical consolidated financial statements of the Company, the Southeast
Systems (prior to their acquisition by the Company) and the Pending
Acquisitions. The unaudited pro forma consolidated statements of operations data
and balance sheets have been derived from the audited and unaudited financial
statements of operations and balance sheets included elsewhere in this
Prospectus.

39
<PAGE> 42

<TABLE>
<CAPTION>
UNAUDITED
-----------------------------------------------------------------------------------
THREE
MONTHS
ENDED
MARCH
31,
YEAR ENDED DECEMBER 31, --------
--------------------------------------------------------------------
COMBINED
COMBINED HISTORICAL PRO HISTORICAL
----------------------------------------------------- FORMA(A) --------
1992 1993 1994 1995 1995 1995
-------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SUBSCRIBER DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................. $ 87,914 $ 96,874 $103,795 $111,816 $146,902 $ 26,868
Operating expenses:
Operating, general and administrative... 42,257 46,332 52,999 56,545 74,434 13,604
Management fees......................... 3,115(b) 3,618(b) 4,292(b) 5,527(b) 7,345(c) 1,234(b)
Depreciation and amortization........... 44,894 39,850 47,775 53,352 67,582 12,284
------- ------- ------- ------- ------- -------
Total operating expenses.............. 90,266 89,800 105,066 115,424 149,361 27,122
------- ------- ------- ------- ------- -------
Operating income (loss).................. (2,352) 7,074 (1,271) (3,608) (2,459) (254)
Interest expense........................ (14,315) (10,713) (14,696) (23,744) (45,463) (5,210)
Interest income......................... 789 895 325 351 515 59
Other income (expense).................. (1,659) (1,468) 72 (1,409) 874 (484)
------- ------- ------- ------- ------- -------
Net loss................................. (17,537) $ (4,212) $(15,570) $(28,410) $(46,533) $ (5,889)
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges(d).... -- -- -- -- -- --
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets............................. $541,632 $729,803
Total debt (including current
maturities)............................. 388,540 519,165
Special limited partners and preferred
limited partners........................ 98,080 --
Partners' Capital........................ 31,648 182,346
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(e)................................ $ 45,657 $ 50,542 $ 50,796 $ 55,271 $ 72,468 $ 13,264
EBITDA margin............................ 51.9% 52.2% 48.9% 49.4% 49.3% 49.4%
Capital expenditures(f).................. $ 20,627 $ 30,647 $ 25,581 $ 26,047 $ 31,545 $ 3,633
Annualized EBITDA(g)..................... 57,216 75,224
Total debt to annualized EBITDA.......... 6.79x 6.90x
Annualized EBITDA to interest expense.... 2.41x 1.65x
OPERATING STATISTICAL DATA
(AT END OF PERIOD, EXCEPT AVERAGES):
Homes passed............................. 408,984 418,678 437,425 451,199 603,256 439,316
Basic subscribers........................ 259,430 273,631 292,214 301,820 398,740 296,558
Basic penetration........................ 63.4% 65.4% 66.8% 66.9% 66.1% 67.5%
Premium service units.................... 117,862 124,936 149,599 159,619 206,747 150,468
Premium penetration...................... 45.4% 45.7% 51.2% 52.9% 51.9% 50.7%
Monthly revenue per basic
subscriber(g)........................... $ 28.24 $ 29.50 $ 29.60 $ 30.87 $ 30.70 $ 30.20

PRO
FORMA(A)
1996 1996
-------- --------

<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................. $ 30,013 $ 39,128
Operating expenses:
Operating, general and administrative... 14,896 19,667
Management fees......................... 1,500(b) 1,957(c)
Depreciation and amortization........... 12,315 16,305
------- -------
Total operating expenses.............. 28,711 37,929
------- -------
Operating income (loss).................. 1,302 1,199
Interest expense........................ (7,278) (11,515)
Interest income......................... 45 84
Other income (expense).................. (9) (19)
------- -------
Net loss................................. $ (5,940) $(10,251)
======= =======
Ratio of earnings to fixed charges(d).... -- --
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets............................. 550,389 $732,093
Total debt (including current
maturities)............................. 375,800 528,877
Special limited partners and preferred
limited partners........................ -- --
Partners' Capital........................ 152,072 177,072
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(e)................................ $ 15,117 $ 19,461
EBITDA margin............................ 50.4% 49.7%
Capital expenditures(f).................. $ 6,078 $ 7,390
Annualized EBITDA(g)..................... 60,468 77,844
Total debt to annualized EBITDA.......... 6.21x 6.79x
Annualized EBITDA to interest expense.... 2.08x 1.69x
OPERATING STATISTICAL DATA
(AT END OF PERIOD, EXCEPT AVERAGES):
Homes passed............................. 460,454 612,869
Basic subscribers........................ 310,320 408,430
Basic penetration........................ 67.4% 66.6%
Premium service units.................... 158,632 203,631
Premium penetration...................... 51.1% 49.9%
Monthly revenue per basic
subscriber(g)........................... $ 32.24 $ 31.93
</TABLE>

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

(d) The combined earnings of the Company's systems were inadequate to cover
fixed charges by $17.5 million, $4.2 million, $15.6 million and $28.4
million for the years ended December 31, 1992, 1993, 1994 and 1995,
respectively, and $5.9 million for the three months ended March 31, 1995 and
1996, respectively. On a pro forma basis, after giving effect to the
applicable Pro Forma Adjustments, the combined earnings of the Southeast
Systems would have been inadequate to cover fixed charges by $46.5 million
for the year ended December 31, 1995 and $10.3 million for the three months
ended March 31, 1996.

(Footnotes continue on following page)

40
<PAGE> 43

(e) EBITDA represents income (loss) before interest expense, income taxes,
depreciation and amortization, management fees and other income (expense).
EBITDA is calculated before payment of management fees so as to be
consistent with certain financial terms contained in the new Credit
Facilities and the Indenture. Management believes EBITDA is a meaningful
measure of performance because it is commonly used in the cable television
industry to analyze and compare cable television companies on the basis of
operating performance, leverage and liquidity. EBITDA is not presented in
accordance with generally accepted accounting principles and should not be
considered an alternative to, or more meaningful than, operating income or
operating cash flows as an indicator of the Company's operating
performance. EBITDA does not include the Company's debt obligations or
other significant commitments.

(f) Capital expenditures exclude cash consideration paid in connection with the
acquisition of cable systems.

(g) EBITDA of the respective three month period multiplied by four.

(h) Revenues divided by basic subscribers divided by the number of months in the
period.

41
<PAGE> 44

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The Company has operated cable television systems for a limited period of
time and had no operations prior to April 30, 1994. The Company acquired the (i)
McDonald Systems on April 30, 1994 for aggregate consideration of approximately
$174.7 million, (ii) Crown Systems as of January 1, 1995 for aggregate
consideration of approximately $108.0 million, (iii) capital stock of Peachtree,
which owns the Peachtree Systems, on May 1, 1995 for approximately $22.0
million, (iv) CableSouth Systems on May 31, 1995 for approximately $48.0
million, (v) Masada I Systems on July 31, 1995 for approximately $34.7 million,
(vi) Masada II Systems on November 30, 1995 for approximately $35.0 million and
(vii) CCIP Systems on March 29, 1996 for approximately $112.0 million (the
McDonald Systems, the Crown Systems, the Peachtree Systems, the CableSouth
Systems, the Masada Systems and the CCIP Systems, collectively, the "Southeast
Systems"). The following discussion of results of operations for the three
months ended March 31, 1996, and for the years ended December 31, 1993, 1994 and
1995 is based on the combined historical results of operations of the Southeast
Systems. Since the cable television systems comprising the Company's operations
were acquired, from time to time, during the period 1994 through 1996, the
financial information contained herein with respect to periods prior to such
acquisitions does not reflect any changes in the operation or management of such
systems that the Company has made since the date of such acquisitions or that it
intends to make in the future; thus, this financial information is not
necessarily indicative of the results of operation that would have been achieved
had the systems been operated by the Company during all of the periods with
respect to which financial information is presented herein or which may be
achieved in the future. Information relating to the payment of management fees,
programming costs and other similar matters for years prior to the acquisition
by the Company of the systems discussed herein is not comparable to the
discussion of such matters after such systems have been fully integrated with
the Company's systems. See "Business -- Description of the Southeast Systems"
for a description of the Southeast Systems.

As a result of the Company's limited operating history, the Company
believes that its results of operations for the three months ended March 31,
1996, and for the year ended December 31, 1995 may not necessarily be indicative
of the Company's future results of operations. As part of its business strategy,
the Company continuously evaluates opportunities to acquire additional cable
systems, which may include the acquisition of other cable systems managed by
Charter. Accordingly, as the Company continues to grow through acquisitions,
period-to-period comparisons of the Company's results of operations may not be
meaningful.

OVERVIEW

In each of the past three years, the Southeast Systems have generated
substantially all of their revenues from monthly customer fees for basic,
premium and other services (such as the rental of converters and remote control
devices and installation charges). Additional revenues were generated from
pay-per-view programming and the sale of advertising and commissions from home
shopping networks.

The Southeast Systems have generated increases in revenues in each of the
past three fiscal years. This growth was accomplished primarily through internal
subscriber growth, which offset the adverse effects of FCC-required rate
rollbacks in certain systems, which became effective in September 1993, and rate
freezes instituted to prevent cable companies from raising their rates prior to
the effectiveness of the rate rollbacks. Systems operating and general and
administrative expenses have increased during such period due to increased
customer growth and expenses related to implementing rate regulation. In
particular, programming costs, which comprise a substantial portion of systems
operating expenses, have increased both in dollars and as a percentage of
revenues for the past three years due to subscriber growth, the provision of
additional channels to customers and industry-wide increases in costs to
purchase cable programming. While the Company's retention of Charter as manager
of the Southeast Systems is expected to result in better control over
programming costs, there can be no assurance that this result will be achieved.
In addition, the Company believes it will benefit from Charter's membership in
the TeleSynergy programming cooperative, which Charter joined in October 1995
and which offers its members certain programming benefits. Furthermore,

42
<PAGE> 45

management believes it will be able, under the FCC's existing cable rate
regulations, to increase its rates for cable services to offset increases in the
costs of programming. The high level of depreciation and amortization associated
with the acquisitions and capital expenditures related to continued
construction, upgrade and expansion of the Southeast Systems, together with
interest costs related to the Company's financing activities, have caused the
Southeast Systems to report net losses. The Company believes that such net
losses are common for cable television companies and that such net losses will
continue for the foreseeable future. EBITDA, which is a common industry measure
of performance, has been positive.

Management fees payable to Charter are based on 5.0% of the Company's
annual revenues. The Indenture prohibits the payment of 40.0% of such management
fees until repayment in full of the Notes. See "Certain Relationships and
Related Transactions" and "Description of Notes."

The following table sets forth for the periods indicated certain unaudited
combined statements of operations items expressed in dollar amounts (in
thousands) and as a percentage of total revenues from continuing operations on a
combined historical pro forma basis (which have been derived from the combined
historical results of operations of systems acquired by the Company from time to
time during the period 1994 through 1996). The financial information contained
herein with respect to periods prior to acquisition of the Southeast Systems by
the Company does not reflect any changes in the operation or management of such
systems that the Company has made or intends to make and is not necessarily
indicative of the results that would have been achieved had the Southeast
Systems been operated by the Company during all of the periods with respect to
which financial information is presented herein. The following table does not
reflect any estimates of the effect of management by Charter on the historical
results of any systems prior to the date such systems were acquired by the
Company and became subject to Charter's management. The following table should
be read in conjunction with the Supplemental Selected Historical and Pro Forma
Combined Financial Data and Charter Southeast's Consolidated Financial
Statements, the Notes thereto, and the other financial information included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,(A) THREE MONTHS ENDED MARCH 31,(A)
----------------------------------------------------------------- ----------------------------------------
1993 1994 1995 1995 1996
------------------- ------------------- ------------------- ------------------ ------------------
% OF % OF % OF % OF % OF
AMOUNT REVENUES AMOUNT REVENUES AMOUNT REVENUES AMOUNT REVENUES AMOUNT REVENUES
-------- -------- -------- -------- -------- -------- ------- -------- ------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of
Operations Data:
Revenues......... $ 96,874 100.0% $103,795 100.0% $111,816 100.0% $26,868 100.0% $30,013 100.0%
Operating
expenses:
Systems'
operations... 36,318 37.5 41,735 40.2 45,885 41.0 10,983 40.9 12,513 41.7
General and
administative... 10,014 10.3 11,264 10.9 10,660 9.5 2,621 9.8 2,383 7.9
Management
fees(b)...... 3,618 3.7 4,292 4.1 5,527 4.9 1,234 4.6 1,500 5.0
Depreciation
and
amortization.. 39,850 41.1 47,775 46.0 53,352 47.7 12,284 45.7 12,315 41.0
------- ----- -------- ----- -------- ----- ------- ----- ------- -----
Total
operating
expenses... 89,800 92.6 105,066 101.2 115,424 103.1 27,122 101.0 28,711 95.6
------- ----- -------- ----- -------- ----- ------- ----- ------- -----
Operating income
(loss)......... 7,074 7.4 (1,271) (1.2) (3,608) (3.1) (254 ) (1.0) 1,302 4.4
Interest
expense...... (10,713) (11.1) (14,696) (14.2) (23,744) (21.2) (5,210 ) (19.4) (7,278 ) (24.2)
Inerest
income....... 895 0.9 325 0.3 351 0.3 59 0.2 45 0.1
Other income
(expense).... (1,468) (1.5) 72 0.1 (1,409) (1.3) (484 ) (1.8) (9 ) (0.0)
------- ----- -------- ----- -------- ----- ------- ----- ------- -----
Net loss......... $ (4,212) (4.3%) $(15,570) (15.0%) $(28,410) (25.3%) $(5,889) (22.0%) $(5,940) (19.7%)
======= ===== ======== ===== ======== ===== ======= ===== ======= =====
EBITDA(c).......... $ 50,542 52.2% $ 50,796 48.9% $ 55,271 49.4% $13,264 49.4% $15,117 50.4%
</TABLE>

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

(a) The unaudited historical combined results of operations have been derived
from the historical results of operations of systems acquired by the Company
during the period 1994 through 1996 and therefore reflect results of periods
prior to the Company's management of such systems.

(b) Represents combined management fees for the Southeast Systems during periods
prior to their acquisition by the Company for those systems which paid
management fees. These fees are not necessarily indicative of the management
fees that would have been charged had the Southeast Systems been operated by
the Company and that may be expected for any future periods. Management fees
payable to Charter are based on 5.0% of the Company's annual revenues. The
Indenture prohibits the payment of 40.0% of such management fees until
repayment in full of the Notes. See "Certain Relationships and Related
Transactions" and "Description of Notes."

(Footnotes continue on following page)

43
<PAGE> 46

(c) EBITDA represents income (loss) before interest expense, income taxes,
depreciation and amortization, management fees and other income (expense).
EBITDA is calculated before payment of management fees so as to be
consistent with certain financial terms contained in the New Credit
Facilities and the Indenture. Management believes EBITDA is a meaningful
measure of performance because it is commonly used in the cable television
industry to analyze and compare cable television companies on the basis of
operating performance, leverage and liquidity. EBITDA is not presented in
accordance with generally accepted accounting principles and should not be
considered an alternative to, or more meaningful than, operating income or
operating cash flows as an indicator of the Company's operating performance.
EBITDA does not include the Company's debt obligations or other significant
commitments.

FIRST QUARTER 1996 COMPARED TO FIRST QUARTER 1995

Revenues. Revenues increased by $3.1 million, or approximately 11.5%, from
$26.9 million in the first quarter of 1995 to $30.0 million in the first quarter
of 1996. Average monthly revenue per basic subscriber increased from $30.20 in
the first quarter of 1995 to $32.24, or 6.8%, in the first quarter of 1996.
Homes passed increased 4.8%, from 439,316 at March 31, 1995 to 460,454 at March
31, 1996. Basic service subscribers increased 4.6% from 296,558 at March 31,
1995 to 310,320 at March 31, 1996. The basic penetration rate decreased from
67.5% in the first quarter of 1995 to 67.4% in the first quarter of 1996, as a
result of an increase in the number of homes passed without an equivalent
increase in the number of basic subscribers.

Operating expenses. Operating expenses increased by $1.5 million, or
approximately 13.6%, from $11.0 million in the first quarter of 1995 to $12.5
million in the first quarter of 1996. As a percentage of revenues, operating
expenses increased from 40.9% to 41.7%. Programming costs for the first quarter
of 1996 increased by $0.8 million, or 22.0%, from the first quarter of 1995.
These increases were due to a combination of factors, including a 4.6% increase
in basic subscribers from March 31, 1995 to March 31, 1996, additional costs
associated with the purchase of programming on the new channels offered to
customers, and industry-wide increases in programming rates charged by certain
vendors. As a result, the Company's programming costs per basic subscriber
increased by 10.0%.

Operating, general and administrative expenses. Operating, general and
administrative expenses decreased by $0.2 million, or approximately 7.7%, from
$2.6 million in the first quarter of 1995 to $2.4 million in the first quarter
of 1996.

Management fees. Management fees increased by $0.3 million, or
approximately 25%, from $1.2 million in the first quarter of 1995 to $1.5
million in the first quarter of 1996, representing an increase, as a percentage
of revenues, from 4.6% in the first quarter of 1995 to 5.0% in the first quarter
of 1996. Once a system is acquired by the Company, management fees to Charter
are recorded based on 5.0% of such system's revenues, although only 3.0% of such
amount is payable currently and the balance is deferred. Prior to their
acquisition by the Company, certain systems did not pay management fees to a
third party.

Depreciation and amortization. Depreciation and amortization expense
remained consistent at $12.3 million during the first quarters of 1995 and 1996.

Interest expense. Interest expense increased by $2.1 million, or
approximately 40.4%, from $5.2 million in the first quarter of 1995 to $7.3
million in the first quarter of 1996. This increase resulted primarily from the
additional indebtedness incurred in connection with the acquisition of the Crown
Systems, the CableSouth Systems, the Peachtree Systems and the Masada Systems in
fiscal 1995.

Other expense. The Company incurred other expenses of approximately $0.5
million in the first quarter of 1995 as compared to $9,000 in the first quarter
of 1996.

Net loss. Net loss remained at $5.9 million for the first quarter 1996.
The increase in revenues that resulted from subscriber growth was not sufficient
to offset the significant costs related to the acquisitions of the Crown
Systems, the CableSouth Systems, the Peachtree Systems and the Masada Systems in
fiscal 1995, as such acquisitions caused a substantial increase in interest
expense due to increased borrowing.

EBIDTA. EBITDA increased by $1.8 million, or approximately 13.5%, from
$13.3 million in the first quarter of 1995 to $15.1 million in the first quarter
of 1996, due to an increase in revenues which was partially offset by an
increase in systems operation expenses. EBITDA, as a percentage of revenues,
increased slightly

44
<PAGE> 47

from 49.4% in the first quarter of 1995 to 50.4% in the first quarter of 1996.
Management believes that EBITDA is a meaningful measure of performance because
it is commonly used in the cable television industry to analyze and compare
cable television companies on the basis of operating performance, leverage and
liquidity.

FISCAL 1995 COMPARED TO FISCAL 1994

Revenues. Revenues increased by $8.0 million, or approximately 7.7%, from
$103.8 million in fiscal 1994 to $111.8 million in fiscal 1995, as a result of
an increase of $3.3 million during such period in revenues from unregulated
services (including premium cable services, pay-per-view, advertising and other
services) and an increase of $4.7 million related primarily to subscriber
growth. Average monthly revenue per basic subscriber increased from $29.60 in
fiscal 1994 to $30.87, or 4.3%, in fiscal 1995. Homes passed increased 3.1%,
from 437,425 at December 31, 1994 to 451,199 at December 31, 1995. Basic service
subscribers increased 3.3%, from 292,214 at December 31, 1994 to 301,820 at
December 31, 1995. The basic penetration rate increased by 0.1% from fiscal 1994
to fiscal 1995 from 66.8% to 66.9%. Revenue growth during 1994 and 1995 was
limited by rate rollbacks of up to 7.0% beginning in July 1994 experienced by
certain of the Southeast Systems (such rate rollbacks have remained in effect
throughout 1995, and have therefore had a more significant effect on revenue
growth in 1995 than 1994). In fiscal 1994 and 1995, however, there were limited
instances of rate increases representing a pass-through of certain external
costs (such as copyright, programming and franchise fees).

Operating expenses. Operating expenses increased by $4.2 million, or
approximately 10.1%, from $41.7 million in fiscal 1994 to $45.9 million in
fiscal 1995. These expenses, as a percentage of revenues, increased from 40.2%
to 41.0%. Programming costs for fiscal 1995 increased by $2.2 million, or 11.1%,
from fiscal 1994. These increases were due to a combination of factors,
including a 3.3% increase in basic subscribers from December 31, 1994 to
December 31, 1995, additional costs associated with the purchase of programming
on the new channels offered to customers, and industry-wide increases in
programming rates charged by certain vendors. As a result, the Company's
programming costs per basic subscriber increased by 7.4%.

Operating, general and administrative expenses. Operating, general and
administrative expenses decreased by $0.6 million, or approximately 5.3%, from
$11.3 million in fiscal 1994 to $10.7 million in fiscal 1995, and these
expenses, as a percentage of revenues, decreased from 10.9% in fiscal 1994 to
9.5% in fiscal 1995.

Management fees. Management fees increased by $1.2 million, or
approximately 27.9%, from $4.3 million in fiscal 1994 to $5.5 million in fiscal
1995, representing an increase, as a percentage of revenues, from 4.1% in fiscal
1994 to 4.9% for fiscal 1995. Once a system is acquired by the Company,
management fees to Charter are recorded based on 5.0% of such system's revenues,
although only 3.0% of such amount is payable currently and the balance is
deferred. Prior to their acquisition by the Company, certain systems did not pay
management fees to a third party.

Depreciation and amortization. Depreciation and amortization expense
increased by $5.6 million, or approximately 11.7%, from $47.8 million in fiscal
1994 to $53.4 million in fiscal 1995. There was a significant increase in
amortization resulting from the acquisition of the Crown Systems, the CableSouth
Systems, the Peachtree Systems and the Masada Systems in fiscal 1995. In
connection with such acquisitions, the acquired franchises were recorded at fair
market value which resulted in a stepped-up basis upon acquisition. In addition,
the increase in depreciation and amortization expense occurred as a result of
the amortization of certain acquisition-related costs such as legal, accounting
and due diligence expenses and deferred debt costs.

Interest expense. Interest expense increased by $9.0 million, or
approximately 61.2%, from $14.7 million in fiscal 1994 to $23.7 million in
fiscal 1995. This increase resulted primarily from the additional indebtedness
incurred in connection with the acquisition of the Crown Systems, the CableSouth
Systems, the Peachtree Systems and the Masada Systems in fiscal 1995.

45
<PAGE> 48

Other income (expense). The Company generated other income of
approximately $0.1 million in fiscal 1994 as compared to other expense of $1.4
million in fiscal 1995. A loss of $0.8 million was recorded in 1995 as a result
of damages from Hurricane Opal.

Net loss. Net loss increased by $12.8 million, or approximately 82.1%,
from $15.6 million in fiscal 1994 to $28.4 million in fiscal 1995. The increase
in revenues that resulted from subscriber growth was not sufficient to offset
the significant costs related to the acquisitions of the Crown Systems, the
CableSouth Systems, the Peachtree Systems and the Masada Systems in fiscal 1995,
as such acquisitions caused a substantial increase in interest expense due to
increased borrowing.

EBITDA. EBITDA increased by $4.5 million, or approximately 8.9%, from
$50.8 million in fiscal 1994 to $55.3 million in fiscal 1995, due to an increase
in revenues which was partially offset by an increase in systems operating
expenses. EBITDA, as a percentage of revenues, increased slightly from 48.9% in
fiscal 1994 to 49.4% in fiscal 1995. Management believes that EBITDA is a
meaningful measure of performance because it is commonly used in the cable
television industry to analyze and compare cable television companies on the
basis of operating performance, leverage and liquidity.

FISCAL 1994 COMPARED TO FISCAL 1993

Revenues. Revenues increased by $6.9 million, or approximately 7.1%, from
$96.9 million in fiscal 1993 to $103.8 million in fiscal 1994, primarily due to
subscriber growth. In fiscal 1994, reduced or frozen rates were in effect in
each of the Southeast Systems, and certain of the Southeast Systems experienced
additional rate rollbacks of up to 7.0% as a result of FCC rate regulation
implemented in July 1994. In fiscal 1994, there were limited instances of rate
increases representing a pass-through of certain external costs (such as
copyright, programming and franchise fees). Thus, average monthly revenue per
basic subscriber increased slightly from $29.50 in fiscal 1993 to $29.60 in
fiscal 1994, or 0.3%. Premium service revenue increased by $2.0 million, or
approximately 15.5%, from $12.9 million in fiscal 1993 to $14.9 million in
fiscal 1994. Homes passed increased 4.5%, from 418,678 at December 31, 1993 to
437,425 at December 31, 1994. Basic service subscribers increased 6.8%, from
273,631 at December 31, 1993 to 292,214 at December 31, 1994. The basic
penetration rate increased 1.4% from fiscal 1993 to fiscal 1994. In addition, in
fiscal 1994 the Company recorded a small increase in revenues from unregulated
services such as pay-per-view, advertising and other ancillary revenues. An
additional factor affecting revenue growth in fiscal 1994 involved the Crown
Systems' change in accounting practice to properly report "pass-throughs" of
franchise fee expenses as subscriber revenues. Prior to fiscal 1994, for the
Southeast Systems, revenues associated with the "pass-through" of franchise fee
expenses were netted against franchise expense for reporting purposes.

Operating expenses. Operating expenses increased by $5.4 million, or
approximately 14.9%, from $36.3 million in fiscal 1993 to $41.7 million in
fiscal 1994. These expenses, as a percentage of revenues, increased from 37.5%
in fiscal 1993 to 40.2% in fiscal 1994. These increases in systems operating
expenses were due to a combination of factors, including a 13.6% increase in
programming costs and a 6.8% increase in basic subscribers. As a result, the
Company's programming costs per subscriber increased by 6.4%.

Operating, general and administrative expenses. Operating, general and
administrative expenses increased by $1.3 million, or approximately 13.0%, from
$10.0 million in fiscal 1993 to $11.3 million in fiscal 1994. These expenses, as
a percentage of revenues, increased from 10.3% in fiscal 1993 to 10.9% in fiscal
1994, as a result of growth of the Company's subscriber base which required
increased staffing. In addition, the systems experienced added costs for
implementing the new FCC rate regulations, as well as costs incidental to
launching new channels. Channel line-up changes, whether resulting from "must
carry" regulation or voluntary changes to improve product line, resulted in
administrative costs and indirect costs such as marketing and customer mailings.
Bad debt expense remained approximately the same from fiscal 1993 to fiscal
1994.

Management fees. Management fees increased by $0.7 million, or
approximately 19.4%, from $3.6 million in fiscal 1993 to $4.3 million in fiscal
1994. These fees were 4.1% of revenues in fiscal 1994 and 3.7% in fiscal 1993.
Once a system is acquired by the Company, management fees to Charter are
recorded based on

46
<PAGE> 49

5.0% of such systems revenues. However, prior to their acquisition by the
Company, certain systems did not pay management fees to a third party.

Depreciation and amortization. Depreciation and amortization expense
increased by $7.9 million, or approximately 19.8%, from $39.9 million in fiscal
1993 to $47.8 million in fiscal 1994. This increase was primarily due to
increased depreciation and amortization in connection with the acquisition of
the McDonald Systems in fiscal 1994. In connection with such acquisition, the
acquired franchises were recorded at fair market value resulting in a stepped-up
basis upon acquisition.

Interest expense. Interest expense increased by $4.0 million, or
approximately 37.4%, from $10.7 million in fiscal 1993 to $14.7 million in
fiscal 1994. The increase resulted primarily from the additional indebtedness
incurred in connection with the acquisition of the McDonald Systems in fiscal
1994. Also, there were higher overall effective interest rates in fiscal 1994
compared to fiscal 1993.

Other income (expense). The Company generated other income of
approximately $0.1 million in fiscal 1994 as compared to other expense of $1.5
million in fiscal 1993.

Net loss. Net loss increased by $11.4 million, or approximately 271.4%,
from $4.2 million in fiscal 1993 to $15.6 million in fiscal 1994. The increase
in revenues that resulted from subscriber growth was not sufficient to offset
the significant costs of the acquisition of the McDonald Systems in fiscal 1994,
as such acquisition caused both a substantial increase in amortization expense
due to the stepped-up basis of the McDonald Systems' assets and interest expense
due to increased borrowing.

EBITDA. EBITDA increased by $0.3 million, or approximately 0.6%, from
$50.5 million in fiscal 1993 to $50.8 million in fiscal 1994, due to an increase
in revenues which was partially offset by rate rollbacks and related increases
in systems operating expenses. EBITDA, as a percentage of revenues, decreased
from 52.2% in fiscal 1993 to 48.9% in fiscal 1994. Despite increases in the
subscriber base, the effects of rate regulation limited revenue growth, with no
comparable reduction of expenses. Management believes that EBITDA is a
meaningful measure of performance because it is commonly used in the cable
television industry to analyze and compare cable television companies on the
basis of operating performance, leverage and liquidity. EBITDA does not include
the Company's debt obligations or other significant commitments.

LIQUIDITY AND CAPITAL RESOURCES

The cable television business requires substantial financing for
construction, expansion and maintenance of plant. In addition, the Company
intends to continue the pursuit of a business strategy which includes selective
strategic acquisitions. In April 1994, in connection with the McDonald Systems
acquisition, the Company received aggregate equity contributions of
approximately $84.5 million consisting of an aggregate of $14.4 million in
preferred equity from two institutional investors and from certain senior
managers of Charter, $40.0 million in special limited partnership interests from
the sellers of the McDonald Systems, and $30.1 million in common equity from
Charterhouse and Charter. In 1995, in connection with the acquisitions of the
other Southeast Systems, the Company received aggregate equity contributions of
approximately $82.4 million from two institutional investors, Charter and
Charterhouse. On March 28, 1996, the net proceeds from the Offerings, of
approximately $192.5 million, were utilized for the acquisition of the CCIP
Systems by CC-II for $115.0 million (this portion of the proceeds were
temporarily used to repay outstanding borrowings under the Old CC-II Credit
Facility, and then reborrowed to consummate the CCIP Acquisition), repayment of
the Charterhouse Bridge Notes for $15.0 million, repayment of the short-term
intercompany note to CC-I for approximately $1.1 million, redemption of CC-I
Special Limited Partnership interests for approximately $43.3 million, and
repayment of $17.5 million and $0.6 million in borrowings under the Old CC-I
Credit Facility and Old CC-II Credit Facility, respectively. As of March 31,
1996, the Company had an aggregate of approximately $76.9 million of
indebtedness outstanding (and $28.1 million unused and available for borrowing)
under the New CC-I Credit Facility, and an aggregate of approximately $173.9
million of indebtedness outstanding (and $31.1 million unused and available for
borrowing) under the New CC-II Credit Facility. See "Description of Other
Indebtedness." The Old Credit Facilities were utilized, together with the equity
contributions noted above, principally in the acquisition of the Southeast
Systems.

The historical combined cash flows provided by operating activities for the
Southeast Systems totaled approximately $39.5 million, $37.0 million and $34.0
million for the years ended December 31, 1993, 1994 and

47
<PAGE> 50

1995, respectively, and $11.4 million and $3.0 million for the three months
ended March 31, 1995 and 1996, respectively.

Cash flows provided by operating activities together with third party
borrowings have been historically sufficient to fund the Company's debt service,
capital expenditures and working capital requirements. In addition, as
previously discussed, the Company has funded portions of certain acquisitions
through the issuance of equity securities. Future cash flows provided by
operating activities and availability for borrowings under the New Credit
Facilities are anticipated to be sufficient, during the next 12 months, for the
Company's ongoing debt service, capital expenditures and working capital needs.
The Company anticipates that future acquisitions could be financed through
borrowings, either presently available under the New Credit Facilities or as a
result of amending the New Credit Facilities to allow for expanded borrowing
capacity. Although to date the Company has been able to obtain financing on
satisfactory terms, there can be no assurance that this will continue to be the
case in the future. In addition, the Company could supplement the financing
required for acquisitions through the sale of additional special limited partner
units.

The Company manages risk arising from fluctuations in interest rates
through the use of interest rate swap and cap agreements required under the
terms of the New Credit Facilities. Interest rate swap and cap agreements are
accounted for by the Company as a hedge of the debt obligation. As a result, the
net settlement amount of any such swap or cap is recorded as an adjustment to
interest expense in the period incurred. The affects of the Company's hedging
practices on its weighted average borrowing rate and on reported interest
expense were not material for either the three month period ended March 31, 1996
or for the year ended December 31, 1995.

The Company has insurance covering risks incurred in the ordinary course of
business, including general liability, property and business interruption
coverage. As is typical in the cable television industry, the Company does not
maintain insurance covering its underground plant, the cost of which management
believes is currently prohibitive. Management believes that the Company's
insurance coverage is adequate, and intends to monitor the insurance markets to
attempt to obtain coverage for the Company's underground plants at reasonable
and cost-effective rates.

CAPITAL EXPENDITURES

The capital expenditures for the Company and the prior owners of the
Southeast Systems (excluding acquisition costs of systems) totaled approximately
$30.6 million, $25.6 million and $26.0 million for the years ended December 31,
1993, 1994 and 1995, respectively, and $3.6 million and $6.1 million for the
three months ended March 31, 1995 and 1996, respectively. These expenditures
were primarily for expansion and rebuild of cable plant and rewiring of
associated headend equipment, office expansion and relocation, upgrade and
replacement of service vehicles, and routine maintenance and replacement of
cable plant and related equipment. These capital expenditures were financed
through a variety of sources which included (i) amounts available under credit
facilities, (ii) equity infusions and (iii) cash flows from operations. The
Company expects capital expenditures (excluding acquisition costs of systems)
over the next two years to total approximately $50.0 million in 1996 and
approximately $30.0 million in 1997, respectively, of which approximately $11.0
million per year represents anticipated maintenance capital expenditures. The
additional capital expenditures will consist primarily of installation of fiber
optic cable and microwave links, which the Company expects to allow it to
eliminate 11 of the Company's 36 headends through headend consolidation. Capital
expenditures will also include expansion and replacement of headend buildings,
rewiring of associated

48
<PAGE> 51

electronic equipment, new vehicles, test equipment and computer equipment. The
remaining capital items include the expenses and capital expenditures required
to add new subscribers and to expand and upgrade plant. The Company expects to
finance the anticipated capital expenditures described above with cash flows
generated from operations and additional borrowings under the New Credit
Facilities.

THE CREDIT FACILITIES

As of March 31, 1996, the Company had an aggregate of approximately $76.9
million of indebtedness outstanding (and $28.1 unused and available for
borrowing) under the New CC-I Credit Facility, and an aggregate of approximately
$173.9 million of indebtedness outstanding (and $31.1 million unused and
available for borrowing) under the New CC-II Credit Facility. The New Credit
Facilities require the Company to purchase and maintain interest rate protection
on at least 50% of the outstanding principal under the New Credit Facilities, so
that the weighted average term of all interest rate protection is not less than
18 months at all dates of determination. The Company may enter into interest cap
agreements to satisfy this requirement, provided that the interest rate related
thereto shall not exceed by 2% per annum the United States Treasury rate in
effect on the date of the agreement for the applicable hedge period. The Old
Credit Facilities contained substantially similar requirements. For additional
information on the terms of the New Credit Facilities, see the historical
financial statements and the notes thereto included elsewhere herein.

The Offerings and the concurrent amendment and restatement of each of the
Old Credit Facilities were the final steps of a refinancing plan intended to
increase the borrowing availability under, and improve the terms and interest
rates of, the Old Credit Facilities and to extend the maturity of the Company's
outstanding indebtedness, thereby enhancing the Company's liquidity and
operational flexibility. The Company amended and restated each of the Old CC-I
Credit Facility and the Old CC-II Credit Facility. The maturity dates of the Old
CC-I Credit Facility and the Old CC-II Credit Facility were extended by the New
Credit Facilities to 2004, and the interest rate spreads available to each of
CC-I and the CC-II Borrowers were improved. Borrowings and reborrowings under
the New Credit Facilities will be available to fund acquisitions and working
capital and capital expenditure requirements. See "Description of Other
Indebtedness -- The New Credit Facilities."

The Issuers expect to make interest payments on the Notes from funds
distributed (which may include funds from the payment of management fees) to
them by CC-I and the CC-II Borrowers to the extent permitted under the terms of
the New Credit Facilities. See "Risk Factors -- Deficiency of Earnings Available
to Cover Fixed Charges; Holding Company Structure."

The Company presently intends to utilize the New Credit Facilities to fund
capital expenditures, acquire additional cable systems and for general corporate
purposes. See "Business -- Business Strategy." The Company expects that it will
be able, during the next 12 months, to meet its debt service, working capital
and capital expenditure requirements through its operating cash flows and
borrowings under the New Credit Facilities.

PENDING LITIGATION

On October 20, 1995, the Action was filed in the Chancery Court of New
Castle County, Delaware. See "Business -Legal Proceedings." On February 15,
1996, the Court of Chancery of the State of Delaware in and for New Castle
County dismissed all of the plaintiff's claims for injunctive relief (including
that which sought to prevent the consummation of the CCIP Acquisition), and the
CCIP Acquisition was consummated on March 29, 1996. The plaintiff's claims for
money damages remain pending. Each of the defendants in the Action, including
Charter and CC-II, believes the Action to be without merit and is contesting it
vigorously. There can be no assurance that the plaintiffs will not be awarded
damages in connection with the Action, some or all of which may be payable by
CC-II. Management does not believe, however, that an adverse determination in
the Action (if it occurred) would have a material adverse effect on the
financial condition or results of operations of the Company.

49
<PAGE> 52

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma financial statements are based upon the
historical combined financial statements of the Company, the Southeast Systems
(prior to their acquisition by the Company), and the Pending Acquisitions. The
unaudited pro forma combined statement of operations for the year ended December
31, 1995 and balance sheet as of December 31, 1995 have been derived from the
audited statement of operations and balance sheets included elsewhere in this
Prospectus. The unaudited pro forma combined statement of operations for the
three months ended March 31, 1996 and balance sheet as of March 31, 1996 have
been derived from the unaudited statements of operations and balance sheet
included elsewhere in this Prospectus.

The following unaudited pro forma statements of operations for the year
ended December 31, 1995 and for the three months ended March 31, 1996 give
effect to the applicable Pro Forma Adjustments, as if such Pro Forma Adjustments
had occurred on January 1, 1995. The following unaudited pro forma balance
sheets as of December 31, 1995 and March 31, 1996 give effect to the applicable
Pro Forma Adjustments, as if such Pro Forma Adjustments had occurred on December
31, 1995 and March 31, 1996, respectively. The acquisitions of the Southeast
Systems have been, and the Pending Acquisitions will be, accounted for under the
purchase method of accounting. The Company has not completed all evaluations
necessary to finalize the purchase price allocations for the Pending
Acquisitions and, accordingly, actual adjustments that reflect other evaluations
of the purchased assets and assumed liabilities may differ from the pro forma
adjustments presented herein. The unaudited pro forma financial statements may
not be indicative of what the results of the Company would have been had the
transactions been completed on the dates assumed, nor are such financial
statements necessarily indicative of the results of operations of the Company
that may exist in the future. The unaudited pro forma financial statements
should be read in conjunction with the Notes thereto and with the historical
combined financial statements and the related Notes thereto appearing elsewhere
in this Prospectus.

50
<PAGE> 53

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

(FOR THE YEAR ENDED AND AS OF DECEMBER 31, 1995)

(NUMBERS IN THOUSANDS, EXCEPT FINANCIAL RATIOS AND SUBSCRIBER DATA)

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
COMPANY(A) ADJUSTMENTS PRO FORMA FOR NOTES FOR NOTES
---------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Revenues............................... $ 72,831 $ 38,985(b) $ 111,816 $ -- $ 111,816
Operating expenses:
Systems' operations................... 31,056 14,829(b) 45,885 -- 45,885
General and administrative............ 6,192 4,468(b) 10,660 -- 10,660
Management fees....................... 3,642 1,885(b) 5,527 64(d) 5,591
Depreciation and amortization......... 40,148 13,204(b) 53,352 937(e) 54,289
-------- -------- -------- --------- --------
Total operating expenses........ 81,038 34,386 115,424 1,001 116,425
-------- -------- -------- --------- --------
Operating income (loss)................ (8,207) 4,599 (3,608) (1,001) (4,609)
Interest expense...................... (18,671) (5,073)(b) (23,744) (9,828)(f) (33,572)
Interest income....................... 198 153(b) 351 -- 351
Other income (expense)................ (856) (553)(b) (1,409) 2,426(g) 1,017
-------- -------- -------- --------- --------
Net loss............................... $(27,536) $ (874) $ (28,410) $ (8,403) $ (36,813)
======== ======== ======== ========= ========
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents.............. $ 5,197 $ -- $ 5,197 $ -- $ 5,197
Receivables, net....................... 3,510 387(k) 3,897 -- 3,897
Systems and equipment, net............. 107,029 22,391(k) 129,420 0 129,420
Franchise costs, net................... 303,828 93,109(k) 396,937 0 396,937
Prepaids and other..................... 6,047 134(k) 6,181 5,000(l) 11,181
-------- -------- -------- --------- --------
Total assets.................... $425,611 $ 116,021 $ 541,632 $ 5,000 $ 546,632
======== ======== ======== ========= ========
Accounts payable and accrued
expenses.............................. $ 15,289 $ 1,396(k) $ 16,685 $ -- $ 16,685
Subscriber deposits and deferred
revenue............................... 1,358 210(k) 1,568 0 1,568
Deferred taxes......................... 5,111 -- 5,111 -- 5,111
Total debt............................. 274,125 114,415(k) 388,540 (22,618)(l)(t) 365,922
Preferred limited partners............. 53,107 -- 53,107 (53,107)(u) --
Special limited partners............... 44,973 -- 44,973 (44,973)(l) --
-------- -------- -------- --------- --------
Total liabilities............... 393,963 116,021 509,984 (120,698) 389,286
Partners' capital...................... 31,648 -- 31,648 125,698(l) 157,346
-------- -------- -------- --------- --------
Total liabilities and partners'
capital........................ $425,611 $ 116,021 $ 541,632 $ 5,000 $ 546,632
======== ======== ======== ========= ========
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(h).............................. $ 35,583 $ 19,688 $ 55,271 $ 55,271
EBITDA margin.......................... 48.9% 50.5% 49.4% 49.4%
Pro forma EBITDA to interest expense... 1.9x 3.9x 2.3x 1.6x
Capital Expenditures(i)................ $ 20,011 $ 6,036 $ 26,047 $ 26,047
Annualized EBITDA(v)................... 57,216
Total debt to annualized EBITDA........ 6.79x
Annualized EBITDA to interest
expense............................... 2.41x
OPERATING STATISTICAL DATA (AT END OF
PERIOD, EXCEPT AVERAGES):
Homes passed........................... 377,857 73,342 451,199
Basic subscribers...................... 249,106 52,714 301,820
Basic penetration...................... 65.9% 71.9% 66.9%
Premium units.......................... 128,900 30,719 159,619
Premium penetration.................... 51.7% 58.3% 52.9%
Monthly revenue per basic
subscriber(j)......................... $ 29.64 $ 36.66 $ 30.87

<CAPTION>
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS FOR NOTES
PENDING FOR PENDING AND PENDING
ACQUISITIONS(C) ACQUISITIONS ACQUISITIONS
--------------- ------------ ------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Revenues............................... $ 35,086 $ -- $146,902
Operating expenses:
Systems' operations................... 15,016 -- 60,901
General and administrative............ 2,873 -- 13,533
Management fees....................... 2,244 (490)(m) 7,345
Depreciation and amortization......... 17,322 (4,029)(n) 67,582
------- -------- --------
Total operating expenses........ 37,455 (4,519) 149,361
------- -------- --------
Operating income (loss)................ (2,369) 4,519 (2,459)
Interest expense...................... (7,847) (4,044)(o) (45,463)
Interest income....................... 164 -- 515
Other income (expense)................ (143) -- 874
------- -------- --------
Net loss............................... $ (10,195) $ 475 $(46,533)
======= ======== ========
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents.............. $ 1,638 $ -- $ 6,835
Receivables, net....................... 629 -- 4,526
Systems and equipment, net............. 40,767 -- 170,187
Franchise costs, net................... 8,735 129,502(p) 535,174
Prepaids and other..................... 3,143 (1,243)(q) 13,081
------- -------- --------
Total assets.................... $ 54,912 $128,259 $729,803
======= ======== ========
Accounts payable and accrued
expenses.............................. $ 4,429 $ -- $ 21,114
Subscriber deposits and deferred
revenue............................... 499 -- 2,067
Deferred taxes......................... -- -- 5,111
Total debt............................. 43,232 110,011(r) 519,165
Preferred limited partners............. -- -- --
Special limited partners............... -- -- --
------- -------- --------
Total liabilities............... 48,160 110,011 547,457
Partners' capital...................... 6,752 18,248(s) 182,346
------- -------- --------
Total liabilities and partners'
capital........................ $ 54,912 $128,259 $729,803
======= ======== ========
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(h).............................. $ 17,197 $ 72,468
EBITDA margin.......................... 49.0% 49.3%
Pro forma EBITDA to interest expense... 2.2x 1.6x
Capital Expenditures(i)................ $ 5,498 $ 31,545
Annualized EBITDA(v)................... 75,224
Total debt to annualized EBITDA........ 6.90x
Annualized EBITDA to interest
expense............................... 1.65x
OPERATING STATISTICAL DATA (AT END OF
PERIOD, EXCEPT AVERAGES):
Homes passed........................... 152,057 603,256
Basic subscribers...................... 96,920 398,740
Basic penetration...................... 63.7% 66.1%
Premium units.......................... 47,128 206,747
Premium penetration.................... 48.6% 51.9%
Monthly revenue per basic
subscriber(j)......................... $ 30.17 $ 30.70
</TABLE>

51
<PAGE> 54

NOTES TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS

(FOR THE YEAR ENDED AND AS OF DECEMBER 31, 1995)
(NUMBERS IN THOUSANDS)

(a) Amounts reflect the historical consolidated operations of the Company.

(b) Amounts reflect the historical 1995 preacquisition results for the
following systems which were acquired during 1995 and the first quarter of
1996. Certain reclassifications have been made between Systems' Operations
and General and Administrative Expenses to conform the presentation to that
of the Company.

<TABLE>
<CAPTION>
PEACHTREE CABLESOUTH MASADA I MASADA II CCIP
SYSTEMS SYSTEMS SYSTEMS SYSTEMS SYSTEMS
1/1/95-4/30/95 1/1/95-5/31/95 1/1/95-7/31/95 1/1/95-11/30/95 1/1/95-12/31/95 TOTAL
-------------- -------------- -------------- --------------- --------------- -------
<S> <C> <C> <C> <C> <C> <C>
Revenues............. $1,578 $4,457 $ 3,508 $ 6,250 $23,192 $38,985
Operating expenses:
Systems'
operations....... 551 1,699 1,410 2,411 8,758 14,829
General and
administrative... 384 718 527 834 2,005 4,468
Management fees.... 26 -- 217 482 1,160 1,885
Depreciation and
amortization..... 325 905 2,001 4,411 5,562 13,204
------- ------- -------------- --------------- --------------- -------
Total operating
expenses....... 1,286 3,322 4,155 8,138 17,485 34,386
------- ------- -------------- --------------- --------------- -------
Operating income
(loss)............. 292 1,135 (647) (1,888) 5,707 4,599
Interest expense... (112) -- (755) (1,612) (2,594) (5,073)
Interest income.... 6 -- 20 40 87 153
Other income
(expense)........ 20 (511) (8) (54) -- (553)
------- ------- -------------- --------------- --------------- -------
Net income (loss).... $ 206 $ 624 $ (1,390) $(3,514) $ 3,200 $ (874)
============== ============== ============== ============== =============== ========
</TABLE>

52
<PAGE> 55

NOTES TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS -- (CONTINUED)

(c) Amounts reflect the historical 1995 results and the December 31, 1995
balance sheet for the following systems which the Company plans to acquire
during 1996. Certain reclassifications have been made between Systems'
Operations and General and Administrative Expenses to conform the
presentation to that of the Company.

<TABLE>
<CAPTION>
ANDERSON LINCOLNTON SANFORD MASADA III HICKORY
SYSTEM SYSTEM SYSTEM SYSTEM SYSTEMS TOTAL
-------- ---------- ------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Revenues.................................... $ 7,771 $ 5,222 $ 4,523 $ 4,855 $ 12,715 $ 35,086
Operating expenses:
Systems' operations....................... 3,567 2,291 2,052 1,743 5,363 15,016
General and administrative................ 562 332 299 575 1,105 2,873
Management fees........................... 389 261 226 298 1,070 2,244
Depreciation and amortization............. 3,833 4,188 2,993 2,154 4,154 17,322
------- ------- ------- ------- -------- -------
Total operating expenses................ 8,351 7,072 5,570 4,770 11,692 37,455
------- ------- ------- ------- -------- -------
Operating income (loss)..................... (580 ) (1,850) (1,047) 85 1,023 (2,369)
Interest expense.......................... (1,551 ) (1,138) (996) (709) (3,453) (7,847)
Interest income........................... 53 12 8 47 44 164
Other income (expense).................... -- -- -- (143) -- (143)
------- ------- ------- ------- -------- -------
Net income (loss)........................... $(2,078 ) $ (2,976) $(2,035) $ (720) $ (2,386) $(10,195)
======= ======= ======= ======= ======== =======
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents................... $ -- $ -- $ -- $ 25 $ 1,613 $ 1,638
Receivables, net............................ 123 50 56 32 368 629
Systems and equipment, net.................. 15,327 8,758 5,865 2,211 8,606 40,767
Franchise costs, net........................ 590 4,389 1,520 488 1,748 8,735
Prepaids and other.......................... 32 1,033 766 133 1,179 3,143
------- ------- ------- ------- -------- -------
Total assets............................ $16,072 $ 14,230 $ 8,207 $ 2,889 $ 13,514 $ 54,912
======= ======= ======= ======= ======== =======
Accounts payable and accrued expenses....... 756 295 432 381 2,565 4,429
Subscriber deposits and deferred revenue.... 2 56 123 26 292 499
Deferred taxes.............................. -- -- -- -- -- --
Total debt.................................. -- -- -- 4,890 38,342 43,232
------- ------- ------- ------- -------- -------
Total liabilities....................... 758 351 555 5,297 41,199 48,160
Systems' equity............................. 15,314 13,879 7,652 (2,408) (27,685) 6,752
------- ------- ------- ------- -------- -------
Total liabilities and systems' equity....... $16,072 $ 14,230 $ 8,207 $ 2,889 $ 13,514 $ 54,912
======= ======= ======= ======= ======== =======
</TABLE>

(d) To eliminate the Southeast Systems historical pro forma management fees
expense totaling $5,527 and to record for the year ended December 31, 1995
management fee expense of $5,591, based upon 5% of revenues pursuant to the
Company's Subsidiary Management Agreements.

(e) To eliminate the Southeast Systems historical pro forma depreciation and
amortization expense totaling $53,352 and to record for the year ended
December 31, 1995 depreciation and amortization expense of $54,289, based
upon the allocation of purchase price to various categories of systems,
equipment and intangibles depreciated using methods and terms consistent
with those utilized by the Company. The franchise costs are generally being
amortized over 5 to 15 years.

(f) To eliminate Southeast Systems historical pro forma interest expense
totaling $23,744 and to record for the year ended December 31, 1995 interest
expense of $18,608 based upon the Company's pro forma borrowings under its
New Credit Facilities assuming an average interest rate of 7.625% and
interest expense of $14,063 on the Notes Offering of $125,000 assuming a
11.25% interest rate. Also includes amortization of all deferred debt
issuance costs of $901.

(g) To eliminate income tax expense and other items not expected to be incurred
by the Company.

(h) EBITDA represents income (loss) before interest expense, income taxes,
depreciation and amortization, management fees and other income (expense).
EBITDA is calculated before payment of management fees so as to be
consistent with certain financial terms contained in the New Credit
Facilities and the Indenture. Management believes that EBITDA is a
meaningful measure of performance because it is commonly used in the cable
television industry to analyze and compare cable television companies on the
basis of operating performance, leverage and

53
<PAGE> 56

NOTES TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS -- (CONTINUED)

liquidity. EBITDA is not presented in accordance with generally accepted
accounting principles and should not be considered an alternative to, or
more meaningful than, operating income or operating cash flows as an
indicator of the Company's operating performance. EBITDA does not include
the Company's debt obligations or other significant commitments.

(i) Capital expenditures exclude cash consideration paid in connection with the
acquisition of cable systems.

(j) Revenues divided by basic subscribers divided by 12 months.

(k) To record the CCIP Acquisition totaling $114,415 using the purchase method
of accounting, including $22,391 of systems and equipment and $93,109 in
franchises. Current liabilities assumed by the Company in the acquisition
exceed current assets by $1,085. The increase in senior bank debt is
$114,415.

(l) To reflect borrowings in the Offering of $125,000 less transaction costs of
$5,000 recorded as deferred debt issuance costs in other assets and the
contribution to the equity capital of Charter Southeast of $72,000 from the
issuance of Debentures by Charter Holdings, assuming proceeds are used to
(i) liquidate the CC-I special limited partners for $43,256 with difference
in the amount recorded on balance sheet of $44,973 credited to equity, (ii)
repay short-term intercompany note with CC-I of $1,126, (iii) repay
Charterhouse Bridge Notes of $15,000 and (iv) repay CC-I and CC-II senior
indebtedness of $132,618.

(m) To record for the year ended December 31, 1995, the Pending Acquisitions pro
forma management fee expense based upon 5.0% of revenues pursuant to the
Company's Subsidiary Management Agreements.

(n) To record for the year ended December 31, 1995, the Pending Acquisitions pro
forma depreciation and amortization expense, based upon the allocation of
purchase price to various categories of systems, equipment and intangibles
depreciated using methods and terms consistent with those utilized by the
Company. The intangibles are generally being amortized over 5 to 15 years.

(o) To record for the year ended December 31, 1995, the Pending Acquisitions pro
forma interest expense, based upon the Company's pro forma borrowings under
its New Credit Facilities (increased for the Pending Acquisitions), assuming
an average interest rate of 7.625%. Also, includes amortization of all
deferred debt issuance costs.

(p) To record the step-up in franchises of the Pending Acquisitions resulting
from purchase accounting.

(q)To eliminate the historical other assets of the Pending Acquisitions, which
would not be recorded as a result of purchase accounting and to record
additional debt issuance costs associated with the additional bank debt.

(r) To eliminate the historical debt and record the bank debt associated with
the Pending Acquisitions.

(s)To eliminate historical equity and record $25,000 of additional capital which
it is estimated may be contributed to the Company in connection with the
Hickory Acquisition.

(t) To pay off $15,000 Charterhouse Bridge Notes.

(u) To reflect the contribution of the preferred limited partners of CC-I and
CC-II into CharterComm Holdings.

(v) Fourth quarter EBITDA multiplied by four.

54
<PAGE> 57

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

(FOR THE THREE MONTHS ENDED AND AS OF MARCH 31, 1996)
(NUMBERS IN THOUSANDS, EXCEPT FOR FINANCIAL RATIOS AND SUBSCRIBER DATA)

<TABLE>
<CAPTION>
HISTORICAL PRO HISTORICAL PRO FORMA PRO
FORMA PRO ADJUSTMENTS FORMA FOR
COMPANY(A) ADJUSTMENTS(B) FORMA FOR NOTES NOTES
---------- -------------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Revenues................................... $ 23,844 $ 6,169 $ 30,013 $ -- $ 30,013
Operating expenses:
Systems' operations....................... 9,985 2,528 12,513 -- 12,513
General and administrative................ 1,904 479 2,383 -- 2,383
Management fees........................... 1,192 308 1,500 2(d) 1,502
Depreciation and amortization............. 10,924 1,391 12,315 708(e) 13,023
-------- ------- -------- ------- --------
Total operating expenses............ 24,005 4,706 28,711 710 29,421
-------- ------- -------- ------- --------
Operating income (loss).................... (161) 1,463 1,302 (710) 592
Interest expense.......................... (6,658) (620) (7,278) (1,248)(f) (8,526)
Interest income........................... 29 16 45 -- 45
Other income (expense).................... 2 (11) (9) -- (9)
-------- ------- -------- ------- --------
$ (6,788) $ 848 $ (5,940) $(1,958) $ (7,898)
======== ======= ======== ======= ========
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents.................. $ 620 $ -- $ 620 $ -- $ 620
Receivables, net........................... 7,542 -- 7,542 -- 7,542
Systems and equipment, net................. 133,893 -- 133,893 -- 133,893
Franchise costs, net....................... 396,376 -- 396,376 -- 396,376
Prepaids and other......................... 11,958 -- 11,958 -- 11,958
-------- ------- -------- ------- --------
Total assets........................ $550,389 $ - $ 550,389 $ - $550,389
======== ======= ======== ======= ========
Accounts payable and accrued expenses...... $ 16,081 -- $ 16,081 -- $ 16,081
Subscriber deposits and deferred revenue... 1,376 -- 1,376 -- 1,376
Deferred taxes............................. 5,060 -- 5,060 -- 5,060
Total debt................................. 375,800 -- 375,800 -- 375,800
-------- ------- -------- ------- --------
Total liabilities................... 398,317 -- 398,317 -- 398,317
======== ======= ======== ======= ========
Partners' capital.......................... 152,072 -- 152,072 -- 152,072
-------- ------- -------- ------- --------
Total liabilities and partners' capital.... $550,389 -- $ 550,389 -- $550,389
======== ======= ======== ======= ========
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(g).................................. $ 11,955 $ 3,162 $ 15,117 $ 15,117
EBITDA margin.............................. 50.1% 51.3% 50.4% 50.4%
Pro forma EBITDA to interest expense....... 1.8x 5.1x 2.1x 1.8x
Capital expenditures(h).................... $ 5,242 $ 836 $ 6,078 $ 6,078
Annualized EBITDA(q)....................... 60,468
Total debt to annualized EBITDA............ 6.21x
Annualized EBITDA to interest expense...... 2.08x
OPERATING STATISTICAL DATA
(AT END OF PERIOD, EXCEPT AVERAGES):
Homes passed............................... 386,549 73,905 460,454
Basic subscribers.......................... 256,440 53,880 310,320
Basic penetration.......................... 66.3% 72.9% 67.4%
Premium units.............................. 125,621 33,011 158,632
Premium penetration........................ 49.0% 61.3% 51.1%
Monthly revenue per basic subscriber(i).... $ 30.99 $ 38.17 $ 32.24

<CAPTION>
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS FOR NOTES
PENDING FOR PENDING AND PENDING
ACQUISITIONS(C) ACQUISITIONS ACQUISITIONS
--------------- ----------- ------------
<S> <<C> <C> <C>
STATEMENT OF OPERATIONS:
Revenues................................... $ 9,115 $ -- $ 39,128
Operating expenses:
Systems' operations....................... 4,012 -- 16,525
General and administrative................ 759 -- 3,142
Management fees........................... 585 (130)(j) 1,957
Depreciation and amortization............. 4,095 (813)(k) 16,305
-------- -------- --------
Total operating expenses............ 9,451 (943) 37,929
-------- -------- --------
Operating income (loss).................... (336) 943 1,199
Interest expense.......................... (1,731) (1,258)(l) (11,515)
Interest income........................... 39 -- 84
Other income (expense).................... (10) -- (19)
-------- -------- --------
$ (2,038) $ (315) $(10,251)
======== ======== ========
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents.................. $ 1,443 $ -- $ 2,063
Receivables, net........................... 597 -- 8,139
Systems and equipment, net................. 39,620 -- 173,513
Franchise costs, net....................... 7,579 129,937(m) 533,892
Prepaids and other......................... 2,692 (164)(n) 14,486
-------- -------- --------
Total assets........................ $ 51,931 $ 129,773 $732,093
======== ======== ========
Accounts payable and accrued expenses...... $ 3,113 -- $ 19,194
Subscriber deposits and deferred revenue... 514 -- 1,890
Deferred taxes............................. -- -- 5,060
Total debt................................. 42,352 110,725(o) 528,877
-------- -------- --------
Total liabilities................... 45,979 110,725 555,021
======== ======== ========
Partners' capital.......................... 5,952 19,048(p) 177,072
-------- -------- --------
Total liabilities and partners' capital.... $ 51,931 $ 129,773 $732,093
======== ======== ========
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(g).................................. $ 4,344 $ 19,461
EBITDA margin.............................. 47.7% 49.7%
Pro forma EBITDA to interest expense....... 2.5x 1.7x
Capital expenditures(h).................... $ 1,312 $ 7,390
Annualized EBITDA(q)....................... 77,844
Total debt to annualized EBITDA............ 6.79x
Annualized EBITDA to interest expense...... 1.69x
OPERATING STATISTICAL DATA
(AT END OF PERIOD, EXCEPT AVERAGES):
Homes passed............................... 152,415 612,869
Basic subscribers.......................... 98,110 408,430
Basic penetration.......................... 64.4% 66.6%
Premium units.............................. 44,999 203,631
Premium penetration........................ 45.9% 49.9%
Monthly revenue per basic subscriber(i).... $ 30.97 $ 31.93
</TABLE>

55
<PAGE> 58

NOTES TO THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS

(FOR THE THREE MONTHS ENDED AND AS OF MARCH 31, 1996)

(NUMBERS IN THOUSANDS)

(a) Amounts reflect the historical consolidated operations of CC-I and CC-II.

(b) Reflects historical results for CCIP Systems for the period ended March 29,
1996.

(c) Amounts reflect the historical 1996 first quarter results and the March 31,
1996 balance sheet for the following systems which the Company plans to
acquire during 1996. Certain reclassifications have been made between
Systems' Operations and General and Administrative Expenses to conform the
presentation to that of the Company.

<TABLE>
<CAPTION>
MASADA
ANDERSON LINCOLNTON SANFORD III HICKORY
SYSTEM SYSTEM SYSTEM SYSTEM SYSTEMS TOTAL
-------- ---------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................................ $ 2,009 $ 1,357 $1,168 $1,257 $ 3,324 $ 9,115
Operating expenses:
Systems' operations........................... 947 595 476 475 1,519 4,012
General and administrative.................... 122 84 89 151 313 759
Management fees............................... 100 68 58 77 282 585
Depreciation and amortization................. 864 1,038 771 403 1,019 4,095
------- ------- ------- ------- ------- -------
Total operating expenses.................... 2,033 1,785 1,394 1,106 3,133 9,451
------- ------- ------- ------- ------- -------
Operating income (loss)......................... (24 ) (428) (226 ) 151 191 (336)
Interest expense.............................. (317 ) (271) (237 ) (78 ) (828) (1,731)
Interest income............................... 3 2 2 16 16 39
Other income (expense)........................ -- (5) -- (5 ) -- (10)
------- ------- ------- ------- ------- -------
Net income (loss)............................... $ (338 ) $ (702) $ (461 ) $ 84 $ (621) $(2,038)
======= ======= ======= ======= ======= =======
BALANCE SHEET (AT END OF PERIOD):
Cash and cash equivalents....................... $ -- $ -- $ -- $ 7 $ 1,436 $ 1,443
Receivables, net................................ 118 67 55 10 347 597
Systems and equipment, net...................... 14,846 8,519 5,714 1,900 8,641 39,620
Franchise costs, net............................ 539 4,118 1,180 443 1,299 7,579
Prepaids and other.............................. 69 706 619 121 1,177 2,692
------- ------- ------- ------- ------- -------
Total assets................................ $15,572 $ 13,410 $7,568 $2,481 $ 12,900 $51,931
======= ======= ======= ======= ======= =======
Accounts payable and accrued expenses........... 404 169 166 321 2,053 3,113
Subscriber deposits and deferred revenue........ 2 52 119 26 315 514
Deferred taxes.................................. -- -- -- -- -- --
Total debt...................................... -- -- -- 3,514 38,838 42,352
------- ------- ------- ------- ------- -------
Total liabilities........................... 406 221 285 3,861 41,206 45,979
Systems' equity................................. 15,166 13,189 7,283 (1,380 ) (28,306) 5,952
------- ------- ------- ------- ------- -------
Total liabilities and systems' equity........... $15,572 $ 13,410 $7,568 $2,481 $ 12,900 $51,931
</TABLE>

(d) To record for the three months ended March 31, 1996, the CCIP Systems'
management fee expense based upon 5% of revenues pursuant to the Company's
Subsidiary Management Agreements.

(e) To record for the three months ended March 31, 1996, the CCIP Systems'
depreciation and amortization expense based upon the allocation of purchase
price to various categories of systems, equipment and intangibles
depreciated using methods and terms consistent with those utilized by the
Company. The franchise costs are generally being amortized over 5 to 15
years.

(f) To record for the three months ended March 31, 1996, CCIP Systems' pro forma
interest expense, based upon the Company's pro forma borrowings under the
New Credit Facilities (increased by $114,415 for the CCIP Acquisition),
assuming an average interest rate of 7.625%. Also, includes amortization of
deferred debt issuance costs of $214.

56
<PAGE> 59

(g) EBITDA represents income (loss) before interest expense, income taxes,
depreciation and amortization, management fees and other income (expense).
EBITDA is calculated before payment of management fees so as to be
consistent with certain financial terms contained in the New Credit
Facilities and the Indenture. Management believes EBITDA is a meaningful
measure of performance because it is commonly used in the cable television
industry to analyze and compare cable television companies on the basis of
operating performance, leverage and liquidity. EBITDA is not presented in
accordance with generally accepted accounting principles and should not be
considered an alternative to, or more meaningful than, operating income or
operating cash flows as an indicator of the Company's operating performance.
EBITDA does not include the Company's debt obligations or significant
commitments.

(h) Capital expenditures exclude cash consideration paid in connection with the
acquisition of cable systems.

(i) Revenues divided by basic subscribers divided by three months.

(j) To record for the three months ended March 31, 1996, the pro forma
management fee expense for the Pending Acquisitions based upon 5% of
revenues pursuant to the Company's Subsidiary Management Agreement.

(k) To record for the three months ended March 31, 1996, the pro forma
depreciation and amortization expense for the Pending Acquisitions, based
upon the allocation of purchase price to various categories of systems,
equipment and intangibles depreciated using methods and terms consistent
with those utilized by the Company. The intangibles are generally being
amortized over 5 to 15 years.

(l) To record for the three months ended March 31, 1996, the pro forma interest
expense for the Pending Acquisitions, based upon the Company's pro forma
borrowings under the New Credit Facilities (increased for the Pending
Acquisitions), assuming an average interest rate of 7.625%. Also, includes
amortization of deferred debt issuance costs.

(m) To record the step-up in franchises for the Pending Acquisitions, resulting
from purchase accounting.

(n) To eliminate the historical other assets which would not be recorded as a
result of purchase accounting and to record additional debt issuance costs
associated with the additional bank debt.

(o) To eliminate the historical debt and record the bank debt associated with
the Pending Acquisitions.

(p) To eliminate historical equity and record $25,000 of additional capital
which may be required to be contributed to the Company in connection with
the Hickory Acquisition.

(q) First quarter EBITDA multiplied by four.

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BUSINESS
GENERAL

The Company owns, operates and develops cable television systems in the
southeastern region of the United States, primarily in suburban communities
which have experienced higher than average rates of population growth. These
communities generally experienced a rate of population growth, in the aggregate,
which exceeded the national average by approximately 55% during the period from
1980 to 1994. See "-- Description of the Southeast Systems -- Demographic
Profile." As of March 31, 1996, the Company owned and operated cable television
systems in Alabama, Georgia, Kentucky, Louisiana, North Carolina, South Carolina
and Tennessee passing approximately 460,000 homes and serving approximately
310,000 basic subscribers. Through strategic acquisitions and internal growth,
the Company seeks to own and operate cable television systems serving, in the
aggregate, at least 400,000 to 500,000 basic subscribers in the southeastern
region of the United States within the next five years.

The Company owns and operates systems which lie within five clusters in the
southeastern region of the United States: the Greenville-Spartanburg/Asheville
Cluster, the Atlanta Cluster, the Northern Alabama Cluster, the New Orleans
Cluster and the Nashville Cluster. The Company has sought to "cluster" its cable
systems in concentrated geographic areas because management believes that such
clustering offers significant opportunities to enhance operating efficiencies
and to improve operating margins and cash flow by spreading its fixed costs over
an expanding subscriber base. The Company's clustered operations typically
reduce costs by eliminating duplicative management personnel and operations,
creating regional customer service centers and establishing centralized
administration and technological support for local management. See "The Company"
and "-- Business Strategy -- Realize Operating Efficiencies."

BUSINESS STRATEGY

Target Clusters in Southeast Suburban Markets. The Company has developed
clusters of cable television systems located in suburban markets in the
southeastern region of the United States in suburban markets that have
experienced, in the aggregate, higher than average population growth rates.
Management believes that the population growth, new housing construction and
continuing outward expansion of the metropolitan areas located near the
Southeast Clusters will enable the Company to achieve growth in its subscriber
base. See "-- Description of the Southeast Systems."

Grow Through Strategic Acquisitions. The Company has grown rapidly through
acquisitions and continues to seek acquisitions in high-growth areas in the
southeast region of the United States either by direct purchase or through
strategic swaps of cable systems. In determining whether to acquire a particular
system, the Company evaluates, among other things, the (i) location, size and
strategic fit of the system with the Company's existing operations, (ii)
technical quality of the system and anticipated capital expenditure requirements
which may be necessary to comply with franchising requirements or to upgrade
systems to satisfy the Company's operating standards, (iii) demographic trends
of the market, (iv) existing and potential competition in the market, (v) price
of the system relative to other characteristics of the system and (vi) the
number of years remaining until the system's franchises must be renewed, along
with the seller's relationship with the relevant franchising authorities. By
virtue of the Company's growth and its relationship with Charter, management
believes that the Company has greater acquisition opportunities than would
otherwise be

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available to the Company. Except as described under "Summary -- Pending
Acquisitions", the Company is not currently a party to any letter of intent or
definitive agreement with respect to any acquisitions. The Company regularly
reviews and analyzes potential acquisitions, which may include the acquisition
of other cable systems managed by Charter or as to which Charter has secured
purchase rights. The Company anticipates that future acquisitions would be
financed with additional debt, or, depending on the size and circumstances of
the acquisition, possibly with additional equity.

Realize Operating Efficiencies. After consummating an acquisition, the
Company centralizes operational and organizational functions to reduce the
operating costs of the system it acquires; such centralization also permits the
Company to spread its fixed costs over an expanded subscriber base and thereby
improve operating cash flow and margins. In making any operational or
organizational changes, the Company attempts to ensure that customer service and
strong community relations will be maintained and enhanced. As part of the
Company's ongoing consolidation efforts, the Company plans to eliminate five
duplicative office locations and to eliminate 11 of its 36 headends through
headend consolidation during the next two years. Management believes that
headend consolidations will reduce maintenance costs, increase system
reliability, enable the Company to expand the number of channels it can offer
its subscribers and increase average revenue per subscriber.

Focus on the Customer. The Company continually seeks to improve its
understanding of, and relationship with, its customers. Management believes this
focus will, over time, increase both subscriber penetration and revenue per
subscriber. The Company's emphasis on customer satisfaction is evident in its
customer service policies, marketing and programming and technological plans.
The Company seeks to provide a high level of customer service by employing a
well-trained staff of customer service representatives and experienced field
technicians. Upon acquisition of the new system, the Company implements a
24-hour customer service hotline, provides completed repair service in 24 hours
(with in excess of 90% of "no picture" problems solved on the same day as
reported) and also offers an installation and service guarantee. Management
believes that the level of customer service provided by the Company to
subscribers gained through acquisitions is generally better than that provided
by previous owners. The Company's programming packages offer different pricing
options, including special value packages and add-on services. From a
technological standpoint, the Company focuses on its customers through its
emphasis on service reliability, improved picture quality and expanded channel
capacity. The Company is also working with Charter to develop a database that
will assist management with its evaluation of the potential demand by existing
and prospective customers for home entertainment, educational services and data
transmission.

Maximize Benefits Provided by Relationship with Charter. The Company
receives significant benefits from its relationship with Charter. The Company
benefits from Charter's principals (Messrs. Babcock, Kent and Wood, formerly
part of the senior management team of Cencom) and their familiarity with those
of the Company's systems previously owned by Cencom. As of March 31, 1996, 39%
of the Company's subscribers were served by systems formerly owned and operated
by Cencom. The Company also benefits from Charter's access to lower cost and
more varied programming, as well as Charter's financial and operational
expertise. The Company believes it will benefit from Charter's membership in the
TeleSynergy programming cooperative, which Charter joined in October 1995 and
which offers its members certain programming benefits. The Company's
relationship with Charter has also increased the Company's acquisition
opportunities, its ability to access debt financing and equity capital and to
obtain marketing support and discounts on cable system equipment. See "Risk
Factors -- Potential Conflicts of Interest."

THE CABLE TELEVISION INDUSTRY

Cable television was introduced in the early 1950s to provide television
signals to small or rural towns with little or no available off-air television
signals and to communities with reception difficulties caused by terrain
problems. Since that time, the cable television industry has added non-broadcast
programming, utilized improved technology to increase channel capacity and
expanded its service markets to include more densely populated areas and those
communities in which off-air reception is not problematic. Enhanced channel
capacity has increased the potential number of programming offerings available
to the subscriber and, consequently, increased the potential revenue available
per subscriber. State-of-the-art cable television systems are currently capable
of providing approximately 36 to 108 channels of programming.

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Cable television systems offer customers various levels (or "tiers") of
basic cable service consisting of off-air television signals of local networks,
independent and educational stations, a limited number of television signals
from "superstations" originating from distant cities, various
satellite-delivered, non-broadcast channels and certain programming originated
locally by the cable systems. For an extra monthly charge, cable systems also
typically offer premium television services to their customers, consisting of
satellite-delivered channels generally providing feature films, live sports
events, concerts and other special entertainment features. See "-- Marketing,
Programming and Rates."

A cable television system consists of two principal operating components:
one or more signal origination points called "headends," which receive
television, radio and data signals that are transmitted by means of off-air
antennas, microwave relay systems and satellite earth stations, and a signal
distribution system. Each headend includes a tower, antennae or other receiving
equipment at a location favorable for receiving broadcast signals and one or
more earth stations that receives signals transmitted by satellite. The headend
facility also houses the electronic equipment which amplifies, modifies and
modulates the signals, preparing them for passage over the system's network of
cables. Cable television systems may also originate their own programming and
other information services for distribution through the systems.

The signal distribution system consists of amplifiers and trunk lines which
originate at the headend and carry the signal to various parts of the system,
smaller distribution cables and distribution amplifiers which carry the signal
to the immediate vicinity of the subscriber and drop lines which carry the
signal into the subscriber's home. In the past several years, many cable
operators have utilized fiber optic (in place of co-axial cable) technology to
transmit signals through the primary trunk lines.

DESCRIPTION OF THE SOUTHEAST SYSTEMS

GENERAL

The Company acquired the Southeast Systems in a series of transactions
commencing in April 1994. The Southeast Systems generally lie within five
clusters in the southeastern region of the United States: the
Greenville-Spartanburg/Asheville Cluster in western North Carolina and South
Carolina; the Atlanta Cluster in the suburban corridor south of Atlanta; the
northern Alabama Cluster near Huntsville and Birmingham; the New Orleans Cluster
in the suburban areas north of New Orleans; and the Nashville Cluster in the
suburban areas northwest of Nashville. Approximately 84% of the Southeast
Systems' basic subscribers are located within the Southeast Clusters.

DEMOGRAPHIC PROFILE

The following table sets forth a demographic profile of the Southeast
Clusters.

<TABLE>
<CAPTION>
1980 - 1994
ESTIMATED
HOMES BASIC POPULATION
SOUTHEAST CLUSTERS PASSED SUBS. PENETRATION GROWTH
- ------------------------------------------------ ------- ------- ----------- -----------
<S> <C> <C> <C> <C>
Greenville-Spartanburg/Asheville Cluster........ 114,189 76,557 67.0% 15.2%
Atlanta Cluster................................. 87,514 59,225 67.7% 40.6%
New Orleans Cluster............................. 52,088 35,402 68.0% 24.2%
Nashville Cluster............................... 53,843 41,616 77.3% 22.8%
Northern Alabama Cluster........................ 74,854 47,742 63.8% 10.9%
------- ------- ----- -----
Total Southeast Clusters.............. 382,488 260,542 68.1% 22.6%(a)
National Average................................ -- -- -- 14.6%
</TABLE>

- ---------------
Source: The 1993 and 1995 Rand McNally Commercial Atlas & Marketing Guide and
Company estimates.
(a) Average weighted by homes passed in each of the Southeast Clusters.

The City of Atlanta and its surrounding area is the tenth largest
Designated Market Area ("DMA") and the eighth largest Metropolitan Statistical
Area ("MSA") in the United States. The Atlanta Cluster represents one of the
fastest growing regions in the United States, with population growth experienced
in this

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region from 1980 to 1994 equal to 161.3% for Fayette County, 97.7% for Henry
County and 71.7% for Rockdale County.

The Greenville-Spartanburg, South Carolina/Asheville, North Carolina area
is the 35th largest DMA and the 67th largest MSA in the United States. Counties
in the Greenville-Spartanburg/Asheville Cluster have also experienced rapid
growth, including population growth from 1980 to 1994 of 32.2% for York County
and 25.5% for Oconee County.

The City of New Orleans and its surrounding area is the 41st largest DMA
and the 41st largest MSA in the United States. Parishes within the New Orleans
Cluster also experienced higher than average population growth from 1980 to
1994, including 44.1% for St. Tammany Parish and 26.3% for Livingston Parish, as
compared with the national average of 14.6%.

The City of Nashville and its surrounding area is the 33rd largest DMA and
the 52nd largest MSA in the United States. The two counties comprising the
Nashville Cluster experienced high rates of population growth from 1980 to 1994,
consisting of 39.2% for Cheatham County and 33.8% for Montgomery County.

The term "DMA" is as defined by the A.C. Nielsen Company and reflects
rankings based on population. The DMA rankings have been obtained from BIA
Publications, Inc. (1995). The term "MSA" is as defined by the Office of
Management and Budget on December 31, 1922 and as revised through July 1, 1994.
The MSA rankings have been obtained from the Rand McNally 1995 Commercial Atlas
& Marketing Guide.

HISTORICAL ACQUISITIONS

The information set forth below briefly describes the acquisition of each
of the Company's existing systems.

McDonald Systems Acquisition. In April 1994, the Company completed the
acquisition of the McDonald Systems for an aggregate purchase price of
approximately $174.7 million. As of March 31, 1996, the McDonald Systems passed
approximately 149,700 homes and provided service to approximately 102,400 basic
subscribers in Georgia, Alabama and Louisiana.

Crown Systems Acquisition. In January 1995, the Company completed the
acquisition of the Crown Systems from Crown Media, Inc. ("Crown Media"), a
subsidiary of Hallmark Cards Incorporated, for an aggregate purchase price of
approximately $108.0 million. As of March 31, 1996, the Crown Systems passed
approximately 96,400 homes and provided service to approximately 67,100 basic
subscribers located in Kentucky, North Carolina and South Carolina.

The acquisition of the Crown Systems was part of a larger transaction in
which Crown Media sold its cable television systems to a group of investors,
including Charter, CC-II and certain other affiliates of Charter, for a total
purchase price of approximately $900.0 million. As a result of this transaction,
Charter-affiliated entities acquired the Crown Systems and certain other cable
television systems owned by Crown Media, serving approximately 260,000 basic
subscribers in Connecticut, Kentucky, Missouri, North Carolina and South
Carolina, adding to Charter's then-existing subscriber base of approximately
280,000. The Crown Systems were managed by members of Charter's management who
were previously associated with Cencom.

CableSouth Systems Acquisition. In May 1995, the Company purchased the
CableSouth Systems for an aggregate purchase price of approximately $48.0
million. As of March 31, 1996, the CableSouth Systems passed approximately
44,700 homes and served approximately 30,000 basic subscribers in Alabama.

Peachtree Systems Acquisition. In May 1995, the Company purchased the
Peachtree Systems for an aggregate purchase price of approximately $22.0
million. As of March 31, 1996, the Peachtree Systems passed approximately 19,400
homes and served approximately 12,500 subscribers in Georgia.

Masada I Systems Acquisition. In July 1995, the Company acquired the
Masada I Systems for an aggregate purchase price of approximately $34.7 million.
As of March 31, 1996, the Masada I Systems passed approximately 31,000 homes and
served approximately 18,500 basic subscribers located in the southern suburbs of
Atlanta, Georgia.

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Masada II Systems Acquisition. In November 1995, the Company acquired the
Masada II Systems for an aggregate purchase price of approximately $35.0
million. As of March 31, 1996, the Masada II Systems passed approximately 37,800
homes and served approximately 21,400 basic subscribers located in
Greenville-Spartanburg, South Carolina.

CCIP Systems Acquisition. In March 1996, the Company acquired the CCIP
Systems for an aggregate purchase price of approximately $112.0 million. As of
March 31, 1996, the CCIP Systems passed approximately 73,900 homes and served
approximately 53,900 basic subscribers in Tennessee, Kentucky, Georgia and North
Carolina. See "Business -- Legal Proceedings."

PENDING ACQUISITIONS

In February 1996, in connection with the liquidation of CCIP II, Charter
submitted a successful bid to acquire, for a purchase price of $36.7 million,
CCIP II's cable television system located in Anderson County, South Carolina.
The Anderson System serves approximately 20,600 subscribers. Charter has
assigned its purchase rights to the Anderson System to CC-II. CC-II's
acquisition of the Anderson System from CCIP II is subject to the prior approval
of the holders of a majority of the outstanding limited partnership interests of
CCIP II. Subject to the receipt of such approval and to the satisfaction of
certain other terms and conditions, the acquisition of the Anderson System is
expected to be consummated in 1997.

On May 29, 1996, an affiliate of Charter entered into an asset purchase
agreement with Masada Cable Partners, L.P. to acquire multiple systems,
including a system serving both Alabama and Tennessee with approximately 13,400
subscribers. On June 18, 1996, the purchase rights to the Masada III System, for
which the purchase price is $22.0 million, were assigned to CC-I. Subject to the
satisfaction of certain terms and conditions, the acquisition of the Masada III
System is expected to be consummated in late 1996.

On May 30, 1996, CC-I entered into separate asset purchase agreements with
CPLP to acquire the assets of certain cable television systems located in
Lincolnton and Sanford, North Carolina, for a purchase price of $27.5 million
and $20.8 million, respectively. The Lincolnton and Sanford systems serve
approximately 14,600 and 12,700 subscribers, respectively. CPLP, the general
partner of which is an affiliate of Charter, is currently in liquidation.
Subject to the satisfaction of certain terms and conditions, the acquisition of
the Lincolnton Systems is expected to be consummated in late 1966.

In May 1996, Charter entered into a letter of intent to acquire certain
cable television systems, serving approximately 36,800 subscribers, located in
Hickory, North Carolina. The letter of intent provides for a purchase price of
$68.0 million. Under the terms of such letter of intent, Charter is permitted to
assign its rights thereunder to an affiliate. Charter and CC-I are negotiating
the terms of an assignment with respect to this transaction. Subject to the
satisfaction of certain terms and conditions, the acquisition of the Hickory
Systems is expected to be consummated in late 1996.

OPERATIONS AND MANAGEMENT BY CHARTER

Charter manages the Company's operations under a decentralized management
structure that is intended to maximize the Company's presence in each of its
clusters and thereby enhance customer service and strengthen community
relations. Each of the Company's clusters has a general manager responsible for
overseeing the day-to-day operations of the systems in such manager's cluster,
including systems not owned by the Company. See "Risk Factors -- Dependence on
Charter and Key Personnel of Charter" and "-- Potential Conflicts of Interest."
Regional management also provides full marketing support and has established a
24-hour customer service hotline. Regional costs, including personnel and other
operating expenses, are allocated to the Company's systems and to certain other
systems owned by affiliates of Charter, pro rata based on the number of
subscribers. By spreading such costs over a broader base of subscribers, the
Company experiences lower operating costs per subscriber than it would without
its affiliation with Charter.

The Company relies on Charter for all of its strategic and managerial
advice, as well as administrative support, including accounts payable, accounts
receivable, billing, payroll and human resources. Charter is dependent upon the
services of certain key personnel, including Messrs. Babcock, Kent and Wood.
Charter

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also coordinates and provides advice with respect to all programming
arrangements, capital expenditure requirements, engineering planning, and
acquisitions and financing of cable televisions systems. In the event the
Company's relationship with Charter were to terminate for any reason, the
Company would no longer benefit from, among other things, the cost savings on
programming and access to acquisition opportunities and financing relationships
that are made available to the Company through Charter. As a multi-system
operator, Charter is able to negotiate agreements covering systems owned by its
numerous affiliated operating companies, including CC-I and CC-II, which results
in reduced costs for all covered entities. Charter's long-term experience and
expertise in the cable industry enables it to access and accomplish acquisition
opportunities that might not be available to a local or regional operator.
Charter also provides in-house legal support. See "Certain Relationships and
Related Transactions."

MARKETING, PROGRAMMING AND RATES

The Company's marketing programs are based upon offering various packages
of cable services designed to appeal to different market segments. Charter, in
its capacity as manager of the Company's systems, performs and utilizes market
research on selected systems, compares the data to national research and tailors
a marketing program for each individual market. The Company uses a coordinated
array of marketing techniques to attract and retain subscribers, including
door-to-door solicitation, telemarketing, media advertising and direct mail
solicitations. The Company regularly implements these marketing efforts in order
to gain new subscribers and to increase basic and premium service penetration in
the communities served by its systems. The Company is in the process of
developing an in-depth customer profile data base which will result in more
targeted direct marketing efforts and is intended to increase sales per
customer. For example, the customer profile data base is expected to be able to
identify those customers that have children under a specified age who are not
currently subscribed to the Disney Channel. Such information would then allow
the Company to tailor its marketing efforts with respect to the Disney Channel.

Charter has entered into various contracts to obtain basic and premium
programming with a number of suppliers. This programming is made available to
the Company for a fixed fee per subscriber. Charter's programming contracts
generally continue for a fixed period of time and are subject to negotiated
renewal. Some program suppliers offer marketing and pricing support. In
particular, Charter has negotiated programming agreements with premium service
suppliers that offer cost incentives under which premium service unit prices
decline as certain premium service growth thresholds are met. In October 1995,
Charter joined the TeleSynergy programming cooperative, which consists of
midsize MSOs, and which is expected to offer its members certain programming
benefits.

The Company's aggregate programming costs are expected to increase in the
future due to additional programming being provided to customers, increased
costs to produce or purchase cable programming, inflationary increases and other
factors affecting the cable television industry. Under FCC rate regulation,
opportunities exist for program suppliers to increase their rates, subject to
certain limitations. See "-- Regulation in the Cable Television
Industry -- Cable Acts and FCC Regulation." Management believes that the
increases in the Company's programming costs which it expects to incur will be
less than the possible increases the Company would otherwise expect to incur
without the benefit of Charter's membership in TeleSynergy. Subject to the
foregoing, management believes the Company will be able to pass-through expected
increases in its programming costs to subscribers, although there can be no
assurance that it will be able to do so. Management believes that the Company's
systems will continue to have access to programming services at competitive
prices, although there can be no assurance that it will continue to do so.

Although services vary from system to system due to differences in channel
capacity, viewer interests and community demographics, each of the Southeast
Systems offers a "basic service tier," consisting of local television channels
(network and independent stations) available over-the-air, local public
channels, governmental, home-shopping and leased access channels. Each of the
Southeast Systems offers, for a monthly fee, an expanded basic tier of
"superstations" originating from distant cities (such as WTBS, WGN and WWOR),
various satellite-delivered, non-broadcast channels (such as Cable News Network
("CNN"), MTV, Music Television, the USA Network, Entertainment and Sports
Programming Network ("ESPN") and Turner Network Television ("TNT")) and certain
programming originated locally by the cable system (such as

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public, governmental and educational access programs) providing information with
respect to news, time, weather and the stock market. In addition to these
services, the Company's systems typically provide one or more premium services
purchased from independent suppliers and combined in different formats to appeal
to the various segments of the viewing audience, such as Home Box Office
("HBO"), Cinemax, Showtime, The Movie Channel and The Disney Channel. These
services are satellite-delivered channels consisting principally of feature
films, original programming, live sports events, concerts and other special
entertainment features, usually presented without commercial interruption. Such
premium programming services are offered by the Company's systems both on an a
la carte basis and as part of premium service packages designed to enhance
customer value and to enable the Company's systems to take advantage of
programming agreements offering cost incentives based on premium service unit
growth. A "premium service unit" is a single premium service for which a
subscriber must pay an additional monthly fee in order to receive the service.
Subscribers may subscribe for one or more premium service units. Additionally,
the Company plans to upgrade certain of its systems with fiber optic cable,
which will allow the Company to expand its ability to use "tiered" packaging
strategies for marketing premium services and promoting niche programming
services. Management believes that this ability will increase basic and premium
service penetration as well as revenue per subscriber.

Rates to subscribers vary from market to market and in accordance with the
type of service selected. As of December 31, 1995, the monthly basic fees for
the Southeast Systems ranged from $6.24 to $9.25 for the basic service tier and
$13.06 to $17.43 for the expanded basic service tier. These rates reflect
reductions effected in response to the 1992 Cable Act's re-regulation of cable
television industry rates, and in particular, the FCC's rate regulations
implementing the 1992 Cable Act, which became effective in 1993. A one-time
installation fee, which may be waived in part during certain promotional
periods, is charged to new subscribers. Management believes that the Company's
rate practices are generally consistent with the current practices in the
industry. See "-- Regulation in the Cable Television Industry."

TECHNOLOGICAL DEVELOPMENTS AND STRATEGY

As part of its commitment to customer service, the Company endeavors to
maintain high technical performance standards in all of its cable systems. All
acquired and existing systems are selectively upgraded to increase channel
capacity and improve picture quality and reliability for the delivery of
additional programming and new services. As part of its evaluation process,
management considers a number of factors before initiating a system upgrade.
Such factors include management's assessment of the (i) upgrades that may be
required by a franchising authority in connection with the renewal of one of the
Company's franchises, (ii) programming alternatives offered by competitors
located near the Company's systems and (iii) cost-effectiveness of any such
upgrades.

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The following table sets forth certain information regarding the channel
capacities, miles of plant and basic subscribers for the Company's existing
owned and operated systems and the CCIP Systems as of December 31, 1995.

<TABLE>
<CAPTION>
UP TO 36 37 TO 42 43 TO 54 55 TO 62 63 TO 78
CHANNELS CHANNELS CHANNELS CHANNELS CHANNELS TOTAL
--------- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
OWNED SYSTEMS:
Number of Systems........................... 8 16 10 5 2 41
Miles of Plant.............................. 1,171 3,201 4,581 1,216 302 10,471
Basic Subscribers........................... 29,127 78,985 100,277 29,948 10,769 249,106
% of Total Basic Subscribers................ 11.7% 31.7% 40.3% 12.0% 4.3% 100.0%
Basic Subscribers/Plant Mile................ 24.87 24.68 21.89 24.63 35.66 23.79
CCIP SYSTEMS:
Number of Systems........................... 0 0 3 2 1 6
Miles of Plant.............................. 0 0 466 834 106 1,406
Basic Subscribers........................... 0 0 16,856 30,067 5,791 52,714
% of Total Basic Subscribers................ 0.0% 0.0% 32.0% 57.0% 11.0% 100.0%
Basic Subscribers/Plant Mile................ 0.00 0.00 36.17 36.05 54.63 37.49
TOTAL:
Number of Systems........................... 8 16 13 7 3 47
Miles of Plant.............................. 1,171 3,201 5,047 2,050 408 11,877
Basic Subscribers........................... 29,127 78,985 117,133 60,015 16,560 301,820
% of Total Basic Subscribers................ 9.7% 26.2% 38.8% 19.9% 5.4% 100.0%
Basic Subscribers/Plant Mile................ 24.87 24.68 23.21 29.28 40.59 25.41
</TABLE>

The Company's systems have an average capacity of approximately 52 channels
and approximately 88% of the Company's subscribers are currently served by
systems that offer addressable technology. Addressable technology enables the
Company, from the office or headend, to change the premium channels being
delivered to each subscriber or to activate pay-per-view services. These service
level changes can be effectuated without the delay or expense associated with
dispatching a technician to the subscriber's home. Addressable technology also
reduces premium service theft and allows Charter automatically to disconnect
delinquent accounts.

The use of fiber optic technology in concert with coaxial cable has
significantly enhanced cable system performance. Fiber optic strands are capable
of carrying hundreds of video, data and voice channels over extended distances
without the extensive signal amplification typically required for coaxial cable.
To date, Charter has used fiber to interconnect headends, to eliminate headends
by installing fiber backbones, and to reduce amplifier cascades, thereby
improving both picture quality and system reliability.

Digital compression and high capacity data modems may become commercially
viable within the next few years. These developments may enable an increase in
system channel capacity and may allow the introduction of alternative
communications delivery systems for data and voice. Management does not
currently plan to deploy digital technology, as it believes such technologies
will not become cost-effective for the Company's systems in the near term.
However, the Company will continue to monitor the development of such technology
and its utilization by other cable operators, and the cost-effectiveness of such
technology.

CUSTOMER SERVICE AND COMMUNITY RELATIONS

The Company is dedicated to providing superior customer service to
customers. As part of this effort, the Company emphasizes improving system
reliability, which includes enhancing technology of the systems, increasing the
level of engineering resources and providing the highest level of customer
service. The Company has also emphasized the availability of customer service
and technical support response time by implementing a 24-hour customer service
hotline and offering installation and service guarantees that provide free
installation if the Company's installer is late for a scheduled appointment and
a $20 credit if the Company's service technician is late for a service call. As
a result of the Company's clustering of its cable

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systems, the Company's technicians from each of the local clusters are able to
assist each other as and when necessary. In October 1995, 27 technicians from
several of the Company's systems were temporarily relocated to the Atlanta
Cluster to assist with the repair of physical damages suffered as a result of
Hurricane Opal. See "-- Properties."

Charter and the Company are also dedicated to fostering strong community
relations in the towns and cities served by the Company's systems. The Company
supports local charities and community causes through marketing promotions. As
part of the Company's fall 1995 marketing campaign, for each new installation
the Company donated $5 to a local school in the community in which such
installation was made. In addition, the Company installs and provides free basic
cable service to public schools, government buildings and not-for-profit
hospitals in the communities in which it operates. Management believes that its
relations with the communities in which the Company operates are generally good.

FRANCHISES

The Company operates pursuant to an aggregate of 217 non-exclusive
franchises, permits or similar authorizations issued by governmental
authorities. Franchises or permits are awarded by a governmental authority and
generally are not transferable without the consent of the authority. Most of the
franchises pursuant to which the Company's systems operate may be terminated
prior to their stated expiration by the granting authority, after due process,
following a breach of a material provision of such franchise. Under the terms of
most of the franchises, a franchise fee of up to 5% of the gross revenues
derived by a cable system from the provision of cable television services (the
maximum amount that may be charged by a franchising authority under the 1984
Cable Act) is payable to the franchising authority.

The table below illustrates the grouping of the franchises of the Company's
systems, on a pro forma basis, after giving effect to the CCIP Acquisition, by
date of expiration and sets forth the approximate number and percentage of basic
service customers for each group of franchises as of December 31, 1995.

<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF PERCENTAGE OF NUMBER OF TOTAL
YEAR OF FRANCHISE EXPIRATION FRANCHISES TOTAL FRANCHISES SUBSCRIBERS SUBSCRIBERS
- ----------------------------------------------- ----------- ---------------- ------------ -------------
<S> <C> <C> <C> <C>
1996-1998...................................... 48 22.1% 48,500 16.1%
1999-2001...................................... 25 11.5 63,000 20.9
After 2001..................................... 144 66.4 190,500 63.0
--- ----- ------- ---- -
Total................................ 217 100.0% 302,000 100.0%
=== ===== ======= =====
</TABLE>

The Cable Acts provide for an orderly franchise renewal process in which
franchise renewal may not be unreasonably withheld. If a renewal is withheld and
the franchising authority acquires ownership of the cable system or effects a
transfer of ownership to another party, the franchise authority must pay the
cable operator the "fair market value" for the system covered by such franchise.
The Cable Acts also establish comprehensive renewal procedures requiring that an
incumbent franchisee's renewal application be asserted 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 commit to making certain technological upgrades to the system, which
may require substantial capital expenditures.

Management believes that the Company generally has good relationships with
the franchising authorities. All of the material franchises relating to the
Company's systems eligible for renewal have been renewed or extended at or prior
to their stated expirations. No material franchise authority has ever refused to
consent to a franchise transfer to the Company, although there can be no
assurance that all franchise authorities will consent to franchise transfers to
the Company in the future, or that the terms and conditions of any such
transfers will be acceptable to the Company.

COMPETITION IN THE CABLE TELEVISION BUSINESS

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authorities from granting exclusive cable television franchises and from
unreasonably refusing to award additional competitive franchises. Cable system
operators may therefore experience competition from other operators building a
system in an existing franchise area (i.e., an "overbuild"). The 1992 Cable Act
also permits municipal authorities to operate cable television systems in their
communities without franchises. There are virtually no overbuilds in the areas
in which the Company's systems are located, although other cable operators may
operate systems in the vicinity of the Company's systems. Cable systems
operators also compete for the right to construct systems in new housing
developments adjoining or otherwise located in proximity to such operator's
existing systems. Management believes that the selection of a cable operator to
construct a system in a new housing development (which may be located near the
cable systems of several different operators) is typically based upon an
evaluation by the real estate developer of the programming and pricing offered
by the different cable operators conducting business in proximity to such
housing development.

Cable television systems also face competition from alternative methods of
receiving and distributing television signals and from other sources of home
entertainment. Within the home video programming market, the Company competes
primarily with other cable franchise holders and with home satellite and
wireless cable providers, and, when existing franchises become available for
renewal (or new franchises become available in the southeastern region of the
United States), with other cable franchise holders. Management believes that
direct broadcast satellite ("DBS"), a service by which packages of television
programming are transmitted to individual homes which are serviced by a single
satellite dish, is currently the most significant competitive threat to the
Company's systems. Based upon an analysis of the disconnects experienced by the
Company during 1995, management believes that approximately 35 to 40 of such
disconnects (or less than 1.0% of the Company's disconnects) per month resulted
from customers switching to DBS. The Company does not expect DBS to become a
more significant threat to the Company in the foreseeable future because of
certain disadvantages associated with DBS technology (e.g., high upfront capital
costs, lack of local programming and topographical limitations which limit
reception in hilly areas).

Cable television systems also compete with wireless program distribution
services such as multichannel multipoint distribution service ("MMDS"), which
uses low power microwave frequencies to transmit video programming over-the-air
to customers. The FCC has amended its regulations to enable MMDS systems to
compete more effectively with cable systems by making available additional
channels to the MMDS industry and by refining the procedures by which MMDS
licenses are granted. The 1992 Cable Act generally prohibits a cable operator
from holding an FCC MMDS license in its franchised cable service area. However,
the Telecommunications Act allows such common ownership if the cable operator is
subject to "effective competition." Although the Company faces some actual or
potential competition from MMDS operators, such competition is not yet
significant. Additionally, the FCC recently initiated a new rulemaking
proceeding in which it proposed to allocate frequencies in the 28 GHz band for a
new multichannel wireless video service similar to MMDS. The Company is unable
to predict the economic viability of wireless video services, such as MMDS, or
whether such services will present a competitive threat to the Company.

Additional forms of competition for cable systems are master antenna
television ("MATV") and satellite master antenna television systems ("SMATV").
These systems are essentially small, closed cable systems which operate within
specific hotels, apartment or condominium complexes and individual residences.
Due to the widespread availability of earth stations, such private cable
television systems can offer both improved reception of local television
stations and many of the same satellite-delivered program services which are
offered by franchised cable television systems. MATV and SMATV systems currently
benefit from operating advantages not available to franchised cable television
systems, including fewer regulatory burdens and no requirement to service low
density or economically depressed communities. The Telecommunications Act, which
to some extent deregulates or lessens the regulatory burden on the cable
industry, may reduce some of the advantages of SMATV and MATV systems. However,
since SMATV and MATV systems generally do not fall within the Cable Acts'
definition of a "cable system," notwithstanding the enactment of such
legislation, they could still be exempt from other requirements of the Cable
Acts which were not amended. Furthermore, the Telecommunications Act broadens an
exemption from regulation as a "cable system," which may exempt additional SMATV
and MATV systems from regulation under the Cable Acts.

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In addition, the Telecommunications Act authorizes LECs to provide a wide
variety of video services competitive with services provided by cable systems
and to provide cable services directly to customers in the telephone companies'
service areas, with some regulatory safeguards. See "Regulation in the Cable
Television Industry." Some video programming services provided by telephone
companies (e.g., "open video systems") do not require local franchises. Further,
certain of the RBOCs have already entered the cable television business outside
their service areas. For example, US West has purchased cable television systems
serving approximately 500,000 subscribers in and around Atlanta, Georgia (an
area in which the Company has cable operations) and has announced an agreement
to acquire Continental Cablevision, Inc., the nation's third-largest MSO serving
over 4.2 million subscribers. Management believes that telephone companies will
generally focus their efforts on cable acquisitions in larger metropolitan
areas, although there can be no assurance that this will be the case.

Other new technologies may become competitive with non-entertainment
services that cable television systems can offer. Advances in communications
technology as well as changes in the marketplace and the regulatory and
legislative environment are constantly occurring. Management cannot predict the
effect that ongoing or future developments might have on the cable television
industry generally or the Company specifically.

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. In addition, recent
legislative and regulatory changes and additional regulatory proposals under
consideration may materially affect the cable television industry. The Cable
Acts, both of which amended the Communications Act, establish a national policy
to guide the development and regulation of cable television systems. The
Communications Act was recently substantially amended by the Telecommunications
Act, which alters Federal, state and local laws pertaining to cable television,
telecommunications and other services. Principal responsibility for implementing
the policies of the Cable Acts is allocated between the FCC and state or local
franchising authorities.

CABLE ACTS AND FCC REGULATION

The Cable Acts and the FCC's implementing rules establish, among other
things, (i) rate regulations, (ii) "anti-buy through" provisions, (iii) "must
carry" and "retransmission consent" requirements, (iv) rules for franchise
renewals and transfer and (v) other regulations covering a variety of
operational areas.

The 1992 Cable Act and the FCC's rules implementing the 1992 Cable 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 franchise authorities. Management is unable to predict the
ultimate effect of the 1992 Cable Act or the ultimate outcome of various FCC
rulemaking proceedings or the litigation challenging various aspects of the 1992
Cable Act and the FCC's regulations implementing the 1992 Cable Act.

Rate Regulation. The Cable Acts and FCC regulations have imposed rate
requirements for basic services and equipment. Under the 1992 Cable Act, a local
franchising authority in a community not subject to "effective competition" (as
defined in the 1992 Cable Act) generally is authorized to regulate basic cable
service rates after certifying to the FCC that, among other things, it will
adopt and administer rate regulations consistent with FCC rules, and in a manner
that will provide a reasonable opportunity to consider the views of interested
parties. The Telecommunications Act expands the definition of "effective
competition" to include any franchise area where a local exchange carrier (or
its affiliate) (or any multichannel video programming distributor using the
facilities of such carrier or its affiliate) provides video programming services
to subscribers by any means, other than through DBS. The local exchange carrier
must provide "comparable" programming services in the franchise area. In
regulating the basic service rates, certified local franchise authorities have
the authority to order a rate refund of previously paid rates determined to be
in excess of the maximum permitted reasonable rates. With respect to any of the
Southeast Systems regulated by local authorities that have already been
certified, during the year ended December 31, 1994, the Company paid total

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cumulative rate refunds of less than $20,000 to subscribers as a result of rate
orders issued by certain franchise authorities.

Rate regulation of the basic service tier remains subject to regulation by
local franchising authorities under the Telecommunications Act, except in
certain circumstances for certain small cable operators. For a defined class of
"small cable operators," the Telecommunications Act immediately eliminates
regulation of cable programming rates. Rates for the basic tier of small cable
operators are deregulated if the system offered only a single tier of services
as of December 31, 1994. To qualify as a "small cable operator," the operator
must serve in the aggregate fewer than one percent of all U.S. subscribers and
have affiliate gross revenues not exceeding $250 million. The exception applies
in any franchise area in which the operator serves 50,000 or fewer subscribers.

Under the 1992 Cable Act, rates for cable programming services not carried
on the basic tier ("non-basic services") could be regulated by the FCC upon the
filing of a complaint by franchise authorities or subscribers that indicates the
cable operator's rates for these services are unreasonable. Rate complaints have
been filed with the FCC with respect to certain of the Company's cable
programming service tiers; none of such complaints has been resolved by the FCC
as of the date of this Prospectus. The Telecommunications Act eliminates
regulation of the cable programming service tier (non-basic programming) as of
March 31, 1999. In the interim, rate regulation of the cable programming tier
can only be triggered by a franchising authority complaint to the FCC. A
franchising authority complaint must be based on more than one subscriber
complaint, which must be filed within 90 days after a rate increase. If the FCC
determines that the Company's cable programming service tier rates are
unreasonable, the FCC has the authority to order the Company to reduce cable
programming service tier rates and to refund to customers any overcharges
occurring from the filing date of the rate complaint at the FCC. While
management believes that the Company has complied in all material respects with
the rate provisions of the 1992 Cable Act, in jurisdictions that have not yet
chosen to certify, refunds covering a one-year period on basic service may be
ordered upon future certification if the Company is unable to justify its rates
through a benchmark or cost-of-service filing or small system cost-of-service
filing pursuant to FCC rules. Management is unable to estimate at this time the
amount of refunds that may be payable by the Company in the event the Southeast
Systems' rates are successfully challenged by franchising authorities or found
to be unreasonable by the FCC, although management does not believe that the
amount of any such refunds would have a material adverse effect on the Company.
Notwithstanding mandated rate reductions, cable operators currently may adjust
their regulated rates to reflect inflation and what the FCC has deemed to be
external costs (such as increases in franchise fees).

In November 1994, the FCC adopted the so-called "going-forward rules"
which, among other things, allow cable operators to raise rates over the next
three years by adding channels to the expanded basic tier. Under the revised
rules, cable operators were allowed to take a per channel mark-up of up to 20
cents for each channel added to the expanded basic tier, with an aggregate cap
of $1.20 per subscriber per month. Accordingly, the Company was permitted to
adjust rates on January 1, 1995 for channel additions occurring after May 14,
1994. In addition to rate adjustments permitted for additional channels, the
"going-forward rules" allow cable operators to recover an additional amount of
30 cents in the aggregate per subscriber per month for license fees associated
with adding new channels through 1996. (During the third year, license fees are
subject to the general rate rules.) Thus, absent a change to these rules or a
change in the regulatory environment in the interim, through 1996 the allowable
rate increases for channel adjustments and license fees could total up to $1.50
per subscriber per month. Under the "going-forward rules," in 1997, cable
operators may make an additional flat fee increase of 20 cents per channel per
month for channels added during that year, provided that the rate increases made
by cable operators over the three-year period (exclusive of license fees) do not
exceed $1.40 in the aggregate. For channels added after May 14, 1994, operators
electing to take advantage of the 20 cents per channel adjustment may not take a
7.5% mark-up on programming cost increases that are otherwise currently
permissible under the rate rules. The "going-forward rules" are scheduled to
expire on December 31, 1997. The Company is currently in the process of
evaluating its rates in light of the revised rules.

The "going-forward rules" also allow cable operators to place channels that
were not offered on the cable system prior to October 1, 1994 on a new separate
unregulated tier as long as the regulated basic and expanded

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basic tiers remain intact. Cable operators may offer the same new channels
simultaneously on both an expanded basic tier and a new unregulated tier, and
may at any time move them to the new tier. Thus, operators may build up a
following for new channels by putting them in the expanded basic tier before
moving them to the new unregulated tier. Channels that were in the basic tier or
the expanded basic tier prior to September 30, 1994 may not be moved to the new
tier, nor may such channels be dropped from the basic or expanded basic tiers
and then added to a new tier within the two-year period after the date upon
which any such channel is dropped.

In September 1995, the FCC developed an abbreviated cost-of-service form
that permits cable operators to recover the costs of significant upgrades that
provide benefits to subscribers of regulated cable services. Cable operators
seeking to raise rates to cover the costs of an upgrade would submit only the
costs of the upgrade instead of all current costs. In December 1995, the FCC
revised its cost-of-service rules. At this time, the Company is unable to
predict the effect of these revised rules on the Company's business.

In another action in September 1995, the FCC established a new optional
rate adjustment methodology that encourages operators to limit their rate
increases to once per year to reflect inflation and changes in external costs
and in the number of channels. The rules permit cable operators to "project
reasonably" changes in their costs for the 12 months following the rate change
(in an effort to eliminate delays in recovering costs). The order also allows
operators to recover increases in additional types of franchise-requirement
costs. Permitted pass-through increases include increases in the costs of
providing institutional networks, video services, data services to or from
governmental and educational institutions, and certain other cost increases. The
Company is unable to predict the effect of these new rate rules on the Company's
business.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operators'
marketing costs and may also allow operators to better respond to competition
from alternative providers. The Company is unable to predict if these proposed
rules will ultimately be promulgated by the FCC and if they are promulgated,
their effect on the Company.

The uniform rate requirements in the 1992 Cable Act are relaxed by the
Telecommunications Act. Specifically, the Telecommunications Act clarifies that
the uniform rate provision does not apply where a cable operator faces
"effective competition." In addition, bulk discounts to multiple dwelling units
are exempted from the uniform rate requirements. However, complaints concerning
"predatory" pricing (including with respect to bulk discounts to multiple
dwelling units) may be made to the FCC. The Telecommunications Act also permits
cable operators to aggregate, on a franchise system, regional or company level,
its equipment costs in broad categories. The Telecommunications Act should
facilitate the rationalization of equipment rates across jurisdictional
boundaries. However, these cost-aggregation rules do not apply to the limited
equipment used by subscribers who only receive basic programming.

"Anti-Buy Through" Provisions. The 1992 Cable Act and corresponding FCC
regulations have established requirements for customers to be able to purchase
video programming on a per channel or per program basis without having to
subscribe to any tier of service (other than the basic tier), subject to
available technology. The available technology exception sunsets on October 5,
2002. Although approximately 88% of the Company's subscribers are served by
systems that offer addressable technology most of the Company's subscribers do
not currently have the requisite equipment in their home to utilize such
technology. As a result, most of the Company's cable television systems are
currently exempt from complying with the requirements of the 1992 Cable Act.
Management cannot predict the extent to which this provision of the 1992 Cable
Act and the corresponding FCC rules may cause customers to discontinue optional
non-basic service tiers in favor of the less expensive basic cable service.

"Must Carry" Requirements/"Retransmission Consents." Under the 1992 Cable
Act, cable television operators are subject to mandatory broadcast signal
carriage requirements that allow local commercial and non-commercial television
broadcast stations to elect to require a cable system to carry the station,
subject to certain exceptions, or, in the case of commercial stations, to
negotiate for "retransmission consent" to carry the station. In addition, there
are requirements for cable systems to obtain retransmission consent for all

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"distant" commercial television stations (except for
commercial/satellite-delivered independent "superstations" such as WTBS),
commercial radio stations and certain low power television stations carried by
such systems after October 6, 1993. The validity of mandatory signal carriage
requirements continues to be litigated in the courts; however, the carriage
requirements will remain in effect pending the outcome of such proceedings. As a
result of the mandatory carriage rules, some of the Company's systems have been
required to carry television broadcast stations that otherwise would not have
been carried, thereby causing displacement of possibly more attractive
programming. The retransmission consent rules have resulted in the deletion of
certain local and distant television broadcast stations which various systems
were carrying. To the extent retransmission consent fees were paid for the
continued carriage of certain television stations, such costs were not
recoverable. Any future amounts paid in exchange for retransmission consent,
however, may be passed along to subscribers as additional programming costs.

Franchise Matters. The 1984 Cable Act contains franchise renewal
procedures designed to protect against arbitrary denials of renewal. The 1992
Cable Act made several changes to the renewal process that could make it easier
for a franchising authority to deny renewal. Moreover, even if a franchise is
renewed, a franchising authority may seek to impose new and more onerous
requirements, including requiring significant upgrades in facilities and
services or increased franchise fees. If a franchising authority's consent is
required for the purchase or sale of a cable television system, the franchising
authority may also seek to impose new and more onerous requirements as a
condition to the transfer. The acceptance of these new requirements, however,
may not be made a condition of the transfer. Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of their franchises. Although management believes that
the Company has generally met the terms of its franchise agreements and has
provided quality levels of service, and anticipates that the Company's future
franchise renewal prospects generally will be favorable, there can be no
assurance that any such franchises will be renewed or, if renewed, that the
franchising authority will not impose more onerous requirements on the Company
than previously existed.

Other FCC Regulations. The Company is subject to a variety of other FCC
rules, covering such diverse areas as equal employment opportunity, programming,
maintenance of records and public inspection of files, technical standards and
customer service. The FCC has 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 FCC
licenses needed to operate certain transmission facilities often used in
connection with cable operations. Although management believes the Company is in
compliance in all material respects with all applicable FCC requirements, there
can be no assurance that the FCC would not find a violation and impose sanctions
that could adversely affect the Company's operations.

Small Cable Systems Operators. The FCC has implemented rules to reduce the
substantive and procedural burdens of rate regulation applicable to small cable
systems (i.e., cable systems serving 15,000 or fewer subscribers that are owned
by or affiliated with a cable company which served, in the aggregate, 400,000 or
fewer subscribers at the time such rules went into effect). Cable companies
falling outside of this definition may petition the FCC for small company
treatment if they can demonstrate similar circumstances. The FCC's small cable
systems rules amended the FCC's previous definitions of small cable entities to
encompass a broader range of cable systems that are eligible for special rate
and administrative treatment. In addition, these new rules made available to
this expanded category a new regulatory scheme which the FCC expects will
provide both rate relief and reduced administrative burdens. Specifically, the
new rules created a new cost-of-service approach involving a five element
calculation based on a system's costs. The calculation will produce a per
channel rate for regulated services that will be presumed reasonable if it is no
higher than $1.24 per channel. If the formula generates a higher rate, the
operator may still charge that rate if not challenged by the franchising
authority, or if, upon being challenged, it meets its burden of proving that the
rate is reasonable. Under these new rules, the regulatory benefits accruing to
such small cable systems remain effective even if such small cable systems are
later acquired by cable companies which serve in excess of 400,000 subscribers.
The Company believes that some of the systems owned by the Company and Charter
may qualify as "small cable systems" under these rules, although management
believes that the failure to obtain such qualification would not be reasonably
likely to have a material adverse effect on the Company. The Company has applied

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for small cable system rate relief with regard to approximately 80% of the
Company's franchises. Such systems' status as small cable systems may be
challenged by other parties and could be denied by the FCC. As of the date of
this Prospectus, the FCC has not ruled on whether any of such systems qualify as
small cable systems, although management believes that the failure to obtain
such qualification would not be reasonably likely to have a material adverse
effect on the Company.

RECENT TELECOMMUNICATIONS LEGISLATION

On February 1, 1996, Congress passed the Telecommunications Act. The
Telecommunications Act was signed into law by the President on February 8, 1996,
and substantially amends the Communications Act (including the re-regulation of
subscriber rates under the 1992 Cable Act). The Telecommunications Act alters
Federal, state and local laws and regulations pertaining to cable television,
telecommunications, and other services. In addition to the amendments previously
discussed in this section, the legislation also allows additional competition in
video programming by telephone companies, and makes other revisions to the
Communications Act and the Cable Acts.

Telephone Company Provision of Video Programming. Under the
Telecommunications Act, telephone companies can compete directly with cable
operators in the provision of video programming. The new legislation recognizes
several multiple entry options for telephone companies to provide competitive
video programming, including over their telephone facilities, through either
common carrier transport or an "open video system," by radio communications, or
as a regular cable system. LECs, including RBOCs, will be allowed to compete
with cable operators both inside and outside the LECs' telephone service areas.
The Telecommunications Act repeals the statutory ban on telephone company
provision of video programming services in the telephone company's service
areas. The FCC's video dialtone regulations have also been repealed, but such
repeal does not affect the status of any video dialtone service offered before
certain FCC regulations on "open video systems" become effective.

In particular, if a telephone company provides video via radio
communications, it will be regulated under title III of the Communications Act
(the general sections governing use of the airwaves), rather than cable
regulation under title VI. If a telephone company provides common carriage
transport of video programming, it will be subject to the requirements of title
II of the Communications Act (the general common carrier provisions), rather
than title VI cable regulation. Telephone companies providing video programming
through any other means (other than as an "open video system," as described
below) will be regulated under title VI cable regulation.

The Telecommunications Act replaces the FCC's video dialtone rules with an
"open video system" plan by which telephone companies can provide video
programming service in their telephone service areas. Telephone companies that
comply with the FCC's open video system regulations (which must be prescribed
within six months from enactment) will be subject to a relaxed regulatory
scheme. The open video system requirements are in lieu of title II common
carrier regulation.

The FCC is directed to prescribe rules that prohibit open video systems
from discriminating among video programming providers with regard to carriage,
and that ensure that open video system rates, terms and conditions for service
are reasonable and non-discriminatory. The FCC must also adopt regulations
prohibiting an open video system operator and its affiliates from occupying more
than one-third of the system's activated channels when demand for channels
exceeds supply. The Telecommunications Act also mandates other open video system
regulations, including channel sharing and sports exclusivity. Open video
systems will be subject to the authority of local governments to manage public
rights-of-way. Local franchising authorities may require open video system
operators to pay franchise-type fees, which may not exceed the rate at which
franchise fees are imposed on any cable operator in the corresponding franchise
area. The FCC adopted open video system rules in June 1996.

Buyouts. The Telecommunications Act generally prohibits LEC buyouts of
cable systems (which includes any ownership interest exceeding 10%) within the
LEC's telephone service area, cable operator buyouts of LEC systems within the
cable operator's franchise area, and joint ventures between cable operators and
LECs in the same markets. There are some statutory exceptions, including a rural
exemption which permits buyouts where the purchased system serves an area with
fewer than 35,000 inhabitants outside an

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urban area. Also, the FCC may grant waivers of the buyout provisions in cases
where (1) the cable operator or LEC would be subject to undue economic distress;
(2) the system or facilities would not be economically viable; or (3) the
anticompetitive effects of the proposed transaction are clearly outweighed by
the effect of transaction in meeting community needs. The respective local
franchising authority must approve any such waiver.

Public Utility Competition. The Telecommunications Act also authorizes
another potential competitor, registered utility holding companies and
subsidiaries, to provide video programming services, notwithstanding the Public
Utility Holding Company Act. Utilities must establish separate subsidiaries and
must apply to the FCC for operating authority.

Cross-Ownership; Reduced Regulations. The Telecommunications Act makes
several other changes to relax ownership restrictions and regulation of cable
systems. It repeals the 1992 Cable Act's three-year holding requirement
pertaining to sales of cable systems. The broadcast/cable cross-ownership
restrictions are eliminated, although the FCC's regulations prohibiting
broadcast/cable common ownership currently remain. The SMATV-cable
cross-ownership and the MMDS-cable cross-ownership restrictions have been
eliminated for cable operators subject to effective competition.

The Telecommunications Act amends the definition of "cable system" so that
a broader class of entities (including some entities which may compete with the
Company) providing video programming will be exempt from regulation as a cable
system under the Communications Act.

Pole Attachments. The Telecommunications Act also alters the scheme
pertaining to pole attachment rates (rates charged by telephone and utility
companies for delivery of cable and non-cable services). The current method for
determining rates will continue for five years. The FCC will establish a new
formula for poles used by cable operators for telecommunications services, which
could result in higher pole rental rates for cable operators that offer
non-cable services. Any increases pursuant to this new formula may not begin for
five years, and will be phased in by equal increments over years five through
ten. However, this new FCC formula does not apply in states which certify that
they regulate pole rates.

Miscellaneous Requirements and Provisions. The Telecommunications Act also
imposes other miscellaneous requirements on cable operators, including an
obligation to fully scramble or block at no charge the audio and video portion
of any channel not specifically subscribed to by a household. In addition,
sexually explicit programming must be scrambled or blocked, although this
provision is currently enjoined by a Federal court. If the cable operator is
unable to scramble or block its signal completely, it must restrict transmission
to those hours of the day when children are unlikely to view the programming, as
determined by the FCC. A Federal court has temporarily stayed enforcement of
this provision pending further consideration of a constitutional challenge. If
the provision is held to be constitutional, it could increase operating expenses
for operators of cable television systems, including the Company, and provide a
competitive advantage to less regulated providers of video programming services.
The Telecommunications Act also directs the FCC to adopt regulations to ensure,
with certain exceptions, that video programming is fully accessible through
close captioning. The FCC is presently engaged in a proceeding to establish
regulations to implement the close captioning requirement.

Certain provisions of the Telecommunications Act could materially affect
the growth and operation of the cable television industry and the cable services
provided by the Company. Although the new legislation may substantially lessen
regulatory burdens, the cable television industry may be subject to additional
competition as a result thereof. There are numerous rulemakings which have been,
and which will be, undertaken by the FCC which will interpret and implement the
Telecommunications Act's provisions. In addition, certain provisions of the Act
(such as the deregulation of cable programming rates) are not immediately
effective. Further, certain of the Telecommunications Act's provisions have been
and are likely to continue to be subject to judicial challenges. The Company is
unable at this time to predict the outcome of such rulemakings or litigation or
the substantive effect (financial or otherwise) of the new legislation and the
rulemakings on the Company.

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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, cable operators can obtain blanket permission to
retransmit broadcast signals. The nature and amount of future copyright payments
for broadcast signal carriage cannot be predicted. The possible simplification,
modification or elimination of the compulsory copyright license is the subject
of continuing legislative review. The elimination or substantial modification of
the cable compulsory license could adversely affect the Company's ability to
obtain suitable programming and could substantially increase the cost of
programming that remained available for distribution to the Company's customers.
Management cannot predict the result of such legislative activity or the effect
of such activity on the Company's condition (financial or otherwise). See
"-- Regulation in the Cable Television Industry."

STATE AND LOCAL REGULATION

Cable television systems generally are operated pursuant to non-exclusive
franchises, permits or licenses granted by a municipality or other state or
local government entity. Franchises generally are granted for fixed terms and in
many cases are terminable if the franchisee fails to comply with material
provisions of its franchise agreement. The terms and conditions of franchises
vary materially from jurisdiction to jurisdiction. 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. Attempts in other states to regulate cable television systems
are continuing and can be expected to increase. Management cannot predict
whether any of the states in which the Company currently operates will engage in
such regulation in the future. State and local franchising jurisdiction is not
unlimited, however, and must be exercised consistently with Federal law. The
1992 Cable Act immunizes franchising authorities from monetary damage awards
arising from regulation of cable television systems or decisions made on
franchise grants, renewals, transfers and amendments.

FCC IMPLEMENTATION OF THE TELECOMMUNICATIONS ACT

The FCC is presently, and will be engaged, in numerous proceedings to
implement various provisions of the Telecommunications Act. In two recent
proceedings, the FCC adopted cable television equipment cost aggregation rules
and adopted open video system rules. In addition to the proceedings previously
discussed herein, the FCC has recently initiated a proceeding to implement most
of the Cable Act reform provisions of the Telecommunications Act.

In this proceeding, the FCC has set forth certain interim rules to govern
while the FCC completes its implementation of the Telecommunications Act. Among
other things, the FCC is requiring on an interim basis that for a LEC to be
deemed to be offering "comparable" programming, such programming must include
the signals of local broadcasters. Cable systems that meet all of the relevant
criteria in the new effective competition test are exempt from rate regulation
as of February 8, 1996 (the date the Telecommunications Act was signed into law
by President Clinton). Cable systems may file a petition with the FCC at any
time for a determination of effective competition.

The FCC has also established interim rules governing the filing of rate
complaints by local franchising authorities. Local franchising authorities may
file rate complaints with the FCC when the local franchising authorities receive
more than one subscriber complaint concerning an operator's rate increase. If
the local franchising authority receives more than one subscriber complaint
within the 90-day period and decides to file its own complaint with the FCC, it
must do so within 180 days after the rate increase became effective. Before
filing a complaint with the FCC, the local franchising authority must first
provide the cable operator written notice of its intent to do so and must give
the operator a minimum of 30 days to file with the local franchising authority
the relevant FCC forms used to justify a rate increase. The local franchising
authority must then forward its complaint and the operator's response to the FCC
within the 180 day deadline. The FCC must issue a final order within 90 days
after it receives a local franchising authority complaint.

For interim purposes, the FCC has established that an operator serving
fewer than 617,000 subscribers is a "small cable operator" if its annual
revenues, when combined with the total annual revenues of all of its

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affiliates, do not exceed $250 million in the aggregate. For interim purposes,
"affiliate" will be defined as a 20% or greater equity interest.

In addition to the interim rules discussed above and other miscellaneous
interim rules, the FCC is also engaged in a rulemaking proceeding to create and
implement final rules relating to the cable reform provisions of the
Telecommunications Act. Among other issues, the FCC is considering whether to
establish a LEC market share that must be satisfied before a LEC will be deemed
to constitute "effective competition" to an incumbent cable operator (which
would free the cable operator from rate regulation). The Company cannot predict
the outcome of this FCC proceeding or its ultimate effect on the Company.

The foregoing does not purport to describe all present and proposed
federal, state and local regulations and legislation relating to the cable
television industry. Other existing federal regulations, copyright licensing
and, in many jurisdictions, state and local franchise requirements, currently
are the subject of a variety of judicial proceedings, legislative hearings and
administrative and legislative proposals which could change, in varying degrees,
the manner in which cable television systems operate. Neither the outcome of
these proceedings nor their short or long-term impact upon the cable television
industry can be predicted at this time.

COMPANY'S BACKGROUND AND OWNERSHIP STRUCTURE

Charter Southeast was organized in October 1995 as a Delaware limited
partnership. Ownership interests in Charter Southeast are held by Charter
Holdings and Charter Communications Southeast Properties, Inc., a Delaware
corporation and wholly-owned subsidiary of Charter Holdings ("Southeast
Properties"). Charter Holdings and Southeast Properties maintain a 99.0% limited
partnership interest and 1.0% general partnership interest in Charter Southeast,
respectively. Ownership interests in Charter Holdings are held by CharterComm
Holdings and Charter Communications Holdings Properties, Inc., a Delaware
corporation and wholly-owned subsidiary of CharterComm Holdings ("Holdings
Properties"). Holdings Properties and CharterComm Holdings maintain a 1.0%
general partnership interest and 99.0% limited partnership interest in Charter
Holdings, respectively. The general partners of CharterComm Holdings are
CharterComm, and CharterComm II, L.L.C., a Delaware limited liability company
("CharterComm II" and, together with CharterComm, the "CharterComm Entities").
Charterhouse and Charter directly and/or indirectly own 93.0% and 7.0%
interests, respectively, in each of the CharterComm Entities. CharterComm and
CharterComm II, respectively, own a 36.3% and a 56.7% general partnership
interest in CharterComm Holdings; preferred equity investors own an aggregate of
7.0% of limited partnership interests in CharterComm Holdings. Charterhouse is a
privately-owned investment firm active in making private equity investments in a
broad range of industrial and service companies. Charter's management has been
associated with Charterhouse for more than a decade, commencing with
Charterhouse's initial investment in Cencom in 1983. Charterhouse has arranged
for the investment of approximately $77.5 million in equity in the Company. As a
result of its investment, Charterhouse can exercise effective control over the
management and affairs of the Issuers and the Company.

Charter Southeast has direct and indirect interests in CC-I and CC-II,
which were formed to acquire and operate certain cable television systems in the
southeastern region of the United States. The sole business activities engaged
in by CC-I and CC-II are the ownership, development and operation of cable
television systems.

The general partner of CC-I is CCP One, Inc. (formerly known as LEB
Communications, Inc.), which is a wholly-owned subsidiary of Charter Southeast,
and which holds a 21.0% general partnership interest therein. The general
partner of CC-II is CCP II, Inc., a Delaware corporation ("CCP II") and
wholly-owned subsidiary of Charter Southeast, which holds a 1.0% general
partnership interest therein. The sole business activities of CCP One, Inc. and
CCP II are serving as the general partners of CC-I and CC-II, respectively.

CC-II directly and indirectly owns 100% of two subsidiary entities, Charter
Communications III, L.P., a Delaware limited partnership, and Peachtree Cable
TV, Inc., a Nevada corporation, which operate cable systems in Alabama and
Georgia, respectively.

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EMPLOYEES

The Issuers have no employees. As of March 31, 1996, CC-I and CC-II
employed an aggregate of 463 full-time equivalent employees. None of such
employees was covered by a collective bargaining arrangement. The Company
considers its relationships with its employees to be good.

Charter acts as the management company for each of the Southeast Systems
pursuant to the management agreements. See "Certain Relationships and Related
Transactions -- Management Agreements." For a discussion of the directors and
executive officers of Charter, see "Management."

PROPERTIES

The principal physical assets of the Company consist of, among other
things, the components of each of its cable systems, which include a headend,
distribution cables and a local business office. The receiving apparatus is
comprised of a tower and antennas for reception of over-the-air broadcast
television signals and one or more earth stations for reception of satellite
signals. Located near these receiving devices is a building that houses
associated electronic gear and processing equipment. The Company owns the
receiving and distribution equipment of its systems and owns or leases small
parcels of real property for the receiving sites.

Cable is either buried in trenches or is attached to utility poles pursuant
to license agreements with the owners of the poles. The Company owns or leases
the local business office of each system from which it dispatches service
employees, monitors the technical quality of the system, handles customer
service and billing inquiries and administers marketing programs. The office
facilities of some systems include studios for local access program production,
as required under the Company's franchises.

Management believes that the Company's properties are generally in good
condition. The physical components of the Company's cable systems, however,
require maintenance and periodic upgrades to keep pace with technological
advances and to comply with the requirements of certain franchising authorities.
For a discussion of historical and planned 1996 capital expenditures, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

INSURANCE

The Company has insurance covering risks incurred in the ordinary course of
business, including general liability, property coverage and business
interruption insurance. As is typical in the cable television industry, the
Company does not maintain insurance covering its underground plant. Management
believes its insurance coverage is adequate.

LEGAL PROCEEDINGS

The Company is involved from time to time in routine legal matters
incidental to its business. Management believes that the resolution of such
matters will not have a material adverse effect on the Company's financial
position or results of operations.

On October 20, 1995, a purported class action lawsuit was filed in the
Chancery Court of New Castle County, Delaware. The Action was purportedly filed
by the plaintiff on his own behalf and on behalf of the limited partners of
CCIP. The action names as defendants the general partner of CCIP, the purchasers
of all of the systems owned by CCIP (which included CC-II and certain other
affiliates of Charter), Charter, which is the indirect parent of the general
partner of CCIP, and certain individuals, including the directors and executive
officers of the general partner of CCIP. The Action sought, among other things,
to enjoin permanently the solicitation of consents undertaken in connection with
the transaction and to enjoin the CCIP Acquisition, as well as to require CCIP
to explore alternatives to the CCIP Acquisition in order to maximize limited
partnership values, and to compensate the plaintiff and other CCIP limited
partners for damages related to the alleged wrongdoing, which included
allegations of breach of fiduciary duties. On February 15, 1996, the Court of
Chancery of the State of Delaware in and for New Castle County dismissed all of
the plaintiff's claims for injunctive relief (including that which sought to
prevent the consummation of the CCIP Acquisition), and the CCIP Acquisition was
consummated on March 29, 1996. The plaintiff's claims for money damages remain
pending. See "Business -- Description of the Southeast Systems -- CCIP Systems
Acquisition."

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information, as of June 1, 1996 with
respect to the executive officers and directors of Southeast Properties, the
general partner of Charter Southeast, the executive officers and directors of
Southeast Capital, and the directors and executive officers of Charter, which,
as the manager of the Southeast Systems, is responsible for providing advice
with respect to the overall management and operations of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES
- ---------------------- --- -------------------------------------------------------------
<S> <C> <C>
Jerald L. Kent........ 38 President and Director of Southeast Properties, Southeast
Capital and Charter
Howard L. Wood........ 57 Chairman of the Management Committee and Director of
Southeast Properties, Southeast Capital and Charter
Barry L. Babcock...... 49 Chairman and Director of Southeast Properties, Southeast
Capital and Charter
Jeffrey C. Sanders.... 35 Executive Vice President and Chief Financial Officer of
Southeast Properties, Southeast Capital and Charter
Theodore W. Browne 42 Executive Vice President, General Counsel and Secretary of
II.................. Southeast Properties, Southeast Capital and Charter
Ralph G. Kelly........ 39 Senior Vice President -- Treasurer, of Southeast Properties,
Southeast Capital and Charter
Glenn M. Stinchcomb... 69 Director of Charter
Thomas C. Dircks...... 38 Director of Southeast Properties
Robert C. Bailey...... 60 Senior Vice President -- Operations of Charter
Thomas R. Jokerst..... 46 Senior Vice President -- Engineering of Charter
David L. McCall....... 40 Senior Vice President -- Southeastern Operations of Charter
Mary Pat Blake........ 40 Senior Vice President -- Marketing of Charter
</TABLE>

The following sets forth certain biographical information with respect to
the directors and executive officers of Southeast Properties, Southeast Capital
and Charter.

JERALD L. KENT is a co-founder, President and a member of the Management
Committee of Charter. Prior to founding Charter, Mr. Kent was associated with
Cencom Cable Associates, Inc. ("Cencom"), where he served as Executive Vice
President and Chief Financial Officer. Mr. Kent also served Cencom as Senior
Vice President of Finance from May 1987, Senior Vice President of Acquisitions
and Finance from July 1988, and Senior Vice President and Chief Financial
Officer from January 1989. Prior to that time, Mr. Kent was employed by Arthur
Andersen & Co., certified public accountants, where he attained the position of
tax manager. Mr. Kent, a certified public accountant, received his undergraduate
and M.B.A. degrees with honors from Washington University (St. Louis).

HOWARD L. WOOD is a co-founder and Chairman of the Management Committee of
Charter. Prior to founding Charter, Mr. Wood was associated with Cencom. Mr.
Wood joined Cencom in July 1987 as President, Chief Financial Officer and
Director and assumed the additional position of Chief Executive Officer
effective January 1, 1989. Prior to that time, Mr. Wood was employed by Arthur
Andersen & Co., certified public accountants, where he served as
Partner-in-Charge of the St. Louis Tax Division from 1973 until joining Cencom.
Mr. Wood has been involved in the cable industry since 1976 when he assisted
Robert A. Brooks in financing the building of the cable television systems of
T.C. Industries, Inc. Mr. Wood is a certified public accountant and a member of
the American Institute of Certified Public Accountants and serves as a director
of Charter, VanLiner Group, Inc., First State Bank and St. Louis Regional
Commerce and Growth Association. He is also a past Chairman of the Board and
former director of the St. Louis College of Pharmacy. Mr. Wood graduated with
honors from Washington University (St. Louis) School of Business.

BARRY L. BABCOCK is a co-founder and Chairman of Charter, and a member of
its Management Committee. Prior to founding Charter, Mr. Babcock was associated
with Cencom, where he served as the

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Executive Vice President from February 1986 to September 1991, and was named
Chief Operating Officer in May of 1986. Mr. Babcock was one of Cencom's founders
and, prior to the duties he assumed in early 1986, was responsible for all of
Cencom's in-house legal work, contracts and governmental relations. Mr. Babcock
serves as a director of Charter. He also serves as a director of Community
Telecommunications Association (CATA), Cable in the Classroom and the St. Louis
Civic Entrepreneur's Organization. Mr. Babcock, an attorney, received his
undergraduate and J.D. degrees from the University of Oklahoma. He also served
four years as a line officer in the United States Navy.

JEFFREY C. SANDERS is Executive Vice President and Chief Financial Officer
of Southeast Properties, Southeast Capital and Charter and a member of the
Management Committee of Charter. He joined Charter in January 1994 as Senior
Vice President -- Finance and Acquisitions. Prior to joining Charter, from
December 1991 through January 1994, Mr. Sanders headed the Media Mergers &
Acquisitions Group of The Toronto-Dominion Bank. Prior to that time, Mr. Sanders
spent three years in the Communications Finance Group of The Toronto-Dominion
Bank. Prior to joining Toronto-Dominion, Mr. Sanders spent three years at
Boatmen's Bancshares where he was a commercial banking officer in the Corporate
Banking Group. Mr. Sanders received his M.B.A. with Distinction from The Wharton
School, University of Pennsylvania, and a B.S. in Business from the University
of Missouri.

THEODORE W. BROWNE, II is Executive Vice President, General Counsel and
Secretary of Southeast Properties, Southeast Capital and Charter and a member of
the Management Committee of Charter. Prior to joining Charter in August 1994,
Mr. Browne was Senior Counsel of Gaylord Entertainment Company. Prior to joining
Gaylord, Mr. Browne served as Senior Vice President -- Legal and Secretary of
Cencom from 1987 to 1993. From 1983 to 1986, Mr. Browne was Associate Counsel
for American Television and Communications Corporation, a subsidiary of Time,
Inc. Mr. Browne received his undergraduate degree from Cornell College and his
J.D. degree from Harvard Law School.

RALPH G. KELLY joined Charter in 1993 as Vice President -- Finance, a
position he held until early 1994 when he became Chief Financial Officer of
CableMaxx, Inc., a wireless cable television operator. Mr. Kelly returned as
Senior Vice President -- Treasurer of Southeast Properties, Southeast Capital
and Charter in February, 1996 and has overall responsibility for treasury
operations and investor and financial reporting. Mr. Kelly has worked in the
cable industry since 1984 when he joined Cencom as Controller. Mr. Kelly was
promoted to Treasurer of Cencom in 1989, and was responsible for treasury
management, loan compliance, budget administration, supervision of internal
audit and SEC reporting. He has served on the Accounting Committee of the Board
of Directors for National Cable Television Association. Mr. Kelly is a certified
public accountant and was in the audit division of Arthur Andersen & Co. from
1979 to 1984. Mr. Kelly received his undergraduate degree in accounting from the
University of Missouri -- Columbia and his M.B.A. from Saint Louis University.

GLENN M. STINCHCOMB has been affiliated with the Oklahoma Publishing
Company ("OPUBCO"), an investor in Charter, since 1958, and served as director,
Vice President and Treasurer until 1995. He remains a director of OPUBCO and
also serves as director of Gaylord Entertainment Company and Western Pacific
Airlines, Inc. Mr. Stinchcomb was elected a director of Charter in March 1993.

THOMAS C. DIRCKS has been a director of Southeast Properties since January
1996. Mr. Dircks has been a Vice President of Charterhouse since August 1988.
Charterhouse is a private investment firm specializing in buy-out acquisitions.
Mr. Dircks is a certified public accountant. Mr. Dircks received his
undergraduate and M.B.A. degrees from Fordham University.

ROBERT C. BAILEY is Senior Vice President of Operations of Charter. Mr.
Bailey joined Charter in January 1993. Prior to joining Charter, Mr. Bailey was
associated with Cencom, serving as Group Vice President of Operations from
August 1987 and as of September 1988 as Senior Vice President/Operations. From
1984 to 1987, Mr. Bailey served as Vice President of Construction for Group W
Cable (Chicago office), where he managed all construction projects and related
field service operations in the Chicago area. From 1981 to 1984, Mr. Bailey
served as Vice President of Construction for Group W Cable (corporate office),
with responsibility for all capital projects. Mr. Bailey is a Graduate of
Capital Radio Engineering Institute of Washington, D.C. and Commercial Radio
Institute of Baltimore, Maryland.

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THOMAS R. JOKERST is Senior Vice President -- Engineering of Charter. Mr.
Jokerst joined Charter in December 1993. Mr. Jokerst is responsible for all
aspects of engineering and technology assessment for Charter. Prior to joining
Charter, from March 1991 to March 1993, Mr. Jokerst served as Vice President,
Office of Science & Technology for Cable Television Laboratories in Boulder,
Colorado. From 1979 to March 1993, Mr. Jokerst was employed by Continental
Cablevision of Illinois, Inc., where his responsibilities included the creation
of a Regional Hub and Headend Interconnect for the St. Louis Region of
Continental Cablevision's systems. Mr. Jokerst is a graduate of Ranken Technical
Institute in St. Louis with a degree in Communications Electronics and Computer
Technology and of Southern Illinois University in Carbondale, Illinois with a
degree in Electronics Technology.

DAVID L. MCCALL is Senior Vice President, Southeastern Operations for
Charter. Mr. McCall joined Charter in January 1994 as Regional Operations
Manager and he has primary responsibility for all cable system operations
managed by Charter in the southeastern region of the United States. Prior to
joining Charter, Mr. McCall was associated with Crown Cable and its predecessor
company, Cencom, from 1983 to 1993. As a Regional Manager of Cencom, Mr.
McCall's responsibilities included supervising all aspects of operations for
systems located in North Carolina, South Carolina and Georgia, consisting of
over 142,000 subscribers. From 1977 to 1982, Mr. McCall was System Manager of
Coaxial Cable Developers (DBA Teleview Cablevision) in Simpsonville, South
Carolina. Mr. McCall has served as a director for the South Carolina Cable
Television Association for the past ten years.

MARY PAT BLAKE is Senior Vice President -- Marketing of Charter. Ms. Blake
joined Charter in August 1995 and is responsible for all aspects of marketing
and sales. Prior to joining Charter, Ms. Blake was active in the emerging
business sector, and formed Blake Investments, Inc. in September 1993, which
created, operated and sold a branded coffeehouse and bakery. From September 1990
to August 1993, Ms. Blake served as Director -- Marketing for Brown Shoe
Company. Ms. Blake has 18 years of experience with senior management
responsibilities in marketing, sales, finance, systems, and general management
with companies such as The West Coast Group, Pepsico Inc.-Taco Bell Division,
General Mills, Inc. and ADP Network Services, Inc.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

Southeast Properties, the general partner of Charter Southeast, was formed
in December 1994. None of the officers of Southeast Properties has received any
compensation in his capacity as an officer or director of Southeast Properties,
and none of such individuals expects to receive any compensation in such
capacity at any time in the future. No employee of any of the Southeast Systems
received in excess of $100,000 of compensation in any fiscal year.

In 1994 and 1995, Charter performed management services for the Company
pursuant to the terms of the old management agreements. See
"Business -- Management Agreements." Under the terms of the Old Management
Agreements, the management fees paid and accrued to Charter by the Company were
$2.2 million in 1995 and $0.6 million in 1994, respectively; no management fees
were paid to Charter in 1993 and 1992. Charter expects to continue to perform
management services for the Company pursuant to the terms of a new management
agreement. See "Certain Relationships and Related Transactions."

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT AGREEMENTS

Pursuant to certain management agreements entered into between each of CC-I
and CC-II (including its wholly-owned subsidiaries, CC-III and Peachtree), on
the one hand, and Charter, on the other hand (the "Old Management Agreements"),
management fees paid and accrued to Charter by CC-I were $0.6 million in 1994.
Management fees paid and accrued to Charter by CC-I and CC-II (including its
wholly-owned subsidiaries, CC-III and Peachtree) were $1.0 million and $1.2
million in 1995, respectively.

In connection with the Offerings, the Old Management Agreements were
replaced. Charter Holdings entered into a management agreement, dated as of the
closing date of the Offerings (the "Charter Management Agreement"), with Charter
pursuant to which Charter Holdings assigned and delegated to Charter its
management rights and obligations under the Subsidiary Management Agreements (as
defined below). Charter Holdings entered into a management agreement, dated as
of the closing date of the Offerings, with Charter Southeast pursuant to which
Charter Southeast assigned and delegated to Charter Holdings its management
rights and obligations under the Subsidiary Management Agreements. Charter
Southeast entered into separate management agreements, dated as of the closing
date of the Offerings, with each of CC-I and CC-II (collectively, the
"Subsidiary Management Agreements"). Pursuant to the Subsidiary Management
Agreements, Charter Southeast has the exclusive right, authorization and
responsibility to manage the day-to-day business and affairs of the cable
systems owned by CC-I, CC-II, CC-III and Peachtree and is entitled to receive
consulting/management fees equal to an aggregate of five percent of the gross
subscriber revenues of such systems for its services.

CCIP ACQUISITION

The Company, through CC-II, acquired the CCIP Systems from CCIP on March
29, 1996 for an aggregate purchase price of approximately $115.0 million,
including related acquisition fees and expenses. As of March 31, 1996, the CCIP
Systems served approximately 53,900 basic subscribers in Tennessee, Kentucky,
Georgia and North Carolina. The Action related to the CCIP Acquisition remains
pending. There can be no assurance that the plaintiffs in the Action will not be
awarded money damages, some or all of which may be payable by CC-II, in
connection with the Action. See "Business -- Description of Southeast Systems --
CCIP Systems Acquisition" and "Business -- Legal Proceedings."

PENDING ACQUISITIONS

On May 29, 1996, an affiliate of Charter entered into an asset purchase
agreement with Masada Cable Partners, L.P. to acquire multiple systems,
including a system serving both Alabama and Tennessee with approximately 13,300
subscribers. On June 18, 1996, the purchase rights to the Masada III System, for
which the purchase price is $22.0 million, were assigned to CC-I. Subject to the
satisfaction of certain terms and conditions, the acquisition of the Masada III
System is expected to be consummated in late 1996.

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14,600 and 12,700 subscribers, respectively. CPLP, the general partner of which
is an affiliate of Charter, is currently in liquidation. Subject to the
satisfaction of certain terms and conditions, the acquisition of the Lincolnton
Systems is expected to be consummated in late 1996.

In May 1996, Charter entered into a letter of intent to acquire certain
cable television systems, serving approximately 34,800 subscribers, located in
Hickory, North Carolina. The letter of intent provides for a purchase price of
$68.0 million. Under the terms of such letter of intent, Charter is permitted to
assign its rights thereunder to an affiliate. Charter and CC-I are negotiating
the terms of an assignment with respect to this transaction. Subject to the
satisfaction of certain terms and conditions, the acquisition of the Hickory
Systems is expected to be consummated in late 1996.

TRANSACTION FEES

In connection with acquisitions and financing transactions by Charter
Holdings, Charter Southeast and its subsidiaries, Charter and Charterhouse are
typically each paid financial advisory and investment banking fees. Such fees
are calculated as a percentage of the transaction, based upon the size of the
transaction; the smaller the transaction, the higher the percentage (up to a
maximum of approximately 1.5% for each, respectively). Typically, the fee is
approximately 1.0% of the transaction. In connection with acquisitions into
which Charter and Charterhouse are contributing equity, such fees may be taken
in the form of equity interests in the purchasing entity. In 1995, Charter
received $450,000 and Charterhouse received $100,000 in fees from Charter
Southeast and its subsidiaries. In 1996, Charterhouse has received a $1,050,000
fee from CC-II in connection with the issuance of the Charterhouse Bridge Notes
(as defined) and related consulting services, and Charter has received $100,000
in transaction fees from CC-II. The Indenture limits the payment of such
transaction fees.

RELATIONSHIP WITH CHARTERHOUSE; RIGHTS OF PREFERRED LIMITED PARTNERS OF
CHARTERCOMM HOLDINGS

CharterComm Holdings holds a 99.0% limited partnership interest in, and,
through a wholly-owned subsidiary, a 1.0% general partnership interest in
Charter Holdings. CharterComm Holdings is capitalized with three classes of
partnership interests: preferred limited partner interests, common limited
partner interests, and general partner interests. Because Charterhouse
indirectly controls both general partners of CharterComm Holdings, Charterhouse
can, subject to applicable law, exercise effective control over the management
and affairs of the Issuers and the Company.

The prior consent of a majority of the preferred limited partner interests
of CharterComm Holdings is required for certain significant corporate
transactions, including, among others, the dissolution of CharterComm Holdings,
certain sales or transfers of the assets of CharterComm Holdings or its
subsidiaries, and certain acquisitions of assets by CharterComm Holdings or its
subsidiaries. In addition, each of the limited partners of CharterComm Holdings
has certain rights to require CharterComm Holdings to purchase all or any
portion of its limited partnership interests upon the earlier to occur of (x)
January 18, 2000 or (y) the occurrence of a Change of Control (as defined in the
CharterComm Holdings L.P. Agreement), at a redemption price calculated in
accordance with the CharterComm Holdings L.P. Agreement. The redemption price
for CharterComm Holdings' (i) preferred interests equals the accreted value of
such interests at the time of redemption and (ii) common interests equals the
fair market value of such interests at the time of redemption. Under the terms
of the CharterComm Holdings L.P. Agreement, a "Change of Control" is deemed to
occur in the event of, among other things, the voluntary departure of all of
Messrs. Babcock, Kent and Wood from active engagement in the management of
CharterComm Holdings.

The CharterComm Holdings L.P. Agreement includes customary events of
default ("Events of Default"), including, without limitation, events relating to
the bankruptcy of either general partner of CharterComm Holdings or CharterComm
Holdings itself, the failure of CharterComm Holdings to comply with material
provisions of the CharterComm Holdings L.P. Agreement and certain other
agreements, the failure to redeem partnership interests of CharterComm Holdings
when required. Upon the occurrence of an Event of Default and subject to the
prior consent of a majority of the preferred limited partners, each of the
preferred limited partners of CharterComm Holdings has the right to (i) replace
the management of

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CharterComm Holdings, (ii) require the liquidation of CharterComm Holdings (with
the consent of the common partners), or (iii) require CharterComm Holdings to
purchase all or any portion of its partnership units. An Event of Default under
the terms of the CharterComm Holdings L.P. Agreement could therefore result in a
change of management of CharterComm Holdings, and, as result thereof, Charter
Southeast. Any of such events could adversely affect the Issuers' ability to
service the Notes and may constitute a Change of Control under the Indenture and
each of the New Credit Facilities. See "Risk Factors -- Purchase of Notes Upon a
Change of Control" and "The Partnership Agreements."

REDEMPTION OF SPECIAL LIMITED PARTNERSHIP INTERESTS

Approximately $43.3 million of the net proceeds from the Offering were used
to redeem outstanding special limited partnership interests in CC-I, which were
issued to certain of the sellers of the McDonald Systems as partial
consideration in connection with the acquisition of the McDonald Systems by
CC-I. As a result of the redemption of such special limited partnership
interests, Charter Southeast beneficially owns all of the outstanding
partnership interests in CC-I.

CHARTERHOUSE BRIDGE NOTES

Charter Holdings and Charterhouse Equity Partners II, L.P., a Delaware
limited partnership controlled by Charterhouse ("CEP"), executed a Note Purchase
Agreement dated as of November 30, 1995 (the "Note Purchase Agreement"). By the
terms of the Note Purchase Agreement, Charter Holdings issued bridge notes (the
"Charterhouse Bridge Notes") due November 29, 1996 in the aggregate principal
amount of $15.0 million in favor of CEP. In connection with its organization,
Charter Southeast assumed the Charterhouse Bridge Notes from Charter Holdings.
The proceeds from the Charterhouse Bridge Notes were used by Charter Southeast
to consummate the acquisition of the Masada Systems; such Bridge Notes were
repaid using proceeds of the Offering. See "Use of Proceeds."

SHORT-TERM INTERCOMPANY NOTE

In February 1996, CharterComm, now a general partner of CharterComm
Holdings, exercised an option to acquire the balance (60.0%) of the outstanding
shares of CCP One, Inc. (formerly known as LEB Communications, Inc.) which it
did not otherwise own for a purchase price of $1.1 million. To exercise this
option, CharterComm borrowed such amount from CC-I. Upon the closing of the
Offerings, CCP One, Inc. became a wholly-owned subsidiary of Charter Southeast.
Charter Southeast indirectly assumed from CharterComm the liability for the
short-term intercompany note from CC-I and repaid it in full from the proceeds
of the Offerings.

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<PAGE> 85

PRINCIPAL SECURITY HOLDERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth, as of June 1, 1996 the ownership of Charter
Southeast, Charter Holdings and CharterComm Holdings. Charter Southeast owns all
of the outstanding capital stock of Southeast Capital. Charter Holdings owns all
of the outstanding capital stock of Holdings Capital and Southeast Properties.
CharterComm Holdings owns all of the capital stock of Holding Properties. For a
more detailed discussion of certain ownership interests of Charter Southeast,
see "Business -- Company's Background and Ownership Structure" and "Certain
Relationships and Related Transactions -- Ownership of Equity Interests in the
Issuers."

<TABLE>
<CAPTION>
NAME AND ADDRESS
OF BENEFICIAL OWNERS TYPE OF INTEREST % OF UNITS
- ------------------------------------------------- ------------------------------------- ----------
<S> <C> <C>
CHARTER SOUTHEAST
Charter Holdings................................. Limited Partnership Units 99.0%
12444 Powerscourt Drive
Suite 400
St. Louis, Missouri 63131
Southeast Properties............................. General Partnership Units 1.0%
12444 Powerscourt Drive
Suite 400
St. Louis, Missouri 63131
CHARTER HOLDINGS
CharterComm Holdings............................. Limited Partnership Units 99.0%
12444 Powerscourt Drive
Suite 400
St. Louis, Missouri 63131
Holdings Properties.............................. General Partnership Units 1.0%
12444 Powerscourt Drive
Suite 400
St. Louis, Missouri 63131
CHARTERCOMM HOLDINGS
CharterComm II, L.L.C.(a)........................ General Partnership Units 56.67%
c/o Charterhouse Group International, Inc.
535 Madison Avenue
New York, New York 10036
CharterComm, Inc.(b)............................. General Partnership Units 36.36%
c/o Charterhouse Group International, Inc.
535 Madison Avenue
New York, New York 10036
Certain institutional investors.................. Preferred Limited Partnership Units 99.26%
Common Limited Partnership Units 6.92%
Senior managers of Charter....................... Preferred Limited Partnership Units 0.74%
Common Limited Partnership Units 0.05%
</TABLE>

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

(a) Charter, which owns 7% of the issued and outstanding stock of CharterComm
and CharterComm II, may be deemed to beneficially own general partnership
units of CharterComm Holdings.

(b) Charterhouse, which beneficially owns 93% of the issued and outstanding
stock of CharterComm and CharterComm II, may be deemed to beneficially own
general partnership units of CharterComm Holdings.

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<PAGE> 86

THE PARTNERSHIP AGREEMENTS

The following is a summary of certain material terms of the Amended and
Restated Agreement of Limited Partnership of Charter Southeast (the "Charter
Southeast L.P. Agreement"); the Amended and Restated Agreement of Limited
Partnership of Charter Holdings (the "Charter Holdings L.P. Agreement") and the
Amended and Restated Agreement of Limited Partnership of CharterComm Holdings
L.P. (the "CharterComm Holdings L.P. Agreement") and certain material agreements
relating thereto. Complete copies of the partnership agreements referred to in
the preceding sentence (and the partnership agreements for each of CC-I and
CC-II) are available in the manner described in "Available Information."

CHARTER SOUTHEAST L.P. AGREEMENT

Organization and Duration. Charter Southeast was formed as a limited
partnership pursuant to the provisions of the Delaware Revised Uniform Limited
Partnership Act, as amended (the "Act"), and a certificate of limited
partnership of Charter Southeast was filed with the Secretary of State of
Delaware on October 25, 1995. The purposes of Charter Southeast, as set forth in
the Charter Southeast L.P. Agreement, are to acquire franchises to operate, and
to own, design, construct, maintain, manage and operate cable television systems
or properties used to receive and transmit television signals including the
ownership and operation of any other business relating to or servicing the
operations of such cable television systems and to do all other things
reasonably incident thereto.

Charter Southeast will be dissolved upon the earliest to occur of (i)
December 31, 2014; (ii) an election to dissolve Charter Southeast made by its
general partner with the consent of the holder(s) of a majority of the limited
partnership units; (iii) the sale, exchange or other disposition of all or
substantially all of the property of Charter Southeast; (iv) the bankruptcy,
dissolution, liquidation, death, disability, legal incapacity, removal or
withdrawal of a partner or the sale, transfer or assignment by a partner of its
limited partnership Units of general partner interest, as the case may be; or
(v) any other event causing dissolution of Charter Southeast under the Act.

Control of Operations. The general partner of Charter Southeast has the
full, exclusive and complete authority, discretion, obligation and
responsibility to manage and control Charter Southeast and to make all decisions
affecting the business and affairs of Charter Southeast.

CHARTER HOLDINGS L.P. AGREEMENT

Organization and Duration. Charter Holdings was formed as a limited
partnership pursuant to the provisions of the Act, and a certificate of limited
partnership of Charter Holdings was filed with the Secretary of State of
Delaware on January 13, 1995. The purposes of Charter Holdings, as set forth in
the Charter Holdings L.P. Agreement, are to acquire franchises to operate, and
to own, design, construct, maintain, manage, and operate cable television
systems or properties used to receive and transmit television signals including
the ownership and operation of any other business relating to or servicing the
operations of such cable television systems and to do all other things
reasonably incident thereto.

Charter Holdings will be dissolved upon the earliest to occur of (i)
December 31, 2014; (ii) an election to dissolve Charter Holdings made by its
general partner with the consent of the holder(s) of a majority of the limited
partnership units; (iii) the sale, exchange or other disposition of all or
substantially all of the property of Charter Holdings; (iv) the bankruptcy,
dissolution, liquidation, death, disability, legal incapacity, removal or
withdrawal of a Partner or the sale, transfer or assignment by a partner of its
limited partnership units of general partner interest, as the case may be; or
(v) any other event causing dissolution of Charter Holdings under the Act.

Control of Operations. The general partner of Charter Holdings has the
full, exclusive and complete authority, discretion, obligation and
responsibility to manage and control Charter Holdings and to make all decisions
affecting the business and affairs of Charter Holdings.

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<PAGE> 87

CHARTERCOMM HOLDINGS L.P. AGREEMENT, AND THE CONTRIBUTION AGREEMENTS, THE
CO-SALE AGREEMENT AND THE SUBSCRIPTION AGREEMENTS RELATING THERETO

Organization and Duration. CharterComm Holdings was formed as a limited
partnership pursuant to the provisions of the Act, and a certificate of limited
partnership of CharterComm Holdings was filed with the Secretary of State of
Delaware in March 1996. The purposes of CharterComm Holdings, as set forth in
the CharterComm Holdings L.P. Agreement, are to acquire franchises to operate,
and to own, design, construct, maintain, manage, and operate cable television
systems or properties used to receive and transmit television signals including
the ownership and operation of any other business relating to or servicing the
operations of such cable television systems and to do all other things
reasonably incident thereto.

CharterComm Holdings will be dissolved upon the earliest to occur of (i)
December 31, 2014; (ii) an election to dissolve CharterComm Holdings made by
either of its general partners with the consent of the holders of a specified
portion of the preferred limited partnership units; (iii) the sale, exchange or
other disposition of all or substantially all of the property of CharterComm
Holdings; (iv) the bankruptcy, dissolution, liquidation, death, disability,
legal incapacity, removal or withdrawal of either general partner of CharterComm
Holdings or the sale, transfer or assignment by the sole remaining general
partner of its interest in CharterComm Holdings; or (v) any other event causing
dissolution of CharterComm Holdings under the Act.

Control of Operations. The general partners of CharterComm Holdings have
the full, exclusive and complete authority, discretion, obligation and
responsibility to manage and control CharterComm Holdings and to make all
decisions affecting the business and affairs of CharterComm Holdings.

Consent Rights. Unless all preferred limited partnership units are
simultaneously redeemed or repurchased, the limited partners of CharterComm
Holdings, in accordance with the terms of the CharterComm Holdings L.P.
Agreement and related Subscription Agreements, have the right to consent to
certain actions taken by CharterComm Holdings, including, without limitation,
(i) amendments of the CharterComm Holdings L.P. Agreement; (ii) the dissolution
and winding up of CharterComm Holdings; (iii) loans by CharterComm Holdings or
any of its subsidiaries, other than (a) loans to CharterComm Holdings or any of
its subsidiaries or (b) loans to employees in the ordinary course of business up
to a maximum amount of $1,250,000 aggregate principal amount outstanding at any
time; (iv) a material change in the nature of the business of CharterComm
Holdings (other than that occurring as a result of any acquisition or
disposition of assets permitted by the CharterComm Holdings L.P. Agreement); (v)
other than as contemplated by the Management Agreements (as defined in the
CharterComm Holdings L.P. Agreement), (a) transactions between the general
partners of CharterComm Holdings (or any of their affiliates) and CharterComm
Holdings or any of its subsidiaries, (b) the entering into of any management
agreement by CharterComm Holdings or any of its subsidiaries following
termination of any Management Agreement or (c) the granting of any required
consent to the assignment by the manager of its rights under any Management
Agreement; (vi) any increase or change to the capital contributions required by
a partner or any change to (a) the rights and interest of a partner in the
taxable income, loss or distributions of CharterComm Holdings, (b) the voting or
consent rights of a partner or (c) the rights of a partner respecting
reconstitution or liquidation of CharterComm Holdings; (vii) any action directly
or indirectly affecting or jeopardizing the status of CharterComm Holdings as a
partnership for Federal income tax purposes; and (vi) any other action requiring
the approval or consent of the limited partners under the Act. Unless any
preferred limited partnership units are simultaneously redeemed or repurchased,
the limited partners of CharterComm Holdings, in accordance with the terms of
the CharterComm Holdings L.P. Agreement and related Subscription Agreements,
have the right to consent to the appointment of the appraiser in connection with
the appraisal process set forth in the CharterComm Holdings L.P. Agreement.

In addition, without the consent of the preferred limited partners,
CharterComm Holdings may not permit any of the following to occur, unless all
preferred limited partnership units are simultaneously redeemed or repurchased:
(i) the ratio at any time during a fiscal quarter of the Outstanding Amount of
Senior Securities (as defined in the CharterComm Holdings L.P. Agreement) at
such time to EBITDA (as defined in the CharterComm Holdings L.P. Agreement) for
the immediately preceding fiscal quarter, to

85
<PAGE> 88

exceed 7.75 to 1 up to and including June 30, 1997 and thereafter 7.5 to 1; (ii)
the sale, lease, mortgage, pledge or other transfer of the assets of CharterComm
Holdings or its subsidiaries (other than in connection with the financing
thereof and the related incurrence of indebtedness) which together with all such
other sales, leases, mortgages, pledges or other transfers (to the extent not
offset by Permitted Swaps (as defined in the CharterComm Holdings L.P.
Agreement)) represent in excess of 20.0% of EBITDA for the four quarters ended
on the last day of the most recent fiscal quarter prior to the consummation of
the last of any such transactions; (iii) the acquisition of assets by
CharterComm Holdings or its subsidiaries (other than inventory and similar
property and the CCIP Acquisition) which, together with all other acquisitions
(to the extent not offset by Permitted Swaps) represent in excess of 20.0% of
EBITDA for the four quarters ended on the last day of the most recent fiscal
quarter prior to the consummation of the last of any such transactions; (iv) the
issuance of Senior Equity Securities (as defined in the CharterComm Holdings
L.P. Agreement); or (v) any amendment of any Management Agreement.

For purposes of the CharterComm Holdings L.P. Agreement and related
Subscription Agreements, the term "Senior Equity Securities" means any equity
security which ranks senior in right and priority of payment to, or pari passu
with, the preferred limited partnership interests upon any liquidation or
dissolution of CharterComm Holdings and any equity security (including any
partnership interest) issued by any subsidiary of CharterComm Holdings to any
Person other than CharterComm Holdings; provided, that for purposes of the
definition of Senior Equity Securities no preferred limited partnership
interests shall constitute Senior Equity Securities.

For purposes of the CharterComm Holdings L.P. Agreement and related
Subscription Agreements, the term "Senior Securities" means, with respect to
CharterComm Holdings or any Subsidiary, all Indebtedness of CharterComm Holdings
or any Subsidiary on a consolidated basis and all outstanding Senior Equity
Securities.

For purposes of the CharterComm Holdings L.P. Agreement and related
Subscription Agreements, the term "EBITDA" means for any specified period, (A)
four multiplied by (B) the consolidated net income of CharterComm Holdings and
its Subsidiaries for the last fiscal quarter of such period, plus, in each case
to the extent deducted in determining such consolidated net income, without
duplication, (i) all income and corporate and other franchise taxes (but not
franchise fees or other similar amounts payable in exchange for the right to own
or operate cable television systems), (ii) any management fees paid or payable
to Charter (or its successor), (iii) any interest expense (net of any interest
income) of CharterComm Holdings or any Subsidiaries (including, without
limitation, interest attributable to capital leases, capitalized interest,
amortization of debt discount and debt issuance costs, non-cash interest
payments and the interest portion of deferred payment obligations), (iv)
amortization and depreciation and (v) other non-cash charges and capital losses
(other than accruals in the ordinary course of business), and minus, to the
extent included in determining such consolidated net income, any non-cash items
or capital gains (other than such items arising in the ordinary course of
business), in each case determined and calculated in accordance with generally
accepted accounting principles as in effect from time to time after giving
appropriate effect to outside minority interests in CharterComm Holdings'
Subsidiaries; provided, however, that in determining EBITDA there shall be
excluded (1) the net income of any Person (other than a Subsidiary of
CharterComm Holdings) in which CharterComm Holdings or any Subsidiary has an
ownership interest, except to the extent that any such net income has been
actually received by CharterComm Holdings or such Subsidiary in the form of cash
dividends or similar distributions and (2) any undistributed net income of a
Subsidiary of CharterComm Holdings which for any reason is unavailable for
distribution to CharterComm Holdings.

Put Rights With Respect to Preferred Limited Partnership Units and Common
Limited Partnership Units. One limited partner has the right, on three separate
occasions, and each of the other limited partners has the right, on one
occasion, to require CharterComm Holdings to purchase all or any portion of
their preferred limited partnership units and proportionate amounts of their
common limited partnership units (based on the amount of the preferred limited
partnership units to be so purchased), if any, at any time after January 18,
2000. The price payable by CharterComm Holdings upon the exercise of such put
right is an amount equal to (A) the accretive value with respect to such
preferred limited partnership units and (B) the fair market value of such common
limited partnership units (determined in accordance with the appraisal process
set forth in

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<PAGE> 89

the CharterComm Holdings L.P. Agreement). Such holders also have such right to
require CharterComm Holdings to purchase all or any portion of their preferred
limited partnership units and a proportionate amount of their common limited
partnership units (based on the amount of the preferred limited partnership
units to be so purchased), if any, upon the occurrence of a Change of Control
Event (as hereinafter defined) or immediately following and during the
continuation of an Event of Default (as defined in the CharterComm Holdings L.P.
Agreement) for a price equal to (A) with respect to the preferred limited
partnership units, the greater of (x) an amount which would be required to be
paid to the holder of a preferred limited partnership unit in order for such
holder to have received a return of the holder's capital contribution and a 17%
per annum return thereon compounded semiannually and (y) the value of the
relevant preferred limited partnership units determined by the CharterComm
Holdings general partners in accordance with the CharterComm Holdings L.P.
Agreement with respect to such preferred limited partnership units and (B) with
respect to the common limited partnership units, the fair market value of such
common limited partnership units (determined in accordance with the appraisal
process set forth in the CharterComm Holdings L.P. Agreement). A "Change of
Control Event" occurs under the CharterComm Holdings L.P. Agreement in the event
of the voluntary departure of Messrs. Barry L. Babcock, Jerald L. Kent and
Howard L. Wood from their active engagement in the management of CharterComm
Holdings.

Redemption of Preferred Limited Partnership Units. At any time on or after
January 18, 2000, CharterComm Holdings may, on three occasions, redeem all or
any portion of the outstanding preferred limited partnership units and a
proportionate amount of their common limited partnership units (based on the
amount of the preferred limited partnership units to be purchased), if any, at a
price equal to (A) with respect to the preferred limited partnership units, the
greater of (x) an amount which would be required to be paid to the holder of a
preferred limited partnership unit in order for such holder to have received a
return of the holder's capital contribution (as defined in the CharterComm
Holdings L.P. Agreement) and a 17% per annum return thereon compounded
semiannually and (y) the value of the relevant preferred limited partnership
units determined by the CharterComm Holdings general partners in accordance with
the CharterComm Holdings L.P. Agreement with respect to such preferred limited
partnership units and (B) with respect to the common limited partnership units,
an amount equal to the fair market value of such common limited partnership
units (determined in accordance with the appraisal process set forth in the
CharterComm Holdings L.P. Agreement). CharterComm Holdings is required to redeem
the preferred limited partnership units on January 18, 2005 at a price equal to
the accretive value with respect to such preferred limited partnership units.

Events of Default. An Event of Default occurs under the CharterComm
Holdings L.P. Agreement upon, among other things, (i) the failure of CharterComm
Holdings to redeem the applicable partnership units within six months of the
exercise of a put, (ii) the failure by CharterComm Holdings to maintain a
required ratio of Senior Securities to EBITDA, (iii) the failure by CharterComm
Holdings to pay any amounts when due to the holders of the preferred partnership
units, (iv) the acceleration of any payment of any Senior Security (as defined
in the CharterComm Holdings L.P. Agreement), (v) certain events of bankruptcy
and insolvency and (vi) the breach of a material term of the CharterComm
Holdings L.P. Agreement or any Subscription Agreement. Upon the occurrence of an
Event of Default, the holders of the preferred limited partnership units have
the right to (i) replace the management of CharterComm Holdings, (ii) replace
the general partners of CharterComm Holdings, (iii) require the liquidation of
CharterComm Holdings, or (iv) require CharterComm Holdings to purchase their
partnership units.

Tag Along/Drag Along Rights With Respect to Limited Partnership
Units. Neither of the general partners is permitted to sell or otherwise
transfer any of their partnership interests in CharterComm Holdings to a third
party unless such sale or transfer includes an offer by such third party to
purchase the limited partnership units held by each of the limited partners. In
the event that both of the general partners desire to sell or otherwise transfer
all of their partnership interests in CharterComm Holdings to a third party, the
general partners have the right to require the limited partners to sell or
otherwise transfer to such third party all, but not less than all, of their
limited partnership units.

Capital Contributions. Under the CharterComm Holdings L.P. Agreement, the
partners have made certain capital contributions to CharterComm Holdings as
described under "Certain Relationships and

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<PAGE> 90

Related Transactions." The general partners may at any time request that the
preferred and/or common limited partners make pro rata subsequent capital
contributions in the event that they determine that CharterComm Holdings
requires additional equity capital for any reason. If CharterComm Holdings
receives less than the aggregate amount of subsequent capital contributions
requested by the general partners, the general partners may obtain capital
contributions from persons other than the partners in accordance with the terms
of the CharterComm Holdings L.P. Agreement. Any subsequent capital contribution
by any partner which consists of property (other than cash) having a fair market
value of more than $1.0 million (as determined in good faith by the general
partners) requires the consent of the preferred limited partners.

Issuance and Sale of Units. The general partners of CharterComm Holdings
have the right, without the consent of the limited partners and in accordance
with the terms of the CharterComm Holdings L.P. Agreement and related
Subscription Agreements, to admit additional limited partners who have purchased
(i) senior equity securities which rank senior in right and priority of payment
to, or pari passu with, the preferred limited partnership units upon any
liquidation or dissolution of CharterComm Holdings including any equity security
(including any partnership interest) issued by any subsidiary of CharterComm
Holdings to any person other than CharterComm Holdings or (ii) junior equity
securities which rank junior in right and priority to the preferred limited
partnership units upon any liquidation or dissolution of CharterComm Holdings.

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<PAGE> 91

DESCRIPTION OF THE NOTES

The Old Notes were issued pursuant to the Indenture dated as of March 15,
1996 among the Issuers and Harris Trust and Savings Bank, as trustee (the
"Trustee"). The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and in effect on the Closing Date.
The Notes are subject to all such terms, and holders of the Notes are referred
to the Indenture and the Trust Indenture Act for a statement thereof. The
following summary of certain provisions of the Indenture does not purport to be
complete and is qualified in its entirety by reference to the Indenture,
including the definitions therein of certain terms used below. The definitions
of certain terms used in the following summary are set forth below under
"Certain Definitions." The Indenture and Registration Rights Agreement are
exhibits to the Registration Statement of which this Prospectus is a part.

On March 28, 1996, the Issuers issued $125.0 million aggregate principal
amount of Old Notes under the Indenture. The terms of the New Notes are
identical in all materials respects to the Old Notes, except for certain
transfer restrictions and registration and other rights relating to the exchange
of the Old Notes for New Notes. The Trustee will authenticate and deliver New
Notes for original issue only in exchange for a like principal amount of Old
Notes. Any Old Notes that remain outstanding after the consummation of the
Exchange Offer, together with the New Notes, will be treated as a single class
of securities under the Indenture.

GENERAL

The Notes are joint and several obligations of Charter Southeast and
Southeast Capital, which are the sole obligors with respect to the Notes. The
Notes are senior unsecured obligations of the Issuers (as described below under
"Ranking") limited to $125.0 million aggregate principal amount. The Notes have
been issued only in fully registered form, without coupons, in denominations of
$1,000 and integral multiples thereof. Principal of, premium, if any, and
interest on the Notes is payable, and the Notes are transferable, at the
corporate trust office or agency of the Trustee maintained for such purposes in
New York, New York. In addition, interest may be paid at the option of the
Issuers by check mailed to the person entitled thereto as shown on the security
register. No service charge will be made for any transfer, exchange or
redemption of Notes, except in certain circumstances for any tax or other
governmental charge that may be imposed in connection therewith.

MATURITY, INTEREST AND PRINCIPAL

The Notes mature on March 15, 2006. Except to the extent set forth in the
next succeeding paragraph, interest on the Notes accrues at the rate of 11.25%
per annum and is payable semi-annually on each March 15 and September 15,
commencing September 15, 1996, to the holders of record of Notes at the close of
business on the March 1 and September 1 immediately preceding such interest
payment date. Interest on the Notes accrues from the most recent date to which
interest has been paid or, if no interest has been paid, from the original date
of issuance (the "Issue Date"). Interest is computed on the basis of a 360-day
year comprised of twelve 30-day months.

Pursuant to the Registration Rights Agreement, the Issuers agreed, at their
expense, for the benefit of the holders of the Notes, either (i) to effect a
registered Exchange Offer under the Securities Act to exchange the Old Notes for
New Notes, which have terms identical in all material respects to the Old Notes
(except that the New Notes do not contain terms with respect to transfer
restrictions) or (ii) in the event that any changes in law or applicable
interpretations of the staff of the Commission do not permit the Issuers to
effect the Exchange Offer, or if for any other reason the Exchange Offer is not
consummated within 150 days of the Issue Date, or under certain other
circumstances, to register the Old Notes for resale under the Securities Act
through a shelf registration statement (a "Shelf Registration Statement"). In
the event that either (a) this Exchange Offer Registration Statement has not
been declared effective on or prior to the 120th day following the Issue Date,
(b) the Exchange Offer is not consummated on or prior to the 150th day following
the Issue Date or (c) a Shelf Registration Statement is not declared effective
on or prior to the 150th day following the Issue Date, the interest rate borne
by the Notes shall be increased by 0.25% per annum following such 120-day period
in the case of (a) above or such 150-day period in the case of (b) or (c) above,
which rate will be

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<PAGE> 92

increased by an additional 0.25% per annum for each 90-day period that any such
additional interest continues to accrue; provided that in no event shall the
interest rate borne by the Notes be increased by more than 1.0%. Upon (w) the
effectiveness of the Exchange Offer Registration Statement in the case of clause
(a) above, (x) the consummation of the Exchange Offer in the case of clause (b)
above or (y) the effectiveness of a Shelf Registration Statement in the case of
clause (c) above, the interest rate borne by the Notes from the date of such
effectiveness or consummation, as the case may be, will be reduced to the
interest rate which would otherwise apply.

Old Notes that remain outstanding after the consummation of the Exchange
Offer and New Notes issued in connection with the Exchange Offer will be treated
as a single class of securities under the Indenture.

REDEMPTION

Optional Redemption. The Notes will be redeemable at the option of the
Issuers, in whole or in part, at any time on or after March 15, 2001, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest to the redemption date, if redeemed
during the 12-month period beginning March 15 of the years indicated below:

<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
----------------------------------------------------- ----------------
<S> <C>
2001................................................. 105.625%
2002................................................. 103.750%
2003................................................. 101.875%
2004 and thereafter.................................. 100.000%
</TABLE>

In addition, prior to March 15, 1999, the Issuers may redeem in the
aggregate up to a maximum of 35% of the aggregate principal amount of Notes
originally issued with the net proceeds of one or more Public Equity Offerings
at a redemption price equal to 111.25% of the principal amount thereof plus
accrued and unpaid interest, if any, to the redemption date; provided, that not
less than $81.3 million aggregate principal amount of Notes is outstanding
immediately after any such redemption.

At any time from January 1, 2000, through and including March 14, 2001, the
Issuers may redeem all, but not less than all, of the outstanding Notes at a
price (the "Applicable Premium") equal to the greater of (i) the aggregate
principal amount thereof plus the "Applicable Premium Amount" or (ii) the first
optional redemption price. Applicable Premium Amount means, with respect to any
Note, the excess of (a) the present value of the remaining interest, premium and
principal amounts due on such Note as if such Note were redeemed on the first
optional redemption date, computed using a discount rate equal to the Treasury
Rate plus 50 basis points, over (b) the aggregate principal amount of such Note.
In addition to the Applicable Premium, the Issuers shall pay all accrued and
unpaid interest on any such Note to such redemption date.

"Treasury Rate" is defined as the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled by and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two business days prior
to the date of calculation or, if such Statistical Release is no longer
published, any publicly available source of similar market data) most nearly
equal to the then remaining maturity of the Notes assuming redemption of the
Notes on the first optional redemption date provided, however, that if the
Average Life of the Notes is not equal to the constant maturity of the United
States Treasury security for which a weekly average yield is given, the Treasury
Rate shall be obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the weekly average yields of United States Treasury
securities for which such yields are given, except that if the Average Life of
the Notes is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used. "Average Life" means the number of years (calculated to the
nearest one-twelfth) between the date of such redemption and March 15, 2001.

Mandatory Redemption. There are no mandatory sinking fund payments for the
Notes. However, as described below, the Issuers may be obligated, under certain
circumstances, (a) to make an offer to purchase all outstanding Notes at a
purchase price of 101% of the principal amount thereof, plus accrued and unpaid

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interest to the date of purchase, upon a Change of Control and (b) to make an
offer to purchase Notes with a portion of the Net Cash Proceeds of Asset Sales
at a purchase price of 100% of the principal amount thereof, plus accrued and
unpaid interest to the date of purchase. See "Change of Control" and "Certain
Covenants -- Disposition of Proceeds of Asset Sales," respectively.

Selection and Notice. In the event that less than all of the Notes are to
be redeemed at any time, selection of such Notes for redemption will be made by
the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not then listed on a national securities exchange, on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate; provided that
no Notes of a principal amount of $1,000 shall be redeemed in part; provided,
further, that any redemption pursuant to the provisions relating to one or more
Public Equity Offerings by the Issuers shall be made on a pro rata basis or on
as nearly a pro rata basis as practicable (subject to any procedures of The
Depository Trust Company). Notice of redemption shall be mailed by first-class
mail at least 30 but not more than 60 days before the redemption date to each
holder of Notes to be redeemed at its registered address. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed. A new Note in
a principal amount equal to the unredeemed portion thereof will be issued in the
name of the holder thereof upon cancellation of the original Note. On and after
the redemption date, if the Issuers do not default in the payment of the
redemption price, interest will cease to accrue on Notes or portions thereof
called for redemption.

CHANGE OF CONTROL

Upon the occurrence of a Change of Control, the Issuers shall be obligated
to make an offer to purchase (a "Change of Control Offer"), and shall, subject
to the provisions described below, purchase, on a business day (the "Change of
Control Purchase Date") not more than 60 nor less than 30 days following the
occurrence of the Change of Control, all of the then outstanding Notes at a
purchase price (the "Change of Control Purchase Price") equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the Change
of Control Purchase Date. The Issuers shall be required to purchase all Notes
properly tendered into the Change of Control Offer and not withdrawn. The Change
of Control Offer is required to remain open for at least 20 business days and
until the close of business on the Change of Control Purchase Date.

In order to effect such Change of Control Offer, the Issuers shall, not
later than the 30th day after the Change of Control, mail to each holder of
Notes notice of the Change of Control Offer, which notice shall govern the terms
of the Change of Control Offer and shall state, among other things, the
procedures that holders of Notes must follow to accept the Change of Control
Offer.

If a Change of Control Offer is made, there can be no assurance that the
Issuers will have available funds sufficient to pay the Change of Control
Purchase Price for all of the Notes that might be delivered by holders of Notes
seeking to accept the Change of Control Offer. Any Change of Control, and any
repurchase of the Notes required under the Indenture upon a Change of Control,
would constitute an event of default under the New Credit Facilities, with the
result that the obligations of the borrowers thereunder could be declared due
and payable by the lenders. Any acceleration of the obligations under the New
Credit Facilities would make it unlikely that CC-I or CC-II could provide
adequate distributions to the Issuers so as to permit the Issuers to effect a
purchase of the Notes upon a Change of Control. See "Description of Other
Indebtedness."

The Issuers shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements
applicable to a Change of Control Offer made by the Issuers and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.

The Issuers will comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that a Change of Control occurs and the
Issuers are required to purchase Notes as described above.

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RANKING

CERTAIN COVENANTS

The Indenture contains, among others, the following covenants:

Limitation on Indebtedness. (a) Charter Southeast will not, and will not
permit any Restricted Subsidiary, directly or indirectly, to create, incur,
assume, issue, guarantee or in any manner become directly or indirectly liable
for or with respect to, contingently or otherwise, the payment of (collectively,
to "incur") any Indebtedness (including any Acquired Indebtedness) or issue any
Disqualified Equity Interests, except for Permitted Indebtedness; provided that,
notwithstanding the foregoing, Charter Southeast will be permitted to incur
Indebtedness or Disqualified Equity Interests, if after giving pro forma effect
to such incurrence (including the application of the net proceeds therefrom),
Charter Southeast's ratio of (x) Total Consolidated Indebtedness to (y) four
times the Consolidated Operating Cash Flow for the latest fiscal quarter for
which consolidated financial statements of Charter Southeast are available
preceding the date of such incurrence would be less than or equal to (i) 6.75 to
1.0 if the date of such incurrence is on or before June 30, 1997 and (ii) 6.5 to
1.0 if the date of such incurrence is on or after July 1, 1997.

(b) The foregoing limitations will not apply to the incurrence of any of
the following (collectively, "Permitted Indebtedness"), each of which shall be
given independent effect:

(i) Indebtedness under the Notes and the Indenture;

(ii) Indebtedness and Disqualified Equity Interests of Charter
Southeast and its Restricted Subsidiaries outstanding on the Issue Date;

(iii) Indebtedness of Restricted Subsidiaries under the New Credit
Facilities in an aggregate principal amount for all such Restricted
Subsidiaries at any one time outstanding not to exceed $310.0 million,
which amount shall be reduced by the amount of (x) Net Cash Proceeds of
Asset Sales applied pursuant to clause (a) of the third sentence set forth
under "Disposition of Proceeds of Asset Sales" to repay Indebtedness
outstanding under such New Credit Facilities and (y) any permanent
reduction in the amounts permitted to be borrowed thereunder, whether or
not such reduction is in connection with any required repayment; provided
that notwithstanding the foregoing (including such $310.0 million maximum
aggregate principal amount and any reduction thereto), a Restricted
Subsidiary will be permitted to incur Indebtedness pursuant to the New
Credit Facilities, if after giving pro forma effect to such incurrence
(including the application of the net proceeds therefrom), such Restricted
Subsidiary's ratio of (x) Total Consolidated Indebtedness to (y) four times
the Consolidated Operating Cash Flow for the latest fiscal quarter for
which consolidated financial statements of such Restricted Subsidiary are
available preceding the date of such incurrence would be less than or equal
to 5.25 to 1.0;

(iv) Indebtedness of any Permitted Restricted Subsidiary; provided
that after giving pro forma effect to such incurrence (including the
application of the net proceeds therefrom), such Permitted Restricted
Subsidiary's ratio of (x) Total Consolidated Indebtedness to (y) four times
the Consolidated Operating Cash Flow for the latest fiscal quarter for
which consolidated financial statements of such Permitted Restricted
Subsidiary are available preceding the date of such incurrence would be
less than or equal to 5.25 to 1.0 and provided further that such
Indebtedness shall be unsecured and such Permitted

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Restricted Subsidiary shall not, directly or indirectly, create or
otherwise enter into or cause to become effective any Payment Restriction;

(v) (x) Indebtedness of any Restricted Subsidiary owed to and held by
Charter Southeast or a Wholly Owned Restricted Subsidiary, in each case
which is not subordinated in right of payment to any Indebtedness of such
Restricted Subsidiary and (y) Indebtedness of Charter Southeast owed to and
held by any Wholly Owned Restricted Subsidiary which is unsecured and
subordinated in right of payment to the payment and performance of the
Issuers' obligations under the Indenture and the Notes (the Indebtedness
incurred pursuant to clause (x) or (y) of this clause (v) being hereafter
referred to as "Intercompany Indebtedness"); provided that an incurrence of
Indebtedness shall be deemed to have occurred upon (i) any sale or other
disposition of any Intercompany Indebtedness referred to in this clause (v)
to a Person (other than Charter Southeast or a Wholly Owned Restricted
Subsidiary), (ii) any sale or other disposition of Equity Interests of a
Wholly Owned Restricted Subsidiary which holds Intercompany Indebtedness
such that such Wholly Owned Restricted Subsidiary ceases to be a Wholly
Owned Restricted Subsidiary after such sale or other disposition or (iii)
designation of a Wholly Owned Restricted Subsidiary which holds
Intercompany Indebtedness as an Unrestricted Subsidiary;

(vi) Indebtedness of Charter Southeast or any Restricted Subsidiary
under (x) Interest Rate Protection Obligations relating to Indebtedness of
Charter Southeast or such Restricted Subsidiary, as the case may be (which
Indebtedness (i) bears interest at fluctuating interest rates and (ii) is
otherwise permitted to be incurred under this covenant); provided the
notional principal amount of such Interest Rate Protection Obligations does
not exceed the principal amount of the Indebtedness to which such Interest
Rate Protection Obligations relate and (y) Currency Agreements relating to
Indebtedness of Charter Southeast or a Restricted Subsidiary of Charter
Southeast; provided that such Currency Agreements do not increase the
Indebtedness of Charter Southeast and its Restricted Subsidiaries
outstanding other than as a result of fluctuations in foreign currency
exchange rates;

(vii) Purchase Money Indebtedness and Capitalized Lease Obligations of
Charter Southeast or any Restricted Subsidiary which do not exceed $7.5
million in the aggregate at any one time outstanding;

(viii) Indebtedness of Charter Southeast or any Restricted Subsidiary
to the extent representing a replacement, renewal, refinancing or extension
(collectively "Refinancing") in whole or in part of outstanding
Indebtedness of Charter Southeast or any Restricted Subsidiary incurred
pursuant to paragraph (a) or clauses (i) and (ii) of paragraph (b) of this
covenant, provided that (i) Indebtedness of Charter Southeast may not be
Refinanced under this clause (viii) with Indebtedness of any Restricted
Subsidiary (except to the extent that any such Restricted Subsidiary was,
prior to such Refinancing, a guarantor of such Indebtedness), (ii) any such
Refinancing Indebtedness (A) to the extent it is pari passu in right of
payment to the Notes shall have a final maturity and weighted average
maturity at least as long as such Indebtedness being Refinanced and (B) to
the extent it is not pari passu in right of payment to the Notes shall not
require any scheduled payment of principal or mandatory redemption prior to
the final maturity of the Notes and in either case shall not exceed the sum
of the principal amount (or, if such Indebtedness provides for a lesser
amount to be due and payable upon a declaration of acceleration thereof, an
amount no greater than such lesser amount) of the Indebtedness being
Refinanced plus the amount of accrued interest thereon and the amount of
any reasonably determined prepayment premium necessary to accomplish such
Refinancing, whether by means of a redemption, tender offer, privately
negotiated transaction or defeasance, replacement, renewal, refinancing or
extension and the reasonable fees and expenses incurred in connection
therewith and (iii) Subordinated Indebtedness may only be Refinanced with
Subordinated Indebtedness which is expressly subordinated by its terms to
the Notes at least to the same extent as the Subordinated Indebtedness
being Refinanced; and

(ix) in addition to the items referred to in clauses (i) through
(viii) above, Indebtedness of Charter Southeast and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $7.5 million at
any time outstanding.

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(c) Charter Southeast will not, directly or indirectly, in any event incur
any Indebtedness which by its terms (or by the terms of any agreement governing
such Indebtedness) is subordinated in right and priority of payment to any other
Indebtedness of Charter Southeast unless such Indebtedness is also by its terms
(or by the terms of any agreement governing such Indebtedness) made expressly
subordinate in right and priority of payment to the Notes to the same extent and
in the same manner as such Indebtedness is subordinated in right and priority of
payment pursuant to subordination provisions that are most favorable to the
holders of any other Indebtedness of Charter Southeast.

Limitation on Restricted Payments. Charter Southeast will not, and will
not permit any Restricted Subsidiary to, directly or indirectly,

(i) declare or pay any dividend or any other distribution on any
Equity Interests of Charter Southeast or any Restricted Subsidiary (other
than dividends or distributions which are paid by any Restricted Subsidiary
to Charter Southeast or a Wholly Owned Restricted Subsidiary of Charter
Southeast) or make any payment or distribution to the direct or indirect
holders (in their capacities as such) of Equity Interests of Charter
Southeast or any Restricted Subsidiary (other than dividends or
distributions payable solely in Equity Interests (other than Disqualified
Equity Interests) of Charter Southeast or in options, warrants or other
rights to purchase Equity Interests (other than Disqualified Equity
Interests) of Charter Southeast);

(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of Charter Southeast or a Restricted Subsidiary (other
than any such Equity Interests owned by Charter Southeast or a Wholly Owned
Restricted Subsidiary);

(iii) purchase, redeem, defease or retire for value prior to the
stated maturity thereof any Subordinated Indebtedness (other than any
Subordinated Indebtedness held by a Wholly Owned Restricted Subsidiary);

(iv) make any Investment (other than Permitted Investments) in any
Person (other than an Investment by a Restricted Subsidiary in Charter
Southeast or an Investment by Charter Southeast or a Restricted Subsidiary
in either (x) a Wholly Owned Restricted Subsidiary or (y) a Person that
becomes a Wholly Owned Restricted Subsidiary as a result of such
Investment); or

(v) make or pay any payment or fee to any direct or indirect holder of
an Equity Interest of Charter Southeast or any Restricted Subsidiary of
Charter Southeast (or any Affiliate of such holder) in connection with or
relating to any acquisition, merger or similar transaction

(such payments or actions which are prohibited by the foregoing clauses (i),
(ii), (iii), (iv) and (v) are collectively referred to as "Restricted
Payments"), unless

(a) no Default shall have occurred and be continuing at the time of or
after giving effect to such Restricted Payment;

(b) immediately after giving effect to such Restricted Payment,
Charter Southeast would be able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the covenant described above
under the caption "Limitation on Indebtedness"; and

(c) immediately after giving effect to such Restricted Payment, the
aggregate amount of all Restricted Payments declared or made on or after
the Issue Date does not exceed an amount equal to the sum of (1) the excess
of (x) the Cumulative Available Cash Flow of Charter Southeast determined
at the time of such Restricted Payment over (y) 150% of an amount equal to
the cumulative Consolidated Interest Expense of Charter Southeast, plus all
cash management fees paid by Charter Southeast and its Restricted
Subsidiaries (to the extent not otherwise included in Consolidated Interest
Expense), determined, in the case of this clause (1), for the period
commencing on April 1, 1996 and ending on the last day of the latest fiscal
quarter for which consolidated financial statements of Charter Southeast
are available preceding the date of such Restricted Payment plus (2) the
aggregate net proceeds, including the fair market value (as determined by
an Independent Financial Advisor) of property other than cash which is used
in the same line of business as that conducted by Charter Southeast and its
Restricted

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Subsidiaries on the Issue Date, received by Charter Southeast either (x) as
capital contributions to Charter Southeast after the Issue Date or (y) from
the issue and sale (other than to a Subsidiary of Charter Southeast) of its
Equity Interests (other than Disqualified Equity Interests) on or after the
Issue Date (excluding any proceeds from the Holdings Offering) plus (3) the
aggregate net proceeds received by Charter Southeast from the issuance
(other than to a Subsidiary of Charter Southeast) on or after the Issue
Date of its Equity Interests (other than Disqualified Equity Interests)
upon the conversion of, or exchange for, Indebtedness of Charter Southeast
plus (4) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment made after the Issue Date, an amount
equal to the lesser of: (i) the return of capital with respect to such
Investment and (ii) the cost of such Investment, in either case, less the
cost of the disposition of such Investment.

The foregoing provisions will not prevent any of the following ("Permitted
Payments"), each of which will be given independent effect: (i) the payment of
any dividend or distribution on, or redemption of, Equity Interests within 60
days after the date of declaration of such dividend or distribution or the
giving of formal notice of such redemption, if at the date of such declaration
or giving of formal notice such payment or redemption would comply with the
provisions of the Indenture; (ii) so long as no Default shall have occurred and
be continuing, the retirement of any Equity Interests of Charter Southeast or
any Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent issue and sale (other than to a Subsidiary of
Charter Southeast) of, Equity Interests of Charter Southeast (other than
Disqualified Equity Interests); provided that any such net cash proceeds and the
value of any Equity Interests issued in exchange for such retired Equity
Interests are excluded from clause (c)(2) of the preceding paragraph; (iii) so
long as no Default shall have occurred and be continuing, the purchase,
redemption, retirement or other acquisition of Subordinated Indebtedness made by
exchange for, or out of the net cash proceeds of, a substantially concurrent
issue and sale (other than to a Subsidiary of Charter Southeast) of (x) Equity
Interests (other than Disqualified Equity Interests) of Charter Southeast,
provided that any such net cash proceeds and the value of any Equity Interests
issued in exchange for Subordinated Indebtedness are excluded from clause (c)(2)
and (c)(3) of the preceding paragraph or (y) other Subordinated Indebtedness
having no stated maturity or amortization requirement for the payment of
principal thereof prior to the 180th day after the final stated maturity of the
Notes; (iv) the payment of any dividend or distribution on Equity Interests of
Charter Southeast or any Restricted Subsidiary that is a partnership or similar
pass-through entity to the extent necessary to permit the direct or indirect
beneficial owners of such Equity Interests to pay Federal and state income tax
liabilities arising from income of Charter Southeast or such Restricted
Subsidiary, as the case may be, and attributable to them solely as a result of
Charter Southeast or such Restricted Subsidiary, as the case may be (and any
intermediate entity through which such holder owns such Equity Interests), being
a partnership or similar pass-through entity for Federal income tax purposes,
(v) fees paid in connection with any acquisition, merger or similar transaction
provided that with respect to any such acquisition, merger or similar
transaction, such fees do not exceed an amount equal to 1.25% of the transaction
value thereof, (vi) so long as no Default or Event of Default shall have
occurred and be continuing, dividends paid to Charter Holdings after March 15,
2001 provided that such dividends are used within five days of the date paid to
Charter Holdings solely to pay cash interest on the then outstanding Debentures
as such Debentures were in existence on the Issue Date, (vii) so long as no
Default or Event of Default shall have occurred and be continuing after giving
effect thereto, dividends paid to Charter Holdings provided that such dividends
are used within five days of the date paid to Charter Holdings solely to pay
accounting, legal and other expenses provided, further that such dividends shall
not exceed, in the aggregate, $100,000 in any calendar year, (viii) so long as
no Default or Event of Default shall have occurred and be continuing after
giving effect to such Investment and Charter Southeast could incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) under the first
paragraph of the covenant described under the caption "Limitation on
Indebtedness," Investments on a pro forma basis after giving effect to such
Investments in Persons other than Wholly Owned Restricted Subsidiaries, provided
that (a) such Person is engaged in the same business as that conducted by
Charter Southeast and its Restricted Subsidiaries on the Issue Date, (b) such
Person's business is managed by Charter or an Affiliate of Charter and (c) the
aggregate outstanding amount of such Investments (based upon the amount actually
invested) shall not exceed, at any one time, $25,000,000 (it being understood
that any Investment made pursuant to this clause (viii) shall not be deemed
outstanding to

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the extent it is repaid), (ix) so long as no Default or Event of Default shall
have occurred and be continuing, and Charter Southeast could incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) under the first
paragraph of the covenant described under the caption "Limitation on
Indebtedness", Investments in Restricted Subsidiaries that are managed by
Charter or an Affiliate of Charter and are engaged in the same business as that
conducted by Charter Southeast and its Restricted Subsidiaries on the Issue
Date, provided that (a) such Restricted Subsidiary shall not, directly or
indirectly, create or otherwise enter into or cause to become effective or allow
to continue any Payment Restriction and (b) any Indebtedness incurred by such
Restricted Subsidiary shall be unsecured and shall not contain any Payment
Restriction (any Restricted Subsidiary referred to in this clause (ix) being
herein referred to as a "Permitted Restricted Subsidiary") or (x) the use of the
net cash proceeds from the Offerings in the manner set forth above under "Use of
Proceeds" (including the subsequent application of borrowings pursuant to the
New Credit Facilities to the extent so applied in the manner described above
under "Use of Proceeds").

Amounts expended pursuant to clauses (i), (iv), (v), (vi), (vii), (viii)
and (ix) (but not clauses (ii), (iii) and (x)) above shall be included in the
calculation of the amount available to be made as Restricted Payments as set
forth in clause (c) above.

Restrictions on Payment of Management Fees. Charter Southeast will not,
and will not permit any Restricted Subsidiary to, pay any management or similar
fee to any Person other than to Charter Southeast or a Wholly-Owned Restricted
Subsidiary of Charter Southeast provided, that with respect to any fiscal year
or portion thereof (commencing with the fiscal year ending December 31, 1996),
an amount equal to 5.0% of Charter Southeast's consolidated revenues for such
fiscal year or portion thereof may be deemed to be a management fee (the
"Management Fee"), which Management Fee may be paid by Charter Southeast or any
Restricted Subsidiary to any Person in accordance with the following provisions:
60.0% of any such Management Fee for any fiscal year or portion thereof may be
paid in cash, so long as no Default or Event of Default shall exist before and
after giving effect to any such payment, and the payment of the remainder of
such Management Fee shall be deferred until satisfaction in full of all
obligations under the Notes and the Indenture. This covenant shall not prohibit
the accrual of any management fee to the extent such management fee is not paid.
Charter Southeast will not, and will not permit any Restricted Subsidiary to,
amend the Management Agreements as in existence on the Issue Date or enter into
a new management agreement, in either such case to provide for subordination
provisions which are less favorable to the holders of the Notes than those
contained in the Management Agreements as in effect on the Issue Date, provided
that the Management Agreements may otherwise be amended to the extent not
otherwise prohibited by the terms of the Indenture and to the extent that such
amendment is not materially adverse to the holders of the Notes.

Limitations on Transactions with Affiliates. Charter Southeast will not,
and will not permit, cause or suffer any Restricted Subsidiary to, conduct any
business or enter into any transaction (or series of related transactions) with
or for the benefit of any of their respective Affiliates or any beneficial
holder of 10% or more of the Equity Interests of Charter Southeast or any
officer, director or employee of Charter Southeast or any of its Subsidiaries
(each an "Affiliate Transaction"), unless (a) such Affiliate Transaction is on
terms which are no less favorable to Charter Southeast or such Restricted
Subsidiary, as the case may be, than would be available in a comparable
transaction with an unaffiliated third party and (b) if such Affiliate
Transaction (or series of related Affiliate Transactions) involves aggregate
payments or other consideration having a Fair Market Value in excess of $1.0
million, a majority of the disinterested members of the Board of Directors of
the General Partner shall have approved such transaction and determined that
such transaction complies with the foregoing provisions or Charter Southeast
shall have obtained a written opinion from an Independent Financial Advisor
stating that the terms of such Affiliate Transaction to Charter Southeast or the
Restricted Subsidiary, as the case may be, are fair from a financial point of
view (an "Independent Fairness Opinion"); provided, that if such Affiliate
Transaction (or series of related Affiliate Transactions) involves aggregate
payments or other consideration having a Fair Market Value of $10.0 million or
more, Charter Southeast shall be required to obtain an Independent Fairness
Opinion.

Notwithstanding the foregoing, the restrictions set forth in this covenant
shall not apply to (i) transactions between or among Charter Southeast and its
Restricted Subsidiaries, (ii) customary directors' fees, indemnification and
similar arrangements which are consistent with Charter Southeast's past business

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practices, (iii) the making of any Permitted Payments described in clause (i),
(ii), (iv), (v), (vi), (vii) or (x) of the penultimate paragraph of "Limitation
on Restricted Payments," (iv) the incurrence of Intercompany Indebtedness
permitted pursuant to clause (b)(v) under the covenant "Limitation on
Indebtedness," (v) loans and advances to officers, directors and employees of
Charter Southeast and its Restricted Subsidiaries for travel, entertainment,
moving and other relocation expenses, in each case made in the ordinary course
of business and consistent with past business practices and (vi) management fees
paid in an amount not to exceed the amount permitted pursuant to the Management
Agreements as in effect on the Issue Date.

Limitations on Liens. Charter Southeast will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur or
assume or suffer to exist any Lien to secure Indebtedness against or upon any of
its property or assets, or any proceeds therefrom, other than Permitted Liens,
unless contemporaneously therewith effective provision is made to secure the
Notes equally and ratably with such Indebtedness with a Lien on the same assets
securing such Indebtedness for so long as such Indebtedness is secured by such
Lien.

Disposition of Proceeds of Asset Sales. Charter Southeast will not, and
will not permit any Restricted Subsidiary to, make any Asset Sale unless (a)
Charter Southeast or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed of and (b) at least 75% of such
consideration therefor consists of cash, Cash Equivalents or properties and
capital assets (including franchises and licenses required to own or operate
such properties and, solely with respect to any transfer of property that
constitutes an Investment made in accordance with clause (viii) or (ix) of the
penultimate paragraph of "Limitation on Restricted Payments," Equity Interests
of any Person engaged in the same business as the business conducted by Charter
Southeast and its Restricted Subsidiaries on the Issue Date), or any combination
thereof, to be used in the same lines of business being conducted by Charter
Southeast or such Restricted Subsidiary on the Issue Date. The amount of any (i)
liabilities of Charter Southeast or any Restricted Subsidiary that are actually
assumed by the transferee in such Asset Sale and for which Charter Southeast and
its Restricted Subsidiaries are fully released shall be deemed to be cash for
purposes of determining the percentage of cash consideration received by Charter
Southeast or its Restricted Subsidiaries and (ii) notes or other similar
obligations received by Charter Southeast or its Restricted Subsidiaries from
such transferee that are immediately converted (or are converted within thirty
days of the related Asset Sale) by Charter Southeast or its Restricted
Subsidiaries into cash shall be deemed to be cash, in an amount equal to the net
cash proceeds realized upon such conversion, for purposes of determining the
percentage of cash consideration received by Charter Southeast or its Restricted
Subsidiaries. Charter Southeast or such Restricted Subsidiary, as the case may
be, may (a) use such Net Cash Proceeds to repay, and thereby permanently reduce
the commitments or amounts available to be reborrowed under, the New Credit
Facility of such Restricted Subsidiary (subject to the proviso of clause (iii)
of paragraph (b) of "Limitation on Indebtedness") and/or (b) apply such Net Cash
Proceeds to acquire or construct property or capital assets in lines of business
related to the businesses of Charter Southeast and the Restricted Subsidiaries
as conducted on the Issue Date.

To the extent all or part of the Net Cash Proceeds of any Asset Sale are
not committed to be so applied within 180 days of such Asset Sale and are not
actually applied within 270 days of such Asset Sale (or within 360 days of such
Asset Sale if the failure to so apply such Net Cash Proceeds within 270 days is
due solely to the failure to obtain applicable regulatory approvals and, during
such period, Charter Southeast has used its reasonable best efforts to obtain
such regulatory approvals), Charter Southeast or any such Restricted Subsidiary
shall, within such 180, 270 or 360 day period, as the case may be, make an offer
to purchase (an "Asset Sale Offer") from all holders of Notes up to a maximum
principal amount (expressed as a multiple of $1,000) of Notes equal to such Net
Cash Proceeds, at a purchase price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the date of
purchase; provided that Charter Southeast may defer the Asset Sale Offer until
there are aggregate unutilized Net Cash Proceeds from such Asset Sales equal to
or in excess of $10.0 million, at which time the entire unutilized amount of
such Net Cash Proceeds, and not just the amount in excess of $10.0 million,
shall be applied as required pursuant to this paragraph. The Asset Sale Offer
shall remain open for a period of 20 business days or such longer period as

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may be required by law. To the extent an Asset Sale Offer is oversubscribed,
Notes shall be purchased among holders on a proportionate basis (based on the
relative aggregate principal amounts validly tendered for purchase by holders
thereof). To the extent the Asset Sale Offer is not fully subscribed to by the
holders of the Notes, Charter Southeast may retain and utilize any unutilized
portion of the Net Cash Proceeds for any purpose consistent with the other terms
of the Indenture and such Net Cash Proceeds shall not be required to be applied
to more than one Asset Sale Offer.

Charter Southeast will comply with Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that an Asset Sale occurs and Charter
Southeast is required to purchase Notes as described above.

Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries. Charter Southeast will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise enter into or cause
to become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distribution on its Equity Interests or any other interest or participation in,
or measured by, its profits to the extent owned by Charter Southeast or any
Restricted Subsidiary, (b) pay any Indebtedness owed to Charter Southeast or a
Restricted Subsidiary, (c) make any Investment in Charter Southeast or any
Restricted Subsidiary or (d) transfer any of its properties or assets to Charter
Southeast or to any Restricted Subsidiary (any such encumbrance or restriction
in the prior clauses (a), (b), (c) and (d), a "Payment Restriction"), except for
(i) any such encumbrance or restriction existing on the Issue Date, (ii) any
such encumbrance or restriction existing under any agreement that refinances or
replaces an agreement containing a restriction permitted by clause (i) above,
provided that the terms and conditions of any such encumbrances or restrictions
are not materially less favorable to the Noteholders than those under or
pursuant to the agreement being replaced or the agreement evidencing the
Indebtedness refinanced and (iii) any such encumbrance or restriction existing
under any other agreement, instrument or document hereafter in effect, provided
that the terms and conditions of any such encumbrance or restriction are not
materially less favorable to the Noteholders than those contained in the New
Credit Facilities as in effect on the Issue Date.

Designation of Unrestricted Subsidiaries. The Indenture will provide that
Charter Southeast may designate any Subsidiary of Charter Southeast as an
"Unrestricted Subsidiary" under the Indenture (a "Designation") if:

(a) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation;

(b) at the time of and after giving effect to such Designation,
Charter Southeast could incur $1.00 of additional Indebtedness under the
applicable provisions of the first paragraph of the "Limitation on
Indebtedness" covenant described above (other than Permitted Indebtedness);
and

(c) Charter Southeast would be permitted under the Indenture to make
an Investment constituting a Restricted Payment at the time of Designation
(assuming the effectiveness of such Designation) in an amount (the
"Designation Amount") equal to the Fair Market Value of such Subsidiary on
such date.

In the event of any such Designation, Charter Southeast shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to the
covenant "Limitation on Restricted Payments" for all purposes of the Indenture
in the Designation Amount. The Indenture further provides that (i) neither
Charter Southeast nor any Restricted Subsidiary shall at any time (x) provide
credit support for, subject any of its property or assets to the satisfaction
of, or guarantee, any Indebtedness of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness), (y) be
directly or indirectly liable for any Indebtedness of any Unrestricted
Subsidiary or (z) be directly or indirectly liable for any Indebtedness which
provides that the holder thereof may (upon notice, lapse of time or both)
declare a default thereon or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity upon the occurrence of a default
with respect to any Indebtedness of any Unrestricted Subsidiary (including any
right to take enforcement action against such Unrestricted Subsidiary).

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The Indenture further provides that Charter Southeast may revoke any
Designation of a Subsidiary as an Unrestricted Subsidiary (a "Revocation") if:

(a) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and

(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of the
Indenture.

All Designations and Revocations must be evidenced by resolutions of
Charter Southeast delivered to the Trustee certifying compliance with the
foregoing provisions.

Limitation on Conduct of Business of Southeast Capital. Southeast Capital
will not own any operating assets or other properties or conduct any business
other than to serve as an Issuer and an obligor on the Notes.

Provision of Financial Information. So long as any of the Notes are
outstanding, the Issuers will file with the Commission, to the extent then
permitted by the Commission, the annual reports, quarterly reports and other
documents that the Issuers would have been required to file with the Commission
pursuant to Sections 13(a) and 15(d) of the Exchange Act if the Issuers were
subject to such Sections, and the Issuers will promptly provide to all holders
of the Notes and file with the Trustee copies of such reports and documents.

Limitation on Sale or Issuance of Stock of Subsidiaries. The Indenture
provides that Charter Southeast will not sell, and will not permit any
Subsidiary to issue or sell, directly or indirectly, less than 100% of the
capital stock of a Subsidiary (other than to Charter Southeast or a Wholly Owned
Restricted Subsidiary), provided that Charter Southeast or any Subsidiary of
Charter Southeast will be permitted to sell any such capital stock provided such
sale is deemed a Restricted Payment for all purposes of the "Limitation on
Restricted Payments" covenant in an amount equal to the Fair Market Value of
such capital stock and Charter Southeast or such Subsidiary, as the case may be,
is permitted to make such Restricted Payment pursuant to such covenant and any
sale is otherwise effected in compliance with the other terms of the Indenture,
including, without limitation, the provisions of the covenant described under
"Disposition of Proceeds of Asset Sales," if applicable.

Additional Covenants. The Indenture also contains covenants with respect
to the following matters: (i) payment of principal, premium, if any, and
interest; (ii) maintenance of an office or agency in The City of New York; (iii)
maintenance of corporate and partnership existence; (iv) payment of taxes and
other claims; (v) maintenance of properties; and (vi) maintenance of insurance.

MERGER, SALE OF ASSETS; ETC.

The Indenture provides that neither of the Issuers may consolidate with or
merge with or into any other entity or sell, convey, assign, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets
(determined, in the case of Charter Southeast, on a consolidated basis for
Charter Southeast and its Restricted Subsidiaries) to any entity in a single
transaction or series of related transactions, unless: (a) either (i) such
Issuer shall be the continuing entity or (ii) the entity (if other than such
Issuer) formed by such consolidation or into which such Issuer is merged or the
entity that acquires, by sale, assignment, conveyance, transfer, lease or
disposition, all or substantially all of the properties and assets of such
Issuer shall be, in the case of Southeast Capital, a corporation or, in any
other case, a corporation, partnership or trust organized and validly existing
under the laws of the United States of America or any State thereof or the
District of Columbia, and shall, in any such case, expressly assume by a
supplemental indenture, the due and punctual payment of the principal of,
premium, if any, and interest on all the Notes and the performance and
observance of every covenant of the Indenture to be performed or observed on the
part of the Issuers; (b) immediately thereafter, no Default or Event of Default
shall have occurred and be continuing; (c) immediately after giving effect to
any such transaction involving the incurrence by Charter Southeast or any
Restricted Subsidiary, directly or indirectly, of additional Indebtedness (and
treating any Indebtedness not previously an obligation of Charter Southeast or
any of its Restricted Subsidiaries in connection with or as a

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result of such transaction as having been incurred at the time of such
transaction), Charter Southeast or such entity could incur, on a pro forma basis
after giving effect to such transaction as if it had occurred at the beginning
of the latest fiscal quarter for which consolidated financial statements of
Charter Southeast are available at least $1.00 of additional Indebtedness under
the applicable provisions of the first paragraph of the "Limitation on
Indebtedness" (other than Permitted Indebtedness) covenant described above; and
(d) immediately thereafter, such Issuer or the other surviving entity, as the
case may be, shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of such Issuer immediately prior to such transaction;
provided that the foregoing clauses (c) and (d) shall not apply to any such
transaction solely between or among Charter Southeast and its Restricted
Subsidiaries or between or among any such Restricted Subsidiaries, and provided
further that, notwithstanding the foregoing, in the event of any disposition or
sale of properties or assets of Charter Southeast or any Restricted Subsidiary
which would otherwise be subject to the terms of this covenant and for which the
consideration therefor is cash or Cash Equivalents, the transferee of such
assets or properties subject thereto shall not be required to succeed to, and
assume, the obligations of the Issuers, provided that the Issuers shall,
simultaneously therewith, defease, in full, all obligations of the Issuers under
the Indenture and the Notes in accordance with the terms of the Indenture.

Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all of the
properties and assets of either Issuer in accordance with the immediately
preceding paragraph, the successor Person formed by such consolidation or into
or with which such Issuer is merged or the successor Person to which such sale,
assignment, conveyance, transfer, lease or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
such Issuer under the Indenture and the Notes, with the same effect as if such
successor had been named as such Issuer in the Indenture and the Notes. When a
successor assumes all the obligations of its predecessor under the Indenture and
the Notes, the predecessor shall be released from those obligations; provided
that in the case of a transfer by lease, the predecessor shall not be released
from the payment of principal, premium, if any, and interest on the Notes.

EVENTS OF DEFAULT

An Event of Default will occur under the Indenture if:

(i) the Issuers shall fail to pay interest on the Notes when the same
becomes due and payable and such failure shall continue for 30 days;

(ii) the Issuers shall fail to pay principal of or premium, if any, on
the Notes when and as the same shall become due and payable at maturity,
upon acceleration, optional or mandatory redemption, required repurchase,
or otherwise;

(iii) either Issuer shall fail to comply with any of its agreements or
covenants in the "Change of Control," "Disposition of Proceeds of Asset
Sales" or "Merger, Sale of Assets, etc." covenants described above;

(iv) either Issuer shall fail to comply with any of its other
agreements or covenants in, or provisions of, the Notes or the Indenture
and such failure shall continue for a period of 30 days after written
notice is given to the Issuers by the Trustee or by the holders of 25.0% in
aggregate principal amount of the Notes then outstanding;

(v) an event of default occurs (after giving effect to any applicable
grace or cure period) under any mortgage, indenture or other instrument
governing any Indebtedness of Charter Southeast or any Restricted
Subsidiary, if (x) such event of default results from the failure to pay at
final maturity $7.5 million or more in principal amount of such
Indebtedness or (y) as a result of such event of default the maturity of
$7.5 million or more in principal amount of such Indebtedness has been
accelerated prior to its stated maturity;

(vi) any final judgments aggregating $7.5 million or more shall be
rendered against Charter Southeast or a Restricted Subsidiary and shall
remain undischarged or unbonded for a period (during which execution shall
not be effectively stayed) of 60 days; or

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(vii) certain events of bankruptcy, insolvency or reorganization with
respect to Charter Southeast or any Significant Restricted Subsidiary shall
have occurred.

If an Event of Default (other than an Event of Default specified in clause
(vii) with respect to either Issuer) occurs and is continuing, the Trustee or
the holders of not less than 25.0% in aggregate principal amount of the Notes
then outstanding may, and the Trustee upon the request of the holders of not
less than 25.0% in aggregate principal amount of the Notes then outstanding
shall declare the Notes due and payable, in an amount equal to the principal
amount of the Notes, together with accrued and unpaid interest to the date the
Notes become due and payable, by a notice in writing to the Issuers (and to the
Trustee, if given by the holders of the Notes) and, upon any such declaration
such principal shall become due and payable. If an Event of Default specified in
clause (vii) above occurs with respect to either Issuer and is continuing, then
the principal of all the Notes shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any holder of the Notes.

At any time after a declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the holders of a majority in aggregate principal amount of the Notes
then outstanding, by written notice to the Issuers and the Trustee, may rescind
and annul such declaration and its consequences if (a) the Issuers have paid or
deposited with the Trustee a sum sufficient to pay (i) all sums paid or advanced
by the Trustee under the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, (ii) all
overdue interest on all Notes, (iii) the principal of and premium, if any, on
any Notes which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Notes, and (iv) to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate borne by the Notes; and (b) all Events of Default, other
than the non-payment of principal of the Notes which have become due solely by
such declaration of acceleration, have been cured or waived.

The holders of not less than a majority in aggregate principal amount of
the Notes then outstanding may, on behalf of the holders of all the Notes, waive
any past Defaults under the Indenture, except a Default in the payment of the
principal of, premium, if any, or interest on any Note, or with respect to a
covenant or provision of the Indenture which, under the Indenture, cannot be
modified or amended without the consent of the holder of each Note then
outstanding.

The Issuers are also required to notify the Trustee upon becoming aware of
the occurrence of any Default.

DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE

The Issuers may, at their option and at any time, elect to have the
obligations of the Issuers discharged with respect to the outstanding Notes
("defeasance"). Such defeasance means that the Issuers shall be deemed to have
paid and discharged the entire indebtedness represented by the outstanding Notes
and to have satisfied all other obligations under the Notes and the Indenture,
except for (i) the rights of holders of the outstanding Notes to receive, solely
from the trust fund described below, payments in respect of the principal of,
premium, if any, and interest on such Notes when such payments are due, (ii) the
Issuers' obligations with respect to the Notes concerning issuing temporary
Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes, and
the maintenance of an office or agency for payment and money for security
payments held in trust, (iii) the rights, powers, trusts, duties and immunities
of the Trustee under the Indenture, and (iv) the defeasance provisions of the
Indenture. In addition, the Issuers may, at their option and at any time, elect
to have the obligations of the Issuers released with respect to certain
covenants that are described in the Indenture ("covenant defeasance") and any
omission to comply with such obligations shall not constitute a Default or an
Event of Default with respect to the Notes. In the event that a covenant
defeasance occurs, certain events (not including non-payment, bankruptcy and
insolvency events) described under "-- Events of Default" will no longer
constitute Events of Default with respect to the Notes.

In order to exercise either defeasance or covenant defeasance, (i) the
Issuers shall irrevocably deposit with the Trustee, as trust funds in trust, for
the benefit of the holders of the Notes, cash in United States dollars, U.S.
Government Obligations (as defined in the Indenture), or a combination thereof,
in such

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amounts as will be sufficient, in the report of a nationally recognized firm of
independent public accounts or a nationally recognized investment banking firm,
to pay and discharge the principal of, premium, if any, and interest on the
outstanding Notes to redemption or maturity; (ii) the Issuers shall have
delivered to the Trustee an opinion of counsel in the United States to the
effect that the holders of the outstanding Notes will not recognize income, gain
or loss for Federal income tax purposes as a result of such defeasance or
covenant defeasance, as the case may be, and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance or covenant defeasance, as the case may be, had
not occurred (in the case of defeasance, such opinion must refer to and be based
upon a ruling of the Internal Revenue Service or a change in applicable Federal
income tax laws); (iii) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit or insofar as clause (vii) under the
first paragraph under "-- Events of Default" is concerned, at any time during
the period ending on the 91st day after the date of deposit; (iv) such
defeasance or covenant defeasance shall not result in a breach or violation of,
or constitute a Default under, the Indenture or any other agreement or
instrument to which either of the Issuers is a party or by which it is bound;
(v) the Issuers shall have delivered to the Trustee an opinion of counsel to the
effect that (A) the trust funds will not be subject to any rights of holders of
Indebtedness (other than holders of the Notes) and (B) after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; and (vi) the Issuers shall have delivered to the
Trustee an officers' certificate and an opinion of counsel, each stating that
all conditions precedent under the Indenture to either defeasance or covenant
defeasance, as the case may be, have been complied with and that no violations
under agreements governing any other outstanding Indebtedness would result
therefrom.

SATISFACTION AND DISCHARGE

The Indenture will cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of the Notes, as expressly
provided for in the Indenture) as to all outstanding Notes when (i) either (a)
all the Notes theretofore authenticated and delivered (except lost, stolen or
destroyed Notes which have been replaced or paid) have been delivered to the
Trustee for cancellation or (b) all Notes not theretofore delivered to the
Trustee for cancellation have become due and payable and the Issuers have
irrevocably deposited or caused to be deposited with the Trustee an amount in
United States dollars sufficient to pay and discharge the entire indebtedness on
the Notes not theretofore delivered to the Trustee for cancellation, for the
principal of, premium, if any, and interest to the date of deposit; (ii) the
Issuers have paid or caused to be paid all other sums payable under the
Indenture by the Issuers; and (iii) each Issuer has delivered to the Trustee an
Officers' Certificate and an opinion of counsel each stating that all conditions
precedent under the Indenture relating to the satisfaction and discharge of the
Indenture have been complied with.

MODIFICATIONS AND AMENDMENTS

Modifications and amendments of the Indenture or the Notes may be made by
the Issuers and the Trustee with the written consent of the holders of not less
than a majority in aggregate principal amount of the outstanding Notes;
provided, however, that no such modification or amendment may, without the
consent of the holder of each outstanding Note affected thereby: (i) change the
stated maturity of the principal of, or any installment of interest on, any
Note, or reduce the principal amount thereof or the rate of interest thereon or
any premium payable upon the redemption thereof, or change the coin or currency
in which the principal of any Note or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment after the stated maturity thereof (or, in the case of redemption, on or
after the redemption date); (ii) amend, change or modify the obligation of the
Issuers to make or consummate a Change of Control Offer in the event of a Change
of Control or an Asset Sale Offer in respect of any Asset Sale or modify any of
the provisions or definitions with respect thereto; (iii) reduce the percentage
in principal amount of outstanding Notes, the consent of whose holders is
required for any supplemental indenture or the consent of whose holders is
required for any waiver of compliance with certain provisions of the Indenture
or certain Defaults thereunder and their consequences provided for in the
Indenture; (iv) modify any of the provisions relating to supplemental indentures
requiring the consent of holders or relating to the waiver of past defaults or
relating to the waiver of certain covenants, except to increase the percentage
of outstanding Notes

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required for such actions or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the holder of each
Note affected thereby; (v) except as otherwise permitted under "-- Merger, Sale
of Assets, Etc." consent to the assignment or transfer by either of the Issuers
of any of its rights and obligations under the Indenture; or (vi) affect the
ranking of the Notes in a manner adverse to the holders of the Notes.

The holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance with certain restrictive covenants and
provisions of the Indenture.

THE TRUSTEE

The Indenture provides that, except during the continuance of an Event of
Default, the Trustee thereunder will perform only such duties as are
specifically set forth in the Indenture. If an Event of Default has occurred and
is continuing, the Trustee will exercise such rights and powers vested in it
under the Indenture and use the same degree of care and skill in its exercise as
a prudent person would exercise under the circumstances in the conduct of such
person's own affairs.

The Indenture and, upon issuance of the New Notes or effectiveness of a
Shelf Registration Statement, provisions of the Trust Indenture Act incorporated
by reference therein, contain limitations on the rights of the Trustee, should
it become a creditor of Charter Southeast, to obtain payment of claims in
certain cases or to realize on certain property received by it in respect of any
such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions with Charter Southeast or any Affiliate of Charter Southeast;
provided that if it acquires any conflicting interest (as defined in the
Indenture or in the Trust Indenture Act) it must eliminate such conflict or
resign.

GOVERNING LAW

The Indenture and the Notes are governed by, and construed in accordance
with, the internal laws of the State of New York, without giving effect to the
conflicts of law principles thereof.

BOOK-ENTRY; DELIVERY AND FORM

The Old Notes were initially issued in the form of one or more Global Notes
(collectively, the "Old Global Notes"). Except for New Notes issued to
Non-Global Purchasers (as defined below), the New Notes will initially be issued
in the form of one or more Global Notes (collectively, the "New Global Notes").
The Old Global Notes were deposited on the date of closing of the sale of the
Old Notes, and the New Global Notes will be deposited on the date of closing of
the Exchange Offer, with or on behalf of the Depositary and registered in the
name of Cede & Co., as nominee of the Depositary (such nominee being referred to
herein as the "DTC Nominee").

Notes that are (i) originally issued to or transferred to "institutional
accredited investors" that are not "qualified institutional buyers," as defined
in Rule 144A under the Securities Act (the "Non-Global Purchasers") or (ii)
issued as described below under "-- Certificated Securities" will be issued in
registered form (the "Certificated Securities"). Upon the transfer to a
qualified institutional buyer of Certificated Securities initially issued to a
Non-Global Purchaser, such Certificated Securities will, unless the Global Notes
have previously been exchanged for Certificated Securities, be exchanged for an
interest in the Global Notes representing the principal amount of Notes being
transferred. "Global Notes" means the Old Global Notes or the New Global Notes
as the case may be.

DTC is (i) a limited purpose trust company organized under the banking laws
of the State of New York (and is a "banking organization" within the meaning of
such laws), (ii) a member of the Federal Reserve System, (iii) a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, as
amended, and (iv) a "Clearing Agency" registered pursuant to Section 17A of the
Exchange Act. DTC was created to hold securities for its participating
organizations (the "participants") and to facilitate the clearance and
settlement of securities transactions between participants through electronic
book-entry changes to the accounts of its participants. DTC's participants
include securities brokers and dealers, commercial banks, trust

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companies, clearing corporations and certain other organizations. DTC is owned
by a number of its direct participants and by each of the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to DTC's system is also available to other
entities such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. Persons who are not participants may beneficially own securities
held by or on behalf of the DTC only through the DTC's direct or indirect
participants.

Pursuant to procedures established by the Depositary (i) upon deposit of
the Global Notes, the Depositary will credit the accounts of participants in
connection with the Notes with portions of the principal amount of the Global
Notes and (ii) ownership of the Notes will be shown on, and the transfer of
ownership thereof will be effected only through, records maintained by the
Depositary (with respect to the interests of the Depositary's participants), the
Depositary's participants and the Depositary's indirect participants.

So long as DTC's Nominee is the registered owner of the Global Notes, DTC
or DTC's Nominee, as the case may be, is considered the sole owner and holder
under the Indenture of the underlying Notes. Unless DTC notifies the Issuers
that it is unwilling or unable to continue serving as depositary for such Notes,
DTC ceases to be a clearing agency registered under the Exchange Act, the
Issuers determine to permit the Global Notes to be exchanged for certificated
Notes or an Event of Default has occurred and is continuing with respect to the
Notes, owners of beneficial interests in the Global Notes will not be entitled
to have the Notes evidenced by the Global Note registered in their names, will
not receive or be entitled to receive physical delivery of certificated Notes in
definitive and fully registered form, and will not be considered to be the
owners or holders of any Notes under the Indenture or such Notes for any
purposes. Neither the Issuers nor the Trustee have any responsibility or
liability for any aspect of the records of DTC or for maintaining, supervising
or reviewing any records of DTC relating to the Notes.

Payments in respect of the principal of, premium, if any, and interest on
the Global Notes are payable by the Trustee to DTC or DTC's Nominee, as the case
may be, as the registered holder under the Indenture. Under the terms of the
Indenture, the Issuers and the Trustee may treat the Persons in whose names
Notes are registered as the owners thereof for the purpose of receiving such
payments. Consequently, neither the Issuers nor the Trustee has any
responsibility or liability for the payment of such amounts to beneficial owners
of Notes (including principal, premium, if any, and interest). The Issuers
believe, however, that it is currently the policy of DTC to immediately credit
the accounts of the relevant participants with such payments, in amounts
proportionate to their respective holdings of beneficial interests in the
relevant security as shown on the records of DTC. Payments by DTC's direct and
indirect participants to the beneficial owners of Notes are governed by standing
instructions and customary practice and are the responsibility of DTC's direct
and indirect participants.

CERTIFICATED SECURITIES

Subject to certain conditions, any Person having a beneficial interest in
Global Notes may, upon request to the Trustee, exchange such beneficial interest
for Notes in the form of Certificated Notes. Upon any such issuance, the Trustee
is required to register such Certificated Notes in the name of, and cause the
same to be delivered to, such Person or Persons (or the nominee of any thereof).
All such certificated Old Notes would be subject to the legend requirements
described herein. In addition, if (i) the Issuers notify the Trustee in writing
that DTC is no longer willing or able to act as a depositary and the Issuers are
unable to locate a qualified successor within 90 days or (ii) the Issuers, at
their option, notify the Trustee in writing that they elect to cause the
issuance of Notes in the form of Certificated Notes under the Indenture, then,
upon surrender by DTC's Nominee of its Global Notes, Notes in such form will be
issued to each Person that DTC's Nominee and DTC identify as being the
beneficial owner of the related Notes.

Neither the Issuers nor the Trustee are liable for any delay by DTC or
DTC's Nominee, as the case may be, in identifying the beneficial owners of Notes
and the Issuers and the Trustee may conclusively rely on, and will be protected
in relying on, instructions from DTC or DTC's Nominee for all purposes.

Neither DTC nor DTC's Nominee will consent or vote in any manner with
respect to the Notes. Pursuant to its customary procedures, in the case of any
matter as to which the consent or vote of holders of the Notes is

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sought, DTC will mail an Omnibus Proxy to the Issuers as soon as practicable
after the record date for the determination of holders eligible to consent or
vote on the matter to be acted upon. The Omnibus Proxy serves to assign DTC's
Nominee's right to consent or vote to the direct participants whose accounts it
maintains as of the record date.

Notices of redemption and repurchase with respect to Notes held by direct
participants in the DTC system will be forwarded to DTC's Nominee. In the case
of a partial redemption, DTC's practice is to determine, by lot, the amount of
the beneficial interest in the Notes to be redeemed of each of its direct
participants.

Beneficial owners who elect to participate in a tender offer or purchase of
their securities, must provide notice of such election, through its direct or
indirect participant in DTC's system, to the appropriate depositary, tender or
purchase agent, and effect delivery of their Notes by causing the direct
participant in DTC's system to transfer the indirect participant's interest in
the Notes, as reflected in DTC's records, to such depositary, tender or purchase
agent. The requirement for physical delivery of certificates evidencing the
Notes in connection with the aforementioned transactions will be deemed
satisfied when the beneficial ownership rights in the Global Notes are
transferred by direct participants on DTC's records.

The conveyance of all notices and other communications by DTC to its direct
participants, among DTC's direct and indirect participants and by DTC's direct
and indirect participants to owners of beneficial interests in the Notes is
governed by customary arrangements among them, subject to statutory or
regulatory requirements in effect with respect thereto from time to time.

Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Notes among participants of DTC, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Issuers nor the Trustee
have any responsibility for the performance by DTC or its participants of their
respective obligations under the rules and procedures governing their
operations.

SAME-DAY SETTLEMENT AND PAYMENT

The Indenture requires that payments in respect of the Notes represented by
the Global Notes (including principal, premium, if any, and interest) be made in
immediately available funds. With respect to Certificated Notes, however, the
Company makes all payments of principal, premium, if any, and interest, by
mailing a check to each Holder's registered address. Secondary trading in
long-term notes and debentures of corporate issuers is generally settled in
clearing-house or next-day funds. In contrast, the Notes represented by the
Global Notes are eligible to trade in the PORTAL Market and to trade in DTC's
Same-Day Funds Settlement System, and any permitted secondary market trading
activity in such Notes will, therefore, be required by DTC to be settled in
immediately available funds. The Issuers expect that secondary trading in the
Certificated Notes will also be settled in immediately available funds.

REGISTRATION RIGHTS; LIQUIDATED DAMAGES

The Issuers and the Initial Purchasers entered into the Registration Rights
Agreement dated as of March 28, 1996. Pursuant to the Registration Rights
Agreement, the Issuers agreed to file with the Commission the Exchange Offer
Registration Statement on the appropriate form under the Securities Act with
respect to the New Notes. Upon the effectiveness of the Exchange Offer
Registration Statement, the Company will offer to the Holders of Transfer
Restricted Securities pursuant to the Exchange Offer who are able to make
certain representations the opportunity to exchange their Transfer Restricted
Securities for Exchange Notes. If the Issuers do not meet their obligations
under the Registration Rights Agreement, they may be required to pay Liquidated
Damages to holders of Old Notes.

Holders of New Notes are not entitled to any registration rights with
respect to the New Notes. The Issuers agree for a period of 180 days from the
effective date of this Prospectus to make available a prospectus meeting the
requirements of the Securities Act to any broker-dealer for use in connection
with any resale of any New Notes. The Registration Statement of which this
Prospectus is a part constitutes the registration

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statement for the Exchange Offer which is the subject of the Registration Rights
Agreement. Upon the closing of the Exchange Offer, subject to certain limited
exceptions, Holders of untendered Old Notes will not retain any rights under the
Registration Rights Agreement.

CERTAIN DEFINITIONS

"Acquired Indebtedness" means Indebtedness of a Person (a) assumed in
connection with an Asset Acquisition from such Person or (b) existing at the
time such Person becomes a Restricted Subsidiary.

"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person.

"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by Charter Southeast or
any Restricted Subsidiary in any other Person, or any acquisition or purchase of
Equity Interests of any other Person by Charter Southeast or any Restricted
Subsidiary, in either case pursuant to which such Person shall become a
Restricted Subsidiary or shall be consolidated, merged with or into Charter
Southeast or any Restricted Subsidiary or (ii) any acquisition by Charter
Southeast or any Restricted Subsidiary of the assets of any Person which
constitute substantially all of an operating unit or a line of business of such
Person or which is otherwise outside of the ordinary course of business.

"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
or other disposition to any Person other than Charter Southeast or a Wholly
Owned Restricted Subsidiary, in one transaction or a series of related
transactions, of (i) any Equity Interest of any Restricted Subsidiary, (ii) any
material license, franchise or other authorization of Charter Southeast or any
Restricted Subsidiary, (iii) any assets of Charter Southeast or any Restricted
Subsidiary which constitute substantially all of an operating unit or line of
business of Charter Southeast or any of its Restricted Subsidiaries or (iv) any
other property or asset of Charter Southeast or any Restricted Subsidiary
outside of the ordinary course of business. For the purposes of this definition,
the term "Asset Sale" shall not include (i) any disposition of properties and
assets of Charter Southeast that is governed under the covenant described above
under the caption "Merger, Sale of Assets, Etc." or resulting from the creation
of a Lien not prohibited by the provisions described under "Limitation on Liens"
on any assets as a result of a foreclosure (or a secured party taking ownership
of such assets in lieu of foreclosure) or an involuntary proceeding in which
Charter Southeast is not able, directly or indirectly, to direct the type of
proceeds received, (ii) sales of property or equipment that have become worn
out, obsolete or damaged or otherwise unsuitable for use in connection with the
business of Charter Southeast or any Restricted Subsidiary, as the case may be,
and (iii) for purposes of the covenant described above under the caption
"Disposition of Proceeds of Asset Sales," any sale, conveyance, transfer, lease
or other disposition of any property or asset, whether in one transaction or a
series of related transactions involving assets with a Fair Market Value not in
excess of $100,000.

"Board of Directors" means the board of directors, management committee or
similar governing body or any authorized committee thereof responsible for the
management of the business and affairs of Charter Southeast or the General
Partner.

"Capitalized Lease Obligation" means, with respect to any Person for any
period, an obligation of such Person to pay rent or other amounts under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of such obligation shall be the capitalized
amount shown on the balance sheet of such Person as determined in accordance
with GAAP.

"Cash Equivalents" means (A) any security, maturing not more than six
months after the date of acquisition, issued by the United States of America, or
an instrumentality or agency thereof and guaranteed fully as to principal,
premium, if any, and interest by the United States of America, (B) any
certificate of deposit, time deposit, money market account or bankers'
acceptance, maturing not more than six months after the date of acquisition,
issued by any commercial banking institution that is incorporated under the laws
of the United States, or any state or commonwealth thereof, and that has
combined capital and surplus and undivided profits of not less than $500.0
million, whose debt has a rating, at the time as of which any

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investment therein is made, of "P-1" (or higher) according to Moody's Investors
Service, Inc. or any successor rating agency, or "A-1" (or higher) according to
Standard & Poor's Rating Group, a division of McGraw-Hill Corporation or any
successor rating agency, (C) commercial paper, maturing not more than three
months after the date of acquisition, issued by any corporation (other than an
Affiliate of Charter Southeast) organized and existing under the laws of the
United States of America with a rating, at the time as of which any investment
therein is made, of "P-1" (or higher) according to Moody's Investors Service,
Inc. or any successor rating agency, or "A-1" (or higher) according to Standard
& Poor's Rating Group, a division of McGraw-Hill Corporation, or any successor
rating agency and (D) investments in money market funds that are registered
under the Investment Company Act of 1940, which have net assets of at least
$500.0 million and at least 85% of whose assets consist of investments or other
obligations of the type described in clauses (A) through (C).

"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), other than the Permitted Holders, becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the total Voting Equity Interests of Charter Southeast or of the
General Partner; (b) any transaction (including a merger or consolidation) the
result of which is that any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) other than the Permitted Holders
has a sufficient number of its or their nominees elected to the Board of
Directors such that such nominees so elected (whether new or continuing
directors) shall constitute a majority of the Board of Directors; (c) the sale
of all or substantially all of the Equity Interests or assets (which for this
purpose, must include the partnership interests in Charter Southeast) of the
General Partner or of Charter Southeast to any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act) other than the
Permitted Holders as an entirety or substantially as an entirety in one
transaction or a series of related transactions; or (d) the admission of any
Person as a general partner of Charter Southeast after which the General Partner
does not have the sole power to take all of the actions it is entitled or
required to take under the limited partnership agreement of Charter Southeast as
in effect on the Issue Date.

"Consolidated Income Tax Expense" means, with respect to any Person for any
period, without duplication, the provision for Federal, state, local and foreign
income taxes payable by such Person and its Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP; provided,
that notwithstanding the foregoing, with respect to any Permitted Restricted
Subsidiary of such Person the income taxes of such Permitted Restricted
Subsidiary shall be included in such Person's Consolidated Income Tax Expense
pro rata based on, and only to the extent of, the aggregate Equity Interests of
such Permitted Restricted Subsidiary owned by such Person.

"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, the sum of (i) the interest expense of such Person
and its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Interest Rate Protection
Obligations (including any amortization of discounts), (c) the interest portion
of any deferred payment obligation, (d) all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and (e) all accrued interest, (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP and (iii) all
management fees to the extent paid in cash and (iv) dividends and distributions
in respect of Preferred Equity Interests actually paid in cash by such Person
during such period as determined on a consolidated basis in accordance with
GAAP; provided, that notwithstanding the foregoing, with respect to any
Permitted Restricted Subsidiary of such Person, the items identified in the
foregoing clauses (i) through, and including, (iv) shall only be included in
such Person's Consolidated Interest Expense pro rata based on, and only to the
extent of, the aggregate Equity Interests of such Permitted Restricted
Subsidiary owned by such Person.

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"Consolidated Net Income" means, for any Person, with respect to any
period, the net income of such Person and its Restricted Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP (provided,
that notwithstanding the foregoing, with respect to any Permitted Restricted
Subsidiary of such Person, the net income of such Permitted Restricted
Subsidiary shall be included in such Person's Consolidated Net Income pro rata
based on, and only to the extent of, the aggregate Equity Interests of such
Permitted Restricted Subsidiary owned by such Person), adjusted, to the extent
included in calculating such net income, by excluding, without duplication, (i)
all extraordinary gains or losses of such Person and its Restricted Subsidiaries
(net of taxes, fees and expenses relating to the transaction giving rise
thereto) for such period, (ii) income of such Person and its Restricted
Subsidiaries derived from or in respect of all Investments in Persons other than
Restricted Subsidiaries of such Person, except to the extent actually received
in cash by such Person or any Restricted Subsidiary of such Person, (iii) the
portion of net income (or loss) of such Person and its Restricted Subsidiaries
allocable to minority interests in unconsolidated Persons for such period,
except to the extent actually received in cash by such Person or any Restricted
Subsidiary of such Person, (iv) net income (or loss) of any other Person
combined with such Person or a Restricted Subsidiary of such Person on a
"pooling of interests" basis attributable to any period prior to the date of
combination and (v) the portion of net income of any Restricted Subsidiary which
is not at the time permitted, directly or indirectly, to be dividended or
distributed by such Restricted Subsidiary, whether by operation of the terms of
its charter or other organizational document or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such Restricted Subsidiary (provided, that with respect to any Restricted
Subsidiary which is a Permitted Restricted Subsidiary of such Person with
respect to the prior clauses (i) and (v), such adjustment shall be made only to
the extent of the aggregate Equity Interests of such Permitted Restricted
Subsidiary owned by such Person).

"Consolidated Net Worth" means with respect to any Person the equity of the
holders of Equity Interests of such Person and its Restricted Subsidiaries
(excluding any Disqualified Equity Interests), as reflected in a balance sheet
of such Person determined on a consolidated basis and in accordance with GAAP.

"Consolidated Operating Cash Flow" means, for any Person and with respect
to any period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period increased, to the extent deducted in determining
such Consolidated Net Income, by the sum of (i) the Consolidated Income Tax
Expense accrued according to GAAP for such period (other than income taxes
attributable to extraordinary, unusual or non-recurring gains or losses); (ii)
the Consolidated Interest Expense for such period; and (iii) depreciation and
amortization and any other non-cash items reducing Consolidated Net Income
(other than any non-cash item which requires the accrual of, or a reserve for,
such charges for any future period) for such period, including, without
limitation, to the extent not previously included therein, amortization of
capitalized debt issuance costs for such period, and (iv) the aggregate amount
of non-cash management fees accrued during such period, all of the foregoing
(except to the extent otherwise expressly provided to the contrary herein)
determined on a consolidated basis in accordance with GAAP minus non-cash items
to the extent they increase Consolidated Net Income (including the partial or
entire reversal of reserves taken in prior periods).

For purposes of the "Limitation on Indebtedness" covenant, "Consolidated
Operating Cash Flow" shall be calculated after giving effect on a pro forma
basis for the applicable period to, without duplication, any Asset Sales or
Asset Acquisitions (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of such Person or one of
its Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring Acquired
Indebtedness) occurring during the period commencing on the first day of such
period to and including the date of the transaction giving rise to the need to
make such calculation (the "Reference Period"), as if such Asset Sale or Asset
Acquisition occurred on the first day of the Reference Period.

"Cumulative Available Cash Flow" means, for any Person, as at any date of
determination, the positive cumulative Consolidated Operating Cash Flow realized
during the period commencing on April 1, 1996 and ending on the last day of the
most recent fiscal quarter immediately preceding the date of determination for
which consolidated financial information of such Person and its Restricted
Subsidiaries is available or, if such

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cumulative Consolidated Operating Cash Flow for such period is negative, the
negative amount by which cumulative Consolidated Operating Cash Flow is less
than zero.

"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect Charter
Southeast or any of its Restricted Subsidiaries against fluctuations in currency
values.

"Default" means any event that is or with the passing of time or giving of
notice or both would be an Event of Default.

"Disqualified Equity Interest" means any Equity Interest which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable at the option of the holder thereof), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable, at the option of the holder thereof, in
whole or in part, or exchangeable into Indebtedness on or prior to the maturity
date of the Notes.

"Equity Interest" in any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, in
such Person, including any Preferred Equity Interests.

"Fair Market Value" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of which is under pressure or
compulsion to complete the transaction; provided that the Fair Market Value of
any such asset or assets shall be determined by the Board of Directors of the
General Partner, acting in good faith, and shall be evidenced by resolutions of
such Board of Directors delivered to the Trustee.

"GAAP" means generally accepted accounting principles as in effect in the
United States on the Issue Date.

"General Partner" means Charter Communications Southeast Properties, Inc.,
a Delaware corporation and the general partner of Charter Southeast.

"guarantee" or "Guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. A guarantee shall include,
without limitation, any agreement to maintain or preserve any other person's
financial condition or to cause any other Person to achieve certain levels of
operating results.

"Indebtedness" means, with respect to any Person, without duplication, (i)
any liability, contingent or otherwise, of such Person (A) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (B) evidenced by a note, debenture or
similar instrument or letters of credit or (C) for the payment of money relating
to a Capitalized Lease Obligation or other obligation relating to the deferred
purchase price of property, except trade accounts payable and other accrued
liabilities arising in the ordinary course of business that are not overdue by
90 days or more or are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted; (ii) any liability of others of
the kind described in the preceding clause (i) which the Person has Guaranteed
or which is otherwise its legal liability; (iii) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (i), (ii) or (iii). In addition, Indebtedness shall not include (a)
obligations of any Person (i) arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business, provided
that such obligations are extinguished within two Business Days of their
incurrence unless covered by an overdraft line or (ii) resulting

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from the endorsement of negotiable instruments for collection in the ordinary
course of business and consistent with past business practices and (b)
Indebtedness consisting of stand-by letters of credit to the extent
collateralized by cash or Cash Equivalents. For purposes of the covenant
described above under the caption "Limitation on Indebtedness," (x) in
determining the principal amount of any Indebtedness to be incurred by Charter
Southeast or a Restricted Subsidiary or which is outstanding at any date, the
principal amount of any Indebtedness which provides that an amount less than the
principal amount thereof shall be due upon any declaration of acceleration
thereof shall be the accreted value thereof at the date of determination and (y)
any Preferred Equity Interest of a Restricted Subsidiary shall be deemed to be
Indebtedness of such Restricted Subsidiary.

"Independent Financial Advisor" means a nationally recognized investment
banking firm, (i) which does not, and whose directors, officers and employees or
Affiliates do not have, a direct or indirect financial interest in Charter
Southeast and (ii) which, in the judgment of the Board of Directors of the
General Partner, is otherwise independent and qualified to perform the task for
which it is to be engaged.

"Interest Rate Protection Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.

"Investment" means, with respect to any Person, any advance, loan, account
receivable (other than an account receivable arising in the ordinary course of
business), or other extension of credit (including, without limitation, by means
of any guarantee) or any capital contribution to (by means of transfers of
property to others, payments for property or services for the account or use of
others, or otherwise), or any purchase or ownership of any stocks, bonds, notes,
debentures or other securities of, any other Person.

"Lien" means any lien, mortgage, charge, security interest, hypothecation,
assignment for security or encumbrance of any kind (including any conditional
sale or capital lease or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest).

"Management Agreements" means the management agreements (i) among Charter
Southeast and CC-I and CC-II, respectively, and (ii) between Charter Holdings
and Charter Southeast.

"Net Cash Proceeds" means the aggregate proceeds, if any, in the form of
cash or Cash Equivalents received by Charter Southeast or any Restricted
Subsidiary in respect of any Asset Sale, including all cash or Cash Equivalents
received upon any sale, liquidation or other exchange of proceeds of Asset Sales
received in a form other than cash or Cash Equivalents, net of (i) the direct
costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees and sales commissions and other
acquisition fees), (ii) taxes paid or payable as a result thereof (after taking
into account any available tax credits or deductions and any tax sharing
arrangements) or amounts required to be distributed to the holders of any
interest in Charter Southeast or any Restricted Subsidiary to permit such
holders to pay any taxes resulting from such sale as and when such taxes are
required to be paid by applicable laws, (iii) amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets that were
the subject of such Asset Sale, (iv) amounts, in good faith, deemed appropriate
by the Board of Directors to be provided as a reserve, in accordance with GAAP,
against any liabilities associated with such assets which are the subject of
such Asset Sale (provided that the amount of any such reserves shall be deemed
to constitute Net Cash Proceeds at the time such reserves shall have been
released or are not otherwise required to be retained as a reserve) and (v) with
respect to Asset Sales by Subsidiaries, the portion of such cash payments
attributable to Persons holding a minority interest in such Subsidiary.

"New Credit Facility" means any senior secured credit facility of a
Restricted Subsidiary as the same may be amended, modified, replaced, renewed,
refunded or refinanced from time to time (including any such

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amendment, modification, replacement, renewal, refunding or refinancing which
increases the aggregate principal amount of Indebtedness which can be borrowed
thereunder).

"Payment Restriction" shall have the meaning set forth under "Limitation on
Dividends and Other Payment Restrictions Affecting Subsidiaries."

"Permitted Holders" means (a) the General Partner, for so long as a
majority of the Voting Equity Interests of such General Partner are beneficially
owned by the Person described in the following clause (b) and (b) Charterhouse.

"Permitted Investments" means (a) cash and Cash Equivalents; (b)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (c) Interest Rate Protection Obligations and Currency Agreements; (d)
bonds, notes, debentures or other securities received as a result of Asset Sales
permitted under the covenant described above under the caption "Disposition of
Proceeds of Asset Sales"; (e) transactions with officers, directors and
employees of Charter Southeast or any Restricted Subsidiary entered into in
ordinary course of business (including compensation or employee benefit
arrangements with any such of director or employee) and consistent with past
business practices; and (f) Investments existing as of the Issue Date and any
amendment, extension, renewal or modification thereof to the extent that any
such amendment, extension, renewal or modification does not require Charter
Southeast or any Restricted Subsidiary to make any additional cash or non-cash
payments or provide additional services in connection therewith.

"Permitted Liens" means (a) Liens existing on property of a Person at the
time such Person is merged into, acquired by or consolidated with Charter
Southeast or any Restricted Subsidiary; provided that such Liens were in
existence prior to the contemplation of such merger, acquisition or
consolidation and do not secure any property or assets of Charter Southeast or
any Restricted Subsidiary other than the property or assets subject to the Liens
prior to such merger, acquisition or consolidation; (b) Liens existing on the
Issue Date; (c) Liens securing only the Notes; (d) Liens in favor of Charter
Southeast or any Restricted Subsidiary; (e) Liens securing Indebtedness
consisting of Capitalized Lease Obligations, Purchase Money Indebtedness,
mortgage financings, industrial revenue bonds or other monetary obligations, in
each case incurred solely for the purpose of financing all or any part of the
purchase price or cost of construction or installation of assets used in the
business of Charter Southeast or its Restricted Subsidiaries on the Issue Date,
or repairs, additions or improvements to such assets, provided that (w) such
Liens secure Indebtedness in an amount not in excess of the original purchase
price or the original cost of any such assets or repair, addition or improvement
thereto (plus an amount equal to the reasonable fees and expenses in connection
with the incurrence of such Indebtedness), (x) such Liens do not extend to any
other assets of Charter Southeast or its Restricted Subsidiaries (and, in the
case of repair, addition or improvement to any such assets, such Lien extends
only to the assets (and improvements thereto or thereon) repaired, added to or
improved), (y) the incurrence of such Indebtedness is permitted by the
provisions described under "-- Limitation on Indebtedness," and (z) such Liens
attach within 30 days of such purchase, construction, installation, repair,
addition or improvement; (f) Liens to secure any Refinancings (or successive
Refinancings), in whole or in part, of any Indebtedness secured by Liens
referred to in the foregoing clauses (a) through (e) so long as such Lien does
not extend to any other property (other than improvements thereto) and the
Indebtedness so secured is not increased; (g) Liens on assets securing
Indebtedness in an aggregate principal amount not to exceed $1,000,000 and (h)
Liens securing letters of credit entered into in the ordinary course of business
and consistent with past business practice.

"Permitted Restricted Subsidiary" shall have the meaning provided in the
penultimate paragraph of "Limitation on Restricted Payments."

"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

"Preferred Equity Interest", in any Person, means an Equity Interest of any
class or classes (however designated) which is preferred as to the payment of
dividends or distributions, or as to the distribution of

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assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over Equity Interests of any other class in such Person.

"Public Equity Offering" means, a public offering by Charter Holdings of
some or all of its Equity Interests (other than Disqualified Equity Interests),
which provide aggregate net proceeds to Charter Holdings in excess of $35.0
million.

"Purchase Money Indebtedness" means Indebtedness of Charter Southeast or
its Restricted Subsidiaries incurred for the purpose of financing all or any
part of the purchase price or the cost of construction or improvement of any
property provided that the aggregate principal amount of such Indebtedness does
not exceed 100.0% of such purchase price or cost.

"Restricted Investment" means any Investment other than a Permitted
Investment.

"Restricted Subsidiary" means any direct or indirect Subsidiary of Charter
Southeast that has not been designated by the Board of Directors of Charter
Southeast, by a resolution of the Board of Directors of Charter Southeast
delivered to the Trustee, as an Unrestricted Subsidiary pursuant to and in
compliance with the covenant "Designation of Unrestricted Subsidiaries."

"Significant Restricted Subsidiary" means, at any date of determination,
any Restricted Subsidiary that, together with its Subsidiaries that constitute
Restricted Subsidiaries (i) for the most recent fiscal year of Charter Southeast
accounted for more than 5.0% of the consolidated revenues of Charter Southeast
and its Restricted Subsidiaries, (ii) as of the end of such fiscal year, owned
more than 5.0% of the consolidated assets of Charter Southeast and its
Restricted Subsidiaries, or (iii) for the most recent fiscal year of Charter
Southeast accounted for more than 5.0% of the Consolidated Operating Cash Flow
or Consolidated Net Income of Charter Southeast and its Restricted Subsidiaries,
all as set forth on the consolidated financial statements of Charter Southeast
and its Restricted Subsidiaries for such year prepared in conformity with GAAP.

"Subordinated Indebtedness" means any Indebtedness of which Charter
Southeast is an obligor that by its terms is expressly subordinated in right and
priority of payment to the Notes.

"Subsidiary" means, with respect to any Person, (i) any corporation of
which the outstanding Voting Equity Interests having at least a majority of the
votes entitled to be cast in the election of directors shall at the time be
owned, directly or indirectly, by such Person, or (ii) any other Person of which
at least a majority of Voting Equity Interests are at the time, directly or
indirectly, owned by such Person.

"Total Consolidated Indebtedness" means, with respect to any Person, as at
any date of determination, an amount equal to the aggregate amount of all
Indebtedness and Disqualified Equity Interests of such Person and its Restricted
Subsidiaries outstanding as of the date of determination; provided, that
notwithstanding the foregoing, with respect to any Permitted Restricted
Subsidiary of such Person, the aggregate amount of Indebtedness and Disqualified
Equity Interests of such Permitted Restricted Subsidiary shall be included in
such Person's Total Consolidated Indebtedness pro rata based on, and only to the
extent of, the aggregate Equity Interests of such Permitted Restricted
Subsidiary owned by such Person.

"Unrestricted Subsidiary" means any Subsidiary of Charter Southeast
designated as such pursuant to and in compliance with the covenant "Designation
of Unrestricted Subsidiaries." Any such designation may be revoked by a
resolution of the Board of Directors of Charter Southeast delivered to the
Trustee, subject to the provisions of the covenant "Designation of Unrestricted
Subsidiaries."

"Voting Equity Interests" means Equity Interests in a corporation or other
Person with voting power under ordinary circumstances entitling the holders
thereof to elect the Board of Directors or other governing body of such
corporation or Person.

"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary all of
the outstanding Voting Equity Interests (other than directors' qualifying
shares) of which are owned by Charter Southeast or another Wholly Owned
Restricted Subsidiary of Charter Southeast.

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DESCRIPTION OF OTHER INDEBTEDNESS

THE DEBENTURES

Concurrently with the Offering, Charter Holdings and Holdings Capital (the
"Debenture Issuers") offered and sold the Debentures. Cash interest will not
accrue on the Debentures prior to March 15, 2001. Thereafter, cash interest on
the Debentures will be payable in arrears March 15 and September 15 of each year
at a rate of 14% per annum.

The Debentures are redeemable at the Debenture Issuers' option, in whole or
in part, at any time on or after March 15, 2001, at the redemption prices set
forth in the Debenture Indenture, provided that the Debentures may be earlier
redeemed, in whole but not in part, at any time from January 1, 2000 through and
including March 14, 2001, at the Issuers' option, at a redemption price equal to
the Applicable Premium (as defined in the Debenture Indenture). In addition, at
any time prior to March 15, 1999, the Debenture Issuers may redeem up to 35.0%
of the aggregate principal amount at maturity of Debentures with the net
proceeds of one or more Public Equity Offerings (as defined in the Debenture
Indenture), at a price equal to 114% of the Accreted Value (as defined in the
Debenture Indenture) thereof; provided that not less than 65% of the aggregate
principal amount at maturity of the Debentures issued are outstanding
immediately after giving effect to any such redemption. Upon the occurrence of a
Change of Control (as defined in the Debenture Indenture), the Debenture Issuers
are required to make an offer to purchase all of the Debentures at a purchase
price equal to 101% of the Accreted Value thereof, together with accrued and
unpaid interest, if any, to the date of purchase.

In addition, the Debenture Indenture contains certain covenants, including,
but not limited to, covenants with respect to the following matters: (i)
limitations on the incurrence of additional Indebtedness and Disqualified Equity
Interests; (ii) limitations on Restricted Payments; (iii) limitations on
transactions with Affiliates; (iv) application of the proceeds of certain Asset
Sales; (v) limitations on the incurrence of Liens to secure Indebtedness; (vi)
limitations on the creation of restrictions on the ability of certain
subsidiaries to make certain distributions and payments to Charter Holdings;
(vii) limitations on the designation of Unrestricted Subsidiaries; (viii)
limitations on the ability of Charter Holdings to sell or issue stock of its
Subsidiaries and (ix) restrictions on mergers, consolidations and the transfer
of all or substantially all of the assets of the Debenture Issuers to another
person. These covenants are subject to important exceptions and qualifications.
Each of the foregoing capitalized terms has the meaning assigned to it in the
Debenture Indenture.

THE NEW CREDIT FACILITIES

The principal terms and conditions of the New Credit Facilities are
summarized below. The CC-I Bank Group has provided the New CC-I Credit Facility,
and the CC-II Bank Group provided the New CC-II Credit Facility.

Facilities. The New CC-I Credit Facility consists of a $30.0 million
eight-year revolving line of credit and a $75.0 million eight-year term credit
facility. The New CC-II Credit Facility consists of a $165.0 million eight-year
revolving line of credit and a $40.0 million eight-year term credit facility.

Interest Rates. Loans under the New Credit Facilities bear interest at a
rate per annum, at the borrower's election, based upon certain spreads plus the
prime rate of interest, the interest rate on certificates of deposit or LIBOR.
Initially, the applicable spreads are 0.75%, 1.875% and 1.75%, respectively,
subject to reductions to 0.25%, 1.375% and 1.25%, respectively, based upon the
ratio of indebtedness to EBITDA. With respect to the term portion of the New
CC-II Credit Facility, the applicable spreads are 1.50%, 2.625% and 2.50%,
respectively, based upon the ratio of indebtedness to EBITDA.

Security. The New CC-I Credit Facility is secured by substantially all of
the assets of CC-I, and includes the grant of a lien on all partnership
interests in CC-I. The New CC-II Credit Facility is secured by substantially all
of the assets of the CC-II Borrowers, and includes the grant of a lien on all
partnership interests in the CC-II Borrowers.

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<PAGE> 116

Amortization. Commencing with the quarter ending March 31, 1998, quarterly
reductions of the New Credit Facilities will be made on the last day of each
March, June, September and December through September 30, 2004.

Covenants. The New Credit Facilities contain certain affirmative and
negative covenants, including, but not limited to (i) maintenance of ratios of
total debt to operating cash flow, operating cash flow to fixed charges and
operating cash flow to debt service, (ii) restrictions on capital expenditures,
(iii) limitations on additional indebtedness, acquisitions, investments, mergers
and sales of assets, creation of liens and encumbrances, guaranties, issuance of
equity interests and operating lease payments, (iv) restrictions on payments of
management fees and (v) limitations on distributions.

Events of Default. The New Credit Facilities contain certain events of
default substantially similar to events of default contained in the Old Credit
Facilities.

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<PAGE> 117

PLAN OF DISTRIBUTION

Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. The Issuers have agreed that, for a period of 180 days after
the effective date of this Prospectus, they will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.

The Issuers will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own accounts
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market prices at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

For a period of 180 days after the effective date of this Prospectus, the
Issuers will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Issuers have agreed, in
connection with the Exchange Offer, to indemnify the Initial Purchasers against
certain liabilities, including liabilities under the Securities Act.

By acceptance of the Exchange Offer, each broker-dealer that receives New
Notes pursuant to the Exchange Offer hereby agrees to notify the Issuers prior
to using the Prospectus in connection with the sale or transfer of New Notes,
and acknowledges and agrees that, upon receipt of notice from the Issuers of the
happening of any event which makes any statement in the Prospectus untrue in any
material respect or which requires the making of any changes in the Prospectus
in order to make the statements therein not misleading (which notice the Issuers
agree to deliver promptly to such broker-dealer), such broker-dealer will
suspend use of the Prospectus until the Issuers have amended or supplemented
prospectus to such broker-dealer.

LEGAL MATTERS

Certain legal matters with respect to the Notes will be passed upon for the
Issuers by Paul, Hastings, Janofsky & Walker, New York, New York.

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INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The consolidated balance sheets of Charter Communications Southeast
Holdings, L.P. as of December 31, 1995 and 1994 and the related consolidated
statements of operations, partners' capital and cash flows for the years ended
December 31, 1995 and 1994; the balance sheet of Charter Communications
Southeast Holdings Capital Corporation as of March 31, 1996 and the related
statement of shareholder's investment for the period from inception to March 31,
1996; the consolidated balance sheet of Charter Communications Southeast, L.P.
as of December 31, 1995 and 1994 and the related consolidated statements of
operations, partners' capital and cash flows for the years ended December 31,
1995 and 1994; the balance sheet of Charter Communications Southeast Capital
Corporation as of March 31, 1996 and the related statement of shareholder's
investment for the period from reception to March 31, 1996; the consolidated
balance sheet of Charter Communications II, L.P. as of December 31, 1995 and the
related consolidated statements of operations, partners' capital and cash flows
for the years ended December 31, 1995 and 1994; the balance sheets of Charter
Communications, L.P. as of December 31, 1995 and 1994, and the related
statements of operations, partners' capital and cash flows for the years ended
December 31, 1995 and 1994; the combined balance sheet of The
Subscriber/Citation Cable Systems as of December 31, 1993 and the related
combined statements of operations, owners' equity and cash flows for the four
months ended April 30, 1994 and for the year ended December 31, 1993; the
combined balance sheet of The Jefferson/LaGrange Cable Systems as of December
31, 1993 and the related combined statements of operations, owners' deficit and
cash flows for the four months ended April 30, 1994 and for the year ended
December 31, 1993; the combined balance sheet of Cencom Cable Operating Systems
as of December 31, 1994 and the related combined statements of operations,
systems' equity and cash flows for the year ended December 31, 1994; the
combined balance sheets of Cencom Cable Income Partners, L.P.-Clarksville, Ft.
Gordon, Camp LeJeune, Tryon Systems as of December 31, 1995 and 1994 and the
related combined statements of operations, systems' equity and cash flows for
the years ended December 31, 1995 and 1994; the balance sheet of Cencom
Partners, L.P.-Lincolnton System as of December 31, 1995 and the related
statements of operations, system's equity and cash flows for the year ended
December 31, 1995; the balance sheet of Cencom Cable Income Partners II,
L.P.-Anderson County System as of December 31, 1995 and the related statements
of operations, system's equity, and cash flows for the year ended December 31,
1995; the balance sheet of Cencom Partners, L.P.-Sanford System as of December
31, 1995 and the related statements of operations, system's equity, and cash
flows for the year ended December 31, 1995; and the balance sheet of Charter
Communications Southeast Properties, Inc. as of December 31, 1995, included in
this Registration Statement and Prospectus have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto.

The combined statements of operations, systems' equity and cash flows of
Cencom Cable Operating Systems for the year ended December 31, 1993 and the
combined statements of operations, systems' equity and cash flows of Cencom
Cable Income Partners, L.P.-Clarksville, Ft. Gordon, Camp LeJeune, Tryon Systems
for the year ended December 31, 1993, included in this Registration Statement
and Prospectus have been audited by KPMG Peat Marwick LLP, independent public
accountants, as indicated in their reports with respect thereto.

The balance sheets of Peachtree Cable TV, Inc. as of December 31, 1994 and
1993 and the related statements of operations, cash flows and stockholders'
equity for the four months in the period ended April 30, 1995 and the years
ended December 31, 1994 and 1993, included in this Registration Statement and
Prospectus have been audited by Holben, Boak, Cooper & Co., independent public
accountants, as indicated in their report with respect thereto.

The balance sheets of the Cable Systems of CableSouth, Inc. as of December
31, 1994 and 1993 and the related statements of operations, systems' equity and
cash flows for the three years in the period ended December 31, 1994 and for the
five month period ended May 31, 1995, included in this Registration Statement
and Prospectus have been audited by Deloitte & Touche LLP, independent public
accountants, as indicated in their report with respect thereto.

The balance sheets of the Georgia Cable Television System (sold by Masada
Cable Partners, L.P. to Charter Communications II, L.P.) as of July 31, 1995 and
December 31, 1994, and the related statements of

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operations, changes in system deficiency and cash flows for the seven months in
the period ended July 31, 1995 and the years ended December 31, 1994 and 1993;
the balance sheets of the Masada Cable Partners II, L.P. as of November 30, 1995
and December 31, 1994, and the related statements of operations, changes in
system capital (deficiency) and cash flows for the eleven months ended November
30, 1995 and the years ended December 31, 1994 and 1993, the Alabama Cable
Television System to be sold by Masada Cable Partners, L.P. to Charter
Communications II, L.P. as of December 31, 1995 and 1994, and the related
statements of operations, changes in system capital (deficiency) and cash flows
for the year ended December 31, 1995, 1994 and 1993; and the balance sheets of
Prime Cable of Hickory, L.P. as of December 31, 1995 and 1994; and the related
statements of operations, changes in partners' capital deficiency, and cash
flows for the years ended December 31, 1995 and 1994, included in this
Registration Statement and Prospectus have been audited by Ernst & Young LLP,
independent public accountants, as indicated in their reports with respect
thereto.

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GLOSSARY

The following is a description of certain terms used in this Prospectus.

A LA CARTE -- The purchase of individual basic or expanded basic
programming services on a per-channel basis.

BASIC PENETRATION -- The measurement of the take-up of basic cable service
expressed by calculating the number of basic service subscribers outstanding on
such date as a percentage of the total number of homes passed in the system.

BASIC SERVICE -- A package of over-the-air broadcast and
satellite-delivered cable television services.

BASIC SUBSCRIBER -- A subscriber to a cable or other television
distribution system who receives the basic level of television service and who
is usually charged a flat monthly rate for a number of channels.

CABLE PLANT -- A network of co-axial and/or fiber optic cables that
transmit multiple channels carrying images, sound and data between a central
facility and an individual customer's television set. Networks may allow one-way
(from a headend to a residence and/or business) or two-way (from a headend to a
residence and/or business with a data return path to the headend) transmission.

CLUSTERING -- A general term used to describe the strategy of operating
cable television systems in a specific geographic region, thus allowing for the
achievement of economies of scale and operating efficiencies in such areas as
system management, marketing and technical functions.

DIGITAL COMPRESSION -- The conversion of the standard analog video signal
into a digital signal, and the compression of that signal so as to facilitate
multiple channel transmission through a single channel's bandwidth.

DIRECT BROADCAST SATELLITE (DBS) -- A service by which packages of
television programming are transmitted to individual homes, each serviced by a
single satellite dish.

EBITDA -- Represents income (loss) before interest expense, income taxes,
depreciation and amortization, management fees and other income (expense).

FCC -- Federal Communications Commission.

HEADEND -- A collection of hardware, typically including satellite
receivers, modulators, amplifiers and video cassette playback machines within
which signals are processed and then combined for distribution within the cable
network.

HOMES PASSED -- Homes that can be connected to a cable distribution system
without further extension of the distribution network.

MATV -- Master Antenna Television system. A system which uses a master
antenna to pick up television signals for distribution over a cable to a small
group of subscribers, such as an apartment block or hotel.

MMDS -- Multichannel Multipoint Distribution Service. A one-way radio
transmission of television channels over microwave frequencies from a fixed
station transmitting to multiple receiving facilities located at fixed points.

OVERBUILD -- The construction of a second cable television system in a
franchise area in which such a system had previously been constructed.

PAY-PER-VIEW -- Payment made for individual movies, programs or events as
opposed to a monthly subscription for a whole channel or group of channels.

PREMIUM PENETRATION -- The measurement of the take-up of premium cable
service expressed by calculating the number of premium units outstanding on such
a date as a percentage of the total number of basic service subscribers.

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PREMIUM SERVICE -- An individual cable programming service available only
for additional subscription over and above the basic or expanded basic levels of
television service.

PREMIUM UNITS -- The number of subscriptions to premium services which are
paid for on an individual basis.

SMATV -- Satellite Master Antenna Television system. A video programming
delivery system to multiple dwelling units utilizing satellite transmissions.

VIDEO DIALTONE -- A general term used to describe a video programming
delivery system through telephone lines.

LIST OF ENTITIES

The following is a list of entities referred to in this Prospectus.

CC-I -- Charter Communications, L.P.
CC-II -- Charter Communications II, L.P.
CCIP -- Cencom Cable Income Partners, L.P.
CCIP II -- Cencom Cable Income Partners II, L.P.
CCP II -- CCP II, Inc.
CPLP -- Cencom Partners, L.P.
CHARTER -- Charter Communications, Inc.
CHARTERCOMM -- CharterComm, Inc.
CHARTERCOMMII -- CharterComm II, L.L.C.
CHARTERCOMM HOLDINGS -- CharterComm Holdings, L.P.
CHARTER HOLDINGS -- Charter Communications Southeast Holdings, L.P.
CHARTERHOUSE -- Charterhouse Group International, Inc. and its affiliates
CHARTER SOUTHEAST -- Charter Communications Southeast, L.P.
HOLDINGS CAPITAL -- Charter Communications Southeast Holdings Capital Corp.
HOLDINGS PROPERTIES -- Charter Communications Holdings Properties, Inc.
SOUTHEAST CAPITAL -- Charter Communications Southeast Capital Corp.
SOUTHEAST PROPERTIES -- Charter Communications Southeast Properties, Inc.

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INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.:
Report of Independent Public Accountants............................................. F-5
Consolidated Balance Sheets as of December 31, 1995 and 1994, and March 31, 1996
(Unaudited)........................................................................ F-6
Consolidated Statements of Operations for the Years Ended December 31, 1995 and 1994,
and the Three Months Ended March 31, 1996 and 1995 (Unaudited)..................... F-7
Consolidated Statements of Partners' Capital for the Years Ended December 31, 1995
and 1994, and the Three Months Ended March 31, 1996 (Unaudited).................... F-8
Consolidated Statements of Cash Flows for the Years Ended December 31, 1995 and 1994,
and the Three Months Ended March 31, 1996 and 1995(Unaudited)...................... F-9
Notes to Consolidated Financial Statements........................................... F-11
CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS CAPITAL CORPORATION
Report of Independent Public Accountants............................................. F-30
Balance Sheet as of March 31, 1996................................................... F-31
Statements of Shareholder's Investment for the Period from Inception to March 31,
1996............................................................................... F-32
Notes to Financial Statement......................................................... F-33
CHARTER COMMUNICATIONS SOUTHEAST, L.P.:
Report of Independent Public Accountants............................................. F-34
Consolidated Balance Sheets as of December 31, 1995 and 1994, and March 31, 1996
(Unaudited)........................................................................ F-35
Consolidated Statements of Operations for the Years Ended December 31, 1995 and 1994,
and the Three Months Ended March 31, 1996 and 1995 (Unaudited)..................... F-36
Consolidated Statements of Partners' Capital for the Years Ended December 31, 1995
and 1994, and the Three Months Ended March 31, 1996 (Unaudited).................... F-37
Consolidated Statements of Cash Flows for the Years Ended December 31, 1995 and 1994,
and the Three Months Ended March 31, 1996 and 1995 (Unaudited)..................... F-38
Notes to Consolidated Financial Statements........................................... F-40
CHARTER COMMUNICATIONS SOUTHEAST CAPITAL CORPORATION
Report of Independent Public Accountants............................................. F-59
Balance Sheet as of March 31, 1996................................................... F-60
Statements of Shareholder's Investment for the Period from Inception to March 31,
1996............................................................................... F-61
Notes to Financial Statement......................................................... F-62
CHARTER COMMUNICATIONS II, L.P.:
Report of Independent Public Accountants............................................. F-63
Consolidated Balance Sheet as of December 31, 1995................................... F-64
Consolidated Statement of Operations for the Year Ended December 31, 1995............ F-65
Consolidated Statement of Partners' Capital for the Year Ended December 31, 1995..... F-66
Consolidated Statement of Cash Flows for the Year Ended December 31, 1995............ F-67
Notes to Consolidated Financial Statements........................................... F-68
CHARTER COMMUNICATIONS, L.P.:
Report of Independent Public Accountants............................................. F-81
Balance Sheets as of December 31, 1995 and 1994...................................... F-82
Statements of Operations for the Years Ended December 31, 1995 and 1994.............. F-83
Statements of Partners' Capital for the Years Ended December 31, 1995 and 1994....... F-84
Statements of Cash Flows for the Years Ended December 31, 1995 and 1994.............. F-85
Notes to Financial Statements........................................................ F-86
</TABLE>

F-1
<PAGE> 123

<TABLE>
<S> <C>
THE SUBSCRIBER/CITATION CABLE SYSTEMS:
Report of Independent Public Accountants............................................. F-100
Combined Balance Sheet as of December 31, 1993....................................... F-101
Combined Statements of Operations for the Four Months Ended April 30, 1994 and the
Year Ended December 31, 1993....................................................... F-102
Combined Statements of Owners' Equity for the Four Months Ended April 30, 1994 and
the Year Ended December 31, 1993................................................... F-103
Combined Statements of Cash Flows for the Four Months Ended April 30, 1994 and the
Year Ended December 31, 1993....................................................... F-104
Notes to Combined Financial Statements............................................... F-105
THE JEFFERSON/LAGRANGE CABLE SYSTEMS:
Report of Independent Public Accountants............................................. F-110
Combined Balance Sheet as of December 31, 1993....................................... F-111
Combined Statements of Operations for the Four Months Ended April 30, 1994 and the
Year Ended December 31, 1993....................................................... F-112
Combined Statements of Owners' Deficit for the Four Months Ended April 30, 1994 and
the Year Ended December 31, 1993................................................... F-113
Combined Statements of Cash Flows for the Four Months Ended April 30, 1994 and the
Year Ended December 31, 1993....................................................... F-116
Notes to Combined Financial Statements............................................... F-117
CENCOM CABLE OPERATING SYSTEMS:
Report of Independent Public Accountants............................................. F-122
Independent Auditors' Report......................................................... F-123
Combined Balance Sheet as of December 31, 1994....................................... F-124
Combined Statements of Operations for the Years Ended December 31, 1994 and 1993..... F-125
Combined Statements of Systems' Equity for the Years Ended December 31, 1994, and
1993............................................................................... F-126
Combined Statements of Cash Flows for the Years Ended December 31, 1994 and 1993..... F-127
Notes to Combined Financial Statements............................................... F-128
PEACHTREE CABLE TV, INC.:
Independent Auditors' Report......................................................... F-134
Balance Sheets as of December 31, 1994 and 1993...................................... F-135
Statements of Operations for the Four Months Ended April 30, 1995 and Years Ended
December 31, 1994 and 1993......................................................... F-136
Statements of Cash Flows for the Four Months Ended April 30, 1995 and Years Ended
December 31, 1994 and 1993......................................................... F-137
Statement of Stockholders' Equity for the Four Months Ended April 30, 1995 and Years
Ended December 31, 1994 and 1993................................................... F-138
Notes to Financial Statements........................................................ F-139
CABLE SYSTEMS OF CABLESOUTH, INC.:
Independent Auditors' Report......................................................... F-145
Balance Sheets as of December 31, 1994 and 1993...................................... F-146
Statements of Operations for the Years Ended December 31, 1992, 1993 and 1994 and the
Five-Month Period Ended May 31, 1995............................................... F-147
Statement of Systems' Equity for the Years Ended December 31, 1992, 1993 and 1994 and
the Five-Month Period Ended May 31, 1995........................................... F-148
Statements of Cash Flows for the Years Ended December 31, 1992, 1993 and 1994 and the
Five-Month Period Ended May 31, 1995............................................... F-149
Notes to Financial Statements........................................................ F-150
GEORGIA CABLE TELEVISION SYSTEM (SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER
COMMUNICATIONS II, L.P.):
Report of Independent Auditors....................................................... F-153
Balance Sheets as of July 31, 1995 and December 31, 1994............................. F-154
</TABLE>

F-2
<PAGE> 124

<TABLE>
<S> <C>
Statements of Operations for the Seven Months Ended July 31, 1995 and Years Ended
December 31, 1994 and 1993......................................................... F-155
Statements of Changes in System Deficiency for the Seven Months Ended July 31, 1995
and Years Ended December 31, 1994 and 1993......................................... F-156
Statements of Cash Flows for the Seven Months Ended July 31, 1995 and Years Ended
December 31, 1994 and 1993......................................................... F-157
Notes to Financial Statements........................................................ F-158
MASADA CABLE PARTNERS II, L.P.:
Report of Independent Auditors....................................................... F-163
Balance Sheets as of November 30, 1995 and December 31, 1994......................... F-164
Statements of Operations for the Eleven Months Ended November 30, 1995 and Years
Ended December 31, 1994 and 1993................................................... F-165
Statements of Changes in System Capital (Deficiency) for the Eleven Months Ended
November 30, 1995 and Years Ended December 31, 1994 and 1993....................... F-166
Statements of Cash Flows for the Eleven Months Ended November 30, 1995 and Years
Ended December 31, 1994 and 1993................................................... F-167
Notes to Financial Statements........................................................ F-168
CENCOM CABLE INCOME PARTNERS, L.P. -- CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON
SYSTEMS:
Report of Independent Public Accountants............................................. F-172
Independent Auditors' Report......................................................... F-173
Combined Balance Sheets as of December 31, 1995 and 1994............................. F-174
Combined Statements of Operations for the Years Ended December 31, 1995, 1994 and
1993, and the Periods Ended March 29, 1996 and March 31, 1995 (Unaudited).......... F-175
Combined Statements of Systems' Equity for the Years Ended December 31, 1995, 1994
and 1993, and the Period Ended March 29, 1996 (Unaudited).......................... F-176
Combined Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and
1993, and the Periods Ended March 29, 1996 and March 31, 1995 (Unaudited).......... F-177
Notes to Combined Financial Statements............................................... F-178
CENCOM CABLE INCOME PARTNERS II, L.P. -- ANDERSON COUNTY SYSTEM
Report of Independent Public Accountants............................................. F-186
Balance Sheets as of March 31, 1996 (Unaudited) and December 31, 1995................ F-187
Statements of Operations for the Year Ended December 31, 1995 and the Three Months
Ended March 31, 1996 and 1995 (Unaudited).......................................... F-188
Statements of System's Equity for the Year Ended December 31, 1995 and the Three
Months Ended March 31, 1996 (Unaudited)............................................ F-189
Statements of Cash Flows for the Year Ended December 31, 1995 and the Three Months
Ended March 31, 1996 and 1995 (Unaudited).......................................... F-190
Notes to Financial Statements........................................................ F-191
CENCOM PARTNERS, L.P. -- LINCOLNTON SYSTEM
Report of Independent Public Accountants............................................. F-199
Balance Sheets as of December 31, 1995 and March 31, 1996 (Unaudited)................ F-200
Statements of Operations for the Year Ended December 31, 1995 and the Three Months
Ended March 31, 1996 and 1995 (Unaudited).......................................... F-201
Statements of System's Equity for the Year Ended December 31, 1995 and the Three
Months Ended March 31, 1996 (Unaudited)............................................ F-202
Statements of Cash Flows for the Year Ended December 31, 1995 and the Three Months
Ended March 31, 1996 and 1995 (Unaudited).......................................... F-203
Notes to Financial Statements........................................................ F-204
</TABLE>

F-3
<PAGE> 125

<TABLE>
<S> <C>
CENCOM PARTNERS, L.P. -- SANFORD SYSTEM
Report of Independent Public Accountants............................................. F-212
Balance Sheets as of December 31, 1995 and March 31, 1996 (Unaudited)................ F-213
Statements of Operations for the Year Ended December 31, 1995 and the Three Months
Ended March 31, 1996 and 1995 (Unaudited).......................................... F-214
Statements of System's Equity for the Year Ended December 31, 1995 and the Three
Months Ended March 31, 1996 (Unaudited)............................................ F-215
Statements of Cash Flows for the Year Ended December 31, 1995 and the Three Months
Ended March 31, 1996 and 1995 (Unaudited).......................................... F-216
Notes to Financial Statements........................................................ F-217
PRIME CABLE OF HICKORY, L.P.
Report of Independent Auditors....................................................... F-225
Balance Sheets as of December 31, 1995 and 1994...................................... F-226
Statements of Operations for the Years Ended December 31, 1995 and 1994.............. F-227
Statements of Changes In Partners' Capital Deficiency for the Years Ended December
31, 1995 and 1994.................................................................. F-228
Statements of Cash Flows for the Years Ended December 31, 1995 and 1994.............. F-229
Notes to Financial Statements........................................................ F-230
PRIME CABLE OF HICKORY, L.P.
Balance Sheets as of March 31, 1996 (Unaudited) and December 31, 1995................ F-236
Statement of Operations for the Three Months Ended March 31, 1996 and 1995
(Unaudited)........................................................................ F-237
Statements of Changes In Partners' Capital Deficiency for the Three Months Ended
March 31, 1996 (Unaudited) and the Years Ended December 31, 1995 and 1994.......... F-238
Statements of Cash Flows for the Three Months Ended March 31, 1996 and 1995
(Unaudited)........................................................................ F-239
Notes to Financial Statements........................................................ F-240
ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE PARTNERS, L.P. TO
CHARTER COMMUNICATIONS II, L.P.
Report of Independent Auditors....................................................... F-241
Balance Sheets as of December 31, 1995 and 1994...................................... F-242
Statements of Operations for the Years Ended December 31, 1995, 1994 and 1993........ F-243
Statements of Changes in System Capital (Deficiency) for the Years Ended December 31,
1995, 1994 and 1993................................................................ F-244
Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........ F-245
Notes to Financial Statements........................................................ F-246
ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE PARTNERS, L.P. TO
CHARTER COMMUNICATIONS II, L.P.
Balance Sheets as of March 31, 1996 and 1995 (Unaudited)............................. F-250
Statements of Operations for the Three Months Ended March 31, 1996 and 1995
(Unaudited)........................................................................ F-251
Statements of Changes in System's Deficiency for the Periods Ended March 31, 1996 and
1995 (Unaudited)................................................................... F-252
Statements of Cash Flows for the Three Months Ended March 31, 1996 and 1995
(Unaudited)........................................................................ F-253
Notes to Unaudited Financial Statements.............................................. F-254
CHARTER COMMUNICATIONS HOLDINGS PROPERTIES, INC.
Balance Sheet as March 31, 1996 (Unaudited).......................................... F-257
Notes to Unaudited Balance Sheet..................................................... F-258
CHARTER COMMUNICATIONS SOUTHEAST PROPERTIES, INC.
Report of Independent Public Accountants............................................. F-260
Balance Sheets as of December 31, 1995 and March 31, 1996 (Unaudited)................ F-261
Notes to Balance Sheets.............................................................. F-262
</TABLE>

F-4
<PAGE> 126

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications Southeast Holdings, L.P.:

We have audited the accompanying consolidated balance sheets of Charter
Communications Southeast Holdings, L.P. (a Delaware limited partnership) and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations, partners' capital and cash flows for the years then
ended. These consolidated financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits. The consolidated financial statements
give retroactive effect to the reorganization under common control of Charter
Communications, L.P. and Charter Communications Southeast, L.P., as described in
the Note 1 to the consolidated financial statements.

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 Charter
Communications Southeast Holdings, L.P. and its subsidiaries as of December 31,
1995 and 1994, and the results of their operations and their cash flows for the
years then ended, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
March 29, 1996

F-5
<PAGE> 127

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------
1995 1994
MARCH 31, ------------ ------------
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.............................................. $ 1,017,764 $ 6,547,438 $ 1,484,263
Accounts receivable, net of allowance for doubtful accounts of
$214,100, $288,128 and $149,204, respectively........................ 3,573,476 1,314,179 818,156
Prepaid expenses and other............................................. 696,058 454,175 76,104
Receivable from parent and affiliates.................................. 3,443,417 796,179 --
------------ ------------ ------------
Total current assets............................................ 8,730,715 9,111,971 2,378,523
------------ ------------ ------------
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment.......................................... 133,893,324 107,029,408 31,151,507
Franchise costs, net of accumulated amortization of $44,215,948,
$40,899,887 and $12,006,151, respectively............................ 396,375,679 303,827,917 136,285,230
------------ ------------ ------------
530,269,003 410,857,325 167,436,737
------------ ------------ ------------
RESTRICTED FUNDS HELD IN ESCROW.......................................... -- -- 463,414
------------ ------------ ------------
OTHER ASSETS............................................................. 14,385,840 5,592,429 3,074,229
------------ ------------ ------------
$553,385,558 $425,561,725 $173,352,903
============ ============ ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Current maturities of long-term debt................................... $ -- $ -- $ 1,168,750
Note payable -- related party.......................................... -- 15,000,000 --
Accounts payable and accrued expenses.................................. 13,255,640 12,330,848 4,207,201
Subscriber deposits and prepayments.................................... 199,354 243,277 102,218
Net payable to affiliates.............................................. 863,689 1,060,451 238,238
------------ ------------ ------------
14,318,683 28,634,576 5,716,407
------------ ------------ ------------
DEFERRED MANAGEMENT FEES PAYABLE TO AFFILIATE............................ 2,364,825 1,898,004 441,405
------------ ------------ ------------
DEFERRED REVENUE......................................................... 1,176,236 1,114,699 --
------------ ------------ ------------
LONG-TERM DEBT, less current maturities.................................. 450,920,811 259,125,000 92,331,250
------------ ------------ ------------
DEFERRED INCOME TAXES.................................................... 5,060,117 5,111,308 --
------------ ------------ ------------
REDEEMABLE PREFERRED LIMITED UNITS--0, 393.5 and 143.5 Class A units, and
0, 100 and 0 Class B units, issued and outstanding, respectively....... -- 53,107,175 15,976,333
------------ ------------ ------------
SPECIAL LIMITED PARTNER UNITS--0, 345.8526 and 345.8526 Class A and 0,
54.1163 and 54.1163 Class B units, issued and outstanding,
respectively........................................................... -- 44,972,506 41,921,466
------------ ------------ ------------
PARTNERS' CAPITAL:
General Partner........................................................ 795,449 315,985 --
Preferred Limited Partners--0, 291.26 and 291.26, Class B units, issued
and outstanding, respectively........................................ -- -- 16,966,042
Common Limited Partners--1,513.36, 477.19 and 7.9 units, issued and
outstanding, respectively............................................ 78,749,437 31,282,472 --
------------ ------------ ------------
Total partners' capital.............................................. 79,544,886 31,598,457 16,966,042
------------ ------------ ------------
$553,385,558 $425,561,725 $173,352,903
============ ============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-6
<PAGE> 128

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTHS ENDED DECEMBER 31
MARCH 31 ---------------------------
------------------------- 1995 1994
1995 ------------ ------------
-----------
1996 (UNAUDITED)
-----------
(UNAUDITED)
<S> <C> <C> <C> <C>
SERVICE REVENUES:
Basic service........................... $17,502,013 $10,630,756 $ 53,237,594 $ 16,314,348
Premium service......................... 2,993,822 1,859,936 9,635,049 2,786,478
Other................................... 3,348,339 1,832,770 9,958,270 2,460,290
----------- ----------- ------------ ------------
23,844,174 14,323,462 72,830,913 21,561,116
----------- ----------- ------------ ------------
OPERATING EXPENSES:
Operating costs......................... 9,985,296 5,956,339 31,056,034 9,228,422
General and administrative.............. 1,903,797 1,180,847 6,191,949 1,924,182
Depreciation and amortization........... 10,923,625 7,885,996 40,147,664 14,319,589
Management fees -- related party........ 1,192,067 715,695 3,642,012 1,078,000
----------- ----------- ------------ ------------
24,004,785 15,738,877 81,037,659 26,550,193
----------- ----------- ------------ ------------
Loss from operations............ (160,611) (1,415,415) (8,206,746) (4,989,077)
----------- ----------- ------------ ------------
OTHER INCOME (EXPENSE):
Interest income......................... 46,844 17,596 198,400 34,564
Interest expense........................ (6,778,524) (3,712,884) (18,721,628) (4,654,539)
Loss from Hurricane Opal................ -- -- (744,800) --
Other................................... (49,200) 3,583 (40,183) --
----------- ----------- ------------ ------------
(6,780,880) (3,691,705) (19,308,211) (4,619,975)
----------- ----------- ------------ ------------
Loss before benefit for income taxes
and extraordinary item............. (6,941,491) (5,107,120) (27,514,957) (9,609,052)
BENEFIT FOR INCOME TAXES.................. 51,191 -- 1,888,692 --
----------- ----------- ------------ ------------
Loss before extraordinary
item.......................... (6,890,300) (5,107,120) (25,626,265) (9,609,052)
EXTRAORDINARY ITEM -- Loss on early
retirement of debt...................... -- -- (1,959,438) --
----------- ----------- ------------ ------------
Net loss........................ (6,890,300) (5,107,120) (27,585,703) (9,609,052)
----------- ----------- ------------ ------------
REDEMPTION PREFERENCE ALLOCATION:
Special Limited Partner units........... (828,616) (762,760) (3,051,040) (1,924,573)
Redeemable Preferred Limited units...... (1,452,343) (1,188,994) (5,539,799) (1,626,333)
NET LOSS ALLOCATED TO REDEEMABLE PREFERRED
LIMITED UNITS........................... 4,063,274 -- 3,408,957 --
----------- ----------- ------------ ------------
Net loss applicable to partners'
capital account............... $(5,107,985) $(7,058,874) $(32,767,585) $(13,159,958)
=========== =========== ============ ============
NET LOSS ALLOCATION TO PARTNERS' CAPITAL
ACCOUNTS
General Partner......................... $ (51,080) $ (28,502) $(12,483,543) $ (210,000)
Class B Preferred Limited Partners...... -- (5,475,448) (16,966,042) (12,159,958)
Common Limited Partners................. (5,056,905) (1,554,924) (3,318,000) (790,000)
----------- ----------- ------------ ------------
$(5,107,985) $(7,058,874) $(32,767,585) $(13,159,958)
=========== =========== ============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-7
<PAGE> 129

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994,

AND THE THREE MONTHS ENDED MARCH 31, 1996

<TABLE>
<CAPTION>
CLASS B
PREFERRED COMMON
GENERAL LIMITED LIMITED
PARTNER PARTNERS PARTNERS TOTAL
--------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1993................ $ -- $ -- $ -- $ --
Capital contributions................... 210,000 29,126,000 790,000 30,126,000
Allocation of net loss.................. (210,000) (12,159,958) (790,000) (13,159,958)
--------- ------------ ------------ ------------
BALANCE, December 31, 1994................ -- 16,966,042 -- 16,966,042
Capital contributions................... 474,000 -- 46,926,000 47,400,000
Allocation of net loss.................. (158,015) (16,966,042) (15,643,528) (32,767,585)
--------- ------------ ------------ ------------
BALANCE, December 31, 1995................ 315,985 -- 31,282,472 31,598,457
Return of capital on Special Limited
partners' buyout (unaudited)......... 25,582 -- 2,532,591 2,558,173
Capital contributions (unaudited)....... 504,962 -- 49,991,279 50,496,241
Allocation of net loss (unaudited)...... (51,080) -- (5,056,905) (5,107,985)
--------- ------------ ------------ ------------
BALANCE, March 31, 1996 (unaudited)....... $ 795,449 $ -- $ 78,749,437 $ 79,544,886
========= ============ ============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-8
<PAGE> 130

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTHS ENDED DECEMBER 31
MARCH 31 -----------------------------
----------------------------- 1995 1994
1995 ------------- -------------
-------------
1996 (UNAUDITED)
-------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................... $ (6,890,300) $ (5,107,120) $ (27,585,703) $ (9,609,052)
Adjustments to reconcile net loss to net
cash provided by operating activities --
Extraordinary item -- Loss on early
retirement of debt.................... -- -- 1,959,438 --
Depreciation and amortization........... 10,923,625 7,885,996 40,147,664 14,319,589
Amortization of interest rate cap
agreements............................ -- -- 116,992 --
Forgiveness of note receivable with
related party......................... 100,000 -- -- --
Amortization on discount of
debentures............................ 120,750 -- -- --
Loss from Hurricane Opal................ -- -- 744,800 --
Deferred income taxes................... (51,191) -- (1,888,692) --
Changes in assets and liabilities, net
of effects from acquisitions --
Accounts receivable, net.............. (285,056) 507,327 101,411 (114,188)
Prepaid expenses and other............ (144,078) (216,461) 27,795 (76,104)
Receivable from parent and
affiliates......................... (2,647,238) 256,321 (796,179) --
Accounts payable and accrued
expenses........................... (696,747) 270,173 5,655,755 3,516,308
Subscriber deposits and prepayments... (43,923) (117) 34,632 (2,098)
Payable to affiliates................. 270,059 1,501,296 (1,577,521) 679,643
Deferred revenue...................... (33,140) -- 1,114,699 --
------------- ------------- ------------- -------------
Net cash provided by operating
activities......................... 622,761 5,097,415 18,055,091 8,714,098
------------- ------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment............................... (5,242,024) (2,003,063) (20,010,811) (4,995,661)
Proceeds from sale of property, plant and
equipment............................... -- -- 119,901 --
Payments for acquisitions, net of cash
acquired................................ (125,270,673) (109,056,245) (251,309,527) (176,387,357)
Payments of organizational expenses........ (34,257) -- (1,386,627) (827,976)
Restricted funds held in escrow............ -- -- 463,414 (463,414)
Proceeds from insurance settlement......... -- -- 500,000 --
------------- ------------- ------------- -------------
Net cash used in investing
activities......................... (130,546,954) (111,059,308) (271,623,650) (182,674,408)
------------- ------------- ------------- -------------
(Continued on the following page)
</TABLE>

F-9
<PAGE> 131

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTHS ENDED DECEMBER 31
MARCH 31 1995 1994
1996 1995 ------------- -------------
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings....................... $ 200,000,061 $ -- $ -- $ --
Payment of debt issuance costs............. (9,037,594) -- (4,393,266) (2,036,820)
Payments for interest rate cap
agreements.............................. -- (1,221,831) -- (391,500)
Borrowings under revolving credit
agreement............................... 9,775,000 77,300,000 247,425,000 96,500,000
Payments under revolving credit
agreement............................... (18,100,000) -- (81,800,000) (3,000,000)
Proceeds from note payable................. -- -- 15,000,000 --
Payment of note payable.................... (15,000,000) -- -- --
Partners' capital contributions............ -- 20,500,000 47,400,000 1,000,000
Preferred Limited Partners'
contributions........................... -- 17,000,000 35,000,000 43,476,000
Issuance of Special Limited Partnership
units................................... -- -- -- 39,996,893
Payment of Special Limited Partnership
units................................... (43,242,948) -- -- --
Issuance of note receivable -- related
party................................... -- -- -- (100,000)
------------- ------------- ------------- -------------
Net cash provided by financing
activities......................... 124,394,519 113,578,169 258,631,734 175,444,573
------------- ------------- ------------- -------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS................................ (5,529,674) 7,616,276 5,063,175 1,484,263
CASH AND CASH EQUIVALENTS, beginning of
period..................................... 6,547,438 1,484,263 1,484,263 --
------------- ------------- ------------- -------------
CASH AND CASH EQUIVALENTS, end of period..... $ 1,017,764 $ 9,100,539 $ 6,547,438 1,484,263
============= ============= ============= =============
CASH PAID FOR INTEREST....................... $ 8,033,416 $ 2,926,038 $ 16,910,470 $ 4,058,098
============= ============= ============= =============
CASH PAID FOR TAXES.......................... $ -- $ -- $ -- $ --
============= ============= ============= =============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-10
<PAGE> 132

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996, IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

Charter Communications Southeast Holdings, L.P. (Southeast Holdings), a
Delaware limited partnership, was formed in January 1995. Southeast Holdings
will terminate no later than December 31, 2014, as provided in the partnership
agreement (the "Partnership Agreement").

In February 1996, CharterComm, Inc. exercised an option to acquire the
balance (60%) of the outstanding shares of CCP One, Inc. (CCP I) (formerly known
as LEB Communications, Inc., General Partner of Charter Communications, L.P.
(CC-I)), which it did not otherwise own, for a purchase price of $1.1 million.
To exercise this option, CharterComm, Inc. borrowed the purchase amount from
CC-I. Southeast indirectly assumed the liability for the short-term intercompany
note from CharterComm, Inc. In addition, the Partnership forgave approximately
$100,000 of debt outstanding under a promissory note (see Note 15) with the
original shareholder.

On March 28, 1996, the net assets of CC-I were transferred from
CharterComm, Inc. to Charter Communications Southeast, L.P. (Southeast) in
exchange for a 36.3% General Partnership interest in CharterComm Holdings, L.P.
(CharterComm Holdings), the Parent of Southeast Holdings. This transfer was
accounted for as a reorganization under common control and, accordingly, the
consolidated financial statements and notes have been restated to include the
results and financial position of CC-I for all periods presented. Thus, the
accompanying consolidated financial statements include the accounts of Southeast
Holdings and its direct and indirect wholly owned subsidiaries, Charter
Communications Southeast Properties, Inc. (Southeast Properties), Charter
Communications Southeast Holdings Capital Corporation (Holdings Capital),
Charter Communications Southeast Capital Corporation (Southeast Capital), CCP
II, Inc. (CCP II), CCP I, Charter Communications II, L.P. (CC-II) and CC-I,
collectively referred to as the "Partnership" herein. All significant
intercompany balances and transactions have been eliminated in consolidation.

CC-I commenced operations effective April 1994, through the acquisition of
certain cable television systems. CC-II commenced operations effective January
1995 through the acquisition of certain cable television systems.

As of December 31, 1995, the Partnership provided cable television service
to approximately 150 franchises serving approximately 249,000 basic subscribers
in Alabama, Georgia, Kentucky, Louisiana, North Carolina and South Carolina.

The accompanying consolidated balance sheet as of March 31, 1996, and the
related statements of operations and cash flows for the three months ended March
31, 1996 and 1995, and the consolidated statement of partners' capital for the
three months ended March 31, 1996, and the notes thereto, are unaudited. In the
opinion of management, these statements have been prepared on the same basis as
the audited consolidated financial statements and include all adjustments
necessary (consisting only of normal recurring adjustments) for the fair
presentation of financial position, results of operations and cash flows. The
results of operations for the three months ended March 31, 1996 and 1995, are
not necessarily indicative of the results that may be expected for an entire
year.

Cash Equivalents

Cash equivalents at December 31, 1995 and 1994, consist primarily of
repurchase agreements with original maturities of 90 days or less. These
investments are carried at cost, which approximates market value. The
Partnership is subject to loss for amounts invested in repurchase agreements in
the event of non-performance by the financial institution which acts as the
counterparty under such agreements; however, such noncompliance is not
anticipated.

F-11
<PAGE> 133

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 installation. 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, and
equipment replacement and betterments are capitalized.

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

<TABLE>
<S> <C>
Trunk and distribution systems........................................... 10 years
Subscriber installations................................................. 10 years
Buildings, headends and leasehold improvements........................... 5-20 years
Converters............................................................... 5 years
Vehicles and equipment................................................... 4-10 years
Office equipment......................................................... 5-10 years
</TABLE>

Franchise Costs

Costs incurred in obtaining and renewing cable franchises are initially
deferred and amortized over the legal 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 television systems represent the
excess of the cost of properties acquired over the amounts assigned to the net
tangible assets at date of acquisition. Acquired franchise rights are amortized
using the straight-line method over a period of up to 15 years.

Other Assets

Organizational expenses are being amortized using the straight-line method
over five years. Debt issuance costs are being amortized over the term of the
debt. The interest rate cap costs are being amortized over the terms of the
agreement, approximately three years.

During 1995, the Partnership adopted Statement of Financial Accounting
Standards (SFAS) No. 121 entitled, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." In accordance with SFAS No.
121, the Partnership periodically reviews the carrying value of its long-lived
assets, identifiable intangibles and franchise costs in relation to historical
financial results, current business conditions and trends (including the impact
of existing legislation and regulation) to identify potential situations in
which the carrying value of such assets may not be recoverable. If a review
indicates that the carrying value of such assets may not be recoverable, the
carrying value of such assets in excess of their fair value will be recorded as
a reduction of the assets' cost as if a permanent impairment has occurred. The
adoption of SFAS No. 121 did not impact the financial statements of the
Partnership.

Revenues

Cable service revenues 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
average estimated period that customers are expected to remain connected to the
cable television system.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Derivative Financial Instruments

The Company manages risk arising from fluctuations in interest rates by
using interest rate swap and cap agreements, as required by its credit
agreements. These agreements are treated as off-balance sheet financial
instruments. The interest rate swap and cap agreements are being accounted for
as a hedge of the debt

F-12
<PAGE> 134

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

obligation, and accordingly, the net settlement amount is recorded as an
adjustment to interest expense in the period incurred.

Income Taxes

Income taxes are the responsibility of the partners and are not provided
for in the accompanying financial statements except for CC-II's indirect wholly
owned subsidiary, Peachtree Cable TV, Inc. (Peachtree). Peachtree is a C
corporation, and taxes have been provided for in the accompanying financial
statements in accordance with that described in SFAS No. 109, "Accounting for
Income Taxes." SFAS No. 109 requires accounting for income taxes based on the
liability method, and deferred taxes are determined based on the estimated
future tax effects of differences between the financial reporting and tax bases
of assets and liabilities given the provisions of the enacted tax laws.

Use of 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 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.

2. DISTRIBUTIONS AND ALLOCATIONS:

For financial reporting purposes, redemption preference allocations,
profits and losses are allocated in accordance with the liquidation provisions
of the applicable partnership agreements.

Currently, under terms of the Partnership Agreement, allocation of
partnership profits of Southeast Holdings for income tax reporting purposes is
based upon capital contributions, as set forth in the Partnership Agreement.

Currently, partnership losses for income tax reporting purposes are
allocated as follows for Southeast Holdings: (i) 99% to the Limited Partners and
1% to the General Partner until the capital account of any such partner is
reduced to zero; (ii) 100% to the General Partner until the capital account of
any such partner is reduced to zero; and (iii) to the Partners in proportion to
the positive balances of their capital accounts until such balances are reduced
to zero.

Prior to the reorganization under common control, the Partnership profits
of CC-I were allocated for income tax reporting purposes as follows: (i) to
partners which deficit capital balances, in proportion to such deficits, until
such deficits are reduced to zero; (ii) to the Special Limited Partners, as
discussed in Note 5; (iii) to the Class A Preferred Limited Partners until each
such Limited Partner's capital account equals its unrecovered capital plus its
unrecovered preference amount (preference amount is equal to 17% of the
unrecovered capital and preference amount per annum); (iv) to the Class B
Preferred Limited Partners until each such Limited Partner's capital account
equals its unrecovered capital plus its unrecovered preference amount
(preference amount is equal to 19% of the unrecovered capital and preference
amount per annum); (v) to the Common Limited Partners and the General Partner
until each of such Partner's capital account equals its unrecovered capital; and
(vi) the remaining balance, 79% to the Common Limited Partners and 21% to the
General Partner.

Prior to the reorganization under common control, partnership losses of
CC-I were allocated for income tax reporting purposes as follows: (i) to the
Class A Preferred Limited Partners until the capital accounts of such partners
are reduced to zero; (ii) to the Class B Preferred Limited Partners until the
capital accounts of such partners are reduced to zero; (iii) 79% to the Common
Limited Partners, and 21% to the General Partner until the capital account of
any such partner is reduced to zero; and (iv) to the partners in proportion to
the positive balances of their capital accounts until such balances are reduced
to zero; provided, however, any item

F-13
<PAGE> 135

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of loss or deduction which would cause or increase a deficit balance in a
limited partner's capital account shall be allocated to the General Partner.

As stated in the Partnership Agreement, the Partnership may make
distributions to the partners out of all available funds at such times and in
such amounts as the General Partner may determine in its sole discretion.

3. REDEEMABLE PREFERRED LIMITED UNITS (CC-II):

CC-II may, at its option, redeem all or any portion of the outstanding
Preferred Limited Partner units for an amount equal to the Optional Redemption
Price, as defined in CC-II's Partnership Agreement, on three separate occasions,
on or after January 18, 2000; provided, however, CC-II has funds available to
pay in cash the Optional Redemption Price for all the Preferred Limited Partner
units to be redeemed. In the case of any redemption of less than all of the then
outstanding Preferred Limited Partner units, such redemption shall be made pro
rata among all the holders of the Preferred Limited Partner units according to
the number of Preferred Limited Partner units held. In addition, CC-II must
redeem all of the outstanding Preferred Limited Partner units at the Mandatory
Redemption Price, as defined in CC-II's Partnership Agreement, on January 18,
2005.

The Class A Preferred Limited Partner shall have the right, on three
separate occasions, and the Class B Preferred Limited Partner, on one occasion,
to require CC-II to purchase all or any portion of their outstanding units. The
occasions are as follows:

1. Five-year put option -- at anytime after January 18, 2000;

2. Change of control put option -- within 90 days following the
occurrence of a change of Control Event, as defined in the
Partnership Agreement; and

3. Default put option -- immediately following and during the
continuation of an Event of Default, as defined in the Partnership
Agreement.

The redemption of the above put options is conditioned upon the purchase
not causing default under any Senior Securities, as defined in CC-II's
Partnership Agreement, which would give the holders thereof the right to
accelerate the maturity of any scheduled payments. Based on the redemption
clauses, the Class A and B Preferred Limited Partners' preference return has
been reflected as an addition to the Redeemable Preferred Limited Partner units,
and the decrease has been allocated to the General Partner and Common Limited
Partner consistent with the liquidation and distribution provisions in CC-II's
Partnership Agreement.

The balance related to the Preferred Limited Partner units is determined as
follows:

<TABLE>
<S> <C>
Initial contributions........................................... $35,000,000
1995 redemption preference allocation........................... 3,729,149
-----------
Balance, December 31, 1995............................ 38,729,149
1996 redemption preference allocation (unaudited)............... 1,452,343
-----------
March 29, 1996 (unaudited)............................ $40,181,492
===========
</TABLE>

On March 28, 1996, in connection with the reorganization under common
control, the Preferred Limited Partners of CC-II exchanged their preferred
interests in CC-II for preferred and common limited partnership interests in
CharterComm Holdings.

4. REDEEMABLE PREFERRED LIMITED UNITS (CC-I):

F-14
<PAGE> 136

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

shall not redeem any Class A Preferred Limited Partner units prior to the
redemption of all the Special Limited Partner units. In addition, the holders of
the Class A Preferred Limited Partner units have the right to cause CC-I to
purchase all of the units held by such holders at any time after April 30, 1998,
subject to certain conditions, including approval by the Special Limited
Partner, as stated in CC-I's Partnership Agreement, at a price equal to the
unrecovered capital and the unrecovered preference amount.

The obligation to purchase the Class A Preferred Limited Partner units is
conditioned upon the purchase not causing default under any Senior Indebtedness,
as defined in CC-I's Partnership Agreement, which would afford the holder
thereof the right to accelerate the maturity date of such Senior Indebtedness.
Based on these redemption clauses, the Class A Preferred Limited Partners'
preference return has been reflected as an addition to the Redeemable Preferred
Limited units, and the decrease has been allocated to the General Partner, Class
B Preferred Limited Partners and Common Limited Partners consistent with the
liquidation and distribution provisions of CC-I's Partnership Agreement.

The balance related to CC-I Class A Preferred Limited Partner units is
determined as follows:

<TABLE>
<S> <C>
Initial contributions........................................... $14,350,000
1994 redemption preference allocation........................... 1,626,333
-----------
Balance, December 31, 1994............................ 15,976,333
1995 redemption preference allocation........................... 1,810,650
Allocation of 1995 net loss..................................... (3,408,957)
-----------
Balance, December 31, 1995............................ 14,378,026
1996 redemption preference allocation (unaudited)............... --
Allocation of net loss (unaudited).............................. (4,063,274)
-----------
Balance, March 28, 1996 (unaudited)................... $10,314,752
===========
</TABLE>

A portion of the 1995 redemption preference allocation of $905,327 has not
been reflected in the balance of CC-I Class A Redeemable Preferred Limited
Partner units as of December 31, 1995, since the General Partner, Common Limited
Partners and Class B Preferred Limited Partners' capital accounts have been
reduced to $-0-. Furthermore, the cumulative redemption preference allocation
totaling $9,924,199 has not been reflected within CC-I Class B Preferred Limited
Partners' capital accounts since the General Partner and Common Limited
Partners' capital accounts have been reduced to $-0-.

On March 28, 1996, in connection with the reorganization under common
control, the Preferred Limited Partners of CC-I exchanged their preferred
interests in CC-I for preferred and common limited partnership interests in
CharterComm Holdings.

5. SPECIAL LIMITED PARTNER UNITS (CC-I):

Under the terms of CC-I's Partnership Agreement, partnership profits are
allocated to the Special Limited Partners until the allocation profits equal the
unrecovered preference amount (preference amounts range from 6% to 17.5% of the
unrecovered initial cost of the partnership units and unrecovered preference
amounts per annum). When there is no profit to allocate, the preference return
is reflected as a decrease in the Partners' Capital.

F-15
<PAGE> 137

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

manner consistent with the liquidation and distributions provisions of CC-I's
Partnership Agreement. In accordance with CC-I's Partnership Agreement,
distributions would be allocated to the Special Limited Partner equal to the
unrecovered preference allocation and the unrecovered initial cost of the
partnership units prior to distributions to any other partnership unit.

At December 31, 1995, the balance of $44,972,506 related to the Special
Limited Partner units consists of $39,996,893 of initial cost of the partnership
units and $4,975,613 of preference allocation. For the period from January 1,
1996, to March 28, 1996, the Special Limited Partners earned an additional
$828,616 of preference allocation resulting in a balance of $45,801,122, which
was paid on March 28, 1996. In accordance with the purchase agreement and
through the use of the proceeds of the notes (see Note 12), Southeast paid the
Special Limited Partners $43,242,948 as full consideration for their partnership
interests. The difference in the payment amount and the March 28, 1996, balance
is reflected as a return of capital in the consolidated statement of partners'
capital.

6. ACQUISITIONS:

In April 1994, CC-I, a subsidiary of Southeast, acquired certain assets
from Citation Cablevision, Inc., Subscriber Cablevision, Inc., LaGrange
Cablevision, Inc., and The Jefferson Trust Partnership (the "McDonald
Acquisition") for approximately $176 million which included cable television
systems in Alabama, Georgia and Louisiana. To finance the acquisition, CC-I
entered into a revolving credit agreement (see Note 12) and issued Special
Limited Partner units (see Note 5).

In January 1995, CC-II completed the acquisition of systems from Crown
Media, Inc. (Crown), a subsidiary of Hallmark Cards, Incorporated for an
aggregate purchase price of approximately $112.8 million. The acquisition of the
Crown systems was part of a series of larger transactions in which Crown sold
its cable television systems to a group of investors, including Charter, CC-II,
certain affiliates of Charter, and third parties, for a total purchase price of
approximately $900.0 million. To finance this acquisition, CC-II entered into a
revolving credit agreement (see Note 12). In April 1995, Charter Communications
III, L.P. (CC-III), a wholly owned subsidiary of CC-II, acquired the stock of
Peachtree, including cable television systems located in Georgia, for an
aggregate purchase price of approximately $22.3 million. In connection with the
completion of the Peachtree acquisition, the Partnership recorded approximately
$7 million of additional franchise costs and deferred income taxes, resulting
from differences between the financial reporting and tax bases of certain assets
acquired.

In May 1995, CC-III purchased the CableSouth systems for an aggregate
purchase price of approximately $49.2 million.

In July 1995, CC-II acquired the Masada systems for an aggregate purchase
price of approximately $35.2 million.

In November 1995, CC-II acquired the Masada II systems for an aggregate
purchase price of approximately $35.5 million.

In March 1996, CC-II purchased certain systems from Cencom Cable Income
Partners, L.P. (the "CCIP Systems") for an aggregate purchase price of
approximately $115.0 million.

F-16
<PAGE> 138

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the date of acquisition. The following shows the purchase price and allocation
of purchase price to assets acquired and liabilities assumed:

<TABLE>
<CAPTION>
MCDONALD CROWN PEACHTREE
------------ ------------ -----------
<S> <C> <C> <C>
Purchase price:
Cash paid to seller............................... $134,390,464 $109,639,897 $21,969,670
Special Limited Partner units issued to seller.... 39,996,893 -- --
Assumed liabilities............................... 500,000 337,725 75,000
Transaction costs................................. 1,500,000 2,822,449 300,000
------------ ------------ -----------
$176,387,357 $112,800,071 $22,344,670
============ ============ ===========
Allocation of purchase price to assets acquired:
Cash.............................................. $ -- $ 3,743,826 $ 9,121
Accounts receivable............................... 703,968 345,444 64,640
Prepaid expenses and other assets................. -- 150,455 158,293
Property, plant and equipment..................... 28,187,217 51,836,684 5,293,554
Franchise costs................................... 148,291,381 62,473,490 24,131,446
Accounts payable and accrued expenses............. (690,893) (5,749,828) (312,384)
Subscriber deposits and prepayments............... (104,316) -- --
Deferred income taxes............................. -- -- (7,000,000)
------------ ------------ -----------
$176,387,357 $112,800,071 $22,344,670
============ ============ ===========
</TABLE>

<TABLE>
<CAPTION>
CCIP
SYSTEMS
CABLESOUTH MASADA MASADA II ------------
----------- ----------- ----------- (UNAUDITED)
<S> <C> <C> <C> <C>
Purchase price:
Cash paid to seller...................... $48,475,475 $34,547,135 $34,955,123 $112,021,452
Assumed liabilities...................... 150,000 115,000 125,000 --
Transaction costs........................ 600,000 500,000 450,000 3,000,000
----------- ----------- ----------- ------------
$49,225,475 $35,162,135 $35,530,123 $115,021,452
=========== =========== =========== ============
Allocation of purchase price to assets
acquired:
Cash..................................... $ -- $ -- $ -- $ 296,810
Accounts receivable...................... 134,532 20,264 32,554 1,924,205
Prepaid expenses and other assets........ 38,903 36,733 21,482 97,805
Property, plant and equipment............ 4,575,134 3,530,312 2,541,886 22,040,675
Franchise costs.......................... 44,586,571 31,734,688 33,033,114 92,378,171
Deferred revenue......................... -- -- -- (94,677)
Accounts payable and accrued expenses.... (109,665) (159,862) (98,913) (1,621,537)
----------- ----------- ----------- ------------
$49,225,475 $35,162,135 $35,530,123 $115,021,452
=========== =========== =========== ============
</TABLE>

F-17
<PAGE> 139

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following are unaudited pro forma operating results for the above
acquisitions as though the acquisitions had been made on January 1 of the
respective years in which the purchase occurred.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31
---------------------------
1995 1994
FOR THE ------------ ------------
THREE
MONTHS ENDED (UNAUDITED) (UNAUDITED)
MARCH 31,
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
Service revenues............................. $30,013,372 $ 88,624,206 $ 32,147,894
Income (Loss) from operations................ $ 593,491 $ (7,432,844) $ (8,815,927)
Net loss..................................... $(8,323,339 ) $(29,042,055) $(16,734,010)
</TABLE>

7. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31
----------------------------
1995 1994
MARCH 31, ------------ -----------
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
Trunk and distribution systems............ $ 87,875,793 $ 76,418,698 $25,198,122
Subscriber installations.................. 26,488,906 17,361,287 3,381,794
Land, buildings, headends and
leasehold improvements.................. 16,179,370 13,229,975 1,581,982
Converters................................ 11,056,633 6,446,647 911,276
Vehicles and equipment.................... 4,729,040 3,725,059 1,200,000
Office equipment.......................... 3,158,516 2,138,248 909,704
------------ ------------ -----------
149,488,258 119,319,914 33,182,878
Less -- Accumulated depreciation.......... (15,594,934) (12,290,506) (2,031,371)
------------ ------------ -----------
$133,893,324 $107,029,408 $31,151,507
============ ============ ===========
</TABLE>

8. RESTRICTED FUNDS HELD IN ESCROW:

In connection with the McDonald acquisition discussed in Note 6, CC-I
agreed to deposit a portion of the purchase price into an escrow account to be
transferred to the sellers upon completion of certain improvements to the cable
systems, as documented in the closing agreements. During 1995, the improvements
were completed to the cable systems and CC-I transferred the funds.

9. OTHER ASSETS:

Other assets are detailed as follows:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1995 1994
MARCH 31, ---------- ----------
1996
-----------
(UNAUDITED)
<S> <C> <C> <C>
Debt issuance costs, net of accumulated
amortization of $646,189, $561,661 and
$157,097.................................... $12,454,969 $3,548,345 $1,879,723
Organizational expenses, net of accumulated
amortization of $494,489, $487,144 and
$67,087..................................... 1,754,371 1,727,459 760,889
Interest rate cap agreements, net of
accumulated
amortization of $215,000, $174,875 and
$57,883..................................... 176,500 216,625 333,617
Note receivable -- related party.............. -- 100,000 100,000
----------- ---------- ----------
$14,385,840 $5,592,429 $3,074,229
=========== ========== ==========
</TABLE>

F-18
<PAGE> 140

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31
--------------------------
1995 1994
MARCH 31, ----------- ----------
1996
-----------
(UNAUDITED)
<S> <C> <C> <C>
Property taxes............................... $ 910,027 $ 454,716 $ 136,231
Franchise fees............................... 1,021,347 1,451,629 472,278
Capital expenditures......................... 1,871,240 2,197,808 533,926
Accounts payable............................. 1,027,009 318,694 594,951
Accrued interest............................. 1,031,957 2,407,599 596,441
Programming expenses......................... 2,505,321 1,953,199 915,996
Other........................................ 4,888,739 3,547,203 957,378
----------- ----------- ----------
$13,255,640 $12,330,848 $4,207,201
=========== =========== ==========
</TABLE>

11. NOTE PAYABLE:

On November 30, 1995, Southeast Holdings entered into a Convertible Senior
Note (the "Convertible Senior Note") with Charterhouse Equity Partners II, L.P.
(Charterhouse) for $15,000,000. Interest on the Convertible Senior Note is
accrued on the unpaid principal amount and payable quarterly in arrears
beginning March 31, 1996; the interest rate is the rate publicly announced by
Chemical Bank in New York (8.5% at December 31, 1995), as its reference rate
plus 3% per annum. During the year ended December 31, 1995, Southeast Holdings
incurred costs of $100,000 relating to the Convertible Senior Note. Charterhouse
has the option on the maturity date, November 30, 1996, to convert the
outstanding balance into Preferred Limited Partnership units (PLP units) in
CC-II or exchange the outstanding balance for Common Limited Partnership units
in CC-II. Concurrent with any such conversion or exchange, the accrued and
unpaid interest with respect to the outstanding amount shall be paid by
Southeast Holdings in full. All taxes and expenses incurred by the conversion or
exchange will be the responsibility of Southeast Holdings. The Convertible
Senior Note agreement contains certain covenants and restrictions on Southeast
Holdings' activities which, if violated, would result in a mandatory prepayment
by Southeast Holdings.

In March 1996, the Convertible Senior Note was repaid using a portion of
the proceeds from the Notes discussed in Note 12. In addition, the Partnership
paid Charterhouse a nonrefundable bridge loan fee of $400,000.

12. LONG-TERM DEBT:

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31
----------------------------
1995 1994
MARCH 31, ------------ -----------
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
Senior Secured Discount Debentures........ $ 75,120,811 $ -- $ --
11 1/4% Senior Notes...................... 125,000,000 -- --
Revolving Credit Agreements............... 250,800,000 259,125,000 93,500,000
------------ ------------ -----------
450,920,811 259,125,000 93,500,000
Less -- Current maturities................ -- -- 1,168,750
------------ ------------ -----------
$450,920,811 $259,125,000 $92,331,250
============ ============ ===========
</TABLE>

On March 28, 1996, Southeast Holdings and Holdings Capital (the "Debenture
Issuers") issued $146,820,000 of Senior Secured Discount Debentures (the
"Debentures") for proceeds of approximately

F-19
<PAGE> 141

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$75,000,000. The Debentures are secured by all of Southeast Holdings' interest
in Southeast. The Debentures are redeemable at the Debenture Issuers' option at
amounts decreasing from 107% to 100% of principal, plus accrued and unpaid
interest to the redemption date, beginning on March 15, 2001. The Debenture
Issuers are required to make an offer to purchase all of the Debentures, at a
purchase price equal to 101% of the principal amount, together with accrued and
unpaid interest, upon the Change in Control, as defined in the Offering
Memorandum. No interest is payable on the Debentures prior to March 15, 2001.
Thereafter, interest on the Debentures is payable semiannually in arrears
beginning September 15, 2001, until maturity on March 15, 2007. The discount on
the Debentures is being accreted using the effective interest method at an
interest rate of 14% from the date of issuance to March 15, 2001. The
unamortized discount was $71,699,189 at March 31, 1996. Proceeds from the
Debentures were used to pay fees and expenses related to the Offering and the
balance was contributed to Southeast as equity capital.

On March 28, 1996, Southeast and Southeast Capital (the "Notes Issuers")
issued $125,000,000 aggregate principal amount of 11 1/4% Senior Notes (the
"Notes"). The Notes are senior unsecured obligations of the Issuers and rank
pari passu in right and priority of payment to all other existing and future
indebtedness. The Notes are redeemable at the Notes Issuers' option at amounts
decreasing from 105.625% to 100% of principal, plus accrued and unpaid interest
to the date of redemption, beginning on March 15, 2001. The Notes Issuers are
required to make an offer to purchase all of the Notes, at a purchase price
equal to 101% of the principal amount, together with accrued and unpaid
interest, upon the Change in Control, as defined in the Offering Memorandum.
Interest is payable semiannually on March 15 and September 15 until maturity on
March 15, 2006. Proceeds from the Notes together with capital contributions from
Southeast Holdings were used to repay the Convertible Senior Note, to pay fees
and expenses related to the Offering, and to make capital contributions to CC-I
and CC-II.

The Debentures and Notes require their respective issuers to comply with
various financial and nonfinancial covenants and restrictions, including
substantial limitations on additional indebtedness, restricted payments,
transactions with affiliates, liens, dividends and certain other items.

During April 1994, CC-I entered into a revolving credit agreement (the
"CC-I Credit Agreement") with a consortium of banks for borrowings up to
$110,000,000. The unpaid principal balance under the CC-I Credit Agreement
converted to a term loan on July 31, 1995. Effective December 31, 1995, the CC-I
Credit Agreement was amended to create a revolving credit facility with maximum
borrowings of $15,000,000. A portion of the proceeds from the revolving credit
facility was used to reduce the principal amount of the term loan outstanding to
$90,000,000 (the term loan outstanding was $92,825,000 prior to the amendment),
and the remainder will be used for capital expenditures and working capital
purposes. Also, the maturity date of the CC-I Credit Agreement was extended to
September 30, 2003, due dates on the term loan were extended, and certain
financial covenants were modified.

Principal payments are due in quarterly installments beginning September
30, 1997, and continuing through September 30, 2003. Portions of the debt bear
interest, at CC-I's option, at rates based upon the Base Rate, as defined in the
CC-I Credit Agreement, LIBOR, or prevailing bid rates of certificates of
deposit. The weighted average interest rate was 8.16% and 7.51% at December 31,
1995 and 1994, respectively. The effective weighted average interest rates and
weighted average borrowings were 8.72% and 7.42%, and $93,622,917 and
$94,125,000 during the years ended December 31, 1995 and 1994, respectively. As
this debt instrument bears interest at current market rates, its carrying amount
approximates fair market value at December 31, 1995.

Borrowings under the CC-I Credit Agreement are subject to certain financial
and nonfinancial covenants and restrictions, the most restrictive of which
requires maintenance of a ratio of debt to annualized operating cash flow, as
defined, not to exceed 6.00 to 1 at December 31, 1995. Borrowings under the CC-I
Credit Agreement are collateralized by the assets of CC-I. A quarterly
commitment fee of 0.5% per annum is payable on the unused revolving credit
facility portion of the CC-I Credit Agreement.

F-20
<PAGE> 142

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Commencing September 30, 1997, and at the end of each calendar quarter
thereafter, the CC-I revolving credit facility commitment (available borrowings)
shall be reduced on an annual basis as set forth below:

<TABLE>
<CAPTION>
PERCENTAGE
REDUCTION TO
YEAR COMMITMENT
----------------------------------------------------------------- ------------
<S> <C>
1997............................................................. 3.0%
1998............................................................. 8.0
1999............................................................. 13.7
2000............................................................. 17.2
2001............................................................. 19.0
2002............................................................. 23.1
2003............................................................. 16.0
-----
100.0%
=====
</TABLE>

Effective March 28, 1996, the CC-I Credit Agreement was amended to reduce
the term loan facility to $75,000,000, to maintain the existing $15,000,000
revolving credit facility and to create a new revolving credit facility, subject
to certain terms and conditions, with maximum borrowings of $15,000,000 for
permitted acquisitions. Also, the maturity date of the CC-I Credit Agreement was
extended to June 30, 2004, and certain financial and nonfinancial covenants were
modified.

As a requirement of the CC-I Credit Agreement, CC-I has secured interest
swap and cap agreements with a certain lender bank. The CC-I Credit Agreement
requires CC-I to enter into interest hedge agreements for amounts not less than
50% of the outstanding obligations. In addition, the interest hedge agreements
must provide interest rate protection for a weighted average period of not less
than two years. Under each swap agreement, on a quarterly basis, if the 90 day
variable rate exceeds the fixed rates stated below, CC-I will receive payments
from the bank to offset the higher interest rates on the notional principal
amounts. These payments, if any, will be recorded as reductions of interest
expense. The fair value of the interest rate caps or swaps is the estimated
amount the Partnership would receive or pay to eliminate the cap or swap
agreement at the reporting date, taking into account current interest rates and
the credit-worthiness of the counterparties. The following summarizes certain
information pertaining to the interest rate protection agreements at December
31, 1995:

<TABLE>
<CAPTION>
FAIR
VALUE/
NOTIONAL FIXED CONTRACT REDEMPTION
AMOUNT TYPE RATE EXPIRATION DATE PRICE
- ------------ ----- ----- -------------------- ----------
<C> <S> <C> <C> <C>
$ 20,000,000 Swap 6.01 % June 6, 1996 $ 42,400
15,000,000 Cap 7 % July 21, 1997 (3,900)
15,000,000 Cap 8 % July 21, 1997 (900)
15,000,000 Cap 8 % July 21, 1997 2,000
25,000,000 Swap 5.73 % September 18, 1997 205,300
10,000,000 Cap 8.5 % November 2, 1997 2,300
55,000,000 Swap 5.92 % October 21, 1998* *
$155,000,000 6.34 % (weighted average) $247,200
</TABLE>

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

*These contracts have not been marked to market since their effective dates are
after the reporting date.

In January 1995, CC-II entered into a revolving credit agreement (the "Old
Credit Agreement") with a consortium of banks for borrowings up to $80,000,000.
During May 1995, CC-II terminated the Old Credit Agreement and entered into a
new revolving credit agreement (the "CC-II Credit Agreement") with a

F-21
<PAGE> 143

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

consortium of banks for borrowings up to $135,000,000. On July 31, 1995, CC-II
and the banks amended the CC-II Credit Agreement to allow for borrowings up to
$165,000,000 for the purpose of making certain acquisitions. On November 29,
1995, CC-II and the banks amended the CC-II Credit Agreement again to provide
for term loans in the aggregate amount of $40,000,000 and total borrowings of
$205,000,000, including a $165,000,000 revolving credit facility. Principal
payments are due in quarterly installments beginning March 31, 1998, and
continuing through September 30, 2004. Portions of the debt bear interest, at
CC-II's option, at rates based upon the Base Rate, as defined in the CC-II
Credit Agreement, LIBOR, or prevailing bid rates of certificates of deposit. The
weighted average interest rate was 8.16% at December 31, 1995. During 1995,
interest rates ranged from 8.125% to 8.875%. The effective weighted average
interest rate and weighted average borrowings were 8.46% and approximately
$121,092,000, respectively, during 1995. As this debt instrument bears interest
at current market rates, its carrying amount approximates fair market value at
December 31, 1995.

Borrowings under the CC-II Credit Agreement are subject to certain
financial and nonfinancial covenants and restrictions, the most restrictive of
which requires maintenance of a ratio of debt to annualized operating cash flow,
as defined, not to exceed 6.5 to 1 at December 31, 1995. Borrowings under the
CC-II Credit Agreement are collateralized by the assets of CC-II. A quarterly
commitment fee of 0.375% per annum is payable on the unused revolving credit
facility portion of the CC-II Credit Agreement.

Commencing March 31, 1998, and at the end of each calendar quarter
thereafter available borrowings shall be reduced on an annual basis as set forth
below:

<TABLE>
<CAPTION>
PERCENTAGE REDUCTION
TO COMMITMENT
--------------------
REVOLVING
CREDIT TERM
YEAR FACILITY LOANS
------------------------------------------------------------------ --------- ------
<S> <C> <C>
1998.............................................................. 8.00% .50%
1999.............................................................. 9.20 .50
2000.............................................................. 14.50 1.00
2001.............................................................. 19.00 1.00
2002.............................................................. 23.10 1.00
2003.............................................................. 26.20 15.00
2004.............................................................. -- 81.00
------ ------
100.00% 100.00%
====== ======
</TABLE>

Effective March 28, 1996, the CC-II Credit Agreement was amended to extend
the maturity date on the revolving credit facility to March 31, 2004, and to
modify certain financial and nonfinancial covenants. Also, the amendment
specified the use of proceeds from the revolving credit facility to include the
CCIP Systems acquisition and for ongoing working capital and capital expenditure
needs.

As a requirement of the CC-II Credit Agreement, CC-II has secured interest
rate swap and cap agreements with a certain lender bank. The CC-II Credit
Agreement requires CC-II to enter into interest hedge agreements for amounts not
less than 50% of the outstanding obligations. In addition, the interest hedge
agreements must provide interest rate protection for a weighted average period
of not less than 18 months. Under each swap agreement, on a quarterly basis, if
the 90 day variable rate exceeds the fixed rate stated below, CC-II will receive
payments from the bank to offset the higher interest rate on the notional
principal amount. These payments, if any, will be recorded as reductions of
interest expense.

F-22
<PAGE> 144

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following summarizes certain information pertaining to the interest rate
protection agreements as of December 31, 1995:

Management believes that the sellers of the interest rate swap and cap
agreements will be able to meet their obligations under the agreements. The
purpose of the Partnership's involvement in the interest rate swap and cap
agreements is to minimize the Partnership's exposure to interest rate
fluctuations on its floating rate debt. Management believes that it has no
material concentration of credit or market risks with respect to its interest
rate protection agreements.

Future principal payments on the total borrowings under both agreements are
as follows at December 31, 1995:

<TABLE>
<CAPTION>
YEAR AMOUNT
------------------------------------------------------- ------------
<S> <C>
1996................................................... $ --
1997................................................... 2,700,000
1998................................................... 7,400,000
1999................................................... 12,530,000
2000................................................... 29,485,000
Thereafter............................................. 207,010,000
------------
$259,125,000
============
</TABLE>

13. DEBT ISSUANCE COSTS:

CC-II refinanced its debt agreement in May 1995. Accordingly, the debt
issuance costs related to the initial debt were written off. The effect of this
write-off was a $1,959,438 charge to expense and was recorded as an
extraordinary item. Additional debt issuance costs were recorded related to the
new debt agreement.

14. NET LOSS FOR INCOME TAX PURPOSES:

The following reconciliation summarizes the differences between the
Partnership's net loss for financial reporting purposes and net loss for federal
income tax purposes for the year ended December 31:

<TABLE>
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Net loss for financial reporting purposes........................ $(24,602,647) $(9,609,052)
Depreciation differences between financial reporting and tax
reporting...................................................... (9,804,115) (1,561,047)
Amortization differences between financial reporting and tax
reporting...................................................... 7,154,093 4,561,627
Differences in expenses recorded for financial reporting and
reporting for tax purposes..................................... 1,780,599 775,943
Revenue reported for tax reporting deferred for financial
reporting...................................................... 1,114,699 --
Other............................................................ 61,576 --
------------- -------------
Net loss for federal income tax purposes....................... $(24,295,795) $(5,832,529)
============= =============
</TABLE>

F-23
<PAGE> 145

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following summarizes the significant cumulative temporary difference
between the Partnership's financial reporting basis and federal income tax
reporting basis as of December 31:

<TABLE>
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Assets:
Accounts receivable............................................ $ 276,201 $ --
Franchise costs................................................ 7,300,502 4,075,685
Accrued expenses............................................... 2,357,832 772,814
Deferred revenue............................................... 1,114,699 --
------------- -------------
$ 11,049,234 $ 4,848,499
============= =============
Liabilities:
Property, plant and equipment.................................. $(11,385,768) $(1,561,047)
Other assets................................................... (47,111) (57,109)
------------- -------------
$(11,432,879) $(1,618,156)
============= =============
</TABLE>

As of December 31, 1995, temporary differences and carryforwards that gave
rise to deferred income tax assets and liabilities to Peachtree are as follows:

<TABLE>
<S> <C>
Deferred income tax assets:
Accounts receivable................................................... $ 4,771
Accrued expenses...................................................... 7,401
Tax loss carryforwards................................................ 548,100
Tax credit carryforwards.............................................. 361,195
-------------
Total deferred income tax assets.............................. 921,467
-------------
Deferred income tax liabilities:
Property, plant and equipment......................................... (1,481,396)
Franchise costs and other assets...................................... (4,551,379)
-------------
Total deferred income tax liabilities......................... (6,032,775)
-------------
Net deferred income tax liability............................. $(5,111,308)
=============
</TABLE>

At December 31, 1995, Peachtree had a net operating loss carryforward for
income tax purposes of approximately $1,370,000 which, if not utilized to reduce
taxable income in future periods, expires in the years 2003 through 2006. All
net operating losses have been recognized for financial statement purposes as a
reduction of deferred income taxes. In addition, Peachtree has an alternative
minimum tax credit carryforward of approximately $361,000, which may be carried
forward indefinitely.

15. RELATED-PARTY TRANSACTIONS:

Charter Communications, Inc. (Charter) provides management services to the
Partnership under the terms of contracts which provide for fees equal to 5% of
the Partnership's gross service revenues. Through December 31, 1998 and 1997,
60% of CC-II's and CC-I's fees shall be paid quarterly with the balance being
deferred. Thereafter, the entire fee may be deferred until termination of the
partnerships. Expenses recognized under this contract during 1995 and 1994 were
$3,642,012 and $1,078,000, respectively. Management fees

F-24
<PAGE> 146

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

currently payable of $630,852 and $238,238 are included in net payable to
affiliates at December 31, 1995 and 1994, respectively.

The Partnership entered into a new management agreement with Charter as of
March 28, 1996. In addition to the deferral of management fees discussed above,
payments due on the Notes and Debentures shall be paid in full before any
management fees are paid; provided that there exists no default on subordinated
debt.

The Partnership is insured for medical, dental and workers' compensation
claims by Charter. Charter charges the Partnership monthly premiums based on the
Partnership's total number of employees, historical claims and medical cost
trend rates. Management considers this allocation to be reasonable for the
operations of the Partnership. During 1995 and 1994, the Partnership expensed
approximately $619,000 and $162,000, respectively, relating to insurance
allocations.

CC-II and other affiliated entities maintain regional offices. The regional
offices perform certain operational services on behalf of the Partnership and
other affiliated entities. The cost of these services was allocated to the
Partnership and affiliated entities based on their number of subscribers.
Management considers this allocation to be reasonable for the operations of the
Partnership. During 1995 and 1994, the Partnership expensed approximately
$1,006,000 and $315,000, respectively, relating to these services.

The Partnership pays certain acquisition advisory fees to Charter which
typically equal approximately 1% of the total purchase price paid for cable
television systems acquired. Total acquisition fees paid to Charter in 1995 and
1994 were $450,000 and $1,500,000, respectively. In addition, Charter received
$2,900,000 of partnership interests as consideration for certain acquisitions
during 1995.

At December 31, 1995, CC-I had an unsecured receivable included in other
assets, of $100,000 from a related party, which bears interest at 6% and matures
on July 1, 1997.

In January 1996, the Partnership entered into a Financial Service Agreement
with Charterhouse Group International, Inc. (Charterhouse Group) for consulting
and financial services. The Partnership will receive services through December
31, 1996, for a nonrefundable fee of $550,000, which was paid upon the execution
and delivery of the Financial Services Agreement.

16. COMMITMENTS AND CONTINGENCIES:

Leases

The Partnership leases certain facilities and equipment under noncancelable
operating leases. Rent expense incurred under leases during 1995 and 1994 was
approximately $324,200 and $19,300, respectively. Approximate future minimum
lease payments are as follows:

<TABLE>
<S> <C>
1996...................................................................... $306,000
1997...................................................................... 236,000
1998...................................................................... 217,000
1999...................................................................... 132,000
2000...................................................................... 31,000
Thereafter................................................................ 107,000
</TABLE>

The Partnership rents utility poles in its operations. Generally, pole
rental agreements are short term, but the Partnership anticipates that such
rentals will recur. Rent expense incurred for pole attachments during 1995 and
1994 was approximately $1,213,200 and $430,900, respectively.

F-25
<PAGE> 147

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Insurance Coverage

The Partnership currently does not have, and does not in the near term
anticipate having, property and casualty insurance on its underground
distribution plant. Due to large claims incurred by the property and casualty
insurance industry, the pricing of insurance coverage has become inflated to the
point where, in the judgment of the Partnership's management, the insurance
coverage is cost prohibitive. Management will continue to monitor the insurance
markets to attempt to obtain coverage for the Partnership's distribution plant
at reasonable rates.

Litigation

The Partnership is a party to lawsuits which are generally incidental to
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
Partnership's consolidated financial position and results of operations.

17. 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. In addition, recent
legislative and regulatory changes and additional regulatory proposals under
consideration may materially affect the cable television industry.

1992 Cable Act and FCC Regulation

The 1992 Cable Act and the Federal Communications Commission's ("FCC")
rules implementing the 1992 Cable Act have generally increased the
administrative and operational expenses of cable television systems and have
resulted in additional regulatory oversight by the FCC and local franchise
authorities. Management is unable to predict the ultimate effect of the 1992
Cable Act or the ultimate outcome of various FCC rule-making proceedings or the
litigation challenging various aspects of the 1992 Cable Act and the FCC's
regulations implementing the 1992 Cable Act.

The 1992 Cable Act and FCC regulations have imposed rate requirements for
basic services and equipment, including rate roll-backs. Under the 1992 Cable
Act, a local franchising authority in a community not subject to "effective
competition" generally is authorized to regulate basic cable rates after
certifying to the FCC that, among other things, it will adopt and administer
rate regulation consistent with FCC rules, and in a manner that will provide a
reasonable opportunity to consider the views of interested parties. The
Telecommunications Act of 1996 (the "Telecommunications Act"), passed by
Congress on February 1, 1996, and signed into law by the President on February
8, 1996, broadens the definition of "effective competition" to include any
franchise area where a local exchange carrier (or its affiliate) provides video
programming services to subscribers by any means, other than through Direct
Broadcast Satellite. Upon certification, the franchising authority obtains the
right to approve the basic rates charged by the cable system operator. In
regulating the basic service rates, certified local franchise authorities have
the authority to order a rate refund of previously paid rates determined to be
in excess of the maximum permitted reasonable rates.

F-26
<PAGE> 148

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

programming rates. Rates for basic tier of "small cable operators" are
deregulated if the system offered a single tier of services as of December 31,
1994.

Under the 1992 Cable Act, rates for cable programming services not carried
on the basic tier (nonbasic services) could be regulated by the FCC upon the
filing of a complaint by franchise authorities or subscribers that indicates the
cable operator's rates for these services are unreasonable. Rate complaints have
been filed with the FCC with respect to certain of the Partnership's cable
programming services; none of such complaints have been resolved by the FCC as
of the date of the financial statements. The Telecommunications Act of 1996
eliminates regulation of nonbasic programming as of March 31, 1999. In the
interim, rate regulation of the nonbasic programming tier can only be triggered
by a franchising authority complaint to the FCC. If the FCC determines that the
Partnership's nonbasic programming service tier rates are unreasonable, the FCC
has the authority to order the Partnership to reduce nonbasic programming
service tier rates and to refund to customers any overcharges occurring from the
filing date of the rate complaint with the FCC.

Under the FCC's initial rate regulations pursuant to the 1992 Cable Act,
regulated cable systems were required to apply a benchmark formula to determine
their maximum permitted rates. Those systems whose rates were above the
benchmark on September 30, 1992, were required to reduce their rates to the
benchmark or by 10%, whichever was less. Under revised rate regulations adopted
February 1994, regulated cable systems were required to set their rates so that
regulated revenues per subscriber did not exceed September 30, 1992, levels,
reduced by 17% (taking into account the previous 10% reduction).

Notwithstanding mandated rate regulations, cable operators currently may
adjust their regulated rates to reflect inflation and what the FCC has deemed to
be external costs (such as increases in franchise fees).

In September 1995, the FCC developed an abbreviated cost-of-service form
that permits cable operators to recover costs of significant upgrades that
provide benefits to subscribers of regulated cable services. Cable operators
seeking to raise rates to cover costs of an upgrade would submit only the costs
of the upgrade instead of all current costs. In December 1995, the FCC revised
its cost-of-service rules. At this time, management is unable to predict the
effect of these revised rules on the Partnership's consolidated financial
position or results of operations.

In another action in September 1995, the FCC established a new optional
rate adjustment methodology that encourages operators to limit their rate
increases to once a year to reflect inflation and changes in external costs and
the number of channels. The rules permit cable operators to "project reasonably"
changes in their costs for the 12 months following the rate change (in an effort
to eliminate delays in recovering costs). The order allows operators to recover
increases in additional types of franchise-requirement costs. Permitted pass-
through increases include increases in the cost of providing institutional
networks, video services, data services to or from governmental and educational
institutions, and certain other cost increases. Management is unable to predict
the effect of these new rules on the Partnership's business.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operators'
marketing costs and may also allow operators to better respond to competition
from alternative providers. Management is unable to predict if these proposed
rules will ultimately be promulgated by the FCC, and if they are promulgated,
their effect on the Partnership's consolidated financial position and results of
operations.

F-27
<PAGE> 149

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Partnership in the event certain of its rates are successfully challenged by
franchising authorities or found to be unreasonable by the FCC. Management 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
Partnership.

"Must Carry" Requirements/"Retransmission Consents"

Under the 1992 Cable Act, cable television operators are subject to
mandatory signal carriage requirements that allow local commercial and
noncommercial television broadcast stations to elect to require a cable system
to carry the station, subject to certain exceptions, or, in the case of
commercial stations, to negotiate for "retransmission consent" to carry the
station. In addition, there are requirements for cable systems to obtain
retransmission consent for all "distant" commercial television stations,
commercial radio stations and certain low power television stations carried by
such systems after October 6, 1993. As a result of the mandatory system carriage
rules, some of the Partnership's systems have been required to carry television
broadcast stations that otherwise would not have been carried, thereby causing
displacement of possibly more attractive programming.

Franchise Matters

The 1992 Cable Act modified the franchise renewal process to make it easier
for a franchising authority to deny renewal. Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement. Although management believes
that the Partnership has generally met the terms of its franchise agreements and
has provided quality levels of service, and anticipates the Partnership's future
franchise renewal prospects generally will be favorable, there can be no
assurance that any such franchises will be renewed or, if renewed, that the
franchising authorities will not impose more onerous requirements on the
Partnership than previously existed.

Recent Telecommunications Legislation

The Telecommunications Act alters federal, state, and local laws and
regulations pertaining to cable television, telecommunications and other
services.

Under the Telecommunications Act, telephone companies can compete directly
with cable operators in the provision of video programming. This new legislation
recognizes several multiple entry options for telephone companies to provide
competitive video programming.

Certain provisions of the Telecommunications Act could materially affect
the growth and operation of the cable television industry and the cable services
provided by the Partnership. Although the new legislation may substantially
lessen regulatory burdens, the cable television industry may be subject to
additional competition as a result thereof. There are numerous rule makings to
be undertaken by the FCC which will interpret and implement the
Telecommunications Act's provisions. In addition, certain provisions of the
Telecommunications Act (such as the deregulation of cable programming rates) are
not immediately effective. Further, certain of the Telecommunications Act's
provisions have been and are likely to be subject to judicial challenges.
Management is unable at this time to predict the outcome of such rule makings or
litigation or the substantive effect of the new legislation and the rule makings
on the consolidated financial position and results of operations of the
Partnership.

18. 401(K) PLAN:

F-28
<PAGE> 150

CHARTER COMMUNICATIONS SOUTHEAST HOLDINGS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

in the Plan. The Plan is a tax-qualified retirement savings plan to which
employees may elect to make pretax contributions up to the lesser of 10% of
their compensation or dollar thresholds established under the Internal Revenue
Code. The Partnership contributes an amount equal to 50% of the first 5%
contributed by each employee. During 1995 and 1994, the Partnership contributed
approximately $87,900 and $5,775, respectively.

19. INSURANCE SETTLEMENT:

In October 1995, Hurricane Opal caused damage to certain of the
Partnership's Alabama and Georgia systems. The Partnership has received a
$500,000 insurance advance during 1995. The claim is to be settled in 1996. In
addition, the Partnership recorded a $744,800 nonoperating loss for its portion
of the insurance deductible.

20. SIGNIFICANT NONCASH TRANSACTIONS:

The Partnership engaged in the following significant noncash financing
transactions:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31
-----------------------
1995 1994
FOR THE ---------- ----------
THREE
MONTHS ENDED
MARCH 31,
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
Redemption preference allocation -- Special
Limited Partner units (CC-I)................... $ 828,616 $3,051,040 $1,924,573
Redemption preference allocation -- Redeemable
Preferred Limited units (CC-I)................. -- 2,715,977 1,626,333
Redemption preference allocation -- Redeemable
Preferred Limited units (CC-II)................ 1,452,343 3,729,149 --
Recording of franchise costs and deferred income
taxes in connection with the Peachtree
acquisition (see Note 6)....................... -- 7,000,000 --
Exchange of Redeemable Preferred Limited units
(CC-I)......................................... 10,314,752 -- --
Exchange of Redeemable Preferred Limited units
(CC-II)........................................ 40,181,492 -- --
Return of Capital -- Special Limited Partner
units (CC-I) buyout............................ 2,558,173 -- --
</TABLE>

F-29
<PAGE> 151

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications Southeast Holdings Capital Corporation:

We have audited the accompanying balance sheet of Charter Communications
Southeast Holdings Capital Corporation (a Delaware corporation) as of March 31,
1996, and the related statement of shareholder's investment for the period from
inception (March 12, 1996) to March 31, 1996. 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 audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Charter Communications
Southeast Holdings Capital Corporation as of March 31, 1996, and the changes in
shareholder's investment for the period from inception (March 12, 1996) to March
31, 1996, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 17, 1996

F-30
<PAGE> 152

CHARTER COMMUNICATIONS SOUTHEAST

HOLDINGS CAPITAL CORPORATION

BALANCE SHEET

<TABLE>
<CAPTION>
MARCH 31,
1996
---------
<S> <C>
ASSETS
TOTAL ASSETS....................................................................... $ --
=======
LIABILITIES AND SHAREHOLDER'S INVESTMENT
COMMITMENTS AND CONTINGENCIES......................................................
SHAREHOLDER'S INVESTMENT:
Common stock, $.01 par value, 1,000 shares authorized, 1 share issued and
outstanding.................................................................. $ 1
Additional paid-in-capital.................................................... 99
Receivable from shareholder................................................... (100)
---------
Total shareholder's investment........................................... $ 100
=======
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-31
<PAGE> 153

CHARTER COMMUNICATIONS SOUTHEAST

HOLDINGS CAPITAL CORPORATION

STATEMENT OF SHAREHOLDER'S INVESTMENT

FOR THE PERIOD FROM INCEPTION TO MARCH 31, 1996

<TABLE>
<CAPTION>
ADDITIONAL RECEIVABLE
COMMON PAID-IN FROM
STOCK CAPITAL SHAREHOLDER TOTAL
-------- -------- ---------- --------
<S> <C> <C> <C> <C>
BALANCE AT INCEPTION............................... $ -- $ -- $ -- $ --
Issuance of common stock...................... 1 99 (100) --
-------- -------- ---------- --------
BALANCE, MARCH 31, 1996............................ $ 1 $ 99 $ (100) $ --
======== ======== ========== ========
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-32
<PAGE> 154

CHARTER COMMUNICATIONS SOUTHEAST

HOLDINGS CAPITAL CORPORATION

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization

Charter Communications Southeast Holdings Capital Corporation (Holdings
Capital), a Delaware corporation, is a wholly owned subsidiary of Charter
Communications Southeast Holdings, L.P. (Southeast Holdings) and was formed
solely for the purpose of acting as co-issuer with Southeast Holdings of $147
million of Senior Secured Discount Debentures (the "Debentures"), and has no
operations or assets from which it will be able to repay the Debentures. All
costs associated with the formation of Holdings Capital have been borne by
Southeast Holdings. Southeast Holdings became the sole shareholder of Holdings
Capital on March 12, 1996, by purchasing one share of $.01 par value common
stock for a purchase price of $100.

As Holdings Capital had no revenues, expenses or cash transactions for the
reporting period, a statement of operations and a statement of cash flows have
been excluded from the accompanying financial statements.

2. COMMITMENTS:

Holdings Capital is a co-issuer with Southeast Holdings of the Debentures.
The Debentures are recorded, net of the discount of $72 million, in the
financial statements of Southeast Holdings and all interest and principal
repayments will be made by Southeast Holdings and its operating subsidiaries.

3. NONCASH FINANCING TRANSACTIONS:

Issuance of common stock ............................................. $100

F-33
<PAGE> 155

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications Southeast, L.P.:

We have audited the accompanying consolidated balance sheets of Charter
Communications Southeast, L.P. (a Delaware limited partnership) and subsidiaries
as of December 31, 1995 and 1994, and the related consolidated statements of
operations, partners' capital and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. The consolidated financial statements give
retroactive effect to the reorganization under common control of Charter
Communications Southeast, L.P. and Charter Communications, L.P., as described in
the Note 1 to the consolidated financial statements.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Charter
Communications Southeast, L.P. and its subsidiaries as of December 31, 1995 and
1994, and the results of their operations and their cash flows for the years
then ended, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
March 29, 1996

F-34
<PAGE> 156

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<S> <C> <C> <C>
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Current maturities of long-term debt................................... $ -- $ -- $ 1,168,750
Note payable -- related party.......................................... -- 15,000,000 --
Accounts payable and accrued expenses.................................. 12,852,375 12,330,848 4,207,201
Subscriber deposits and prepayments.................................... 199,354 243,277 102,218
Payable to affiliates................................................ 863,689 1,060,451 238,238
------------ ------------ ------------
13,915,418 28,634,576 5,716,407
------------ ------------ ------------
DEFERRED MANAGEMENT FEES PAYABLE TO AFFILIATE............................ 2,364,825 1,898,004 441,405
------------ ------------ ------------
DEFERRED REVENUE......................................................... 1,176,236 1,114,699 --
------------ ------------ ------------
LONG-TERM DEBT, less current maturities.................................. 375,800,000 259,125,000 92,331,250
------------ ------------ ------------
DEFERRED INCOME TAXES.................................................... 5,060,117 5,111,308 --
------------ ------------ ------------
REDEEMABLE PREFERRED LIMITED UNITS -- 0, 393.5 and 143.5 Class A units
and 0, 100 and 0 Class B units, issued and outstanding, respectively... -- 53,107,175 15,976,333
------------ ------------ ------------
SPECIAL LIMITED PARTNER UNITS -- 0, 345.8526 and 345.8526 Class A and 0,
54.1163 and 54.1163 Class B units, issued and outstanding,
respectively........................................................... -- 44,972,506 41,921,466
------------ ------------ ------------
PARTNERS' CAPITAL:
General Partner........................................................ 1,520,722 316,482 --
Preferred Limited Partners -- 0, 291.26 and 291.26 Class B units,
issued and outstanding, respectively................................. -- -- 16,966,042
Common Limited Partners -- 1,513.36, 477.19 and 7.9 units, issued and
outstanding, respectively............................................ 150,551,536 31,331,677 --
------------ ------------ ------------
Total partners' capital......................................... 152,072,258 31,648,159 16,966,042
------------ ------------ ------------
$550,388,854 $425,611,427 $173,352,903
============ ============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-35
<PAGE> 157

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTHS ENDED DECEMBER 31
MARCH 31 ---------------------------
------------------------- 1995 1994
1995 ------------ ------------
-----------
1996 (UNAUDITED)
-----------
(UNAUDITED)
<S> <C> <C> <C> <C>
SERVICE REVENUES:
Basic service........................... $17,502,013 $10,630,756 $ 53,237,594 $ 16,314,348
Premium service......................... 2,993,822 1,859,936 9,635,049 2,786,478
Other................................... 3,348,339 1,832,770 9,958,270 2,460,290
----------- ----------- ----------- -----------
23,844,174 14,323,462 72,830,913 21,561,116
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Operating costs......................... 9,985,296 5,956,339 31,056,034 9,228,422
General and administrative.............. 1,903,797 1,180,847 6,191,949 1,924,182
Depreciation and amortization........... 10,923,625 7,885,996 40,147,664 14,319,589
Management fees -- related party........ 1,192,067 715,695 3,642,012 1,078,000
----------- ----------- ----------- -----------
24,004,785 15,738,877 81,037,659 26,550,193
----------- ----------- ----------- -----------
Loss from operations................. (160,611) (1,415,415) (8,206,746) (4,989,077)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest income......................... 28,701 17,596 197,965 34,564
Interest expense........................ (6,657,774) (3,712,884) (18,671,491) (4,654,539)
Loss from Hurricane Opal................ -- -- (744,800) --
Other................................... (49,200) 3,583 (40,183) --
----------- ----------- ----------- -----------
(6,678,273) (3,691,705) (19,258,509) (4,619,975)
----------- ----------- ----------- -----------
Loss before benefit for income taxes
and extraordinary item............. (6,838,884) (5,107,120) (27,465,255) (9,609,052)
BENEFIT FOR INCOME TAXES.................. 51,191 -- 1,888,692 --
----------- ----------- ----------- -----------
Loss before extraordinary item....... (6,787,693) (5,107,120) (25,576,563) (9,609,052)
EXTRAORDINARY ITEM -- Loss on early
retirement of debt...................... -- -- (1,959,438) --
----------- ----------- ----------- -----------
Net loss............................. (6,787,693) (5,107,120) (27,536,001) (9,609,052)
----------- ----------- ----------- -----------
REDEMPTION PREFERENCE ALLOCATION:
Special Limited Partner units........ (828,616) (762,760) (3,051,040) (1,924,573)
Redeemable Preferred Limited units... (1,452,343) (1,188,994) (5,539,799) (1,626,333)
NET LOSS ALLOCATED TO REDEEMABLE PREFERRED
LIMITED UNITS........................... 4,063,274 -- 3,408,957 --
----------- ----------- ----------- -----------
Net loss applicable to partners'
capital accounts................... $(5,005,378) $(7,058,874) $(32,717,883) $(13,159,958)
=========== =========== =========== ===========
NET LOSS ALLOCATION TO PARTNERS' CAPITAL
ACCOUNTS:
General Partner......................... $ (50,054) $ (28,502) $ (157,518) $ (210,000)
Class B Preferred Limited Partners...... -- (5,475,448) (16,966,042) (12,159,958)
Common Limited Partners................. (4,955,324) (1,554,924) (15,594,323) (790,000)
----------- ----------- ----------- -----------
$(5,005,378) $(7,058,874) $(32,717,883) $(13,159,958)
=========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-36
<PAGE> 158

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994,

AND THE THREE MONTHS ENDED MARCH 31, 1996

<TABLE>
<CAPTION>
CLASS B
PREFERRED COMMON
GENERAL LIMITED LIMITED
PARTNER PARTNERS PARTNERS TOTAL
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1993.......... $ -- $ -- $ -- $ --
Capital contributions............. 210,000 29,126,000 790,000 30,126,000
Allocation of net loss............ (210,000) (12,159,958) (790,000) (13,159,958)
---------- ------------ ------------ ------------
BALANCE, December 31, 1994.......... -- 16,966,042 -- 16,966,042
Capital contributions............. 474,000 -- 46,926,000 47,400,000
Allocation of net loss............ (157,518) (16,966,042) (15,594,323) (32,717,883)
---------- ------------ ------------ ------------
BALANCE, December 31, 1995.......... 316,482 -- 31,331,677 31,648,159
Return of capital on Special
Limited partners' buyout
(unaudited).................... 25,582 -- 2,532,591 2,558,173
Capital contributions
(unaudited).................... 1,228,712 -- 121,642,592 122,871,304
Allocation of net loss
(unaudited).................... (50,054) -- (4,955,324) (5,005,378)
---------- ------------ ------------ ------------
BALANCE, March 31, 1996
(unaudited)....................... $1,520,722 $ -- $150,551,536 $152,072,258
========== ============ ============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-37
<PAGE> 159

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTHS ENDED DECEMBER 31
MARCH 31 -----------------------------
----------------------------- 1995 1994
1995 ------------- -------------
-------------
1996 (UNAUDITED)
-------------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................... $ (6,787,693) $ (5,107,120) $ (27,536,001) $ (9,609,052)
Adjustments to reconcile net loss to net
cash provided by operating activities
Extraordinary item -- Loss on early
retirement of debt.................... -- -- 1,959,438 --
Depreciation and amortization........... 10,923,625 7,885,996 40,147,664 14,319,589
Amortization of interest rate cap
agreements............................ -- -- 116,992 --
Forgiveness of note receivable with
related party......................... 100,000 -- -- --
Loss from Hurricane Opal................ -- -- 744,800 --
Deferred income taxes................... (51,191) -- (1,888,692) --
Changes in assets and liabilities, net
of effects from acquisitions--
Accounts receivable, net.............. (285,056) 507,327 101,411 (114,188)
Prepaid expenses and other............ (144,078) (216,461) 27,795 (76,104)
Receivable from parent and
affiliates......................... (1,771,813) 256,321 (2,196,179) --
Accounts payable and accrued
expenses........................... (1,100,010) 270,173 5,655,755 3,516,308
Subscriber deposits and prepayments... (43,923) (117) 34,632 (2,098)
Payable to affiliates................. 270,059 1,501,296 (1,577,521) 679,643
Deferred revenue...................... (33,140) -- 1,114,699 --
------------- ------------- ------------- -------------
Net cash provided by operating
activities............................ 1,076,780 5,097,415 16,704,793 8,714,098
------------- ------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment............................... (5,242,024) (2,003,063) (20,010,811) (4,995,661)
Proceeds from sale of property, plant and
equipment............................... -- -- 119,901 --
Payments for acquisitions, net of cash
acquired................................ (125,270,673) (109,056,245) (251,309,527) (176,387,357)
Payments of organizational expenses........ (34,257) -- (1,386,627) (827,976)
Restricted funds held in escrow............ -- -- 463,414 (463,414)
Proceeds from insurance settlement......... -- -- 500,000 --
------------- ------------- ------------- -------------
Net cash used in investing activities... (130,546,954) (111,059,308) (271,623,650) (182,674,408)
------------- ------------- ------------- -------------
(continued on the following page)
</TABLE>

F-38
<PAGE> 160

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTHS ENDED DECEMBER 31
MARCH 31 1995 1994
1996 1995 ------------- -------------
------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt borrowings.................. 125,000,000 -- -- --
Payment of debt issuance costs............. (5,913,610) (1,221,831) (4,393,266) (2,036,820)
Payments for interest rate cap
agreements.............................. -- -- -- (391,500)
Borrowings under revolving credit
agreement............................... 9,775,000 77,300,000 247,425,000 96,500,000
Payments under revolving credit
agreement............................... (18,100,000) -- (81,800,000) (3,000,000)
Proceeds from note payable................. -- -- 15,000,000 --
Payment of note payable.................... (15,000,000) -- -- --
Partners' capital contributions............ 72,375,061 20,500,000 47,400,000 1,000,000
Preferred Limited Partners'
contributions........................... -- 17,000,000 35,000,000 43,476,000
Issuance of Special Limited Partner
units................................... -- -- -- 39,996,893
Payment of Special Limited Partner units... (43,242,948) -- -- --
Issuance of note receivable -- related
party................................... -- -- -- (100,000)
------------- ------------- ------------- -------------
Net cash provided by financing
activities............................ 124,893,503 113,578,169 258,631,734 175,444,573
------------- ------------- ------------- -------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS................................ (4,576,671) 7,616,276 3,712,877 1,484,263
CASH AND CASH EQUIVALENTS, beginning of
period..................................... 5,197,140 1,484,263 1,484,263 --
------------- ------------- ------------- -------------
CASH AND CASH EQUIVALENTS, end of period..... $ 620,469 $ 9,100,539 $ 5,197,140 $ 1,484,263
============= ============= ============= =============
CASH PAID FOR INTEREST....................... $ 8,033,416 $ 2,926,038 $ 16,860,333 $ 4,058,098
============= ============= ============= =============
CASH PAID FOR TAXES.......................... $ -- $ -- $ -- $ --
============= ============= ============= =============
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-39
<PAGE> 161

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1996, IS UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

Charter Communications Southeast, L.P. (Southeast), a Delaware limited
partnership, wholly owned by Charter Communications Southeast Holdings, L.P.
(Southeast Holdings), was formed effective January 1995 through the assignment
of the general and limited partnership interests and operations of Charter
Communications II, L.P. (CC-II) from Southeast Holdings. Southeast will
terminate no later than December 31, 2014, as provided in the partnership
agreement (the "Partnership Agreement").

On March 28, 1996, the net assets of CC-I were transferred from
CharterComm, Inc. to Southeast in exchange for a 36.3% General Partnership
interest in CharterComm Holdings, L.P. (CharterComm Holdings), the Parent of
Southeast Holdings. This transfer was accounted for as a reorganization under
common control and accordingly, the consolidated financial statements and notes
have been restated to include the results and financial position of CC-I for all
periods presented. Thus, the accompanying consolidated financial statements
include the accounts of Southeast and its direct and indirect wholly owned
subsidiaries, Charter Communications Southeast Capital Corporation (Southeast
Capital), CCP II, Inc. (CCP II), CCP I, CC-II and CC-I, collectively referred to
as the "Partnership" herein. All significant intercompany balances and
transactions have been eliminated in consolidation.

Cash Equivalents

Cash equivalents at December 31, 1995 and 1994, consist primarily of
repurchase agreements with original maturities of 90 days or less. These
investments are carried at cost, which approximates market value. The
Partnership is subject to loss for amounts invested in repurchase agreements in
the event of nonperformance by the financial institution which acts as the
counterparty under such agreements; however, such noncompliance is not
anticipated.

F-40
<PAGE> 162

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Property, Plant and Equipment

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

<TABLE>
<S> <C>
Trunk and distribution systems.......................................... 10 years
Subscriber installations................................................ 10 years
Buildings, headends and leasehold improvements.......................... 5-20 years
Converters.............................................................. 5 years
Vehicles and equipment.................................................. 4-10 years
Office equipment........................................................ 5-10 years
</TABLE>

Franchise Costs

Other Assets

Revenues

Cable service revenues are recognized when the related services are
provided.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

F-41
<PAGE> 163

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Derivative Financial Instruments

Income Taxes

Income taxes are the responsibility of the partners and are not provided
for in the accompanying consolidated financial statements except for CC-II's
indirect wholly owned subsidiary, Peachtree Cable TV, Inc. (Peachtree).
Peachtree is a C corporation, and taxes have been provided for in the
accompanying financial statements in accordance with that described in SFAS No.
109, "Accounting for Income Taxes." SFAS No. 109 requires accounting for income
taxes based on the liability method, and deferred taxes are determined based on
the estimated future tax effects of differences between the financial reporting
and tax bases of assets and liabilities given the provisions of the enacted tax
laws.

Use of Estimates

2. DISTRIBUTIONS AND ALLOCATIONS:

For financial reporting purposes, redemption preference allocations,
profits and losses are allocated in accordance with the liquidation provisions
of the applicable partnership agreements.

Currently, under terms of the Partnership Agreement, allocation of
partnership profits for income tax reporting purposes is as follows for
Southeast: (i) to partners with deficit capital account balances, in proportion
to such deficits, until such deficits are reduced to zero; (ii) 99% to the
Limited Partners and 1% to the General Partner.

Currently, Partnership losses for income tax reporting purposes are
allocated as follows for Southeast: (i) 99% to the Limited Partners and 1% to
the General Partner until the Capital Account of any such Partner is reduced to
zero and (ii) to the General Partner and the Limited Partners in proportion to
the positive balances of their capital accounts until such balances are reduced
to zero.

Prior to the reorganization under common control, partnership profits of
CC-I were allocated for income tax reporting purposes as follows: (i) to
partners with deficit capital balances, in proportion to such deficits, until
such deficits are reduced to zero; (ii) to the Special Limited Partners, as
discussed in Note 5; (iii) to the Class A Preferred Limited Partners until each
such Limited Partner's capital account equals its unrecovered capital plus its
unrecovered preference amount (preference amount is equal to 17% of the
unrecovered capital and preference amount per annum); (iv) to the Class B
Preferred Limited Partners until each such Limited Partner's capital accounts
equals its unrecovered capital plus its unrecovered preference amount
(preference amount is equal to 19% of the unrecovered capital and preference
amount per annum); (v) to the Common Limited Partners and the General Partner
until each of such Partner's capital account equals its unrecovered capital; and
(vi) the remaining balance, 79% to the Common Limited Partners and 21% to the
General Partner.

F-42
<PAGE> 164

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. REDEEMABLE PREFERRED LIMITED UNITS (CC-II):

1. Five-year put option -- at anytime after January 18, 2000;

2. Change of control put option -- within 90 days following the
occurrence of a change of Control Event, as defined in the
Partnership Agreement; and

3. Default put option -- immediately following and during the
continuation of an Event of Default, as defined in the Partnership
Agreement.

The balance related to the Preferred Limited Partner units is determined as
follows:

<TABLE>
<S> <C>
Initial contributions........................................... $35,000,000
1995 redemption preference allocation........................... 3,729,149
-----------
Balance, December 31, 1995.................................... 38,729,149
1996 redemption preference allocation (unaudited)............... 1,452,343
-----------
March 28, 1996 (unaudited).................................... $40,181,492
===========
</TABLE>

F-43
<PAGE> 165

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. REDEEMABLE PREFERRED LIMITED UNITS (CC-I):

CC-I may redeem the Class A Preferred Limited Partner units for an amount
equal to the unrecovered capital plus any unrecovered preference amount on or
after April 30, 1996; provided, however, that CC-I shall not redeem any Class A
Preferred Limited Partner units prior to the redemption of all the Special
Limited Partner units. In addition, the holders of the Class A Preferred Limited
Partner units have the right to cause CC-I to purchase all of the units held by
such holders at any time after April 30, 1998, subject to certain conditions,
including approval by the Special Limited Partner, as stated in CC-I's
Partnership Agreement, at a price equal to the unrecovered capital and the
unrecovered preference amount.

The balance related to CC-I Class A Preferred Limited Partner units is
determined as follows:

<TABLE>
<S> <C>
Initial contributions................................................... $14,350,000
1994 redemption preference allocation................................... 1,626,333
-----------
Balance, December 31, 1994............................................ 15,976,333
1995 redemption preference allocation................................... 1,810,650
Allocation of 1995 net loss............................................. (3,408,957)
-----------
Balance, December 31, 1995............................................ 14,378,026
1996 redemption preference allocation (unaudited)....................... --
Allocation of net loss (unaudited)...................................... (4,063,274)
-----------
Balance, March 28, 1996 (unaudited)................................... $10,314,752
===========
</TABLE>

5. SPECIAL LIMITED PARTNER UNITS (CC-I):

F-44
<PAGE> 166

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amounts per annum). When there is no profit to allocate, the preference return
is reflected as a decrease in the Partners' Capital.

In accordance with CC-I's Partnership Agreement, CC-I may redeem the
Special Limited Partner units at any time for an amount equal to the unrecovered
initial cost of the partnership units plus any unrecovered preference amount
with respect to the units. In addition, the Special Limited Partner has the
option to cause CC-I to redeem the units any time after April 30, 2001. Based on
these redemption clauses, the Special Limited Partner units have been excluded
from Partners' Capital and the decrease in Partners' Capital attributed to the
Special Limited Partners' preference return has been allocated to the other
partners in a manner consistent with the liquidation and distributions
provisions of CC-I's Partnership Agreement. In accordance with CC-I's
Partnership Agreement, distributions would be allocated to the Special Limited
Partner equal to the unrecovered preference allocation and the unrecovered
initial cost of the partnership units prior to distributions to any other
partnership unit.

At December 31, 1995, the balance of $44,972,506 related to the Special
Limited Partner units consists of $39,996,893 of initial cost of the partnership
units and $4,975,613 of preference allocation. For the period from January 1,
1996, to March 28, 1996, the Special Limited Partners earned an additional
$828,616 of preference allocation resulting in a balance of $45,801,122, which
was paid on March 28, 1996. In accordance with the purchase agreement and
through the use of the proceeds of the Notes (see Note 12), Southeast paid the
Special Limited Partners $43,242,948 as full consideration for their partnership
interests. The difference in the payment amount and the March 28, 1996, balance
is reflected as a return of capital in the consolidated statements of partners'
capital.

6. ACQUISITIONS:

In April 1994, CC-I acquired certain assets from Citation Cablevision,
Inc., Subscriber Cablevision, Inc., LaGrange Cablevision, Inc., and The
Jefferson Trust Partnership (the "McDonald Acquisition") for approximately $176
million which included cable television systems in Alabama, Georgia and
Louisiana. To finance the acquisition, CC-I entered into a revolving credit
agreement (see Note 12) and issued Special Limited Partner units (see Note 5).

In April 1995, Charter Communications III, L.P. (CC-III), a wholly owned
subsidiary of CC-II, acquired the stock of Peachtree, including cable television
systems located in Georgia, for an aggregate purchase price of approximately
$22.3 million. In connection with the completion of the Peachtree acquisition,
the Partnership recorded approximately $7 million of additional franchise costs
and deferred income taxes, resulting from differences between the financial
reporting and tax bases of certain assets acquired.

In May 1995, CC-III purchased the CableSouth systems for an aggregate
purchase price of approximately $49.2 million.

In July 1995, CC-II acquired the Masada systems for an aggregate purchase
price of approximately $35.2 million.

In November 1995, CC-II acquired the Masada II systems for an aggregate
purchase price of approximately $35.5 million.

F-45
<PAGE> 167

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In March 1996, CC-II purchased certain systems from Cencom Cable Income
Partners, L.P. (the "CCIP Systems") for an aggregate purchase price of
approximately $115.0 million.

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 the date of acquisition. The
following shows the purchase price and allocation of purchase price to assets
acquired and liabilities assumed:

<TABLE>
<CAPTION>
MCDONALD CROWN PEACHTREE
------------ ------------ -----------
<S> <C> <C> <C>
Purchase price:
Cash paid to seller............................. $134,390,464 $109,639,897 $21,969,670
Special Limited Partner units issued............ 39,996,893 -- --
Assumed liabilities............................. 500,000 337,725 75,000
Transaction costs............................... 1,500,000 2,822,449 300,000
------------ ------------ -----------
$176,387,357 $112,800,071 $22,344,670
============ ============ ===========
Allocation of purchase price to assets acquired:
Cash............................................ $ -- $ 3,743,826 $ 9,121
Accounts receivable............................. 703,968 345,444 64,640
Prepaid expenses and other assets............... -- 150,455 158,293
Property, plant and equipment................... 28,187,217 51,836,684 5,293,554
Franchise costs................................. 148,291,381 62,473,490 24,131,446
Accounts payable and accrued expenses........... (690,893) (5,749,828) (312,384)
Subscriber deposits and prepayments............. (104,316) -- --
Deferred income taxes........................... -- -- (7,000,000)
------------ ------------ -----------
$176,387,357 $112,800,071 $22,344,670
============ ============ ===========
</TABLE>

<TABLE>
<CAPTION>
CCIP
SYSTEMS
CABLESOUTH MASADA MASADA II ------------
----------- ----------- ----------- (UNAUDITED)
<S> <C> <C> <C> <C>
Purchase price:
Cash paid to seller................ $48,475,475 $34,547,135 $34,955,123 $112,021,452
Assumed liabilities................ 150,000 115,000 125,000 --
Transaction costs.................. 600,000 500,000 450,000 3,000,000
----------- ----------- ----------- ------------
$49,225,475 $35,162,135 $35,530,123 $115,021,452
=========== =========== =========== ============
Allocation of purchase price to
assets acquired:
Cash............................... $ -- $ -- $ -- $ 296,810
Accounts receivable................ 134,532 20,264 32,554 1,924,205
Prepaid expenses and other
assets.......................... 38,903 36,733 21,482 97,805
Property, plant and equipment...... 4,575,134 3,530,312 2,541,886 22,040,675
Franchise costs.................... 44,586,571 31,734,688 33,033,114 92,378,171
Deferred revenue................... -- -- -- (94,677)
Accounts payable and accrued
expenses........................ (109,665) (159,862) (98,913) (1,621,537)
----------- ----------- ----------- ------------
$49,225,475 $35,162,135 $35,530,123 $115,021,452
=========== =========== =========== ============
</TABLE>

F-46
<PAGE> 168

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following are unaudited pro forma operating results for the above
acquisitions as though the acquisitions had been made on January 1 of the
respective year in which the purchase occurred.

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31
-----------------------------
1995 1994
FOR THE ------------ ------------
THREE
MONTHS ENDED (UNAUDITED) (UNAUDITED)
MARCH 31,
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
Service revenues......................... $30,013,372 $ 88,624,206 $ 32,147,894
Income (loss) from operations............ $ 593,491 $ (7,432,844) $ (8,815,927)
Net loss................................. $(8,220,732 ) $(28,992,353) $(16,734,010)
</TABLE>

7. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31
----------------------------
1995 1994
MARCH 31, ------------ -----------
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
Trunk and distribution systems............ $ 87,875,793 $ 76,418,698 $25,198,122
Subscriber installations.................. 26,488,906 17,361,287 3,381,794
Land, buildings, headends and leasehold
improvements............................ 16,179,370 13,229,975 1,581,982
Converters................................ 11,056,633 6,446,647 911,276
Vehicles and equipment.................... 4,729,040 3,725,059 1,200,000
Office equipment.......................... 3,158,516 2,138,248 909,704
------------ ------------ -----------
149,488,258 119,319,914 33,182,878
Less -- Accumulated depreciation.......... (15,594,934) (12,290,506) (2,031,371)
------------ ------------ -----------
$133,893,324 $107,029,408 $31,151,507
============ ============ ===========
</TABLE>

8. RESTRICTED FUNDS HELD IN ESCROW:

9. OTHER ASSETS:

Other assets are detailed as follows:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1995 1994
MARCH 31, ---------- ----------
1996
-----------
(UNAUDITED)
<S> <C> <C> <C>
Debt issuance costs, net of accumulated
amortization of $646,189, $561,661
and $157,097................................ $ 9,330,985 $3,548,345 $1,879,723
Organizational expenses, net of accumulated
amortization of $494,489, $487,144 and
$67,087..................................... 1,754,371 1,727,459 760,889
Interest rate cap agreements, net of
accumulated amortization of $215,000,
$174,875 and $57,883........................ 176,500 216,625 333,617
Note receivable -- related party.............. -- 100,000 100,000
----------- ---------- ----------
$11,261,856 $5,592,429 $3,074,229
=========== ========== ==========
</TABLE>

F-47
<PAGE> 169

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31
--------------------------
1995 1994
MARCH 31, ----------- ----------
1996
-----------
(UNAUDITED)
<S> <C> <C> <C>
Property taxes............................... $ 910,027 $ 454,716 $ 136,231
Franchise fees............................... 1,021,347 1,451,629 472,278
Capital expenditures......................... 1,871,240 2,197,808 533,926
Accounts payable............................. 623,746 318,694 594,951
Accrued interest............................. 1,031,957 2,407,599 596,441
Programming expenses......................... 2,505,321 1,953,199 915,996
Other........................................ 4,888,737 3,547,203 957,378
----------- ----------- ----------
$12,852,375 $12,330,848 $4,207,201
=========== =========== ==========
</TABLE>

11. NOTE PAYABLE:

On November 30, 1995, Southeast Holdings entered into a Convertible Senior
Note (the "Convertible Senior Note") with Charterhouse Equity Partners II, L.P.
(Charterhouse) for $15,000,000. This note payable was assumed by the Partnership
in 1995. Interest on the Convertible Senior Note is accrued on the unpaid
principal amount and payable quarterly in arrears beginning March 31, 1996; the
interest rate is the rate publicly announced by Chemical Bank in New York (8.5%
at December 31, 1995), as its reference rate plus 3% per annum. During the year
ended December 31, 1995, the Partnership incurred costs of $100,000 relating to
the Convertible Senior Note. Charterhouse has the option on the maturity date,
November 30, 1996, to convert the outstanding balance into Preferred Limited
Partnership units in CC-II or exchange the outstanding balance for Common
Limited Partnership units in CC-II. Concurrent with any such conversion or
exchange, the accrued and unpaid interest in respect to the outstanding amount
shall be paid by the Partnership in full. All taxes and expenses incurred by the
conversion or exchange will be the responsibility of the Partnership. The
Convertible Senior Note agreement contains certain covenants and restrictions on
the Partnership's activities which if violated would result in a mandatory
prepayment by the Partnership.

12. LONG-TERM DEBT:

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31
----------------------------
1995 1994
MARCH 31, ------------ -----------
1996
------------
(UNAUDITED)
<S> <C> <C> <C>
11 1/4% Senior Notes...................... $125,000,000 $ -- $ --
Revolving Credit Agreements............... 250,800,000 259,125,000 93,500,000
------------ ------------ -----------
375,800,000 259,125,000 93,500,000
Less -- Current maturities................ -- -- 1,168,750
------------ ------------ -----------
$375,800,000 $259,125,000 $92,331,250
============ ============ ===========
</TABLE>

On March 28, 1996, Southeast and Southeast Capital (the "Issuers") issued
$125,000,000 aggregate principal amount of 11 1/4% Senior Notes (the "Notes").
The Notes are senior unsecured obligations of the

F-48
<PAGE> 170

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Issuers and rank pari passu in right and priority of payment to all other
existing and future indebtedness. The Notes are redeemable at the Issuers'
option at amounts decreasing from 105.625% to 100% of principal, plus accrued
and unpaid interest to the date of redemption, beginning on March 15, 2001. The
Issuers are required to make an offer to purchase all of the Notes, at a
purchase price equal to 101% of the principal amount, together with accrued and
unpaid interest, upon the Change in Control, as defined in the Offering
Memorandum. Interest is payable semiannually on March 15 and September 15 until
maturity on March 15, 2006. Proceeds from the Notes together with capital
contributions from Southeast Holdings were used to repay the Convertible Senior
Note, to pay fees and expenses related to the Offering, and to make capital
contributions to CC-I and CC-II. The Notes require the Issuers to comply with
various financial and nonfinancial covenants and restrictions, including
substantial limitations on additional indebtedness, restricted payments,
transactions with affiliates, liens, dividends and certain other items.

On March 28, 1996, Southeast Holdings and Holdings Capital (the "Debenture
Issuers") issued $146,820,000 of Senior Secured Discount Debentures (the
"Debentures") for proceeds of approximately $75,000,000. The Debentures are
secured by all of Southeast Holdings' interest in Southeast. The Debentures are
redeemable at the Debenture Issuers' option at amounts decreasing from 107% to
100% of principal, plus accrued and unpaid interest to the redemption date,
beginning on March 15, 2001. The Debenture Issuers are required to make an offer
to purchase all of the Debentures, at a purchase price equal to 101% of the
principal amount, together with accrued and unpaid interest, upon the Change in
Control, as defined in the Offering Memorandum. No interest is payable on the
Debentures prior to March 15, 2001. Thereafter, interest on the Debentures is
payable semiannually in arrears beginning September 15, 2001, until maturity on
March 15, 2007. The discount on the Debentures is being accreted using the
effective interest method at an interest rate of 14% from the date of issuance
to March 15, 2001. The unamortized discount was $71,699,189 at March 31, 1996.
Proceeds from the Debentures were used to pay fees and expenses related to the
Offering and the balance was contributed to the Partnership as equity capital.

F-49
<PAGE> 171

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

on the unused revolving credit facility portion of the CC-I Credit Agreement.
Commencing September 30, 1997, and at the end of each calendar quarter
thereafter, the CC-I revolving credit facility commitment (available borrowings)
shall be reduced on an annual basis as set forth below:

<TABLE>
<CAPTION>
PERCENTAGE
REDUCTION
TO
YEAR COMMITMENT
------------------------------------------------------- ----------
<S> <C>
1997................................................... 3.0%
1998................................................... 8.0
1999................................................... 13.7
2000................................................... 17.2
2001................................................... 19.0
2002................................................... 23.1
2003................................................... 16.0
-----
100.0%
=====
</TABLE>

<TABLE>
<CAPTION>
FAIR
CONTRACT VALUE/
NOTIONAL FIXED EXPIRATION REDEMPTION
AMOUNT TYPE RATE DATE PRICE
- ----------- ----- ----- ------------------ ----------
<S> <C> <C> <C> <C>
$20,000,000 Swap 6.01 % June 6, 1996 $ 42,400
15,000,000 Cap 7 % July 21, 1997 (3,900)
15,000,000 Cap 8 % July 21, 1997 (900)
15,000,000 Cap 8 % July 21, 1997 2,000
25,000,000 Swap 5.73 % September 18, 1997 205,300
10,000,000 Cap 8.5 % November 2, 1997 2,300
55,000,000 Swap 5.92 % October 21, 1998 *
- ----------- ----------
$155,000,000 6.34 % (weighted average) $247,200
========
- -----------
- -----------
</TABLE>

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

(*) These contracts have not been marked to market since their effective dates
are after the reporting date.

F-50
<PAGE> 172

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Commencing March 31, 1998, and at the end of each calendar quarter
thereafter, available borrowings shall be reduced on an annual basis as set
forth below:

<TABLE>
<CAPTION>
PERCENTAGE REDUCTION
TO COMMITMENT
-------------------------
REVOLVING
CREDIT TERM
YEAR FACILITY LOAN
------------------------------------------------------- --------------- -----
<S> <C> <C>
1998................................................... 8.0% .5%
1999................................................... 9.2% .5%
2000................................................... 14.5% 1.0%
2001................................................... 19.0% 1.0%
2002................................................... 23.1% 1.0%
2003................................................... 26.2% 15.0%
2004................................................... -- 81.0%
----- -----
100.0% 100.0%
===== =====
</TABLE>

As a requirement of the CC-II Credit Agreement, CC-II has secured interest
rate swap and cap agreements with a certain lender bank. The Credit Agreement
requires CC-II to enter into interest hedge agreements for amounts not less than
50% of the outstanding obligations. In addition, the interest hedge agreements
must provide interest rate protection for a weighted average period of not less
than 18 months. Under each swap agreement, on a quarterly basis, if the 90 day
variable rate exceeds the fixed rate stated below, CC-II will receive payments
from the bank to offset the higher interest rate on the notional principal

F-51
<PAGE> 173

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amount. These payments, if any, will be recorded as reductions of interest
expense. The following summarizes certain information pertaining to the interest
rate protection agreements as of December 31, 1995:

<TABLE>
<CAPTION>
FAIR
CONTRACT VALUE/
NOTIONAL FIXED EXPIRATION REDEMPTION
AMOUNT TYPE RATE DATE VALUE
- ----------- ----- ---------- -------------- ----------
<C> <S> <C> <C> <C>
$40,000,000 Swap 6.01% June 12, 1996 $ 87,000
20,000,000 Cap 8.50% March 28, 1998 9,600
20,000,000 Cap 8.50% April 13, 1998 8,900
- -----------
$80,000,000
==========
</TABLE>

Future principal payments on the total borrowings under both agreements are
as follows at December 31, 1995:

13. DEBT ISSUANCE COSTS:

14. NET LOSS FOR INCOME TAX PURPOSES:

<TABLE>
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Net loss for financial reporting purposes........................ $(24,552,945) $(9,609,052)
Depreciation differences between financial reporting and tax
reporting...................................................... (9,804,115) (1,561,047)
Amortization differences between financial reporting and tax
reporting...................................................... 7,154,093 4,561,627
Differences in expenses recorded for financial reporting and
reporting for tax purposes..................................... 1,780,599 775,943
Revenue reported for tax reporting deferred for financial
reporting...................................................... 1,114,699 --
Other............................................................ 61,576 --
------------ -----------
Net loss for federal income tax purposes....................... $(24,246,093) $(5,832,529)
============ ===========
</TABLE>

F-52
<PAGE> 174

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following summarizes the significant cumulative temporary difference
between the Partnership's financial reporting basis and federal income tax
reporting basis as of December 31:

<TABLE>
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Assets:
Accounts receivable............................................ $ 276,201 $ --
Franchise costs................................................ 11,493,158 4,075,685
Accrued expenses............................................... 2,357,832 772,814
Deferred revenue............................................... 1,114,699 --
------------ -----------
$ 15,241,890 $ 4,848,499
============ ===========
Liabilities:
Property, plant and equipment.................................. $(11,385,768) $(1,561,047)
Franchise costs................................................ (4,192,656) --
Other assets................................................... (47,111) (57,109)
------------ -----------
$(15,625,535) $(1,618,156)
============ ===========
</TABLE>

As previously stated, Peachtree is a C corporation. The benefit for income
taxes is the result of the change in deferred income taxes for the year ended
December 31, 1995. The statutory and effective tax rates approximated 40% for
the year ended December 31, 1995. As of December 31, 1995, temporary differences
and carryforwards that gave rise to deferred income tax assets and liabilities
pertaining to Peachtree are as follows:

<TABLE>
<S> <C>
Deferred income tax assets:
Accounts receivable................................................... $ 4,771
Accrued expenses...................................................... 7,401
Tax loss carryforwards................................................ 548,100
Tax credit carryforwards.............................................. 361,195
-----------
Total deferred income tax assets.............................. 921,467
-----------
Deferred income tax liabilities:
Property, plant and equipment......................................... (1,481,396)
Franchise costs and other assets...................................... (4,551,379)
-----------
Total deferred income tax liabilities......................... (6,032,775)
-----------
Net deferred income tax liability............................. $(5,111,308)
===========
</TABLE>

15. RELATED-PARTY TRANSACTIONS:

F-53
<PAGE> 175

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

currently payable of $630,852 and $238,238 are included in net receivable from
parent and affiliates at December 31, 1995 and 1994, respectively.

CC-I, CC-II and other affiliated entities maintain regional offices. The
regional offices perform certain operational services on behalf of the
Partnership and other affiliated entities. The cost of these services was
allocated to the Partnership and affiliated entities based on their number of
subscribers. Management considers this allocation to be reasonable for the
operations of the Partnership. During 1995, the Partnership expensed
approximately $1,006,000 and $315,000, respectively, relating to these services.

The Partnership pays certain acquisition advisory fees to Charter, which
typically equal approximately 1% of the total purchase price paid for cable
television systems acquired. Total acquisition fees paid to Charter in 1995 and
1994 were $450,000 and $1,500,000, respectively. In addition, Charter received
$2,900,000 of partnership interests as consideration for certain acquisitions
during 1995. The Partnership has a $1,400,000 receivable from Southeast
Holdings. In addition, CC-I has an unsecured note receivable of $100,000 from a
related party, which bears interest at 6% and matures on July 1, 1997.

In January 1996, the Partnership entered into a Financial Services
Agreement with Charterhouse Group International, Inc. (Charterhouse Group) for
consulting and financial services. The Partnership will receive services through
December 31, 1996, for a nonrefundable fee of $550,000, which was paid upon the
execution and delivery of the Financial Services Agreement.

16. COMMITMENTS AND CONTINGENCIES:

Leases

Insurance Coverage

F-54
<PAGE> 176

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Litigation

17. REGULATION IN THE CABLE TELEVISION INDUSTRY:

1992 Cable Act and FCC Regulation

F-55
<PAGE> 177

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

regulation of the nonbasic programming tier can only be triggered by a
franchising authority complaint to the FCC. If the FCC determines that the
Partnership's nonbasic programming service tier rates are unreasonable, the FCC
has the authority to order the Partnership to reduce nonbasic programming
service tier rates and to refund to customers any overcharges occurring from the
filing date of the rate complaint with the FCC.

Under the FCC's initial rate regulations pursuant to the 1992 Cable Act,
regulated cable systems were required to apply a benchmark formula to determine
their maximum permitted rates. Those systems whose rates were above the
benchmark on September 30, 1992, were required to reduce their rates to the
benchmark or by 10%, whichever was less. Under revised rate regulations adopted
February 1994, regulated cable systems were required to set their rates so that
regulated revenues per subscriber did not exceed September 30, 1992, levels,
reduced by 17% (taking into account the previous 10% reduction).

In another action in September 1995, the FCC established a new optional
rate adjustment methodology that encourages operators to limit their rate
increases to once a year to reflect inflation and changes in external costs and
the number of channels. The rules permit cable operators to "project reasonably"
changes in their costs for the 12 months following the rate change (in an effort
to eliminate delays in recovering costs). The order allows operators to recover
increases in additional types of franchise-requirement costs. Permitted pass-
through increases include increases in the cost of providing institutional
networks, video services, data services to or from governmental and educational
institutions, and certain other cost increases. The management is unable to
predict the effect of these new rules on the Partnership's business.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operators'
marketing costs and may also allow operators to better respond to competition
from alternative providers. Management is unable to predict if these proposed
rules will ultimately be promulgated by the FCC, and if they are promulgated,
their effect on the Partnership's consolidated financial position and results of
operations.

While management believes that the Partnership has complied in all material
respects with the rate provisions of the 1992 Cable Act, in jurisdictions that
have not yet chosen to certify, refunds covering a one-year period on basic
services may be ordered upon future certification if the Partnership is unable
to justify its rates through a benchmark or cost-of-service filing or small
system cost-of-service filing pursuant to FCC rules. Management is unable to
estimate at this time the amount of refunds, if any, that may be payable by the
Partnership in the event certain of its rates are successfully challenged by
franchising authorities or found to be unreasonable by the FCC. Management 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
Partnership.

"Must Carry" Requirements/"Retransmission Consents"

F-56
<PAGE> 178

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

negotiate for "retransmission consent" to carry the station. In addition, there
are requirements for cable systems to obtain retransmission consent for all
"distant" commercial television stations, commercial radio stations and certain
low power television stations carried by such systems after October 6, 1993. As
a result of the mandatory system carriage rules, some of the Partnership's
systems have been required to carry television broadcast stations that otherwise
would not have been carried, thereby causing displacement of possibly more
attractive programming.

Franchise Matters

Recent Telecommunications Legislation

The Telecommunications Act alters federal, state, and local laws and
regulations pertaining to cable television, telecommunications and other
services.

18. 401(K) PLAN:

In 1994, the Partnership adopted the Charter Communications, Inc. 401(k)
Plan (the "Plan") for the benefit of its employees. All employees who have
completed one year of employment are eligible to participate in the Plan. The
Plan is a tax-qualified retirement savings plan to which employees may elect to
make pretax contributions up to the lesser of 10% of their compensation or
dollar thresholds established under the Internal Revenue Code. The Partnership
contributes an amount equal to 50% of the first 5% contributed by each employee.
During 1995 and 1994, the Partnership contributed approximately $87,900 and
$5,775, respectively.

19. INSURANCE SETTLEMENT:

In October 1995, Hurricane Opal caused damage to certain of the
Partnership's Alabama and Georgia systems. The Partnership received a $500,000
insurance advance during 1995. The claim is to be settled in

F-57
<PAGE> 179

CHARTER COMMUNICATIONS SOUTHEAST, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1996. In addition, the Partnership recorded a $744,800 nonoperating loss for its
portion of the insurance deductible.

20. SIGNIFICANT NONCASH TRANSACTIONS:

The Partnership engaged in the following significant noncash financing
transactions:

<TABLE>
<CAPTION>
FOR THE
THREE FOR THE YEAR ENDED
MONTHS ENDED DECEMBER 31
MARCH 31, -------------------------
1996 1995 1994
------------ ---------- ----------
<S> <C> <C> <C>
(UNAUDITED)
Redemption preference allocation -- Special
Limited Partner units (CC-I)............... $ 828,616 3,051,040 $1,924,573
Redemption preference
allocation -- Redeemable Preferred Limited
units (CC-I)............................... -- 2,715,977 1,626,333
Redemption preference
allocation -- Redeemable Preferred Limited
units (CC-II).............................. 1,452,343 3,729,149 --
Recording of franchise costs and deferred
income taxes in connection with the
Peachtree acquisition (see Note 6)......... -- 7,000,000 --
Exchange of Redeemable Preferred Limited
units (CC-I)............................... 10,314,752 -- --
Exchange of Redeemable Preferred Limited
units (CC-II).............................. 40,181,492 -- --
Return of Capital -- Special Limited Partner
units (CC-I) buyout........................ 2,558,173 -- --
</TABLE>

F-58
<PAGE> 180

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications Southeast Capital Corporation:

We have audited the accompanying balance sheet of Charter Communications
Southeast Capital Corporation (a Delaware corporation) as of March 31, 1996, and
the related statement of shareholder's investment for the period from inception
(March 12, 1996) to March 31, 1996. 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 audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Charter Communications
Southeast Capital Corporation as of March 31, 1996, and the changes in
shareholder's investment for the period from inception (March 12, 1996) to March
31, 1996, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 17, 1996

F-59
<PAGE> 181

CHARTER COMMUNICATIONS SOUTHEAST CAPITAL CORPORATION

BALANCE SHEET

<TABLE>
<CAPTION>
MARCH 31,
1996
---------
<S> <C>
ASSETS
TOTAL ASSETS....................................................................... $ --
=======
LIABILITIES AND SHAREHOLDER'S INVESTMENT
COMMITMENTS AND CONTINGENCIES......................................................
SHAREHOLDER'S INVESTMENT:
Common stock, $.01 par value, 100 shares authorized, 1 share issued and
outstanding.................................................................. $ 1
Additional paid-in-capital.................................................... 99
Receivable from shareholder................................................... (100)
---------
Total shareholder's investment........................................... $ --
=======
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-60
<PAGE> 182

CHARTER COMMUNICATIONS SOUTHEAST CAPITAL CORPORATION

STATEMENT OF SHAREHOLDER'S INVESTMENT

FOR THE PERIOD FROM INCEPTION TO MARCH 31, 1996

<TABLE>
<CAPTION>
ADDITIONAL RECEIVABLE
COMMON PAID-IN FROM
STOCK CAPITAL SHAREHOLDER TOTAL
------ ---------- ----------- -----
<S> <C> <C> <C> <C>
BALANCE AT INCEPTION.............................. $ -- $ -- $ -- $ --
Issuance of common stock..................... 1 99 (100) --
------ ---------- ----------- -----
BALANCE AT MARCH 31, 1996......................... $ 1 $ 99 $(100) $ --
====== ======= ========= =====
</TABLE>

The accompanying notes are an integral part of this statement.

F-61
<PAGE> 183

CHARTER COMMUNICATIONS SOUTHEAST CAPITAL CORPORATION

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization

Charter Communications Southeast Capital Corporation (Southeast Capital), a
Delaware corporation, is a wholly owned subsidiary of Charter Communications
Southeast, L.P. (Southeast) and was formed solely for the purpose of acting as
co-issuer with Southeast of $125,000,000 of Senior Unsecured Notes (the "Notes")
and has no operations or assets from which it will be able to repay the Notes.
All costs associated with the formation of Southeast Capital have been borne by
Southeast. Southeast became the sole shareholder of Southeast Capital on March
12, 1996, by purchasing one share of $.01 par value common stock for a purchase
price of $100.

As Holdings Capital had no revenues, expenses and cash transactions for the
reporting period, a statement of operations and a statement of cash flows have
been excluded from the accompanying financial statements.

2. COMMITMENTS:

Southeast Capital is a co-issuer with Southeast of the Notes. The Notes are
included in the financial statements of Southeast and all interest and principal
repayments will be made by Southeast and its operating subsidiaries.

3. NONCASH FINANCING TRANSACTIONS:

Issuance of common stock............................................. $100

F-62
<PAGE> 184

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications II, L.P.:

We have audited the accompanying consolidated balance sheet of Charter
Communications II, L.P. (a Delaware limited partnership) as of December 31,
1995, and the related consolidated statements of operations, partners' capital
and cash flows for the year then ended. These consolidated financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Charter
Communications II, L.P. as of December 31, 1995, and the results of their
operations and their cash flows for the year then ended, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
February 23, 1996

F-63
<PAGE> 185

CHARTER COMMUNICATIONS II, L.P.

CONSOLIDATED BALANCE SHEET -- DECEMBER 31, 1995

ASSETS

<TABLE>
<CAPTION>
1995
------------
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents.................................................... $ 4,445,994
Accounts receivable, net of allowance for doubtful accounts of $173,488...... 753,134
Prepaid expenses and other................................................... 425,753
Receivables from parent and affiliates....................................... 1,096,371
-----------
Total current assets................................................. 6,721,252
-----------
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment................................................ 70,231,308
Franchise costs, net of accumulated amortization of $11,749,623.............. 184,686,800
-----------
254,918,108
-----------
OTHER ASSETS................................................................... 2,725,558
-----------
$264,364,918
===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable and accrued expenses........................................ $ 7,159,574
Subscriber deposits and prepayments.......................................... 98,135
Payables to affiliates....................................................... 474,908
-----------
7,732,617
-----------
DEFERRED MANAGEMENT FEES PAYABLE TO AFFILIATE.................................. 765,118
-----------
DEFERRED REVENUE............................................................... 434,817
-----------
LONG-TERM DEBT................................................................. 166,300,000
-----------
DEFERRED INCOME TAXES.......................................................... 5,111,308
-----------
REDEEMABLE PREFERRED LIMITED UNITS, 250 Class A and 100 Class B units, issued
and outstanding.............................................................. 38,729,149
-----------
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL:
General Partner.............................................................. 713,210
Common Limited Partners, 599.41 units, issued and outstanding................ 44,578,699
-----------
Total partners' capital.............................................. 45,291,909
-----------
$264,364,918
===========
</TABLE>

The accompanying notes are an integral part of this consolidated balance sheet.

F-64
<PAGE> 186

CHARTER COMMUNICATIONS II, L.P.

CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
1995
------------
<S> <C>
SERVICE REVENUES:
Basic service................................................................ $ 27,726,525
Premium service.............................................................. 5,454,514
Other........................................................................ 5,075,878
-----------
38,256,917
-----------
EXPENSES:
Operating costs.............................................................. 16,129,801
General and administrative................................................... 3,064,069
Depreciation and amortization................................................ 18,734,594
Management fees -- related party............................................. 1,912,846
-----------
39,841,310
-----------
Loss from operations................................................. (1,584,393)
-----------
OTHER INCOME (EXPENSE):
Interest income.............................................................. 123,282
Interest expense............................................................. (10,244,658)
Loss from Hurricane Opal..................................................... (102,427)
-----------
(10,223,803)
-----------
Loss before benefit for income taxes and extraordinary item............... (11,808,196)
BENEFIT FOR INCOME TAXES....................................................... 1,888,692
-----------
Loss before extraordinary item....................................... (9,919,504)
EXTRAORDINARY ITEM -- Loss on early retirement of debt......................... (1,959,438)
-----------
Net loss............................................................. (11,878,942)
Redemption preference allocation -- Redeemable Preferred Limited
units................................................................ (3,729,149)
-----------
Net loss applicable to partners' capital accounts............... $(15,608,091)
===========
NET LOSS ALLOCATION TO PARTNERS' CAPITAL ACCOUNTS:
General Partner.............................................................. $ (245,790)
Common Limited Partners...................................................... (15,362,301)
-----------
$(15,608,091)
===========
NET LOSS PER AVERAGE COMMON LIMITED PARTNER UNITS OUTSTANDING.................. $ (40,892)
===========
</TABLE>

The accompanying notes are an integral part of this consolidated statement.

F-65
<PAGE> 187

CHARTER COMMUNICATIONS II, L.P.

CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
COMMON
GENERAL LIMITED
PARTNER PARTNERS TOTAL
--------- ------------ ------------
<S> <C> <C> <C>
BALANCE, BEGINNING OF YEAR......................... $ -- $ -- $ --
Contributions...................................... 959,000 59,941,000 60,900,000
Allocation of net loss............................. (245,790) (15,362,301) (15,608,091)
---------- ---------- -----------
BALANCE, DECEMBER 31, 1995......................... $ 713,210 $ 44,578,699 $ 45,291,909
========== ========== ===========
</TABLE>

The accompanying notes are an integral part of this consolidated statement.

F-66
<PAGE> 188

CHARTER COMMUNICATIONS II, L.P.

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
1995
-------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................................... $ (11,878,942)
Adjustments to reconcile net loss to net cash provided by operating
activities-
Extraordinary item- Loss on early retirement of debt..................... 1,959,438
Depreciation and amortization............................................ 18,734,594
Loss from Hurricane Opal................................................. 102,427
Deferred income taxes.................................................... (1,888,692)
Changes in assets and liabilities, net of effects from acquisitions-
Accounts receivable, net............................................... (155,700)
Prepaid expenses and other............................................. (19,887)
Accounts payable and accrued expenses.................................. 4,691,682
Subscriber deposits and prepayments.................................... (8,292)
Receivables from parent and affiliates................................. (1,096,371)
Payables to affiliates................................................. (2,616,307)
Deferred revenue....................................................... 434,817
-----------
Net cash provided by operating activities........................... 8,258,767
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment.................................. (9,248,545)
Payment for Crown Media, Inc. acquisition, net of cash acquired............. (109,056,245)
Payment for Peachtree Cable TV, Inc. acquisition, net of cash acquired...... (22,335,549)
Payment for CableSouth, Inc. acquisition.................................... (49,225,475)
Payment for Masada Cable Partners, L.P. acquisition......................... (35,162,135)
Payment for Masada Cable Partners II, L.P. acquisition...................... (35,530,123)
Payments of organizational expenses......................................... (1,386,627)
-----------
Net cash used in investing activities............................... (261,944,699)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of debt issuance costs............................................. (4,068,074)
Borrowings under revolving credit agreement................................. 243,100,000
Payments under revolving credit agreement................................... (76,800,000)
Preferred Limited Partners' contributions................................... 35,000,000
Common Limited Partners' contributions...................................... 59,941,000
General Partner's contributions............................................. 959,000
-----------
Net cash provided by financing activities........................... 258,131,926
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS..................................... 4,445,994
CASH AND CASH EQUIVALENTS, beginning of year.................................. --
-----------
CASH AND CASH EQUIVALENTS, end of year........................................ $ 4,445,994
===========
CASH PAID FOR INTEREST........................................................ $ 8,986,247
===========
CASH PAID FOR TAXES........................................................... $ --
===========
</TABLE>

The accompanying notes are an integral part of this consolidated statement.

F-67
<PAGE> 189

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

Charter Communications II, L.P. (CC-II), a Delaware limited partnership,
was formed on June 28, 1994, for the purpose of acquiring and operating existing
cable television systems. At December 31, 1994, CC-II had a $100 receivable from
both the General Partner and the initial limited partner for the initial capital
contributions required to form the partnership. These receivables were recorded
as a reduction to the Partners' capital accounts. CC-II will terminate no later
than December 31, 2014, as provided in the partnership agreement (the
"Agreement"). The General Partner is Charter Communications Properties II, Inc.
(CCPII), an affiliate of Charter Communications, Inc. (Charter).

CC-II commenced operations effective January 1, 1995, through the
acquisition of cable television systems in Kentucky, North Carolina, South
Carolina and Tennessee from Crown Media, Inc. (Crown). CC-II owns 100% of the
partnership interest in Charter Communications III, L.P. (CC-III), which
commenced operations in April 1995, through the stock acquisition of Peachtree
Cable TV, Inc. (Peachtree), which has cable television systems in Georgia. In
May 1995, CC-III acquired cable television systems in Alabama from CableSouth,
Inc. (CableSouth). In July and November 1995, CC-II acquired cable television
systems in Georgia and South Carolina from Masada Cable Partners, L.P. (Masada)
and Masada Cable Partners II, L.P. (Masada II), respectively.

The consolidated financial statements include the accounts of CC-II, its
wholly owned subsidiary CCP-III, Inc. (CCP-III), formerly doing business as
BellWest Communications, Inc., CC-III and its wholly owned subsidiary Peachtree.
CC-II, CCP-III, CC-III and Peachtree are collectively referred to as "the
Partnership" herein. All significant intercompany balances and transactions have
been eliminated in consolidation.

As of December 31, 1995, the Partnership provided cable television service
to approximately 80 franchises serving approximately 147,730 basic subscribers
in Alabama, Georgia, Kentucky, North Carolina and South Carolina.

Cash Equivalents

Cash equivalents at December 31, 1995, consist primarily of repurchase
agreements with original maturities of 90 days or less. These investments are
carried at cost, which approximates market value. The Partnership is subject to
loss for amounts invested in repurchase agreements in the event of
nonperformance of the financial institution which acts as the counterparty under
such agreements; however, such noncompliance is not anticipated.

Property, Plant and Equipment

F-68
<PAGE> 190

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Depreciation is provided using the composite method on a straight-line
basis over the estimated useful lives of the assets as follows:

Franchise Costs

Other Assets

Organizational expenses are being amortized using the straight-line method
over five years. Debt issuance costs are being amortized over the term of the
debt.

Revenues

Cable service revenues are recognized when the related services are
provided.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Derivative Financial Instruments

The Company manages risk arising from fluctuations in interest rates by
using interest rate swap and cap agreements, as required by its credit
agreement. These agreements are treated as off-balance sheet financial
instruments. The interest rate swap and cap agreements are being accounted for
as a hedge of the debt obligation, and accordingly, the net settlement amount is
recorded as an adjustment to interest expense in the period incurred.

F-69
<PAGE> 191

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Income Taxes

Income taxes are the responsibility of the partners and are not provided
for in the accompanying consolidated financial statements except for Peachtree.
Peachtree is a C corporation, and taxes have been provided for in the
accompanying financial statements in accordance with that described in SFAS No.
109 entitled, "Accounting for Income Taxes." SFAS No. 109 requires accounting
for income taxes based on the liability method, and deferred taxes are
determined based on the estimated future tax effects of differences between the
financial reporting and tax bases of assets and liabilities given the provisions
of the enacted tax laws.

Net Loss Per Average Common Limited Partner Units Outstanding

The net loss per average Common Limited Partner units outstanding is based
upon the weighted average number of Common Limited Partner units outstanding
during the year after allocating the net loss in accordance with that prescribed
in Notes 2 and 3. The weighted average number of Common Limited Partner units
was 375.68 for the year ended December 31, 1995.

2. DISTRIBUTIONS AND ALLOCATIONS:

Under terms of the Agreement, allocation of partnership profits for income
tax reporting purposes is as follows: (i) to partners with deficit capital
account balances, in proportion to such deficits, until such deficits are
reduced to zero; (ii) to the Preferred Limited Partners until each such
Preferred Limited Partner's capital account equals its unrecovered capital plus
its unrecovered preference amount (preference amount is equal to 15% of the
unrecovered capital and the unrecovered preference amount per annum compounded
semiannually on each June 30 and December 31); (iii) to the Common Limited
Partners and the General Partner until each of such partner's capital account
equals its unrecovered capital; and (iv) the remaining balance to the Preferred
Limited Partners in respect of Preferred Limited Partner units with respect to
which the Contingent Distribution Right, as defined in the Agreement, has not
been converted, in an amount equal to 11% of the amount to be allocated,
multiplied by the Proration Factor, as defined, and, of the remaining amount,
99% to the Common Limited Partners and 1% to the General Partner.

Partnership losses for income tax reporting purposes are allocated as
follows: (i) 1% to the Preferred Limited Partners, 98% to the Common Limited
Partners and 1% to the General Partner until the capital accounts of any such
partner is reduced to zero; (ii) 99% to the Common Limited Partners and 1% to
the General Partner until the capital account of any such partner is reduced to
zero; and (iii) to the General Partner and the Common Limited Partners in
proportion to the positive balances of their capital accounts until such
balances are reduced to zero; provided, however, any item of loss or deduction
which would cause or increase a deficit balance in a limited partner's capital
account shall be allocated to the General Partner.

As stated in the Agreement, the Partnership may make distributions to the
partners out of all available funds at such times and in such amounts as the
General Partner may determine in its sole discretion.

For financial reporting purposes, redemption preference allocations,
profits and losses are allocated in accordance with the liquidation provisions
of the Agreement.

3. REDEEMABLE PREFERRED LIMITED UNITS:

The Partnership may, at its option, redeem all or any portion of the
outstanding Preferred Limited Partner units for an amount equal to the Optional
Redemption Price, as defined in the Agreement, on three separate occasions, on
or after January 18, 2000; provided, however, the Partnership has funds
available to pay in cash the Optional Redemption Price for all the Preferred
Limited Partner units to be redeemed. In the case of any redemption of less than
all of the then outstanding Preferred Limited Partner units, such redemption
shall be made pro rata among all the holders of the Preferred Limited Partner
units according to the number

F-70
<PAGE> 192

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of Preferred Limited Partner units held. In addition, the Partnership must
redeem all of the outstanding Preferred Limited Partner units at the Mandatory
Redemption Price, as defined in the Agreement, on January 18, 2005.

The Class A Preferred Limited Partner shall have the right, on three
separate occasions, and the Class B Preferred Limited Partner, on one occasion,
to require the Partnership to purchase all or any portion of their outstanding
units. The occasions are as follows:

1. Five-year put option -- at anytime after January 18, 2000;

2. Change of control put option -- within 90 days following the
occurrence of a change of Control Event, as defined in the
Agreement; and

3. Default put option -- immediately following and during the
continuation of an Event of Default, as defined in the Agreement.

The redemption of the above put options is conditioned upon the purchase
not causing default under any Senior Securities, as defined in the Agreement,
which would give the holders thereof the right to accelerate the maturity of any
scheduled payments. Based on the redemption clauses, the Class A and B Preferred
Limited Partners' preference return has been reflected as an addition to the
Redeemable Preferred Limited units, and the decrease has been allocated to the
General Partner and Common Limited Partner consistent with the liquidation and
distribution provisions in the Agreement.

At December 31, 1995, the balance related to the Preferred Limited Partner
units is determined as follows:

<TABLE>
<S> <C>
Initial contributions................................................... $35,000,000
1995 redemption preference allocation................................... 3,729,149
-----------
$38,729,149
===========
</TABLE>

For purposes of the consolidated statement of cash flows, the above
redemption preference allocation is considered a noncash financing transaction.

4. ACQUISITIONS:

In January 1995, CC-II completed the acquisition of systems from Crown, a
subsidiary of Hallmark Cards, Incorporated for an aggregate purchase price of
approximately $112.8 million. The acquisition of the Crown systems was part of a
series of larger transactions in which Crown sold its cable television systems
to a group of investors, including Charter, CC-II, certain affiliates of
Charter, and third parties, for a total purchase price of approximately $900.0
million. To finance this acquisition, the Partnership entered into a revolving
credit agreement (see Note 8).

In April 1995, CC-III acquired the stock of Peachtree, including cable
television systems located in Georgia, for an aggregate purchase price of
approximately $22.3 million. In connection with the completion of the Peachtree
acquisition, the Partnership recorded approximately $7,000,000 of additional
franchise costs and deferred income taxes, resulting from differences between
the financial reporting and tax bases of certain assets acquired. For purposes
of the consolidated statement of cash flows, the recording of this activity was
considered a noncash transaction.

In May 1995, CC-III purchased the CableSouth systems for an aggregate
purchase price of approximately $49.2 million.

In July 1995, CC-II acquired the Masada systems for an aggregate purchase
price of approximately $35.2 million.

F-71
<PAGE> 193

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In November 1995, CC-II acquired the Masada II systems for an aggregate
purchase price of approximately $35.5 million.

<TABLE>
<CAPTION>
CROWN PEACHTREE CABLESOUTH MASADA MASADA II
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Purchase price:
Cash paid to seller.......... $109,639,897 $21,969,670 $48,475,475 $34,547,135 $34,955,123
Assumed liabilities.......... 337,725 75,000 150,000 115,000 125,000
Transaction costs............ 2,822,449 300,000 600,000 500,000 450,000
------------ ----------- ----------- ----------- -----------
$112,800,071 $22,344,670 $49,225,475 $35,162,135 $35,530,123
============ =========== =========== =========== ===========
Allocation of purchase price to
assets acquired:
Cash......................... $ 3,743,826 $ 9,121 $ -- $ -- $ --
Accounts receivable.......... 345,444 64,640 134,532 20,264 32,554
Prepaid expenses and other
assets.................... 150,455 158,293 38,903 36,733 21,482
Property, plant and
equipment................. 51,836,684 5,293,554 4,575,134 3,530,312 2,541,886
Franchise costs.............. 62,473,490 17,131,446 44,586,571 31,734,688 33,033,114
Accounts payable and accrued
expenses.................. (5,749,828) (312,384) (109,665) (159,862) (98,913)
------------ ----------- ----------- ----------- -----------
$112,800,071 $22,344,670 $49,225,475 $35,162,135 $35,530,123
============ =========== =========== =========== ===========
</TABLE>

The following are unaudited pro forma operating results for the above
acquisitions as though the acquisitions had been made on January 1, 1995.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1995
------------------
(UNAUDITED)
<S> <C>
Service revenues.................................................... $ 54,050,210
Loss from operations................................................ $ (810,491)
Net loss............................................................ $(13,335,294)
Net loss per average Common Limited Partner units outstanding....... $ (34,937)
</TABLE>

5. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following at December 31,
1995:

<TABLE>
<S> <C>
Trunk and distribution systems.......................................... $47,180,834
Subscriber installations................................................ 11,636,137
Land, buildings, headends and leasehold improvements.................... 11,047,526
Converters.............................................................. 4,033,023
Vehicles and equipment.................................................. 1,706,496
Office equipment........................................................ 1,067,750
-------------
76,671,766
Less- Accumulated depreciation.......................................... (6,440,458)
-------------
$70,231,308
=============
</TABLE>

F-72
<PAGE> 194

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. OTHER ASSETS:

Other assets are detailed as follows at December 31, 1995:

<TABLE>
<S> <C>
Debt issuance costs, net of accumulated amortization of $164,599......... $1,583,395
Organizational expenses, net of accumulated amortization of $244,464..... 1,142,163
------------
$2,725,558
============
</TABLE>

7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following at December
31, 1995:

<TABLE>
<S> <C>
Accounts payable......................................................... $ 276,194
Franchise fees........................................................... 814,014
Capital expenditures..................................................... 1,026,199
Programming expenses..................................................... 1,116,178
Accrued interest......................................................... 1,258,411
Other.................................................................... 2,668,578
----------
$7,159,574
==========
</TABLE>

8. LONG-TERM DEBT:

In January 1995, the Partnership entered into a revolving credit agreement
(the "Old Credit Agreement") with a consortium of banks for borrowings up to
$80,000,000. During May 1995, the Partnership terminated the Old Credit
Agreement and entered into a new revolving credit agreement (the "Credit
Agreement") with a consortium of banks for borrowings up to $135,000,000. On
July 31, 1995, the Partnership and the banks amended the Credit Agreement to
allow for borrowings up to $165,000,000 for the purpose of making certain
acquisitions. On November 29, 1995, the Partnership and the banks amended the
Credit Agreement again to provide for term loans in the aggregate amount of
$40,000,000 and total borrowings of $205,000,000, including a $165,000,000
revolving credit facility. Principal payments are due in quarterly installments
beginning March 31, 1998, and continuing through September 30, 2004. Portions of
the debt bear interest, at the Partnership's option, at rates based upon the
Base Rate, as defined in the Credit Agreement, LIBOR, or prevailing bid rates of
certificates of deposit. The weighted average interest rate was 8.16% at
December 31, 1995. During 1995, interest rates ranged from 8.125% to 8.875%. The
effective weighted average interest rate and weighted average borrowings were
8.46% and approximately $121,092,000, respectively, during 1995. As this debt
instrument bears interest at current market rates, its carrying amount
approximates fair market value at December 31, 1995.

Borrowings under the Credit Agreement are subject to certain financial and
nonfinancial covenants and restrictions, the most restrictive of which requires
maintenance of a ratio of debt to annualized operating cash flow, as defined,
not to exceed 6.5 to 1 at December 31, 1995. Borrowings under the Credit
Agreement are collateralized by the assets of the Partnership. A quarterly
commitment fee of 0.375% per annum is payable on the unused revolving credit
facility portion of the Credit Agreement.

F-73
<PAGE> 195

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Commencing March 31, 1998, and at the end of each calendar quarter
thereafter, the revolving credit facility commitment (available borrowings)
shall be reduced on an annual basis as set forth below:

<TABLE>
<CAPTION>
AMOUNT OF
YEAR REDUCTION
----------------------------------------------------------------------- ------------
<S> <C>
1998................................................................... $ 13,200,000
1999................................................................... 15,180,000
2000................................................................... 23,925,000
2001................................................................... 31,350,000
2002................................................................... 38,115,000
2003................................................................... 43,230,000
------------
$165,000,000
============
</TABLE>

Future principal payments on the Credit Agreement at December 31, 1995, are
as follows:

<TABLE>
<CAPTION>
YEAR AMOUNT
----------------------------------------------------------------------- ------------
<S> <C>
1996................................................................... $ --
1997................................................................... --
1998................................................................... 200,000
1999................................................................... 200,000
2000................................................................... 14,005,000
Thereafter............................................................. 151,895,000
------------
$166,300,000
============
</TABLE>

As a requirement of the Credit Agreement, the Partnership has secured
interest rate swap and cap agreements with a certain lender bank. The Credit
Agreement requires the Partnership to enter into interest hedge agreements for
amounts not less than 50% of the outstanding obligations. In addition, the
interest hedge agreements must provide interest rate protection for a weighted
average period of not less than 18 months. Under the swap agreement, on a
quarterly basis, if the 90 day variable rate exceeds the fixed rate stated
below, the Partnership will receive payments from the bank to offset the higher
interest rate on the notional principal amount. These payments, if any, will be
recorded as reductions of interest expense. The following summarizes certain
information pertaining to the interest rate protection agreements as of December
31, 1995:

<TABLE>
<CAPTION>
NOTIONAL FIXED CONTRACT FAIR VALUE/
AMOUNT TYPE RATE EXPIRATION DATE REDEMPTION PRICE
- ----------- ---- ----- --------------- ----------------
<C> <C> <C> <S> <C>
$40,000,000 Swap 6.01 % June 12, 1996 $ 87,000
20,000,000 Cap 8.50 % March 28, 1998 9,600
20,000,000 Cap 8.50 % April 13, 1998 8,900
- ----------- ----------------
$80,000,000 $105,500
========== =============
</TABLE>

The fair value of the interest rate caps or swaps is the estimated amount
the Partnership would receive or pay to eliminate the cap or swap agreement at
the reporting date, taking into account current interest rates and the
credit-worthiness of the counterparties.

Management believes that the seller of the interest rate swap and cap
agreements will be able to meet its obligations under the agreements. The
purpose of the Partnership's involvement in the interest rate swap and cap
agreements is to minimize the Partnership's exposure to interest rate
fluctuations on its floating rate debt. Management believes that it has no
material concentration of credit or market risks with respect to its interest
rate protection agreements.

F-74
<PAGE> 196

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. DEBT ISSUANCE COSTS:

The Partnership refinanced its debt agreement in May 1995. Accordingly, the
debt issuance costs related to the initial debt were written off. The effect of
this write-off was a $1,959,438 charge to expense and was recorded as an
extraordinary item. Additional debt issuance costs were recorded related to the
new debt agreement.

10. NET LOSS FOR INCOME TAX PURPOSES:

The following reconciliation summarizes the differences between CC-II and
CC-III's combined net loss for financial reporting purposes and net loss for
federal income tax purposes for the year ended December 31, 1995:

<TABLE>
<S> <C>
Net loss for financial reporting purposes.............................. $ (8,895,886)
Depreciation differences between financial reporting and tax
reporting............................................................ (3,793,373)
Amortization differences between financial reporting and tax
reporting............................................................ (143,058)
Differences in expenses recorded for financial reporting and reported
for tax purposes..................................................... 1,320,502
Revenue reported for tax reporting deferred for financial reporting.... 434,817
Other.................................................................. 61,576
------------
Net loss for federal income tax purposes..................... $(11,015,422)
============
</TABLE>

The following summarizes the significant cumulative temporary differences
between CC-II and CC-III's financial reporting basis and federal income tax
reporting basis as of December 31, 1995:

<TABLE>
<S> <C>
Assets:
Accounts receivable................................................... $ 161,561
Accrued expenses...................................................... 1,158,941
Deferred revenue...................................................... 434,817
-----------
$ 1,755,319
===========
Liabilities:
Property, plant and equipment......................................... $(3,793,373)
Franchise costs....................................................... (4,192,656)
-----------
$(7,986,029)
===========
</TABLE>

F-75
<PAGE> 197

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 1995, temporary differences and carryforwards that gave
rise to deferred income tax assets and liabilities pertaining to Peachtree are
as follows:

<TABLE>
<S> <C>
Deferred income tax assets:
Accounts receivable................................................... $ 4,771
Accrued expenses...................................................... 7,401
Tax loss carryforwards................................................ 548,100
Tax credit carryforwards.............................................. 361,195
-----------
Total deferred income tax assets.............................. 921,467
-----------
Deferred income tax liabilities:
Property, plant and equipment......................................... (1,481,396)
Franchise costs and other assets...................................... (4,551,379)
-----------
Total deferred income tax liabilities......................... (6,032,775)
-----------
Net deferred income tax liability............................. $(5,111,308)
===========
</TABLE>

11. RELATED-PARTY TRANSACTIONS:

Charter provides management services to the Partnership under the terms of
a contract which provides for fees equal to 5% of the Partnership's gross
operating revenues. Through December 31, 1998, 60% of such fees shall be paid
quarterly with the balance being deferred. Thereafter, the entire fee may be
deferred until termination of the Partnership. Expenses recognized under this
contract during 1995 were $1,912,846. Management fees currently payable of
$362,963 are included in net receivable from affiliates at December 31, 1995.

The Partnership is insured for medical, dental and workers' compensation
claims by Charter. Charter charges the Partnership monthly premiums based on the
Partnership's total number of employees, historical claims and medical cost
trend rates. Management considers this allocation to be reasonable for the
operation of the Partnership. During 1995, the Partnership expensed
approximately $319,000 relating to insurance allocations.

CC-II and other affiliated entities maintain regional offices. The regional
offices perform certain operational services on behalf of the Partnership and
other affiliated entities. The cost of these services was allocated to the
Partnership and affiliated entities based on their number of subscribers.
Management considers this allocation to be reasonable for the operation of the
Partnership. During 1995, the Partnership expensed approximately $603,000
relating to these services.

The Partnership has an agreement with Charter to pay an acquisition fee
equal to approximately 1% of the purchase price paid for cable television
systems acquired. Total acquisition fees paid to Charter in 1995 were $450,000.
In addition, Charter received $2,900,000 of partnership interests as
consideration for certain acquisitions during 1995.

F-76
<PAGE> 198

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. COMMITMENTS AND CONTINGENCIES:

Leases

The Partnership leases certain facilities and equipment under noncancelable
operating leases. Rent expense incurred under leases during 1995 was
approximately $216,200. Future minimum lease payments are as follows:

<TABLE>
<S> <C>
1996...................................................................... $260,141
1997...................................................................... 217,712
1998...................................................................... 206,962
1999...................................................................... 127,905
2000...................................................................... 31,343
Thereafter................................................................ 106,538
</TABLE>

Insurance Coverage

Litigation

13. REGULATION IN THE CABLE TELEVISION INDUSTRY:

1992 Cable Act and FCC Regulation

F-77
<PAGE> 199

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FCC rule-making proceedings or the litigation challenging various aspects of the
1992 Cable Act and the FCC's regulations implementing the 1992 Cable Act.

The 1992 Cable Act and FCC regulations have imposed rate requirements for
basic services and equipment, including rate roll-backs. Under the 1992 Cable
Act, a local franchising authority in a community not subject to "effective
competition" generally is authorized to regulate basic cable rates after
certifying to the FCC that, among other things, it will adopt and administer
rate regulation consistent with FCC rules, and in a manner that will provide a
reasonable opportunity to consider the views of interested parties. The
Telecommunications Act of 1996, passed by Congress on February 1, 1996, and
signed into law by the President on February 8, 1996, broadens the definition of
"effective competition" to include any franchise area where a local exchange
carrier (or its affiliate) provides video programming services to subscribers by
any means, other than through Direct Broadcast Satellite. Upon certification,
the franchising authority obtains the right to approve the basic rates charged
by the cable system operator. In regulating the basic service rates, certified
local franchise authorities have the authority to order a rate refund of
previously paid rates determined to be in excess of the maximum permitted
reasonable rates.

Rate regulation of the basic service tier remains subject to regulation by
local franchising authorities under the Telecommunications Act of 1996, except
in certain circumstances for small cable operators. For a defined class of
"small cable operators," the Telecommunications Act of 1996 immediately
eliminates regulation of cable programming rates. Rates for basic tier of small
cable operators are deregulated if the system offered a single tier of services
as of December 31, 1994.

Under the 1992 Cable Act, rates for cable programming services not carried
on the basic tier (nonbasic services) could be regulated by the FCC upon the
filing of a complaint by franchise authorities or subscribers that indicates the
cable operator's rates for these services are unreasonable. Rate complaints have
been filed with the FCC with respect to certain of the Partnership's cable
programming services; none of such complaints have been resolved by the FCC as
of the date of the consolidated financial statements. The Telecommunications Act
of 1996 eliminates regulation of nonbasic programming as of March 31, 1999. In
the interim, rate regulation of the nonbasic programming tier can only be
triggered by a franchising authority complaint to the FCC. If the FCC determines
that the Partnership's nonbasic programming service tier rates are unreasonable,
the FCC has the authority to order the Partnership to reduce nonbasic
programming service tier rates and to refund to customers any overcharges
occurring from the filing date of the rate complaint with the FCC.

Under the FCC's initial rate regulations pursuant to the 1992 Cable Act,
regulated cable systems were required to apply a benchmark formula to determine
their maximum permitted rates. Those systems whose rates were above the
benchmark on September 30, 1992, were required to reduce their rates to the
benchmark or by 10%, whichever was less. Under revised rate regulations adopted
February 1994, regulated cable systems were required to set their rates so that
regulated revenues per subscriber did not exceed September 30, 1992, levels,
reduced by 17% (taking into account the previous 10% reduction).

F-78
<PAGE> 200

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

costs and the number of channels. The rules permit cable operators to "project
reasonably" changes in their costs for the 12 months following the rate change
(in an effort to eliminate delays in recovering costs). The order allows
operators to recover increases in additional types of franchise-requirement
costs. Permitted pass-through increases include increases in the cost of
providing institutional networks, video services, data services to or from
governmental and educational institutions, and certain other cost increases.
Management is unable to predict the effect of these new rules on the
Partnership's business.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operators'
marketing costs and may also allow operators to better respond to competition
from alternative providers. Management is unable to predict if these proposed
rules will ultimately be promulgated by the FCC, and if they are promulgated,
their effect on the Partnership's consolidated financial position and results of
operations.

"Must Carry" Requirements/"Retransmission Consents"

Franchise Matters

The 1992 Cable Act modified the franchise renewal process to make it easier
for a franchising authority to deny renewal. Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement. Although management believes
that the Partnership has generally met the terms of its franchise agreements and
has provided quality levels of service, and anticipates the Partnership's future
franchise renewal prospects generally will be favorable, there can be no
assurance that any such franchises will be renewed or, if renewed, that the
franchising authority will not impose more onerous requirements on the
Partnership than previously existed.

Recent Telecommunications Legislation

The Telecommunications Act of 1996 alters federal, state, and local laws
and regulations pertaining to cable television, telecommunications and other
services.

F-79
<PAGE> 201

CHARTER COMMUNICATIONS II, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Under the Telecommunications Act of 1996, telephone companies can compete
directly with cable operators in the provision of video programming. This new
legislation recognizes several multiple entry options for telephone companies to
provide competitive video programming.

The Telecommunications Act of 1996 eliminates broadcast/cable
cross-ownership restrictions, but leaves in place FCC regulations prohibiting
local cross-ownership between television stations and cable systems.

Certain provisions of the Telecommunications Act of 1996 could materially
affect the growth and operation of the cable television industry and the cable
services provided by the Partnership. Although the new legislation may
substantially lessen regulatory burdens, the cable television industry may be
subject to additional competition as a result thereof. There are numerous rule
makings to be undertaken by the FCC which will interpret and implement the
Telecommunications Act's provisions. In addition, certain provisions of the
Telecommunications Act of 1996 (such as the deregulation of cable programming
rates) are not immediately effective. Further, certain of the Telecommunications
Act's provisions have been and are likely to be subject to judicial challenges.
Management is unable at this time to predict the outcome of such rule makings or
litigation or the substantive effect of the new legislation and the rule makings
on the consolidated financial position and results of operations of the
Partnership.

14. 401(K) PLAN:

In 1995, the Partnership adopted the Charter Communications, Inc. 401(k)
Plan (the "Plan") for the benefit of its employees. All employees who have
completed one year of employment are eligible to participate in the Plan. The
Plan is a tax-qualified retirement savings plan to which employees may elect to
make pretax contributions up to the lesser of 10% of their compensation or
dollar thresholds established under the Internal Revenue Code. The Partnership
contributes an amount equal to 50% of the first 5% contributed by each employee.
During 1995, the Partnership matched contributions of approximately $42,800.

15. INSURANCE SETTLEMENT:

In October 1995, Hurricane Opal caused damage to certain of the
Partnership's Alabama and Georgia systems. The Partnership has recorded a
receivable from affiliate in the amount of $75,000 relating to an insurance
advance. The claim is to be settled in 1996. In addition, the Partnership
recorded a $102,427 nonoperating loss for its portion of the insurance
deductible.

16. SUBSEQUENT EVENTS:

Charter Communications Southeast, L.P. (Southeast), parent of the
Partnership, and Charter Communications Southeast Holdings, L.P. (Holdings),
parent of Southeast, are expected to issue approximately $125 million in Senior
Notes and $75 million in Senior Discount Debentures (collectively referred to as
the "Offerings") of which approximately $115.6 million will be capital
contributed to the Partnership. This capital contribution will be used to repay
outstanding borrowings under the Credit Agreement.

In contemplation of and subject to the completion of the Offerings, a
Co-Sale Agreement, Subscription Agreement and Contribution Agreement have been
entered into by certain parties, whereby the Redeemable Preferred Limited
Partners of CC-II will receive Redeemable Preferred Limited Partner and Common
Limited Partner units in CharterComm Holdings, L.P., the parent of Holdings.
Upon consummation of this transaction, all of CC-II's partnership interests will
be indirectly and directly held by Southeast.

F-80
<PAGE> 202

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications, L.P.:

We have audited the accompanying balance sheets of Charter Communications,
L.P. (a Delaware limited partnership) as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Charter Communications, L.P.
as of December 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
February 23, 1996

F-81
<PAGE> 203

CHARTER COMMUNICATIONS, L.P.

BALANCE SHEETS -- DECEMBER 31, 1995 AND 1994

ASSETS

<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents..................................... $ 751,146 $ 1,484,263
Accounts receivable, net of allowance for doubtful accounts of
$114,640 and $149,202, respectively........................ 561,045 818,156
Prepaid expenses and other.................................... 28,422 76,104
------------ ------------
Total current assets.................................. 1,340,613 2,378,523
------------ ------------
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment................................. 36,798,100 31,151,507
Franchise costs, net of accumulated amortization of
$29,150,264 and $12,006,151, respectively.................. 119,141,117 136,285,230
------------ ------------
155,939,217 167,436,737
------------ ------------
RESTRICTED FUNDS HELD IN ESCROW................................. -- 463,414
------------ ------------
OTHER ASSETS.................................................... 2,541,679 3,074,229
------------ ------------
$159,821,509 $173,352,903
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Current maturities of long-term debt.......................... $ -- $ 1,168,750
Accounts payable and accrued expenses......................... 5,027,524 4,207,201
Subscriber deposits and prepayments........................... 145,142 102,218
Payables to affiliates........................................ 660,543 238,238
------------ ------------
Total current liabilities............................. 5,833,209 5,716,407
------------ ------------
DEFERRED REVENUE................................................ 679,882 --
------------ ------------
DEFERRED MANAGEMENT FEES PAYABLE TO AFFILIATE................... 1,132,886 441,405
------------ ------------
LONG-TERM DEBT, less current maturities......................... 92,825,000 92,331,250
------------ ------------
SPECIAL LIMITED PARTNER UNITS, 345.8526 Class A and 54.1163
Class B units, issued and outstanding......................... 44,972,506 41,921,466
------------ ------------
REDEEMABLE PREFERRED LIMITED UNITS, 143.5 Class A units, issued
and outstanding............................................... 14,378,026 15,976,333
------------ ------------
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL:
General Partner............................................... -- --
Preferred Limited Partners, 291.26 Class B units, issued and
outstanding................................................ -- 16,966,042
Common Limited Partners, 7.9 units, issued and outstanding.... -- --
------------ ------------
Total partners' capital............................... -- 16,966,042
------------ ------------
$159,821,509 $173,352,903
=========== ===========
</TABLE>

The accompanying notes are an integral part of these balance sheets.

F-82
<PAGE> 204

CHARTER COMMUNICATIONS, L.P.

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
SERVICE REVENUES:
Basic service................................................. $ 25,511,069 $ 16,314,348
Premium service............................................... 4,180,535 2,786,478
Other......................................................... 4,882,392 2,460,290
------------ ------------
34,573,996 21,561,116
------------ ------------
OPERATING EXPENSES:
Operating costs............................................... 14,926,233 9,228,422
General and administrative.................................... 3,127,880 1,924,182
Depreciation and amortization................................. 21,413,070 14,319,589
Management fees -- related party.............................. 1,729,166 1,078,000
------------ ------------
41,196,349 26,550,193
------------ ------------
Loss from operations.................................. (6,622,353) (4,989,077)
------------ ------------
OTHER INCOME (EXPENSE):
Interest income............................................... 74,683 34,564
Interest expense.............................................. (8,283,083) (4,654,539)
Loss from Hurricane Opal...................................... (642,373) --
Other......................................................... (40,183) --
------------ ------------
(8,890,956) (4,619,975)
------------ ------------
Net loss.............................................. (15,513,309) (9,609,052)
Redemption preference allocation -- Special Limited
Partner units....................................... (3,051,040) (1,924,573)
Redemption preference allocation -- Redeemable
Preferred Limited units............................. (1,810,650) (1,626,333)
Net loss allocated to Redeemable Preferred Limited
units............................................... 3,408,957 --
------------ ------------
Net loss applicable to Partners' Capital
accounts....................................... $(16,966,042) $(13,159,958)
=========== ===========
NET LOSS ALLOCATION TO PARTNERS' CAPITAL ACCOUNTS:
General Partner............................................... $ -- $ (210,000)
Class B Preferred Limited Partners............................ (16,966,042) (12,159,958)
Common Limited Partners....................................... -- (790,000)
------------ ------------
$(16,966,042) $(13,159,958)
=========== ===========
NET LOSS PER AVERAGE COMMON LIMITED PARTNER UNITS OUTSTANDING... $ -- $ (100,000)
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-83
<PAGE> 205

CHARTER COMMUNICATIONS, L.P.

STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
CLASS B
PREFERRED COMMON
GENERAL LIMITED LIMITED
PARTNER PARTNERS PARTNERS TOTAL
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1993............. $ -- $ -- $ -- $ --
Contributions........................ 210,000 29,126,000 790,000 30,126,000
Allocation of net loss............... (210,000) (12,159,958) (790,000) (13,159,958)
--------- ------------ --------- ------------
BALANCE, December 31, 1994............. -- 16,966,042 -- 16,966,042
Allocation of net loss............... -- (16,966,042) -- (16,966,042)
--------- ------------ --------- ------------
BALANCE, December 31, 1995............. $ -- $ -- $ -- $ --
========= ============ ========= ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-84
<PAGE> 206

CHARTER COMMUNICATIONS, L.P.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
------------ -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss..................................................... $(15,513,309) $ (9,609,052)
Adjustments to reconcile net loss to net cash provided by
operating activities --
Depreciation and amortization............................. 21,413,070 14,319,589
Amortization of interest rate cap agreements.............. 116,992 --
Loss from Hurricane Opal.................................. 642,373 --
Change in assets and liabilities, net of effects from
acquisition --
Accounts receivable, net................................ 257,111 (114,188)
Prepaid expenses and other.............................. 47,682 (76,104)
Accounts payable and accrued expenses................... 820,323 3,516,308
Subscriber deposits and prepayments..................... 42,924 (2,098)
Payables to affiliates.................................. 1,113,786 679,643
Deferred revenue........................................ 679,882 --
------------ -------------
Net cash provided by operating activities............ 9,620,834 8,714,098
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment................... (10,762,266) (4,995,661)
Proceeds from sale of property, plant and equipment.......... 119,901 --
Payment for acquisition, net of cash acquired................ -- (176,387,357)
Payments of organizational expenses.......................... -- (827,976)
Restricted funds held in escrow.............................. 463,414 (463,414)
Proceeds from insurance settlement........................... 500,000 --
------------ -------------
Net cash used in investing activities................ (9,678,951) (182,674,408)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit agreement.................. 4,325,000 96,500,000
Payments under revolving credit agreement.................... (5,000,000) (3,000,000)
Payments of debt issuance costs.............................. -- (2,036,820)
Payments for interest rate cap agreements.................... -- (391,500)
Preferred Limited Partners' contributions.................... -- 43,476,000
Common Limited Partners' contributions....................... -- 790,000
General Partner's contribution............................... -- 210,000
Issuance of Special Limited Partnership units................ -- 39,996,893
Issuance of note receivable -- related party................. -- (100,000)
------------ -------------
Net cash (used in) provided by financing
activities......................................... (675,000) 175,444,573
------------ -------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS........... (733,117) 1,484,263
CASH AND CASH EQUIVALENTS, beginning of year................... 1,484,263 --
------------ -------------
CASH AND CASH EQUIVALENTS, end of year......................... $ 751,146 $ 1,484,263
============ =============
CASH PAID FOR INTEREST......................................... $ 7,874,086 $ 4,058,098
============ =============
</TABLE>

The accompanying notes are an integral part of these statements.

F-85
<PAGE> 207

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

Charter Communications, L.P. (the "Partnership"), a Delaware limited
partnership, was formed on November 19, 1993, for the purpose of acquiring and
operating existing cable television systems. At December 31, 1993, the
Partnership had a $100 receivable from both the General Partner and the initial
Preferred Limited Partner for the initial capital contributions required to form
the Partnership. These receivables were recorded as a reduction to the Partners'
capital accounts. The Partnership commenced operations effective April 1994,
through the acquisition of certain cable television systems. The Partnership
will terminate no later than June 30, 2010, as provided in the partnership
agreement (the "Agreement"). LEB Communications, Inc. (LEB), the General
Partner, holds a 21% common interest in the Partnership. CharterComm, Inc.
(CharterComm) holds the remaining 79% common interest in the Partnership and
owns 40% of LEB. Charter Communications, Inc. (Charter) indirectly owns
approximately a 6% common interest of the Partnership.

As of December 31, 1995, the Partnership provided cable television service
to approximately 70 franchises serving approximately 101,400 basic subscribers
in Alabama, Georgia and Louisiana.

Cash Equivalents

Cash equivalents at December 31, 1995 and 1994, consist primarily of
repurchase agreements with original maturities of 90 days or less. These
investments are carried at cost, which approximates market value. The
Partnership is subject to loss for amounts invested in repurchase agreements in
the event of nonperformance of the financial institution which acts as the
counterparty under such agreements; however, such noncompliance is not
anticipated.

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 installation. The
costs of disconnecting a residence are charged to expense in the period
incurred. Expenditures for repairs and maintenance are charged to expense as
incurred, and equipment replacement and betterments are capitalized.

Depreciation is provided using the composite method on a straight-line
basis over the estimated useful lives of the related property and equipment as
follows:

<TABLE>
<S> <C>
Buildings and headends........................................... 9-20 years
Trunk and distribution systems................................... 10 years
Subscriber installations......................................... 10 years
Converters....................................................... 5 years
Vehicles and equipment........................................... 4-8 years
Office equipment................................................. 5-10 years
</TABLE>

F-86
<PAGE> 208

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Intangible Assets

Franchise costs are being amortized using the straight-line method over the
term of the individual 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. Organizational expenses are being
amortized by the straight-line method over five years. Debt issuance costs are
being amortized over the term of the debt. The interest rate cap costs are being
amortized over the terms of the agreements, approximately three years.

During 1995, the Partnership adopted Statement of Financial Accounting
Standards (SFAS) No. 121 entitled, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of." In accordance with SFAS No.
121, the Partnership periodically reviews the carrying value of its long-lived
assets, identifiable intangibles and franchise costs in relation to historical
financial results, current business conditions and trends (including the impact
of existing legislation and regulation) to identify potential situations in
which the carrying value of such assets may not be recoverable. If a review
indicates that the carrying value of such assets may not be recoverable, the
carrying value of such assets in excess of their fair value will be recorded as
a reduction of the assets' cost as if a permanent impairment has occurred. The
adoption of SFAS No. 121 did not impact the financial statements of the
Partnership.

Revenue Recognition

Cable service revenues are recognized when the related services are
provided.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Derivative Financial Instruments

The Company manages risk arising from fluctuations in interest rates by
using interest rate swap and cap agreements, as required by its credit
agreement. Certain of these agreements are treated as off-balance sheet
financial instruments. The interest rate swap and cap agreements are being
accounted for as a hedge of the debt obligation, and accordingly, the net
settlement amount is recorded as an adjustment to interest expense in the period
incurred.

Income Taxes

Income taxes are the responsibility of the partners and as such are not
provided in the accompanying financial statements.

Net Loss Per Average Common Limited Partner Units Outstanding

The net loss per average common limited partner units outstanding is based
upon the weighted average number of common limited partner units outstanding
during the respective years after allocating the net loss in accordance with
that prescribed in Notes 2, 3 and 4. The weighted average number of common
limited partner units was 7.9 for the years ended December 31, 1995 and 1994.

Reclassifications

Certain amounts in the 1994 financial statements and footnotes have been
reclassified for consistency of presentation with no effects on previously
reported net loss.

F-87
<PAGE> 209

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. ALLOCATIONS AND DISTRIBUTIONS:

Under terms of the Agreement, allocation of Partnership profits for income
tax reporting purposes is as follows: (i) to partners with deficit capital
balances, in proportion to such deficits, until such deficits are reduced to
zero; (ii) to the Special Limited Partners, as discussed in Note 3; (iii) to the
Class A Preferred Limited Partners until each such Limited Partner's capital
account equals its unrecovered capital plus its unrecovered preference amount
(preference amount is equal to 17% of the unrecovered capital and preference
amount per annum); (iv) to the Class B Preferred Limited Partners until each
such Limited Partner's capital account equals its unrecovered capital plus its
unrecovered preference amount (preference amount is equal to 19% of the
unrecovered capital and preference amount per annum); (v) to the Common Limited
Partners and the General Partner until each of such Partner's capital account
equals its unrecovered capital; and (vi) the remaining balance, 79% to the
Common Limited Partners and 21% to the General Partner.

Partnership losses for income tax reporting purposes are allocated as
follows: (i) to the Class A Preferred Limited Partners until the capital
accounts of such partners are reduced to zero; (ii) to the Class B Preferred
Limited Partners until the capital accounts of such partners are reduced to
zero; (iii) 79% to the Common Limited Partners, and 21% to the General Partner
until the capital account of any such partner is reduced to zero; and (iv) to
the partners in proportion to the positive balances of their capital accounts
until such balances are reduced to zero; provided, however, any item of loss or
deduction which would cause or increase a deficit balance in a limited partner's
capital account shall be allocated to the General Partner.

For financial reporting purposes, redemption preference allocations,
profits and losses are allocated in accordance with the liquidation provisions
of the Agreement.

3. SPECIAL LIMITED PARTNER UNITS:

Under the terms of the Agreement, Partnership profits are allocated to the
Special Limited Partners until the allocated profits equal the unrecovered
preference amount (preference amounts range from 6% to 17.5% of the unrecovered
initial cost of the partnership units and unrecovered preference amounts per
annum). When there is no profit to allocate, the preference return is reflected
as a decrease in the Partners' Capital. At December 31, 1995, the balance of
$44,972,506 related to the Special Limited Partnership units consists of
$39,996,893 of initial cost of the partnership units and $4,975,613 of
preference allocation.

In accordance with the Agreement, the Partnership may redeem the Special
Limited Partnership units at any time for an amount equal to the unrecovered
initial cost of the partnership units plus any unrecovered preference amount
with respect to the units. In addition, the Special Limited Partner has the
option to cause the Partnership to redeem the units any time after April 30,
2001. Based on these redemption clauses, the Special Limited Partnership units
have been excluded from Partners' Capital and the decrease in Partners' Capital
attributed to the Special Limited Partners' preference return has been allocated
to the other partners in a manner consistent with the liquidation and
distributions provisions of the Agreement. In accordance with the Agreement,
distributions would be allocated to the Special Limited Partner equal to the
unrecovered preference allocation and the unrecovered initial cost of the
partnership units prior to distributions to any other partnership unit.

4. PREFERRED LIMITED PARTNER UNITS:

The Partnership may redeem the Class A Preferred Limited Partnership units
for an amount equal to the unrecovered capital plus any unrecovered preference
amount on or after April 30, 1996; provided, however, that the Partnership shall
not redeem any Class A Preferred Limited Partnership units prior to the
redemption of all the Special Limited Partnership units. In addition, the
holders of the Class A Preferred Limited

F-88
<PAGE> 210

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Partnership units have the right to cause the Partnership to purchase all of the
units held by such holders at any time after April 30, 1998, subject to certain
conditions, including approval by the Special Limited Partner, as stated in the
agreement, at a price equal to the unrecovered capital and the unrecovered
preference amount.

The obligation to purchase the Class A Preferred Limited Partnership units
is conditioned upon the purchase not causing default under any Senior
Indebtedness, as defined in the Agreement, which would afford the holder thereof
the right to accelerate the maturity date of such Senior Indebtedness. Based on
these redemption clauses, the Class A Preferred Limited Partners' preference
return has been reflected as an addition to the Redeemable Preferred Limited
units, and the decrease has been allocated to the General Partner, Class B
Preferred Limited Partners and Common Limited Partners consistent with the
liquidation and distribution provisions of the Agreement.

At December 31, 1995, the balance related to Class A Redeemable Preferred
Limited Partner units is determined as follows:

A portion of the 1995 redemption preference allocation of $905,327 has not
been reflected in the balance of the Class A Redeemable Preferred Limited
Partner units as of December 31, 1995, since the General Partner, Common Limited
Partners and Class B Preferred Limited Partners' capital accounts have been
reduced to $-0-. Furthermore, the cumulative redemption preference allocation
totaling $9,924,199 has not been reflected within the Class B Preferred Limited
Partners' capital accounts since the General Partner and Common Limited
Partners' capital accounts have been reduced to $-0-.

5. ACQUISITION:

Effective April 30, 1994, the Partnership acquired certain assets from
Citation Cablevision, Inc., Subscriber Cablevision, Inc., LaGrange Cablevision,
Inc., and The Jefferson Trust Partnership (collectively, "the Sellers") for
approximately $176 million which included cable television systems in Georgia,
Alabama and Louisiana.

To finance the acquisition, the Partnership entered into a revolving credit
agreement (see Note 10) and issued Special Limited Partnership units.

The 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 date of acquisition.

F-89
<PAGE> 211

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The following shows the purchase price and the allocation of the purchase price
to assets acquired and liabilities assumed:

<TABLE>
<S> <C>
Purchase price:
Cash paid to the Sellers............................................. $134,390,464
Special Limited Partner units issued to the Sellers.................. 39,996,893
Assumed liabilities.................................................. 500,000
Transaction costs.................................................... 1,500,000
------------
$176,387,357
============
Amounts allocated to:
Accounts receivable.................................................. $ 703,968
Property, plant and equipment........................................ 28,187,217
Franchise costs...................................................... 148,291,381
Subscriber deposits and prepayments.................................. (104,316)
Accounts payable and accrued expenses................................ (690,893)
------------
Purchase price............................................... $176,387,357
============
</TABLE>

The following are unaudited pro forma operating results for the above
acquisition as though the acquisition had been made on January 1, 1994.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1994
------------------
(UNAUDITED)
<S> <C>
Service revenues............................................ $ 32,147,894
Loss from operations........................................ $ (8,815,927)
Net loss.................................................... $(16,734,010)
Net loss per average Common Limited Partner units
outstanding............................................... $ (100,000)
</TABLE>

6. PROPERTY, PLANT AND EQUIPMENT:

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

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Trunk and distribution systems............................ $29,237,864 $25,198,122
Subscriber installations.................................. 5,725,150 3,381,794
Land, buildings and headends.............................. 2,182,449 1,581,982
Converters................................................ 2,413,624 911,276
Vehicles and equipment.................................... 2,018,563 1,200,000
Office equipment.......................................... 1,070,498 909,704
----------- -----------
42,648,148 33,182,878
Less -- Accumulated depreciation.......................... (5,850,048) (2,031,371)
----------- -----------
$36,798,100 $31,151,507
=========== ===========
</TABLE>

7. RESTRICTED FUNDS HELD IN ESCROW:

In connection with the acquisition discussed in Note 5, the Partnership
agreed to deposit a portion of the purchase price into an escrow account to be
transferred to the Sellers upon completion of certain

F-90
<PAGE> 212

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

improvements to the cable systems, as documented in the closing agreements.
During 1995, the Sellers completed improvements to the cable systems and the
Partnership transferred the funds to the Sellers.

8. OTHER ASSETS:

Other assets are detailed as follows at December 31:

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Debt issuance costs, net of accumulated amortization of
$397,062 and $157,097..................................... $1,639,758 $1,879,723
Organizational expenses, net of accumulated amortization of
$242,680 and $67,087...................................... 585,296 760,889
Interest rate cap agreements, net of accumulated
amortization of $174,875 and $57,883...................... 216,625 333,617
Note receivable -- related party............................ 100,000 100,000
---------- ----------
$2,541,679 $3,074,229
========== ==========
</TABLE>

9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

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

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Accounts payable............................................ $ 42,500 $ 594,951
Accrued interest............................................ 1,005,438 596,441
Capital expenditures........................................ 1,171,609 533,926
Franchise fees.............................................. 637,615 472,278
Programming expenses........................................ 837,021 915,996
Copyright fees.............................................. 250,177 236,947
Other....................................................... 1,083,164 856,662
---------- ----------
$5,027,524 $4,207,201
========== ==========
</TABLE>

10. LONG-TERM DEBT:

During April 1994, the Partnership entered into a revolving credit
agreement (the "Credit Agreement") with a consortium of banks for borrowings up
to $110,000,000. The unpaid principal balance under the Credit Agreement
converted to a term loan on July 31, 1995. Effective December 31, 1995, the
Credit Agreement was amended to create a revolving credit facility with maximum
borrowings of $15,000,000. A portion of the proceeds from the revolving credit
facility were used to reduce the principal amount of the term loan outstanding
to $90,000,000 (the term loan outstanding was $92,825,000 prior to the
amendment), and the remainder will be used for capital expenditures and working
capital purposes. Also, the maturity date of the Credit Agreement was extended
to September 30, 2003, due dates on the term loan were extended, and certain
financial covenants were modified.

Principal payments are due in quarterly installments beginning September
30, 1997, and continuing through September 30, 2003. Portions of the debt bear
interest, at the Partnership's option, at rates based upon the Base Rate, as
defined in the Credit Agreement, LIBOR, or prevailing bid rates of certificates
of deposit. The weighted average interest rate was 8.16% and 7.51% at December
31, 1995 and 1994, respectively. The effective weighted average interest rates
and weighted average borrowings were 8.72% and 7.42%, and $93,622,917 and
$94,125,000 during the years ended December 31, 1995 and 1994, respectively. As
this debt

F-91
<PAGE> 213

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

instrument bears interest at current market rates, its carrying amount
approximates fair market value at December 31, 1995.

Borrowings under the Credit Agreement are subject to certain financial and
nonfinancial covenants and restrictions, the most restrictive of which requires
maintenance of a ratio of debt to annualized operating cash flow, as defined,
not to exceed 6.00 to 1 at December 31, 1995. Borrowings under the Credit
Agreement are collateralized by the assets of the Partnership. A quarterly
commitment fee of 0.5% per annum is payable on the unused revolving credit
facility of the Credit Agreement.

Commencing September 30, 1997, and at the end of each calendar quarter
thereafter, the revolving credit facility commitment (available borrowings)
shall be reduced on an annual basis as set forth below:

<TABLE>
<CAPTION>
PERCENTAGE
REDUCTION
YEAR TO COMMITMENT
- ---- -------------
<C> <S> <C>
1997 ................................................................. 3.0%
1998 ................................................................. 8.0
1999 ................................................................. 13.7
2000 ................................................................. 17.2
2001 ................................................................. 19.0
2002 ................................................................. 23.1
2003 ................................................................. 16.0
-----
100.0%
=====
</TABLE>

Future principal payments on the Credit Agreement are as follows at
December 31, 1995:

<TABLE>
<CAPTION>
YEAR AMOUNT
- ---- -----------
<C> <S> <C>
1996 .................................................................. $ --
1997 .................................................................. 2,700,000
1998 .................................................................. 7,200,000
1999 .................................................................. 12,330,000
2000 .................................................................. 15,480,000
Thereafter............................................................... 55,115,000
-----------
$92,825,000
===========
</TABLE>

As a requirement of the Credit Agreement, the Partnership has secured
interest rate swap and cap agreements with a certain lender bank. The Credit
Agreement requires the Partnership to enter into interest hedge agreements for
amounts not less than 50% of the outstanding obligations. In addition, the
interest hedge agreements must provide interest rate protection for a weighted
average period of not less than two years. Under the swap agreements, on a
quarterly basis, if the 90 day variable rate exceeds the fixed rates stated
below, the Partnership will receive payments from the bank to offset the higher
interest rates on the notional

F-92
<PAGE> 214

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

principal amounts. These payments, if any, will be recorded as reductions of
interest expense. The following summarizes certain information pertaining to the
interest rate protection agreements at December 31, 1995:

<TABLE>
<CAPTION>
CONTRACT
NOTIONAL FIXED EXPIRATION FAIR VALUE/
AMOUNT TYPE RATE DATE REDEMPTION PRICE
- ------------ ---- ----- ------------------ ----------------
<C> <C> <C> <S> <C>
$ 20,000,000 Swap 6.01 % June 6, 1996 $42,400
15,000,000 Cap 7 % July 21, 1997 (3,900)
15,000,000 Cap 8 % July 21, 1997 (900)
15,000,000 Cap 8 % July 21, 1997 2,000
25,000,000 Swap 5.73 % September 18, 1997 205,300
10,000,000 Cap 8.5 % November 2, 1997 2,300
55,000,000 Swap 5.92 % October 21, 1998 *
- ------------
$155,000,000 6.34 % (weighted average ) $247,200
============
</TABLE>

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

* These contracts have not been marked to market since their effective dates are
after the reporting date.

Management believes that the seller of the swap and cap agreements will be
able to meet its obligations under the agreements. The purpose of the
Partnership's involvement in interest rate swap and cap agreements is to
minimize the Partnership's exposure to interest rate fluctuations on its
floating rate debt. Management believes that it has no material concentration of
credit or market risks with respect to these interest rate protection
agreements.

11. RELATED-PARTY TRANSACTIONS:

Charter provides management services to the Partnership under the terms of
a contract which provides for fees equal to 5% of the Partnership's gross
operating revenue. Through December 31, 1997, 60% of such fees shall be paid
quarterly with the balance being deferred. Thereafter, the entire fee may be
deferred until termination of the Partnership. Expenses recognized by the
Partnership under this contract during 1995 and 1994 were $1,729,166 and
$1,078,000, respectively. Management fees currently payable of $267,889 and
$238,238 are included in net payable to affiliates at December 31, 1995 and
1994, respectively.

The Partnership is insured for medical, dental and workers' compensation
claims by Charter. Charter charges the Partnership monthly premiums based on the
Partnership's total number of employees, historical claims and medical cost
trend rates. Management considers this allocation to be reasonable for the
operations of the Partnership. During 1995 and 1994, the Partnership expensed
approximately $300,000 and $162,000, respectively, relating to insurance
allocations.

During 1995 and 1994, the Partnership maintained a regional office. The
regional office performed certain operational services on behalf of the
Partnership and other affiliated entities. The cost of the services was
allocated to the Partnership and other affiliated entities based on their number
of subscribers. In August 1995, the Partnership's regional operations were
transferred to an affiliated entity, thereafter, the Partnership received
expense allocations from this affiliated entity based on its number of
subscribers. Management considers this allocation to be reasonable for the
operations of the Partnership. During 1995 and 1994, the Partnership expensed
approximately $403,000 and $315,000, respectively, relating to regional
operations.

F-93
<PAGE> 215

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The Partnership has an unsecured note receivable of $100,000 from a related
party. The note bears interest at 6%. The interest and principal amounts are due
on July 1, 1997.

12. COMMITMENTS AND CONTINGENCIES:

Leases

The Partnership leases certain facilities and equipment under noncancelable
operating leases. Rent expense incurred under these leases during 1995 and 1994
was approximately $108,000 and $19,300, respectively.

Future minimum lease payments are as follows:

<TABLE>
<S> <C>
1996....................................................................... $45,900
1997....................................................................... 18,700
1998....................................................................... 9,800
1999....................................................................... 4,100
2000 and thereafter........................................................ --
</TABLE>

The Partnership rents utility poles in its operations. Generally, pole
rental agreements are short term, but the Partnership anticipates that such
rentals will recur. Rent expense for pole attachments during 1995 and 1994 was
approximately $753,000 and $430,900, respectively.

Insurance Coverage

The Partnership currently does not have and does not in the near term
anticipate having property and casualty insurance on its underground
distribution plant. Due to large claims incurred by the property and casualty
insurance industry, the pricing of insurance coverage has become inflated to the
point where, in the judgment of the Partnership's management, the price is cost
prohibitive. Management will continue to monitor the insurance markets to
attempt to obtain coverage for the Partnership's distribution plant at
reasonable rates.

Litigation

13. REGULATION IN THE CABLE TELEVISION INDUSTRY:

1992 Cable Act and FCC Regulation

F-94
<PAGE> 216

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The 1992 Cable Act and FCC regulations have imposed rate requirements for
basic services and equipment, including rate roll-backs. Under the 1992 Cable
Act, a local franchising authority in a community not subject to "effective
competition" generally is authorized to regulate basic cable rates after
certifying to the FCC that, among other things, it will adopt and administer
rate regulation consistent with FCC rules, and in a manner that will provide a
reasonable opportunity to consider the views of interested parties. The
Telecommunications Act of 1996, passed by Congress on February 1, 1996, and
signed into law by the President on February 8, 1996, broadens the definition of
"effective competition" to include any franchise area where a local exchange
carrier (or its affiliate) provides video programming services to subscribers by
any means, other than through Direct Broadcast Satellite. Upon certification,
the franchising authority obtains the right to approve the basic rates charged
by the cable system operator. In regulating the basic service rates, certified
local franchise authorities have the authority to order a rate refund of
previously paid rates determined to be in excess of the maximum permitted
reasonable rates. During the years ended December 31, 1995 and 1994, the
Partnership paid cumulative rate refunds of $0 and $20,000, respectively, to
subscribers as a result of rate orders issued by certain franchise authorities.

Under the FCC's initial rate regulations pursuant to the 1992 Cable Act,
regulated cable systems were required to apply a benchmark formula to determine
their maximum permitted rates. Those systems whose rates were above the
benchmark on September 30, 1992, were required to reduce their rates to the
benchmark or by 10%, whichever was less. Under revised rate regulations adopted
February 1994, regulated cable systems were required to set their rates so that
regulated revenues per subscriber did not exceed September 30, 1992, levels,
reduced by 17% (taking into account the previous 10% reduction).

F-95
<PAGE> 217

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

of all current costs. In December 1995, the FCC revised its cost-of-service
rules. At this time, management is unable to predict the effect of these revised
rules on the Partnership's financial position or results of operations.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operators'
marketing costs and may also allow operators to better respond to competition
from alternative providers. Management is unable to predict if these proposed
rules will ultimately be promulgated by the FCC, and if they are promulgated,
their effect on the Partnership's financial position and results of operations.

While management believes that the Partnership has complied in all material
respects with the rate provisions of the 1992 Cable Act, in jurisdictions that
have not yet chosen to certify, refunds covering a one-year period on basic
services may be ordered upon future certification if the Partnership is unable
to justify its rates through a benchmark or cost-of-service filing or small
system cost-of-service filing pursuant to FCC rules. Management is unable to
estimate at this time the amount of refunds, if any, that may be payable by the
Partnership in the event certain of its rates are successfully challenged by
franchising authorities or found to be unreasonable by the FCC. Management 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 Partnership.

"Must Carry" Requirements/"Retransmission Consents"

Franchise Matters

The 1992 Cable Act modified the franchise renewal process to make it easier
for a franchising authority to deny renewal. Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement. Although management believes
that the Partnership has generally met the terms of its franchise agreements and
has provided quality levels of service, and anticipates the Partnership's future
franchise renewal prospects generally will be favorable, there can be no
assurance that any such franchises will be renewed or, if renewed, that the
franchising authority will not impose more onerous requirements on the
Partnership than previously existed.

F-96
<PAGE> 218

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Recent Telecommunications Legislation

The Telecommunications Act of 1996 alters federal, state, and local laws
and regulations pertaining to cable television, telecommunications and other
services.

Certain provisions of the Telecommunications Act of 1996 could materially
affect the growth and operation of the cable television industry and the cable
services provided by the Partnership. Although the new legislation may
substantially lessen regulatory burdens, the cable television industry may be
subject to additional competition as a result thereof. There are numerous rule
makings to be undertaken by the FCC which will interpret and implement the
Telecommunications Act's provisions. In addition, certain provisions of the
Telecommunications Act of 1996 (such as the deregulation of cable programming
rates) are not immediately effective. Further, certain of the Telecommunications
Act's provisions have been and are likely to be subject to judicial challenges.
Management is unable at this time to predict the outcome of such rule makings or
litigation or the substantive effect of the new legislation and the rule makings
on the financial position and results of operations of the Partnership.

14. 401(K) PLAN:

15. NET LOSS FOR INCOME TAX PURPOSES:

<TABLE>
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Net loss for financial reporting purposes................ $(15,513,309) $(9,609,052)
Depreciation differences between financial reporting and
tax reporting.......................................... (6,010,742) (1,561,047)
Amortization differences between financial reporting and
tax reporting.......................................... 7,297,151 4,561,627
Differences in expenses recorded for financial reporting
and reported for tax purposes.......................... 460,097 775,943
Revenue reported for tax reporting deferred for financial
reporting.............................................. 679,882 --
------------- -------------
Net loss for federal income tax purposes................. $(13,086,921) $(5,832,529)
============= =============
</TABLE>

F-97
<PAGE> 219

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The following summarizes the significant cumulative temporary differences
between the Partnership's financial reporting basis and federal income tax
reporting basis as of December 31:

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Assets:
Accounts receivable..................................... $ 114,640 $ --
Franchise costs......................................... 11,493,158 4,075,685
Accrued expenses........................................ 1,198,891 772,814
Deferred revenue........................................ 679,882 --
------------ ------------
$13,486,571 $ 4,848,499
============ ============
Liabilities:
Property, plant and equipment........................... $(7,592,395) $(1,561,047)
Other assets............................................ (47,111) (57,109)
------------ ------------
$(7,639,506) $(1,618,156)
============ ============
</TABLE>

16. INSURANCE SETTLEMENT:

In October 1995, Hurricane Opal caused damage to certain of the
Partnership's Alabama and Georgia systems. The Partnership received a $500,000
insurance advance during 1995 and expects settlement in 1996. In addition, the
Partnership recorded a $642,373 nonoperating loss for its portion of the
insurance deductible.

17. SIGNIFICANT NONCASH TRANSACTIONS:

The Partnership engaged in the following significant noncash financing
transactions regarding the redemption preference allocations pertaining to the
Special Limited Partner and Redeemable Preferred Limited units:

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Redemption preference allocation -- Special Limited Partner
units..................................................... $3,051,040 $1,924,573
Redemption preference allocation -- Redeemable Preferred
Limited units............................................. 2,715,977 1,626,333
---------- ----------
$5,767,017 $3,550,906
========== ==========
</TABLE>

18. SUBSEQUENT EVENTS:

Charter Communications Southeast Holdings, L.P. (Holdings) and Charter
Communications Southeast, L.P. (Southeast), affiliated entities, are expected to
issue approximately $125 million in Senior Notes and $75 million in Senior
Discount Debentures (collectively referred to as the "Offerings") of which
approximately $60.8 million will be capital contributed to the Partnership. This
capital contribution will be applied to repay outstanding borrowings of
approximately $17.5 million under the Credit Agreement and the remainder will be
used to redeem the outstanding Special Limited Partner units. The Partnership
and the holders of the Special Limited Partner units have reached an agreement
whereby the Special Limited Partner units may be redeemed at predetermined
prices. Accordingly, if the Special Limited Partner units are redeemed by March
31, 1996, the redemption price will be $2.5 million less than the carrying value
as of the redemption date.

In contemplation of and subject to the completion of the Offerings, a
Co-Sale Agreement, Subscription Agreement and Contribution Agreement have been
entered into by certain parties, whereby the Preferred Limited Partners will
receive Preferred Limited Partner and Common Limited Partner units in
CharterComm Holdings, L.P., the parent of Holdings. Upon consummation of this
transaction, all of the Partnership's interests will be indirectly and directly
held by Southeast. Holdings is the parent of Southeast.

F-98
<PAGE> 220

CHARTER COMMUNICATIONS, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

CharterComm expects to exercise an option to acquire the balance (60%) of
the outstanding shares of LEB, which it did not otherwise own, for a purchase
price of $1.1 million. To exercise this option, CharterComm will borrow the
purchase amount from the Partnership. At the closing of the Offerings, Southeast
will indirectly assume the liability for the short-term intercompany note from
CharterComm and will repay it in full with a portion of the proceeds from the
Offerings.

F-99
<PAGE> 221

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications, L.P.:

We have audited the accompanying combined balance sheet of The
Subscriber/Citation Cable Systems (as defined in Note 1) as of December 31,
1993, and the related combined statements of operations, owners' equity and cash
flows for the four months ended April 30, 1994, and for the year ended December
31, 1993. These combined financial statements are the responsibility of the
System's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Subscriber/Citation
Cable Systems as of December 31, 1993, and the results of their operations and
their cash flows for the four months ended April 30, 1994, and for the year
ended December 31, 1993, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
September 22, 1995

F-100
<PAGE> 222

THE SUBSCRIBER/CITATION CABLE SYSTEMS

COMBINED BALANCE SHEET -- DECEMBER 31, 1993

ASSETS

<TABLE>
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents..................................................... $ 73,278
Due from management companies................................................. 3,727,548
Accounts receivable, net of allowance for doubtful accounts of $66,443........ 271,798
Prepaid expenses and other.................................................... 62,099
Receivables from owners....................................................... 1,314,088
Receivables from Affiliates................................................... 1,570,975
-----------
Total current assets.................................................. 7,019,786
-----------
PROPERTY AND EQUIPMENT.......................................................... 14,219,956
FRANCHISE COSTS, net of accumulated amortization of $95,418..................... 78,435
-----------
$21,318,177
===========
LIABILITIES AND OWNERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt.......................................... $ 8,500,000
Payable to stockholder........................................................ 5,477,054
Accounts payable and accrued expenses......................................... 2,592,472
-----------
Total current liabilities............................................. 16,569,526
-----------
COMMITMENTS AND CONTINGENCIES
OWNERS' EQUITY:
Stockholder's equity --
Common stock, $1 par value, 1,000 shares authorized, issued and
outstanding............................................................... 1,000
Additional paid-in capital................................................. 348,648
Retained earnings.......................................................... 3,432,273
-----------
Total stockholder's equity............................................ 3,781,921
-----------
Partners' capital............................................................. 507,000
Accumulated earnings.......................................................... 459,730
-----------
Total partners' equity................................................ 966,730
-----------
Total owners' equity.................................................. 4,748,651
-----------
$21,318,177
===========
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-101
<PAGE> 223

THE SUBSCRIBER/CITATION CABLE SYSTEMS

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOUR MONTHS
ENDED YEAR ENDED
APRIL 30, DECEMBER 31,
1994 1993
----------- ------------
<S> <C> <C>
SERVICE REVENUES................................................... $5,341,142 $ 13,951,490
---------- ------------
OPERATING EXPENSES:
Operating, general and administrative............................ 3,029,754 6,681,199
Depreciation and amortization.................................... 1,410,813 3,766,595
Management fees -- related party................................. 173,703 449,373
---------- ------------
4,614,270 10,897,167
---------- ------------
Income from operations................................... 726,872 3,054,323
---------- ------------
OTHER INCOME (EXPENSE):
Interest expense................................................. (292,489 ) (690,524)
Interest income.................................................. 81,232 201,223
Gain (loss) on disposal of property and equipment................ (266,854 ) --
---------- ------------
(478,111 ) (489,301)
---------- ------------
Income before provision for taxes........................ 248,761 2,565,022
PROVISION FOR STATE INCOME TAXES................................... 12,100 126,403
---------- ------------
Net income............................................... $ 236,661 $ 2,438,619
========== ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-102
<PAGE> 224

THE SUBSCRIBER/CITATION CABLE SYSTEMS

COMBINED STATEMENTS OF OWNERS' EQUITY

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDER'S
STOCK CAPITAL EARNINGS EQUITY
------ ---------- ---------- -------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1992.................... $1,000 $ 348,648 $1,211,309 $ 1,560,957
Net income.................................. -- -- 2,220,964 2,220,964
------ -------- ---------- ----------
BALANCE, December 31, 1993.................... 1,000 348,648 3,432,273 3,781,921
Net income.................................. -- -- 168,066 168,066
------ -------- ---------- ----------
BALANCE, April 30, 1994....................... $1,000 $ 348,648 $3,600,339 $ 3,949,987
====== ======== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
TOTAL TOTAL
PARTNERS ACCUMULATED PARTNERSHIP OWNERS'
CAPITAL EARNINGS CAPITAL EQUITY
-------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1992................. $507,000 $ 242,075 $ 749,075 $2,310,032
Net income............................... -- 217,655 217,655 2,438,619
-------- -------- ---------- ----------
BALANCE, December 31, 1993................. 507,000 459,730 966,730 4,748,651
Net income............................... -- 68,595 68,595 236,661
-------- -------- ---------- ----------
BALANCE, April 30, 1994.................... $507,000 $ 528,325 $ 1,035,325 $4,985,312
======== ======== ========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

F-103
<PAGE> 225

THE SUBSCRIBER/CITATION CABLE SYSTEMS

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOUR MONTHS
ENDED YEAR ENDED
APRIL 30, DECEMBER 31,
1994 1993
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...................................................... $ 236,661 $ 2,438,619
Adjustments to reconcile net loss to net cash provided by
operating activities --
Depreciation and amortization................................ 1,410,813 3,766,595
Interest income on receivables from affiliates............... (71,512) (99,901)
Interest income on receivables from owners................... (4,367) (13,845)
Interest expense on payable to stockholder................... 132,028 253,699
Interest income on due from management companies............. -- (81,788)
Loss (gain) on disposal of property and equipment............ 266,854 --
Change in assets and liabilities --
Accounts receivable........................................ 47,521 (49,470)
Prepaid expenses and other................................. (54,513) (12,237)
Accounts payable and accrued expenses...................... (519,685) 1,415,376
----------- -----------
Net cash provided by operating activities............... 1,443,800 7,617,048
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment............................. (2,193,110) (7,366,373)
Net advances to management companies............................ -- (1,221,690)
Collections from affiliates..................................... 1,328,140 129,214
----------- -----------
Net cash used in investing activities................... (864,970) (8,458,849)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable to stockholder....................... -- 1,175,000
Payments to affiliates.......................................... (547,254) (43,451)
Proceeds from management companies.............................. -- (289,732)
----------- -----------
Net cash (used in) provided by financing activities..... (547,254) 841,817
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS......................... 31,576 16
CASH AND CASH EQUIVALENTS, beginning of period.................... 73,278 73,262
----------- -----------
CASH AND CASH EQUIVALENTS, end of period.......................... $ 104,854 $ 73,278
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest........................ $ 108,287 $ 436,825
=========== ===========
Cash paid during the period for taxes........................... $ 81,100 $ 49,853
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-104
<PAGE> 226

THE SUBSCRIBER/CITATION CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

The accompanying combined financial statements include the accounts of
certain cable television systems (collectively referred to as the "Systems"
herein) acquired from Subscriber Cablevision, Ltd. (Subscriber) and Citation
Cablevision, Inc. (Citation) by Charter Communications, L.P. (CCLP) pursuant to
a purchase agreement effective April 30, 1994. The Systems provide cable
television service to approximately 36 franchises serving approximately 49,000
subscribers in Alabama, Georgia, Louisiana and Mississippi. Prior to the
acquisition by CCLP, Subscriber and Citation were operated under common control.

Citation was formed on March 31, 1992, as a Delaware corporation, pursuant
to an Agreement and Plan of Corporate Separation and Reorganization entered into
by the shareholders of Chattahoochee Cablevision, Inc. (Chattahoochee). Under
the plan, the assets and liabilities of Chattahoochee were split into two new
companies, Citation and LaGrange Cablevision, Inc. (LaGrange). The assets and
liabilities of the Alexander City, Newnan, Ozark and Washington systems, and 50%
of the Parish system were transferred to Citation and the assets and liabilities
of the LaGrange, Thomaston and Guntersville systems, and 50% of the Parish
system were transferred to LaGrange. These transfers of net assets to Citation
and LaGrange totaled $349,645 and $1,940,812, respectively.

Subscriber was formed on August 15, 1991, as a limited partnership in the
state of Alabama. Subscriber purchased a portion of the assets of an existing
cable television system.

Cash Equivalents

The Systems consider all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

Revenues

Cable service revenues are recognized when the related services are
provided.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Property and Equipment

Property and equipment are 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 installation. The
costs of disconnecting and reconnecting a residence are charged to expense in
the period incurred. Expenditures for repairs and maintenance are charged to
expense as incurred, and equipment replacement and betterments are capitalized.
Depreciation is calculated using the accelerated methods over the estimated
useful lives of five to seven years.

Leasehold improvements are amortized using the straight-line method over
their useful life or lease term, whichever is shorter.

Franchise Costs

F-105
<PAGE> 227

THE SUBSCRIBER/CITATION CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

estimated fair value at the date of acquisition and amortized using the
straight-line method over the remaining term of the individual franchises
acquired.

Income Taxes

Income or losses of Subscriber and Citation, a partnership and an S
corporation, respectively, are included on the individual Federal income tax
returns of the partners and stockholder, and as such no Federal income taxes are
provided for in the accompanying combined financial statements. Citation is
taxed as a C corporation in certain states, resulting in a provision for state
income taxes. Deferred tax assets and liabilities are not material.

Effective January 1, 1993, the Systems adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." SFAS No. 109
required a change from the deferred method as prescribed by APB Opinion 11 to
the asset and liability method of accounting for income taxes. The cumulative
effect of the change was not material.

2. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following at December 31, 1993:

<TABLE>
<S> <C>
Trunk and distribution systems and subscriber installations............ $ 41,070,029
Converters............................................................. 10,287
Land, buildings and headends........................................... 23,408
Vehicles and equipment................................................. 288,120
Office equipment....................................................... 649,321
Construction in progress............................................... 448,971
------------
42,490,136
Less -- Accumulated depreciation....................................... (28,270,180)
------------
$ 14,219,956
============
</TABLE>

3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following at December
31, 1993:

<TABLE>
<S> <C>
Accounts payable......................................................... $1,114,201
Programming expense...................................................... 636,875
Accrued income taxes..................................................... 150,014
Franchise fee expense.................................................... 346,361
Other.................................................................... 345,021
----------
$2,592,472
==========
</TABLE>

4. LONG-TERM DEBT:

Long-term debt represents the outstanding borrowings of the Parish system
under a loan agreement with AmSouth Bank, N.A. (the Bank). Interest is paid at
the end of either 30, 60 or 90-day periods and is based on the London Interbank
Offered Rate (LIBOR) as determined by the Bank. The note agreement is
collateralized by all assets now owned or acquired, including franchising and
licensing agreements of the Parish division. As the note bears interest at
current market rates, the carrying amount approximates fair value at December
31, 1993.

F-106
<PAGE> 228

THE SUBSCRIBER/CITATION CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The note was paid off on May 2, 1994, and accordingly has been classified
as current in the accompanying combined balance sheet. The note contained
covenants which, among other restrictions, require the Parish System to maintain
certain ratios, keep capital expenditures under a specific maximum.

5. RELATED-PARTY TRANSACTIONS:

McDonald Investment Company (MIC) and McDonald Management, Inc. (MMI)
provide management advisory and accounting services to the Systems for a
standard management fee equal to 5%. Management believes the terms of the
contract are at least as favorable to the Systems as those it could negotiate
with unrelated parties. MIC is owned by the Company's stockholder and MMI is
owned by the stockholder of LaGrange. MIC and MMI maintain central operating
cash accounts on behalf of the Systems and other affiliated companies. The
Company's allocated portion of these accounts is included on the balance sheet
with the "due from management company." MIC allocates interest income or expense
to the accounts based on their monthly balances. Management considers this
allocation to be reasonable for the operation of the Systems. Other amounts
payable to or receivable from the management companies are also included in the
"due from management company" account.

The balance of the Systems' advances to the McDonald Group, Inc. at
December 31, 1993, is shown on the balance sheet as "Receivables from
Affiliates." Interest income is recorded monthly at prime on the receivables
from affiliates. Interest income on these receivables for the four months ended
December 31, 1994, and the years ended December 31, 1993, were $71,512 and
$99,901, respectively.

The Systems have payables to the stockholders in the amount of $5,477,054
at December 31, 1993. The payables bear interest at prime, which was 6% at
December 31, 1993, and are payable on demand. Interest expense on the payable
for the four months ended December 31, 1994, and the year ended December 31,
1993, were $132,028 and $253,699, respectively. The receivables from the owners
relating to Subscriber earn interest at prime. The receivables from the owner
relating to Citation earn no interest. Interest income on the receivables to
owners for the four months ended December 31, 1994, and the year ended December
31, 1993, were $4,367 and $13,845, respectively.

6. COMMITMENTS AND CONTINGENCIES:

The Systems lease certain facilities and equipment under noncancelable
operating leases on a month to month basis. Rent expense incurred under the
leases is not significant.

Congress enacted the Cable Television Consumer Protection and Competition
Act of 1992 (the "1992 Cable Act"), which became effective on December 4, 1992.
This legislation has caused significant changes to the regulatory environment in
which the cable television industry operates. The 1992 Cable Act generally
allows for a greater degree of regulation of the cable television industry.
Under the 1992 Cable Act's definition of effective competition, nearly all cable
systems in the United States are subject to rate regulation of basic cable
services. In addition, the 1992 Cable Act allows the Federal Communications
Commission (FCC) to regulate rates for nonbasic service tiers other than premium
services in response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and nonbasic services. The FCC's rules became effective on September 1,
1993. In compliance with these rules, the Systems reduced rates charged for
certain regulated services effective September 1, 1993.

On February 22, 1994, the FCC adopted several additional rate orders
including an order which revised its earlier-announced regulatory scheme with
respect to rates. The FCC's new regulations will generally require rate
reductions, absent a successful cost-of-service showing, of 17% of September 30,
1992, rates, adjusted for inflation, channel modifications, equipment costs, and
increases in programming costs. However, the FCC held rate reductions in
abeyance in certain systems. The new regulations became effective on

F-107
<PAGE> 229

THE SUBSCRIBER/CITATION CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

May 15, 1994, but operators could elect to defer rate reductions to July 14,
1994, so long as they made no changes in their rates and did not restructure
service offerings between May 15 and July 14.

On February 22, 1994, the FCC also adopted interim cost-of-service
regulations. Rate reductions will not be required where it is successfully
demonstrated that rates for basic and other regulated programming services are
justified and reasonable using cost-of-service standards. The FCC established an
interim industry-wide 11.25% permitted rate of return, and requested comments on
whether this standard and other interim cost-of-service standards should be made
permanent.

The Systems' management believes that it has generally complied with all
provisions of the 1992 Cable Act, including its cable programming service rate
setting provisions. However, as a result of the aforementioned rate calculation
process, the systems are charging cable programming service rates which are in
excess of the related benchmark rates and, accordingly, may be subject to
challenge by regulatory authorities. The amount of refunds, if any, which could
be payable by the Systems in the event that these Systems' cable programming
service rates are successfully challenged by regulatory authorities is not
currently estimable.

On June 15, 1995, the United States Senate approved comprehensive
telecommunications legislation to amend the Communications Act of 1934. This
bill lifts the telephone-cable cross-ownership ban, but requires regional Bell
operating companies (RBOCs) which seek to provide video programming to
subscribers in their service areas to do so via a separate affiliate. However,
local telephone companies and their affiliates may only purchase up to a 10%
financial interest in any cable operator which provides cable service within the
local telephone company's telephone service area. Correspondingly, cable
operators and their affiliates may only purchase up to a 10% financial interest
in any local telephone company which provides telephone service within the cable
operator's franchise area.

The bill also prohibits local telephone companies and cable operators whose
telephone service areas and cable franchise areas, respectively, are in the same
market, from entering into any joint venture or partnership to provide video
programming directly to subscribers in the "shared" area.

The bill also seeks to substantially amend the 1992 Cable Act's rate
regulation provisions. Pursuant to the bill, when a cable operator becomes
subject to "effective competition" by virtue of the commencement by an
unaffiliated telephone company to provide video dialtone or cable services with
programming comparable to that provided by the cable operator in the cable
operator's franchise area, the basic tier rates of the cable operator will cease
to be regulated. The bill would also limit the FCC's review of expanded tier
rates to circumstances where such rates of an operator exceed the national
average rate for comparable cable programming services provided by cable systems
(other than small cable systems), determined on a per-channel basis.

The United States House of Representatives bill (the "House Bill"),
approved on August 4, 1995, would remove rate regulation of expanded tier rates
and equipment rental rates (except for equipment for basic-only subscribers) if
a telephone company competes with an operator by providing video dialtone or
cable service to subscribers within an operator's franchise area, or a certain
amount of time has passed since video platform rules have become effective.
Rates for basic service would continue to be regulated under the House Bill.
Small cable systems would have all price controls removed, including regulation
of basic rates. In addition, 3% of a cable company's subscribers would have to
complain before the FCC would begin a review of the company's expanded rate
charges.

F-108
<PAGE> 230

THE SUBSCRIBER/CITATION CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

protection provisions. Telephone companies providing video programming (through
the required affiliate), would be exempt from being subject to a franchise, but
the affiliate would be required to pay a fee equivalent to a franchising fee to
the local franchising authority.

Although new legislation may substantially lessen regulatory burdens, there
can be no assurance that Congress will enact definitive legislation, and, if it
does enact such legislation, it is unknown when such legislation will become
effective. Furthermore, the Systems' management cannot be certain of the
effects, if any that such legislation will have upon the Systems' results of
operation or financial condition.

7. SUBSEQUENT EVENT:

On April 30, 1994, Charter Communications, L.P. purchased substantially all
of the operating assets of the Systems for approximately $91,000,000. The impact
of the sale is not reflected in the accompanying combined financial statements.

F-109
<PAGE> 231

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications, L.P.:

We have audited the accompanying combined balance sheet of The
Jefferson/LaGrange Cable Systems (as defined in Note 1) as of December 31, 1993,
and the related combined statements of operations, owners' deficit and cash
flows for the four months ended April 30, 1994, and for the year ended December
31, 1993. These combined financial statements are the responsibility of the
Systems' management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Jefferson/LaGrange Cable
Systems as of December 31, 1993, and the results of their operations and their
cash flows for the four months ended April 30, 1994, and for the year ended
December 31, 1993, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
September 22, 1995

F-110
<PAGE> 232

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

COMBINED BALANCE SHEET
DECEMBER 31, 1993

ASSETS

<TABLE>
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents.................................................... $ 281,186
Accounts receivable, net of allowance for doubtful accounts of $82,232....... 204,984
Prepaid expenses and other................................................... 65,902
Receivables from Affiliates.................................................. 184,687
------------
Total current assets................................................. 736,759
PROPERTY AND EQUIPMENT......................................................... 10,977,885
FRANCHISE COSTS, net of accumulated amortization of $1,992,531................. 4,140,328
OTHER ASSETS................................................................... 115,412
------------
$ 15,970,384
============
LIABILITIES AND OWNERS' DEFICIT
CURRENT LIABILITIES:
Current maturities of long-term debt......................................... $ 38,446,700
Accounts payable and accrued expenses........................................ 3,371,523
Due to management company.................................................... 772,841
------------
Total current liabilities............................................ 42,591,064
------------
COMMITMENTS AND CONTINGENCIES
OWNERS' DEFICIT:
Partners' deficit --
Partners' capital......................................................... 1,172,600
Accumulated deficit....................................................... (5,477,472)
------------
Total partners' deficit.............................................. (4,304,872)
------------
Stockholder's deficit --
Common stock, $1 par value, 1,000 shares authorized, issued and
outstanding.............................................................. 1,000
Additional paid-in capital................................................ 1,939,812
Retained earnings......................................................... 4,333,896
Receivables from stockholder.............................................. (28,590,516)
------------
Total stockholder's deficit.......................................... (22,315,808)
------------
Total owners' deficit................................................ (26,620,680)
------------
$ 15,970,384
============
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-111
<PAGE> 233

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOUR MONTHS
ENDED
APRIL 30, DECEMBER 31,
1994 1993
----------- ------------
<S> <C> <C>
SERVICE REVENUES................................................... $5,245,636 $ 14,536,387
---------- -----------
OPERATING EXPENSES:
Operating, general and administrative............................ 3,153,763 7,300,223
Depreciation and amortization.................................... 1,065,419 3,084,499
Management fees -- related party................................. 99,138 311,044
---------- -----------
4,318,320 10,695,766
---------- -----------
Income from operations................................... 927,316 3,840,621
---------- -----------
OTHER INCOME (EXPENSE):
Interest expense................................................. (927,678 ) (2,358,748)
Interest income.................................................. 87,578 591,977
Other, net....................................................... -- 2,350
---------- -----------
(840,100 ) (1,764,421)
---------- -----------
Income before provision for taxes........................ 87,216 2,076,200
PROVISION FOR STATE INCOME TAXES................................... 50,000 161,500
---------- -----------
Net income............................................... $ 37,216 $ 1,914,700
========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-112
<PAGE> 234

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

COMBINED STATEMENTS OF OWNERS' DEFICIT

<TABLE>
<CAPTION>
TOTAL
PARTNERS' ACCUMULATED PARTNERS'
CAPITAL DEFICIT DEFICIT
---------- ----------- -----------
<S> <C> <C> <C>
BALANCE, December 31, 1992........................... $1,172,600 $(5,010,878) $(3,838,278)
Net advances to stockholder........................ -- -- --
Net income (loss).................................. -- (466,594) (466,594)
---------- ---------- -----------
BALANCE, December 31, 1993........................... 1,172,600 (5,477,472) (4,304,872)
Net advances to stockholder........................ -- -- --
Net income (loss).................................. -- (144,920) (144,920)
---------- ---------- -----------
BALANCE, April 30, 1994.............................. $1,172,600 $(5,622,392) $(4,449,792)
========== ========== ===========
</TABLE>

(Continued on following page)

F-113
<PAGE> 235

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

COMBINED STATEMENTS OF OWNERS' DEFICIT
(CONTINUED)

<TABLE>
<CAPTION>
ADDITIONAL RECEIVABLES TOTAL
COMMON PAID-IN RETAINED FROM STOCKHOLDER'S
STOCK CAPITAL EARNINGS STOCKHOLDER DEFICIT
------ ---------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1992.......... $1,000 $1,939,812 $1,952,602 $(15,355,230) $ (11,461,816)
Net advances to stockholder....... -- -- -- (13,235,286) (13,235,286)
Net income........................ -- -- 2,381,294 -- 2,381,294
------ ---------- ---------- ------------ ------------
BALANCE, December 31, 1993.......... 1,000 1,939,812 4,333,896 (28,590,516) (22,315,808)
Net advances to stockholder....... -- -- -- (45,540) (45,540)
Net income........................ -- -- 182,136 -- 182,136
------ ---------- ---------- ------------ ------------
BALANCE, April 30, 1994............. $1,000 $1,939,812 $4,516,032 $(28,636,056) $ (22,179,212)
====== ========== ========== ============ ============
</TABLE>

(Continued on following page)

F-114
<PAGE> 236

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

COMBINED STATEMENTS OF OWNERS' DEFICIT
(CONTINUED)

<TABLE>
<CAPTION>
TOTAL TOTAL TOTAL
PARTNERS' STOCKHOLDER'S OWNERS'
DEFICIT DEFICIT DEFICIT
----------- ------------- ------------
<S> <C> <C> <C>
BALANCE, December 31, 1992........................ $(3,838,278) $ (11,461,816) $(15,300,094)
Net advances to stockholder..................... -- (13,235,286) (13,235,286)
Net income (loss)............................... (466,594) 2,381,294 1,914,700
----------- ----------- ------------
BALANCE, December 31, 1993........................ (4,304,872) (22,315,808) (26,620,680)
Net advances to stockholder..................... -- (45,540) (45,540)
Net income (loss)............................... (144,920) 182,136 37,216
----------- ----------- ------------
BALANCE, April 30, 1994........................... $(4,449,792) $ (22,179,212) $(26,629,004)
=========== =========== ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-115
<PAGE> 237

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOUR MONTHS
ENDED
APRIL 30, DECEMBER 31,
1994 1993
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...................................................... $ 37,216 $ 1,914,700
Adjustments to reconcile net income to net cash provided by
operating activities --
Depreciation and amortization................................ 1,065,419 3,084,499
Interest income (expense) on receivables from affiliates..... 76,762 (75,634)
Gain on sale of property and equipment....................... -- (2,350)
Changes in assets and liabilities --
Accounts receivable........................................ 5,373 11,905
Prepaid expenses and other................................. (83,978 ) (22,046)
Accounts payable and accrued expenses...................... 284,302 1,236,321
---------- ------------
Net cash provided by operating activities............... 1,385,094 6,147,395
---------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment............................. (3,182,757 ) (6,210,248)
Proceeds from the sale of property and equipment................ -- 2,950
---------- ------------
Net cash used in investing activities................... (3,182,757 ) (6,207,298)
---------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease) increase in due to management company................ (723,550 ) 1,963,999
Proceeds from notes payable..................................... 2,610,000 12,390,000
Payments of notes payable....................................... (212,500 ) (912,050)
Net advances to stockholder..................................... (45,540 ) (13,235,286)
Net payments from (advances to) affiliates...................... 22,753 43,618
---------- ------------
Net cash provided by (used in) financing activities..... 1,651,163 250,281
---------- ------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS.............. (146,500 ) 190,378
CASH AND CASH EQUIVALENTS, beginning of period.................... 281,186 90,808
---------- ------------
CASH AND CASH EQUIVALENTS, end of period.......................... $ 134,686 $ 281,186
========== ============
CASH PAID FOR INTEREST............................................ $ 514,986 $ 1,851,522
========== ============
CASH PAID FOR TAXES............................................... $ -- $ --
========== ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-116
<PAGE> 238

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

The accompanying combined financial statements include the accounts of
certain cable television systems (collectively referred to as the "Systems"
herein) acquired from the Jefferson Trust Partnership (Jefferson) and LaGrange
Cablevision, Inc. (LaGrange) by Charter Communications, L.P. (CCLP) pursuant to
a purchase agreement effective April 30, 1994. The Systems provide cable
television service to approximately 34 franchises serving approximately 48,000
basic subscribers in Alabama, Georgia and Louisiana. Prior to the acquisition by
CCLP, Jefferson and LaGrange were operated under common control.

LaGrange was formed on March 31, 1992, as a Delaware corporation pursuant
to an Agreement and Plan of Corporate Separation and Reorganization entered into
by the stockholders of Chattahoochee Cablevision, Inc. (Chattahoochee). Under
the plan, the assets and liabilities of Chattahoochee were split into two new
companies, LaGrange and Citation Cablevision, Inc. (Citation). The assets and
liabilities of the Alexander City, Newnan, Ozark and Washington divisions, and
50% of the Parish division were transferred to Citation and the assets and
liabilities of the LaGrange, Thomaston and Guntersville divisions, and 50% of
the Parish division were transferred to LaGrange. These transfers of net assets
to Citation and LaGrange totaled $349,645 and $1,940,812, respectively.

Jefferson was formed on June 1, 1989, as a general partnership in the State
of Alabama. Jefferson purchased the assets of two existing cable television
systems in Georgia.

Cash Equivalents

The Systems consider all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

Revenues

Cable service revenues are recognized when the related services are
provided.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Property and Equipment

Property and equipment are 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 installation. The
costs of disconnecting and reconnecting a residence are charged to expense in
the period incurred. Expenditures for repairs and maintenance are charged to
expense as incurred, and equipment replacement and betterments are capitalized.
Depreciation is calculated using accelerated methods over the estimated useful
lives of five to seven years.

Other Assets

Costs incurred in obtaining and renewing cable franchises are initially
deferred and amortized over the legal lives of the franchises. Franchise rights
acquired through the purchase of cable systems are stated at estimated fair
value at the date of acquisition and amortized using the straight-line method
over the remaining term of the individual franchises acquired. Loan costs are
amortized to expense over the term of the related debt using the straight-line
method, which does not materially differ from the effective interest method.

F-117
<PAGE> 239

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Noncompete agreements are amortized on a straight-line basis over a 60 month
period based on the life of the agreement. Organization costs, consisting
primarily of legal and tax fees, are capitalized and amortized to expense on a
straight-line basis over a 60 month period.

Income Taxes

Income or losses of Jefferson and LaGrange, a partnership and a S
corporation, respectively, are included on the individual Federal income tax
returns of the partners and stockholder, and as such no Federal income taxes are
provided for in the accompanying combined financial statements. LaGrange is
taxed as a C corporation in certain states, resulting in a provision for state
income taxes.

Effective January 1, 1993, the Systems adopted Statement of Financial
Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes." SFAS No. 109
required a change from the deferred method as prescribed by APB Opinion 11 to
the asset and liability method of accounting for income taxes. The cumulative
effect of the change was not material.

The Systems have a deferred tax asset of approximately $100,000 at December
31, 1993, resulting from not recognizing interest income from certain related
party receivables for book purposes. The Systems have offset the benefit of the
deferred tax asset with a valuation allowance as realization is not assured. The
effective tax rate for the four months ended April 30, 1994, and the year ended
December 31, 1993, was increased as a result of recording the valuation
allowance discussed above.

2. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following at December 31, 1993:

<TABLE>
<S> <C>
Trunk and distribution systems and subscriber installations............ $ 40,700,948
Construction in progress............................................... 4,181,413
Land, buildings and headends........................................... 173,491
Vehicles and equipment................................................. 607,203
Office equipment....................................................... 720,833
------------
46,383,888
Less -- Accumulated depreciation....................................... (35,406,003)
------------
$ 10,977,885
============
</TABLE>

3. OTHER ASSETS:

Other assets consist of the following at December 31, 1993:

<TABLE>
<S> <C>
Loan costs, net of accumulated amortization of $23,568.................... $ 45,221
Noncompete costs, net of accumulated amortization of $1,235,000........... 65,000
Organization costs, net of accumulated amortization of $98,638............ 5,191
--------
$115,412
========
</TABLE>

F-118
<PAGE> 240

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following at December
31, 1993:

<TABLE>
<S> <C>
Accounts payable......................................................... $1,372,940
Income taxes............................................................. 310,500
Interest................................................................. 137,796
Copyright fees........................................................... 411,895
Programming expenses..................................................... 534,018
Franchise fees........................................................... 360,014
Other.................................................................... 244,360
----------
$3,371,523
==========
</TABLE>

5. LONG-TERM DEBT:

Long-term debt consists of the following at December 31, 1993:

<TABLE>
<S> <C>
Installment note payable to bank, principal due in quarterly payments
through 2000, interest payable at the end of 30, 60 or 90 day periods
based on LIBOR (5.0% at December 31, 1993), secured by all owned
assets of LaGrange including franchising and licensing agreements..... $22,509,200
Note payable to bank, principal due in quarterly payments through 1999,
interest payable at the end of 30, 60 or 90 day periods based on prime
(6.0% at December 31, 1993), secured by all owned assets, including
franchising and licensing agreements, of the Parish division.......... 8,500,000
Installment note payable to bank, principal and interest due in
quarterly payments through 1999, interest based on prime (6.0% at
December 31, 1993) plus an additional percentage of interest as set
forth in the loan agreement, secured by all owned assets of Jefferson
including franchise and licensing agreements.......................... 7,437,500
-----------
38,446,700
Less -- Current maturities.............................................. 38,446,700
-----------
$ --
===========
</TABLE>

The notes payable contained covenants which, among other restrictions,
required the Systems to maintain certain ratios, keep the number of subscribers
above a specified minimum, keep capital expenditures under a specified maximum
and prohibited the issuance of additional debt. The notes payable were all paid
in full on May 2, 1994, and accordingly have been classified as current in the
accompanying combined balance sheet.

As these debt instruments bear interest at current market rates, their
carrying amounts approximate fair market value at December 31, 1993.

6. RELATED-PARTY TRANSACTIONS:

McDonald Management, Inc. (MMI), an affiliated management company, provides
management advisory and accounting services to the Systems. Management believes
the terms of the contract are at least as favorable to the Systems as those it
could negotiate with unrelated parties. MMI maintains central operating cash
accounts on behalf of the Systems and other affiliated companies. The Systems'
allocated portion of these accounts is reflected on the balance sheet as "Due to
management company."

Jefferson has loans in the amount of $391,440 at December 31, 1993, from
beneficiaries of the trusts which form the Partnership. The loans accrue
interest at prime which was 6% at December 31, 1993, and are payable on demand.
Jefferson recorded interest expense on these loans in the amounts of $7,478 and
$28,546 during the four months of 1994, and during 1993, respectively.

F-119
<PAGE> 241

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

LaGrange has receivables from the stockholder of $28,590,516 at December
31, 1993. The receivables bear interest at prime, which was 6% at December 31,
1993. Interest income on these receivables has not been recorded in the
accompanying statements of operations during the four months of 1994 and during
1993, of approximately $740,000 and $960,000, respectively.

7. COMMITMENTS AND CONTINGENCIES:

The Systems lease certain facilities and equipment under noncancelable
operating leases on a month to month basis. Rent expense incurred under leases
during the four months in 1994 and during 1993 was approximately $10,750 and
$36,300, respectively.

F-120
<PAGE> 242

THE JEFFERSON/LAGRANGE CABLE SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The House bill would permit telephone companies to provide video
programming to subscribers within their telephone service areas through separate
affiliates. Telephone companies would be prohibited from buying out cable
systems within their telephone service areas (with some limited exceptions). The
FCC could grant waivers of this general prohibition upon a showing of undue
economic distress by the owner of the cable system. The House bill would also
require that certain provisions of the Cable Communications Policy Act of 1984
(the "Cable Act") and the 1992 Cable Act continue to apply, including program
access and consumer protection provisions. Telephone companies providing video
programming (through the required affiliate), would be exempt from being subject
to a franchise, but the affiliate would be required to pay a fee equivalent to a
franchising fee to the local franchising authority.

Although new legislation may substantially lessen regulatory burdens, there
can be no assurance that Congress will enact definitive legislation, and, if it
does enact such legislation, it is unknown when such legislation will become
effective. Furthermore, the Systems' management cannot be certain of the
effects, if any, that such legislation will have upon the Systems' results of
operation or financial condition.

8. SUBSEQUENT EVENT:

On April 30, 1994, Charter Communications, L.P. purchased substantially all
of the operating assets of the Systems for approximately $85,000,000. The impact
of the sale is not reflected in the accompanying combined financial statements.

F-121
<PAGE> 243

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications II, L.P.:

We have audited the accompanying combined balance sheet of Cencom Cable
Operating Systems (as defined in Note 1) as of December 31, 1994, and the
related combined statements of operations, Systems' equity and cash flows for
the year then ended. These combined financial statements are the responsibility
of the Systems' management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cencom Cable Operating
Systems as of December 31, 1994, and the results of their operations and their
cash flows for the year then ended, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
June 23, 1995

F-122
<PAGE> 244

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Crown Media, Inc.

We have audited the accompanying combined statements of operations,
systems' equity and cash flows of Cencom Cable Operating Systems for the year
ended December 31, 1993. 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 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 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 results of operations and the cash flows
of Cencom Cable Operating Systems for the year ended December 31, 1993 in
conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Dallas, Texas
August 9, 1995

F-123
<PAGE> 245

CENCOM CABLE OPERATING SYSTEMS

COMBINED BALANCE SHEET -- DECEMBER 31, 1994

ASSETS

<TABLE>
<CAPTION>
1994
-----------
<S> <C>
CURRENT ASSETS:
Cash.......................................................................... $ --
Accounts receivable, net of allowance for doubtful accounts of $49,610........ 321,863
Prepaid expenses and other.................................................... 129,920
Total current assets.................................................. 451,783
PROPERTY AND EQUIPMENT.......................................................... 51,931,626
FRANCHISE COSTS, net of accumulated amortization of $18,593,598................. 31,475,275
OTHER ASSETS.................................................................... 9,532,015
$93,390,699
LIABILITIES AND SYSTEMS' EQUITY
CURRENT LIABILITIES -- Accounts payable and accrued expenses.................... $ 2,221,764
COMMITMENTS AND CONTINGENCIES
SYSTEMS' EQUITY................................................................. 91,168,935
$93,390,699
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-124
<PAGE> 246

CENCOM CABLE OPERATING SYSTEMS

COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993

<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
SERVICE REVENUES.................................................. $23,045,375 $21,503,173
----------- -----------
OPERATING EXPENSES:
Operating, general and administrative........................... 11,474,664 9,531,729
Depreciation and amortization................................... 12,849,394 13,215,191
Management fees -- related party................................ 938,554 913,118
----------- -----------
25,262,612 23,660,038
----------- -----------
Loss from operations.................................... (2,217,237) (2,156,865)
----------- -----------
OTHER INCOME (EXPENSE):
Intercompany interest expense................................... (3,957,519) (3,225,334)
Other, net...................................................... 15,225 (60,347)
----------- -----------
(3,942,294) (3,285,681)
----------- -----------
Net loss................................................ $(6,159,531) $(5,442,546)
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-125
<PAGE> 247

CENCOM CABLE OPERATING SYSTEMS

COMBINED STATEMENTS OF SYSTEMS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993

<TABLE>
<CAPTION>
CAPITAL ACCUMULATED SYSTEMS'
CONTRIBUTIONS LOSSES EQUITY
------------ ------------ ------------
<S> <C> <C> <C>
SYSTEMS' EQUITY AT DECEMBER 31, 1992............. $111,892,959 $(11,641,003) $100,251,956
Net activity with Parent....................... 1,914,170 -- 1,914,170
Net loss....................................... -- (5,442,546) (5,442,546)
------------ ------------ ------------
SYSTEMS' EQUITY AT DECEMBER 31, 1993............. 113,807,129 (17,083,549) 96,723,580
Net activity with Parent....................... 604,886 -- 604,886
Net loss....................................... -- (6,159,531) (6,159,531)
------------ ------------ ------------
SYSTEMS' EQUITY AT DECEMBER 31, 1994............. $114,412,015 $(23,243,080) $ 91,168,935
============ ============ ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-126
<PAGE> 248

CENCOM CABLE OPERATING SYSTEMS

COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993

<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss........................................................ $(6,159,531) $(5,442,546)
Adjustments to reconcile net loss to net cash provided by
operating activities --
Depreciation and amortization................................ 12,849,394 13,215,191
Loss on retirements of property and equipment................ -- 29,568
Changes in assets and liabilities --
Accounts receivable, net................................... 64,215 29,301
Prepaid expenses and other................................. 4,530 12,804
Accounts payable and accrued expenses...................... 655,356 551
----------- -----------
Net cash provided by operating activities............... 7,413,964 7,844,869
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment............................. (8,018,850) (9,759,039)
----------- -----------
Net cash used in investing activities................... (8,018,850) (9,759,039)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in capital accounts with Parent...................... 604,886 1,914,170
----------- -----------
Net cash provided by financing activities............... 604,886 1,914,170
----------- -----------
CASH, beginning and end of year................................... $ -- $ --
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-127
<PAGE> 249

CENCOM CABLE OPERATING SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization

The accompanying combined financial statements include the historical
accounts of certain cable television systems (collectively referred to as the
"Systems" herein) acquired from Crown Media, Inc. (the "Parent" or "Crown"), an
indirect wholly owned subsidiary of Hallmark Cards, Inc. (Hallmark), by Charter
Communications II, L.P. (CC-II), pursuant to a purchase agreement between Crown,
CC-II, affiliated entities of CC-II, and other unaffiliated third parties.
Effective January 1, 1995, CC-II acquired the Systems concurrent with the
aforementioned agreement from Cencom Cable Entertainment, Inc. (CCE), a wholly
owned subsidiary of Crown. The Systems, consisting of the Erwin System of North
Carolina, the Kentucky System, the North Carolina System and the South Carolina
System, were owned by CCE. All significant intersystem balances and transactions
have been eliminated from the combined financial statements.

As of December 31, 1994, the Systems provided cable television service to
approximately 44 franchises serving approximately 63,000 basic subscribers in
Kentucky, North Carolina and South Carolina.

Basis of Accounting

The financial information as of December 31, 1994, and for each of the
years in the two-year period ended December 31, 1994, presented herein reflects
the financial position and results of operations of the Systems and is not
necessarily indicative of the financial position or results of operations had
the Systems operated as a separate, stand-alone entity during the reporting
period. The results of operations for such period do not necessarily reflect any
trends or future results for the Systems as an independent entity.

Revenues

Cable service revenues are recognized when the related services are
provided.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Property and Equipment

Property and equipment are 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 installation. 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, and
equipment replacement and betterments are capitalized. Depreciation is provided
using the composite method on a straight-line basis over the estimated useful
lives of the assets as follows:

<TABLE>
<S> <C>
Trunk and distribution systems........................................... 15 years
Subscriber installations................................................. 10 years
Converters............................................................... 5 years
Buildings and headends................................................... 5-20 years
Vehicles and equipment................................................... 4-8 years
Office equipment......................................................... 5-10 years
</TABLE>

Leasehold improvements are amortized using the straight-line method over
their useful lives or lease terms, whichever is shorter.

F-128
<PAGE> 250

CENCOM CABLE OPERATING SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Other Assets

Costs incurred in obtaining and renewing cable franchises are initially
deferred and amortized over the legal lives of the franchises. Franchise rights
acquired through the purchase of cable systems are stated at estimated fair
value at the date of acquisition and amortized using the straight-line method
over the remaining term of the individual franchises acquired. Goodwill is
amortized using the straight-line method over 15 years. Noncompete agreements
are amortized on a straight-line basis over the original terms of the agreement.

The Systems' management continually evaluates the recoverability of
carrying amounts and estimated recovery periods of long-term and intangible
assets. Such evaluation is based on management's estimates of current
liquidation values of the cable systems on a combined, undiscounted basis using
a cash flow multiple approach. Based on this valuation, the Systems' management
believes that no impairment of the carrying amount of intangible assets exists
at December 31, 1994, and no adjustment of estimated recovery periods is
warranted.

Intercompany Interest Expense

Interest expense allocated to the Systems has been determined by applying
the ratio of System subscribers to total CCE subscribers at the date of CCE's
acquisition by Crown to total CCE interest expense for the respective years. CCE
makes disbursements on behalf of the Systems for interest expense. Management
considers this allocation method to be reasonable for the operations of the
Systems. CCE debt balances totaled $261,130,000 at December 31, 1994. The
borrowings pertaining to the Systems are reflected within Systems' Equity. The
weighted average interest rate on these CCE borrowings was 5.25% and 4.3% during
the years ended December 31, 1994 and 1993, respectively. The interest rate at
December 31, 1994, is 6.0%.

Income Taxes

Income taxes are the responsibility of the Parent and as such are not
provided for in the accompanying financial statements. The Systems are part of
the Crown consolidated group which files consolidated federal income tax returns
with Hallmark. Crown accounts for income taxes under the asset and liability
method as prescribed by Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Consolidated tax balances of Crown are not
allocated to individual systems or subsidiaries comprising the Crown
consolidated group. On a separate, stand-alone basis, the Systems would not have
recognized any income tax benefit of operating losses as the Systems have
generated operating losses for income tax purposes since their inception and are
expected to generate such losses for the foreseeable future.

Cash Management and Systems' Equity Account

The cash management function for the Systems is performed by the Parent.
Excess cash funds are transferred to the Parent using the Systems' equity
account. In addition, the Parent makes disbursements on behalf of the Systems
for certain items such as payroll, payroll taxes, employee benefits and other
costs, and incurs debt borrowings for the Systems. Such amounts are transferred
to the Systems through the Systems' equity account and are recognized in the
appropriate expense categories in the accompanying combined statements of
operations.

F-129
<PAGE> 251

CENCOM CABLE OPERATING SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

2. PREPAID EXPENSES AND OTHER:

Prepaid expenses and other consists of the following at December 31:

<TABLE>
<CAPTION>
1994
--------
<S> <C>
Prepaid programming....................................................... $ 54,460
Inventories............................................................... 35,423
Other prepaid expenses.................................................... 40,037
--------
$129,920
========
</TABLE>

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following at December 31:

<TABLE>
<CAPTION>
1994
------------
<S> <C>
Trunk and distribution systems......................................... $ 48,063,451
Subscriber installations............................................... 10,089,934
Converters............................................................. 4,538,230
Land, buildings and headends........................................... 5,210,830
Vehicles and equipment................................................. 2,103,787
Office equipment....................................................... 843,695
------------
70,849,927
Less -- Accumulated depreciation....................................... (18,918,301)
------------
$ 51,931,626
============
</TABLE>

4. OTHER ASSETS:

Other assets consist of the following at December 31:

<TABLE>
<CAPTION>
1994
----------
<S> <C>
Goodwill, net of accumulated amortization of $2,364,156.................. $9,056,015
Noncompete agreement, net of accumulated amortization of $544,000........ 476,000
----------
$9,532,015
==========
</TABLE>

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

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

<TABLE>
<CAPTION>
1994
----------
<S> <C>
Accounts payable......................................................... $ 153,993
Capital expenditures..................................................... 130,365
Franchise fees........................................................... 283,946
Property taxes........................................................... 447,087
Accrued compensation..................................................... 246,447
Litigation settlement.................................................... 250,000
Other.................................................................... 709,926
----------
$2,221,764
==========
</TABLE>

F-130
<PAGE> 252

CENCOM CABLE OPERATING SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

6. SYSTEMS' EQUITY:

Systems' equity consists of the following at December 31:

<TABLE>
<CAPTION>
1994
------------
<S> <C>
Capital contributions.................................................. $114,412,015
Accumulated losses..................................................... (23,243,080)
------------
$ 91,168,935
============
</TABLE>

7. RELATED-PARTY TRANSACTIONS:

Crown Cable Associates, Inc. (CCA) a former wholly owned subsidiary of
Crown, managed the Systems' cable television operations for a standard
management fee equal to 5% in 1994 and 1993 of the Systems' gross operating
revenue excluding franchise fees. CCA provided management services including,
but not limited to, accounting, legal, marketing and negotiation of programming
contracts. For the years ended December 31, 1994 and 1993, the Systems expensed
$938,554 and $913,118, respectively, related to this arrangement. Management
believes these charges are indicative of the expense which would have been
incurred as a stand-alone entity.

8. COMMITMENTS AND CONTINGENCIES:

The Systems lease certain facilities and equipment under noncancelable
operating leases. Rent expense incurred under leases during 1994 and 1993 was
approximately $142,100 and $150,620, respectively. Future minimum lease payments
are as follows:

<TABLE>
<S> <C>
1995....................................................................... $90,191
1996....................................................................... 68,414
1997....................................................................... 58,672
1998....................................................................... 55,600
1999....................................................................... 41,435
2000 and thereafter........................................................ 10,917
</TABLE>

The Systems rent utility poles in their operations. Generally, pole rental
agreements are short term, but the Systems anticipate that such rentals will
recur. Rent expense incurred for pole attachments during 1994 and 1993 was
approximately $278,000 and $233,500, respectively.

The Systems currently do not have and do not in the near term anticipate
having property and casualty insurance on their underground distribution plant.
Due to large claims over the past several years incurred by the property and
casualty insurance industry, the pricing of insurance coverage has become
inflated to the point where, in the judgment of the Systems' management, the
insurance coverage is cost prohibitive. Management will continue to monitor the
insurance markets to attempt to obtain coverage for the Systems' distribution
plant at reasonable rates.

F-131
<PAGE> 253

CENCOM CABLE OPERATING SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

for basic and nonbasic services. The FCC's rules became effective on September
1, 1993. In compliance with these rules, the Systems reduced rates charged for
certain regulated services effective September 1, 1993.

The Systems' management believes that it has generally complied with all
provisions of the 1992 Cable Act, including its cable programming service rate
setting provisions. However, as a result of the aforementioned rate calculation
process, the Systems are charging cable programming service rates which are in
excess of the related benchmark rates and, accordingly, may be subject to
challenge by regulatory authorities. The amount of refunds, if any, which could
be payable by the Systems in the event that these Systems' cable programming
service rates are successfully challenged by regulatory authorities is not
currently estimable.

The United States House of Representatives bill (the "House Bill"),
approved on August 4, 1995, would remove rate regulation of expanded tier rates
and equipment rental rates (except for equipment for basic-only subscribers) if
a telephone company competes with an operator by providing video dialtone or
cable service to subscribers within an operator's franchise area, or if a
certain amount of time has passed since video platform rules have become
effective. Rates for basic service would continue to be regulated under the
House Bill. Small cable systems would have all price controls removed, including
regulation of basic rates. In addition, 3%

F-132
<PAGE> 254

CENCOM CABLE OPERATING SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

of a cable company's subscribers would have to complain before the FCC would
begin a review of the company's expanded rate charges.

The House Bill would permit telephone companies to provide video
programming to subscribers within their telephone service areas through separate
affiliates. Telephone companies would be prohibited from buying out cable
systems within their telephone service areas (with some limited exceptions). The
FCC could grant waivers of this general prohibition upon a showing of undue
economic distress by the owner of the cable system. The House Bill would also
require that certain provisions of the Cable Communications Policy Act of 1984
(the "Cable Act") and the 1992 Cable Act continue to apply, including program
access and consumer protection provisions. Telephone companies providing video
programming (through the required affiliate), would be exempt from being subject
to a franchise, but the affiliate would be required to pay a fee equivalent to a
franchising fee to the local franchising authority.

Although new legislation may substantially lessen regulatory burdens, there
can be no assurance that Congress will enact definitive legislation, and if it
does enact such legislation, it is unknown when such legislation will become
effective. Furthermore, the Systems' management cannot be certain of the
effects, if any, that such legislation will have upon the Systems' results of
operations or financial condition.

9. SUBSEQUENT EVENT:

Effective January 1, 1995, Charter Communications, Inc., CC-II, affiliated
entities, and other third parties purchased all of the outstanding shares of the
Parent and subsidiaries (including the stock of CCE) for approximately
$900,000,000 subject to certain closing adjustments. Approximately $110,000,000
was the portion of the purchase price related to the acquisition of the Systems.

F-133
<PAGE> 255

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Peachtree Cable TV, Inc. (Nevada Corporation)

We have audited the accompanying balance sheets of Peachtree Cable TV, Inc.
as of December 31, 1994 and 1993 and the related statements of operations, cash
flows and stockholders' equity for the four months ended April 30, 1995 and the
years ended December 31, 1994 and 1993. 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 financial statements referred to above present fairly,
in all material respects, the financial position of Peachtree Cable TV, Inc. as
of December 31, 1994 and 1993 and the results of its operations and its cash
flows for the four months ended April 30, 1995 and the years ended December 31,
1994 and 1993 in conformity with generally accepted accounting principles.

HOLBEN, BOAK, COOPER & CO.

Denver, Colorado
March 14, 1996

F-134
<PAGE> 256

PEACHTREE CABLE TV, INC.

BALANCE SHEETS
DECEMBER 31, 1994 AND 1993

<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
ASSETS
Cash................................................................ $ 181,266 $ 436
Trade and other receivables......................................... 179,672 103,392
Less allowance for doubtful receivables............................. 14,480 14,306
---------- ----------
165,192 89,086
---------- ----------
Deposits and prepaid expenses....................................... 31,978 26,264
Property and equipment, at cost:
Distribution systems.............................................. 7,019,219 6,974,248
Support equipment................................................. 345,995 307,590
---------- ----------
7,365,214 7,281,838
Less accumulated depreciation..................................... 1,927,599 1,626,273
---------- ----------
5,437,615 5,655,565
---------- ----------
Franchise costs..................................................... 5,505,744 5,505,744
Less accumulated amortization..................................... 2,584,111 2,235,478
---------- ----------
2,921,633 3,270,266
---------- ----------
Other assets........................................................ 3,835 --
---------- ----------
$8,741,519 $9,041,617
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Revolving credit agreement (Note 2)................................. $4,850,000 $6,000,000
Amounts due to subsidiaries of TCI (Note 3)......................... 284,067 345,832
Accounts payable and accrued expenses............................... 143,078 200,015
Subscriber advance payments......................................... 22,750 16,704
Deferred income taxes (Note 4)...................................... 1,328,172 965,362
---------- ----------
Total liabilities............................................ 6,628,067 7,527,913
---------- ----------
Commitments and contingencies (Note 6)
Stockholders' equity (Note 5):
Common stock:
Class A voting shares, $1 par value, 40,000 shares authorized,
6,343 shares issued and outstanding........................... 6,343 6,343
Class B limited voting shares, $1 par value, 20,000 shares
authorized, 3,207 shares issued and outstanding............... 3,207 3,207
Retained earnings................................................. 2,103,902 1,504,154
---------- ----------
Total stockholders' equity................................... 2,113,452 1,513,704
---------- ----------
$8,741,519 $9,041,617
========== ==========
</TABLE>

See accompanying notes to financial statements.

F-135
<PAGE> 257

PEACHTREE CABLE TV, INC.

STATEMENTS OF OPERATIONS
FOR THE FOUR MONTHS ENDED APRIL 30, 1995
AND YEARS ENDED DECEMBER 31, 1994 AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Cable television revenue............................... $1,577,785 $4,541,347 $4,432,724
Operating costs and expenses:
Operating (Note 3)................................... 484,254 1,171,278 1,119,247
Selling, general and administrative.................. 450,333 1,065,865 950,586
Management fees (Note 3)............................. 26,127 76,859 80,629
Depreciation......................................... 207,782 599,049 577,568
Amortization......................................... 116,958 348,836 348,655
---------- ---------- ----------
1,285,454 3,261,887 3,076,685
---------- ---------- ----------
Operating income.................................. 292,331 1,279,460 1,356,039
Other income (expense):
Interest expense..................................... (112,292) (278,098) (254,154)
Interest income...................................... 6,288 10,543 9,878
Other income......................................... -- 20,546 --
---------- ---------- ----------
(106,004) (247,009) (244,276)
---------- ---------- ----------
Earnings before income taxes...................... 186,327 1,032,451 1,111,763
Income tax (benefit) expense (Note 4).................. (20,244) 432,703 479,830
---------- ---------- ----------
Net earnings...................................... $ 206,571 $ 599,748 $ 631,933
========== ========== ==========
Earnings per common share (Note 1)..................... $ 21.63 $ 62.80 $ 64.64
========== ========== ==========
Weighted average number shares outstanding (Note 1).... 9,550 9,550 9,776
========== ========== ==========
</TABLE>

See accompanying notes to financial statements.

F-136
<PAGE> 258

PEACHTREE CABLE TV, INC.

STATEMENTS OF CASH FLOWS
FOR THE FOUR MONTHS ENDED APRIL 30, 1995
AND YEARS ENDED DECEMBER 31, 1994 AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Cash received from customers...................... $ 1,639,428 $ 4,465,748 $ 4,427,609
Cash paid to suppliers, including payments to
subsidiaries of TCI............................ (1,138,596) (2,312,429) (2,191,886)
Interest paid..................................... (112,292) (282,145) (262,383)
Interest received................................. 6,288 10,543 9,878
Income taxes paid................................. (1,000) (165,750) (290,750)
----------- ----------- -----------
Net cash provided by operating activities...... 393,828 1,715,967 1,692,468
----------- ----------- -----------
Cash flows from investing activities:
Capital expended for property and equipment....... (66,119) (423,993) (402,025)
Proceeds from sales of assets..................... 146 42,893 2,606
----------- ----------- -----------
Net cash (used in) investing activities........ (65,973) (381,100) (399,419)
----------- ----------- -----------
Cash flows from financing activities:
Purchase of Class A common stock.................. -- -- (482,926)
Borrowings under revolving credit agreement....... -- -- 300,000
Repayments under revolving credit agreement....... (500,000) (1,150,000) (1,250,000)
Capital expended for debt restructuring........... -- (4,037) --
----------- ----------- -----------
Net cash (used in) financing activities........ (500,000) (1,154,037) (1,432,926)
----------- ----------- -----------
Net increase (decrease) in cash................ (172,145) 180,830 (139,877)
Cash at beginning of period......................... 181,266 436 140,313
----------- ----------- -----------
Cash at end of period..................... $ 9,121 $ 181,266 $ 436
=========== =========== ===========
Reconciliation of net earnings to net cash provided
by operating activities:
Net earnings...................................... $ 206,571 $ 599,748 $ 631,933
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation................................... 207,782 599,049 577,568
Amortization................................... 116,958 348,836 348,655
Deferred income tax expense.................... 23,658 362,810 198,810
Changes in operating assets and liabilities:
Change in receivables........................ 82,818 (76,106) (1,820)
Change in deposits and prepaid expenses...... 30,323 (5,714) (137)
Change in subscriber advance payments........ (21,175) 6,046 (3,296)
Change in accrued interest expense........... -- (4,047) (8,229)
Change in accrued liabilities................ -- (20,546) --
Change in accounts payable and accrued
expenses, and amounts due to subsidiaries
of TCI.................................... (253,107) (94,109) (51,016)
----------- ----------- -----------
Net cash provided by operating
activities.............................. $ 393,828 $ 1,715,967 $ 1,692,468
=========== =========== ===========
</TABLE>

See accompanying notes to financial statements.

F-137
<PAGE> 259

PEACHTREE CABLE TV, INC.

STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE FOUR MONTHS ENDED APRIL 30, 1995
AND YEARS ENDED DECEMBER 31, 1994 AND 1993

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
CLASS A CLASS B
----------------- ----------------- RETAINED STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT EARNINGS EQUITY
------ ------ ------ ------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1992.... 6,794 $6,794 3,207 $3,207 $1,354,696 $ 1,364,697
Net earnings.................. -- -- -- -- 631,933 631,933
Purchase of Class A common
stock (Note 5)............. (451 ) (451) -- -- (482,475) (482,926)
----- ------ ----- ------ ---------- ----------
Balance at December 31, 1993.... 6,343 6,343 3,207 3,207 1,504,154 1,513,704
Net earnings.................. -- -- -- -- 599,748 599,748
----- ------ ----- ------ ---------- ----------
Balance at December 31, 1994.... 6,343 6,343 3,207 3,207 2,103,902 2,113,452
Net earnings.................. -- -- -- -- 206,571 206,571
----- ------ ----- ------ ---------- ----------
Balance at April 30, 1995....... 6,343 $6,343 3,207 $3,207 $2,310,473 $ 2,320,023
===== ====== ===== ====== ========== ==========
</TABLE>

See accompanying notes to financial statements.

F-138
<PAGE> 260

PEACHTREE CABLE TV, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Peachtree Cable TV, Inc., ("Peachtree" or the "Company") was organized to
acquire and develop cable television systems. Peachtree is owned by certain
officers and other employees of Tele-Communications, Inc. ("TCI"). The Company
owns cable systems in Carrolton and Dublin, Georgia, with approximately 4,500
and 7,500 subscribers, respectively.

Property and Equipment

Property and equipment is stated at cost which includes acquisition costs
allocated to tangible assets of cable television systems acquired. Construction
costs of cable television systems, including interest during construction and
applicable overhead, are capitalized. Interest capitalized is not material.

Depreciation is computed on a straight-line basis using estimated useful
lives of 5 to 15 years for distribution systems and to 5 to 10 years for support
equipment.

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 for removal of such
property are charged to accumulated depreciation, and salvage, if any, is
credited thereto. Gains or losses will only be recognized in connection with the
sale of properties in their entirety.

Franchise Costs

Costs incurred in obtaining and renewing cable franchises are initially
deferred and amortized over the legal lives of the franchises. Franchise rights
acquired through the purchase of cable systems are stated at the difference
between the cost of acquiring cable television systems and amounts assigned to
their tangible assets. These amounts are amortized on a straight-line basis over
the lives (15 to 17 1/2 years) of the respective franchises.

The Company's management continually evaluates the recoverability of
carrying amounts and estimated recovery periods of franchise costs. Such
evaluation is based on management's estimates of current liquidation values of
the cable systems. Based on this valuation, management believes that no
impairment of the carrying amount of intangible assets exists at April 30, 1995,
and no adjustment of estimated recovery periods is warranted.

Income Taxes

Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, which was adopted by Peachtree on January 1, 1991, requires use of the
"asset and liability" method of accounting for income taxes. Under such method,
deferred income taxes are recognized for the tax consequences of "temporary
differences" by applying enacted statutory tax rates applicable to future years
to differences between the financial statement carrying amounts and the tax
basis of existing assets and liabilities. The primary causes of these
differences are excess depreciation and amortization for income tax purposes.

Revenues

Cable service revenues are recognized when the related services are
provided.

Installation revenues are recognized to the extent of direct selling and
installation costs incurred. The remainder, if any, is deferred and amortized to
income over the average estimated period that customers are expected to remain
connected to the cable television system.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

F-139
<PAGE> 261

PEACHTREE CABLE TV, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Cash and Cash Equivalents

Cash and cash equivalents presented in the statements of cash flows consist
of demand deposits in banks.

Concentration of Credit Risk

SFAS No. 105, "Disclosure of Information About Financial Instruments with
Off-Balance Sheet Risk and Financial Instruments with Concentrations of Credit
Risk", requires disclosure of significant concentrations of credit risk
regardless of the degree of such risk. The Company's cable systems are located
in Carrolton, Georgia, near Atlanta, and Dublin, Georgia, near the center of the
State. Both cities are in rural areas. The Company's customers are principally
residential homeowners and renters. As of April 30, 1995, the Company's cash
consisted of demand deposits maintained at a financial institution. The amounts
due from accounts receivable derive from the Company's customer's base, which
has wide economic dispersion. The Company does not believe significant credit
risk exists at April 30, 1995 due to the dispersion of the customer base. The
Company's cash and receivables are subject to minimal risk.

Earnings per share

The calculation of earnings per share is based on the weighted average
number of common shares outstanding. Since each Class B share is convertible
without cost and at the sole discretion of the holder, all Class B shares have
been treated as fully converted into Class A share for each period presented.

NOTE 2 -- REVOLVING CREDIT AGREEMENT

The revolving credit agreement, as amended (the "Credit Agreement"), which
provided for borrowings of up to $6,800,000 at April 30, 1995 has mandatory
quarterly reductions of the amount available for borrowing thereunder commencing
in March 1996. The Credit Agreement provides for interest at varying rates based
upon optional measures which approximate the prime rate (8.5% at April 30,
1995). The Credit Agreement also contains restrictive covenants regarding
additional indebtedness, guarantees, liens, investments, dispositions and
dividend payments, and requires the maintenance of certain ratios of cash flow
to debt service and cash flow to senior debt, as defined. As security for this
indebtedness, the shareholders of Peachtree have pledged all of their common
stock.

For the four months ending April 30, 1995 and the years ended December 31,
1994 and 1993, the weighted average interest rate was approximately 6.9% and the
amount borrowed averaged $5,757,000.

The total amount was repaid on May 5, 1995.

NOTE 3 -- TRANSACTIONS WITH TCI

Peachtree purchases, at TCI's cost, various pay television and other
programming through a certain subsidiary of TCI. Charges for such programming
were $280,176, $760,787 and $713,487 for the four months ending April 30, 1995
and the years ended December 31, 1994 and 1993, respectively.

Peachtree has a management agreement with another subsidiary of TCI whereby
the subsidiary's management is providing administrative services and has assumed
managerial responsibility for cable television system operations and
construction. Pursuant to this management agreement, Peachtree makes
reimbursement for all operating costs and expenses incurred on its behalf and
pays a monthly management fee calculated on a per-subscriber basis. Also,
Peachtree pays an additional management fee in an amount equal to 1% of the
charges for programming (as described in the preceding paragraph).

F-140
<PAGE> 262

PEACHTREE CABLE TV, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 4 -- INCOME TAXES

Income tax expense for the four months ending April 30, 1995 and the years
ended December 31, 1994 and 1993 consisted of:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Deferred Federal tax expense....................... $ 23,658 $319,610 $141,253
Deferred State tax expense......................... -- 43,200 57,557
-------- -------- --------
23,658 362,810 198,810
-------- -------- --------
Current Federal tax expense (benefit).............. (43,902) 69,143 280,270
Current State tax expense.......................... -- 750 750
-------- -------- --------
(43,902) 69,893 281,020
-------- -------- --------
$(20,244) $432,703 $479,830
======== ======== ========
</TABLE>

Significant components of deferred tax assets and liabilities, based on the
tax effects of temporary differences between book and tax amounts are as
follows:

<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards........................ $ 283,956 $ 486,179
Investment tax credit carryforwards..................... -- 28,468
Alternative minimum tax credit carryforwards............ 349,971 285,807
Other................................................... 5,633 5,565
----------- -----------
639,560 806,019
Deferred tax (liabilities):
Accelerated depreciation................................ (1,385,392) (1,266,107)
Franchise costs......................................... (582,340) (505,274)
----------- -----------
(1,967,732) (1,771,381)
----------- -----------
Net deferred tax (liabilities)............................ $(1,328,172) $ (965,362)
=========== ===========
</TABLE>

At December 31, 1994, Peachtree had a net operating loss carryforward for
income tax purposes of approximately $729,000 which, if not utilized to reduce
taxable income in future periods, expires in the years 2003 through 2005. All
net operating losses have been recognized for financial statement purposes as a
reduction of deferred income taxes. To the extent the net operating loss
carryforward is utilized for income tax purposes, deferred tax credits will be
restored at the then current tax rates.

At December 31, 1994, Peachtree had no available regular investment tax
credits. All such investment tax credits have been recognized for financial
statement purposes as a reduction of deferred income taxes.

Reconciliations of the differences between income taxes computed at Federal
statutory tax rates and the provisions for income taxes are as follows:

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Income taxes computed at the Federal statutory
rate............................................. $ 65,214 $361,358 $388,855
State provisions, net of Federal benefits.......... -- 115,211 43,385
Effect of rate change.............................. -- -- 30,114
Other items, net................................... (85,458) (43,866) 17,476
-------- --------- ---------
Provision (benefit) for income taxes............... $(20,244) $432,703 $479,830
======== ========= =========
</TABLE>

F-141
<PAGE> 263

PEACHTREE CABLE TV, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5 -- STOCKHOLDERS' EQUITY

The stockholders of Peachtree have entered into a stockholders' agreement
which provides, among other things, for rights of first refusal in the event any
stockholder wishes to dispose of shares and for the conversion of shares of
Class B into shares of Class A common stock, under certain circumstances,
without cost and at the sole discretion of the Class B shareholder.

On June 30, 1993, Peachtree purchased and redeemed 451 Class A common
shares for a purchase price of $482,926 pursuant to the stockholders' agreement.
As a result of this transaction, Class A common stock was reduced by $451, and
retained earnings was charged $482,475.

NOTE 6 -- COMMITMENTS AND CONTINGENCIES

The Company leases certain facilities and equipment under noncancelable
operating leases. Future minimum lease payments are as follows:

<TABLE>
<S> <C>
1995...................................................... $ 29,097
1996...................................................... 55,585
1997...................................................... 48,385
1998...................................................... 48,385
1999 and thereafter....................................... $118,922
</TABLE>

The 1992 Cable Act and the Federal Communications Commission's ("FCC")
rules implementing the 1992 Cable Act have generally increased the
administrative and operational expenses of cable television systems and have
resulted in additional regulatory oversight by the FCC and local franchise
authorities. Management is unable to predict the ultimate effect of the 1992
Cable Act or the ultimate outcome of various FCC rulemaking proceedings or the
litigation challenging various aspects of the 1992 Cable Act and the FCC's
regulations implementing the 1992 Cable Act.

The 1992 Cable Act and FCC regulations have imposed rate requirements for
basic services and equipment. Under the 1992 Cable Act, a local franchising
authority in a community not subject to "effective competition" generally is
authorized to regulate basic cable rates after certifying to the FCC that, among
other things, it will adopt and administer rate regulation consistent with FCC
rules, and in a manner that will provide a reasonable opportunity to consider
the views of interested parties. The Telecommunications Act of 1996, passed by
Congress on February 1, 1996, and signed into law by the President on February
8, 1996, broadens the definition of "effective competition" to include any
franchise area where a local exchange carrier (or its affiliate) provides video
programming services to subscribers by any means, other than through direct
broadcast satellite. In regulating the basic service rates, certified local
franchise authorities have the authority to order a rate refund of previously
paid rates determined to be in excess of the maximum permitted reasonable rates.

Rate regulation of the basic service tier remains subject to regulation by
local franchising authorities under the Telecommunications Act of 1996, except
in certain circumstances for small cable operators. For a defined class of
"small cable operators", the Telecommunications Act of 1996 immediately
eliminates regulation of cable programming rates. Rates for basic tier of small
cable operators are deregulated if the system offered a single tier of services
as of December 31, 1994.

F-142
<PAGE> 264

PEACHTREE CABLE TV, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Under the 1992 Cable Act, rates for cable programming services not carried
on the basic tier (non-basic services) could be regulated by the FCC upon the
filing of a complaint by franchise authorities or subscribers that indicates the
cable operator's rates for these services are unreasonable. The
Telecommunications Act of 1996 eliminates regulation of non-basic programming as
of March 31, 1999. In the interim, rate regulation of the non-basic programming
tier can only be triggered by a franchising authority complaint to the FCC. If
the FCC determines that the cable operator's non-basic programming service tier
rates are unreasonable, the FCC has the authority to order the operator to
reduce non-basic programming service tier rates and to refund to customers any
overcharges occurring from the filing date of the rate complaint with the FCC.

In September 1995, the FCC developed an abbreviated cost-of-service form
that permits cable operators to recover costs of significant upgrades that
provide benefits to subscribers of regulated cable services. Cable operators
seeking to raise rates to cover costs of an upgrade would submit only the costs
of the upgrade instead of all current costs. In December 1995, the FCC revised
its cost-of-service rules. At this time, the Company is unable to predict the
effect of these revised rules on the Company's financial position or results of
operations.

In another action in September 1995, the FCC established a new optional
rate adjustment methodology that encourages operators to limit their rate
increases to once a year to reflect inflation and changes in external costs and
the number of channels. The rules permit cable operators to "project reasonable"
changes in their costs for the 12 months following the rate change (in an effort
to eliminate delays in recovering costs). The order allows operators to recover
increases in additional types of franchise-requirement costs. Permitted pass-
through increases include increases in the cost of providing institutional
networks, video services, data services to or from governmental and educational
institutions, and certain other cost increases. The Company is unable to predict
the effect of these new rules on the Company's business.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operator's
marketing costs and may also allow operators to better respond to competition
from alternative providers. The Company is unable to predict if these proposed
rules will ultimately be promulgated by the FCC, and if they are promulgated,
their effect of the Company's financial position and results of operations.

Under the 1992 Cable Act, cable television operators are subject to
mandatory signal carriage requirements that allow local commercial and
non-commercial television broadcast stations to elect to require a cable system
to carry the station, subject to certain exceptions, or, in the case of
commercial stations, to negotiate for "retransmission consent" to carry the
station. In addition, there are requirements for cable systems to obtain
retransmission consent for all "distant" commercial television stations,
commercial radio stations and certain low power television stations carried by
such systems after October 6, 1993.

The 1992 Cable Act modified the franchise renewal process to make it easier
for a franchising authority to deny renewal. Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement. Although management believes
that the Company has generally met the terms of its franchise agreements and has
provided quality levels of service, and anticipates the Partnership's future
franchise renewal prospects generally will be favorable, there can be no
assurance that any such franchises will be renewed or, if renewed, that the
franchising authority will not impose more onerous requirements on the Company
than previously existed.

The Telecommunications act of 1996 alters Federal, state and local laws and
regulations pertaining to cable television, telecommunications, and other
services.

F-143
<PAGE> 265

PEACHTREE CABLE TV, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Under the Telecommunications Act of 1996, telephone companies can compete
directly with cable operators providing video programming. This new legislation
recognizes several multiple entry options for telephone companies to provide
competitive video programming.

Certain provisions of the Telecommunications Act of 1996 could materially
affect the growth and operation of the cable television industry and the cable
services provided by the Company. Although the new legislation may substantially
lessen regulatory burdens, the cable television industry may be subject to
additional competition as a result thereof. There are numerous rulemakings to be
undertaken by the FCC which will interpret and implement the Telecommunications
Act's provisions. In addition, certain provisions of the Telecommunications Act
of 1996 (such as the deregulation of cable programming rates) are not
immediately effective. Further, certain of the Telecommunications Act's
provisions have been and are likely to be subject to judicial challenges. The
Company is unable at this time to predict the outcome of such rulemakings or
litigation or the substantive effect of the new legislation and the rulemakings
on the financial position and results of operations of the Company.

NOTE 7 -- SUBSEQUENT EVENTS

On January 10, 1995, the Shareholders of the Company had executed a Stock
Purchase Agreement (Agreement), which authorized the sale of all issued and
outstanding shares of common stock of Peachtree Cable TV, Inc. to Charter
Communications III, L.P., an unrelated party. The sale was consummated on May 5,
1995 at a sales price of $22,050,000.

F-144
<PAGE> 266

INDEPENDENT AUDITORS' REPORT

CableSouth, Inc.:

We have audited the accompanying balance sheets of the Cable Systems of
CableSouth, Inc. as of December 31, 1993 and 1994, and the related statements of
operations, systems' equity, and cash flows for each of the three years in the
period ended December 31, 1994 and for the five-month period ended May 31, 1995.
These financial statements are the responsibility of CableSouth, Inc.'s
management. Our responsibility is to express an opinion on these 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
CableSouth, Inc.'s 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, such financial statements present fairly, in all material
respects, the financial position of the Cable Systems of CableSouth, Inc. at
December 31, 1993 and 1994, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1994 and for the
five-month period ended May 31, 1995 in conformity with generally accepted
accounting principles.

As discussed in Note 6, CableSouth, Inc. sold all of its operating assets
of the Cable Systems effective May 31, 1995.

DELOITTE & TOUCHE LLP
Birmingham, Alabama
March 5, 1996

F-145
<PAGE> 267

CABLE SYSTEMS OF CABLESOUTH, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1993 1994
---------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents......................................... $ 585,362 $ 734,117
Accounts receivable:
Subscriber..................................................... 77,329 102,193
Other.......................................................... 44,329 42,671
Prepaid expenses.................................................. 97,824 158,632
Inventory......................................................... 90,143 57,987
---------- ----------
Total current assets...................................... 894,987 1,095,600
---------- ----------
Property, Plant and Equipment, Net (Note 2)......................... 6,752,932 5,127,427
---------- ----------
Other Assets:
Intangible assets, net of accumulated amortization (Note 3)....... 1,012,505 884,369
Deposits and other................................................ 12,505 13,462
---------- ----------
Total other assets........................................ 1,025,010 897,831
---------- ----------
Total (Note 6)...................................................... $8,672,929 $7,120,858
========== ==========
LIABILITIES AND SYSTEMS' EQUITY
Current Liabilities:
Accounts payable.................................................. $ 365,869 $ 401,769
Accrued expenses.................................................. 311,403 254,926
Other liabilities................................................. 87,240 67,522
---------- ----------
Total current liabilities......................................... 764,512 724,217
Deferred Compensation (Note 4)...................................... 3,343,348 2,126,628
---------- ----------
Total liabilities......................................... 4,107,860 2,850,845
Commitments and Contingencies (Note 5)
Systems' Equity..................................................... 4,565,069 4,270,013
---------- ----------
Total............................................................... $8,672,929 $7,120,858
========== ==========
</TABLE>

See notes to financial statements.

F-146
<PAGE> 268

CABLE SYSTEMS OF CABLESOUTH, INC.

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1992, 1993, 1994 AND FOR THE
FIVE-MONTH PERIOD ENDED MAY 31, 1995

<TABLE>
<CAPTION>
DECEMBER 31, FIVE-MONTH
------------------------------------------- PERIOD ENDED
1992 1993 1994 MAY 31, 1995
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenues............................... $8,883,589 $ 10,048,530 $10,565,050 $4,457,334
Operating Expenses:
Service costs........................ 867,780 924,375 988,607 429,121
Programming costs.................... 1,874,554 2,093,305 2,345,648 1,031,415
Selling, general and
administrative.................... 2,186,145 2,398,628 2,454,369 957,066
Depreciation and amortization (Notes
2 and 3).......................... 3,462,019 3,249,328 2,913,558 905,058
Deferred compensation provision
(benefit)......................... 934,265 576,652 (980,721) 485,972
---------- ----------- ----------- ----------
Operating Income (Loss)................ (441,174) 806,242 2,843,589 648,702
Other Expense, Net..................... (120,421) (24,000) (148,129) (25,103)
---------- ----------- ----------- ----------
Net Income (Loss)...................... $ (561,595) $ 782,242 $ 2,695,460 $ 623,599
========== =========== =========== ==========
</TABLE>

See notes to financial statements.

F-147
<PAGE> 269

CABLE SYSTEMS OF CABLESOUTH, INC.

STATEMENT OF SYSTEMS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1992, 1993, 1994 AND
FOR THE FIVE-MONTH PERIOD ENDED MAY 31, 1995

<TABLE>
<S> <C>
Systems' Equity, January 1, 1992................................ $ 9,872,703
Net loss...................................................... (561,595)
Net activity with corporate home office....................... (2,711,801)
-----------
Systems' Equity, December 31, 1992.............................. 6,599,307
Net income.................................................... 782,242
Net activity with corporate home office....................... (2,816,480)
-----------
Systems' Equity, December 31, 1993.............................. 4,565,069
Net income.................................................... 2,695,460
Net activity with corporate home office....................... (2,990,516)
-----------
Systems' Equity, December 31, 1994.............................. 4,270,013
Net income.................................................... 623,599
Net activity with corporate home office....................... (1,987,865)
-----------
Systems' Equity, May 31, 1995................................... $ 2,905,747
==========
</TABLE>

See notes to financial statements.

F-148
<PAGE> 270

CABLE SYSTEMS OF CABLESOUTH, INC.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1992, 1993, 1994 AND FOR
THE FIVE-MONTH PERIOD ENDED MAY 31, 1995

<TABLE>
<CAPTION>
DECEMBER 31, FIVE-MONTH
------------------------------------------- PERIOD ENDED
1992 1993 1994 MAY 31, 1995
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Operating Activities:
Net income (loss)................... $ (561,595) $ 782,242 $ 2,695,460 $ 623,599
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization.... 3,462,019 3,249,328 2,913,558 905,058
Deferred
compensation -- provision
(benefit)...................... 934,265 576,652 (980,721) 485,972
Gain on sale of property and
equipment...................... (5,011) (5,954) (4,340)
Changes in assets and liabilities
provided (used) cash:
Accounts receivable............ 79,896 (60,165) (24,864) (69,910)
Other current assets........... 59,834 (98,652) (27,951) 144,623
Accounts payable............... (70,032) 115,955 35,900 252,923
Other current liabilities...... (184,551) (90,379) (76,195) 52,872
Deferred compensation
(advances).................. (236,000) (236,000)
----------- ----------- ----------- -----------
Net cash provided by operating
activities.................. 3,714,825 4,233,027 4,294,847 2,395,137
----------- ----------- ----------- -----------
Investing Activities:
Expenditures for property, plant and
equipment........................ (1,766,664) (1,372,902) (1,159,916) (259,764)
Proceeds from sale of property and
equipment........................ 8,000 30,620 4,340
----------- ----------- ----------- -----------
Net cash used in investing
activities.................. (1,758,664) (1,342,282) (1,155,576) (259,764)
----------- ----------- ----------- -----------
Financing Activities --
Net activity with corporate home
office.............................. (2,711,801) (2,816,480) (2,990,516) (1,987,865)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Cash and
Cash Equivalents.................... (755,640) 74,265 148,755 147,508
Cash and Cash Equivalents, Beginning
of Period........................... 1,266,737 511,097 585,362 734,117
----------- ----------- ----------- -----------
Cash and Cash Equivalents, End of
Period.............................. $ 511,097 $ 585,362 $ 734,117 $ 881,625
=========== =========== =========== ===========
</TABLE>

See notes to financial statements.

F-149
<PAGE> 271

CABLE SYSTEMS OF CABLESOUTH, INC.

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION -- CableSouth, Inc. (the ("Company")
operated a cable television systems business (the "Cable Systems") in the state
of Alabama until May 31, 1995 when all of its Cable Systems operating assets
were sold (see Note 6). The Company's consolidated entities, BayCom Partners,
L.P. and CableSouth Management, L.P., which operate in the radio and television
listings industries, respectively, and the Company's investment in TV Data
Technologies, L.P., are not included in the accompanying financial statements.

The financial information as of December 31, 1993 and 1994 and for each of
the three years in the period ended December 31, 1994 and for the five-month
period ended May 31, 1995 presented herein reflects the financial position and
results of operations of the Cable Systems and is not necessarily indicative of
the financial position or results of operations had the Cable Systems operated
as a separate, stand-alone entity during the reporting periods. The results of
operations for such periods do not necessarily reflect any trends or future
prospects for the Cable Systems as an independent entity.

ACCOUNTING 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 and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS -- Cash and cash equivalents include cash on
hand, cash on deposit and highly liquid investments with a maturity of three
months or less at purchase date.

ACCOUNTS RECEIVABLE -- Annually management of the Cable Systems assess the
need for an allowance for doubtful accounts. In the opinion of the Cable
Systems' management, no allowance is deemed necessary.

PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment are stated
at cost. The cost of cable television systems constructed by the Cable Systems
includes applicable labor and overhead. Depreciation is calculated on either the
straight-line or double declining-balance methods over the estimated useful
lives of the related assets. Leasehold improvements are amortized on the
straight-line method over the shorter of the lease term or the estimated useful
life of the asset. When assets are retired or disposed of, the cost and related
accumulated depreciation and amortization are removed from the accounts and any
resulting gain or loss is recognized in income for the period. The cost of
maintenance and repairs is charged to income as incurred; significant renewals
and betterments are capitalized. Initial subscriber installment costs, including
material, labor and overhead costs of the drops, are capitalized and depreciated
over a period consistent with cable system installations. The costs of
subsequent disconnecting and reconnecting are charged to expense.

INTANGIBLE ASSETS -- Intangible assets are stated at cost less accumulated
amortization and are amortized on a straight-line basis over the estimated
useful life of the asset. The Cable Systems' management annually assesses the
recoverability of its intangible assets based on judgments as to future cash
flows from operations.

INCOME TAXES -- The Company has elected S corporation status under the
Internal Revenue Code and taxable income of the Company is includable in the
income tax returns of the stockholders. Accordingly, no provision is made for
income taxes for Cable Systems operations in the accompanying financial
statements.

REVENUE RECOGNITION -- Service revenues are recognized when the related
services are provided.

F-150
<PAGE> 272

CABLE SYSTEMS OF CABLESOUTH, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

2. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at December 31, consist of the following, and
are being depreciated over the indicated periods:

<TABLE>
<CAPTION>
1993 1994
----------- -----------
<S> <C> <C> <C>
Headend building and equipment............ $ 2,297,574 $ 2,310,870 7 - 25 years
Trunk and distribution systems............ 16,530,864 17,188,373 7 years
Drops and taps............................ 3,530,805 3,906,079 7 years
Other equipment........................... 1,885,245 1,956,050 5 - 7 years
Vehicles.................................. 668,088 677,127 3 - 5 years
Office furniture and fixtures............. 676,609 697,020 7 years
Leasehold improvements.................... 58,017 58,017 Term of lease
Land...................................... 21,085 21,085 --
----------- -----------
Total........................... 25,668,287 26,814,621
Less accumulated depreciation and
amortization............................ 18,915,355 21,687,194
----------- -----------
Total........................... $ 6,752,932 $ 5,127,427
=========== ===========
</TABLE>

Depreciation and amortization expense of property, plant and equipment was
$3,147,639 in 1992, $3,088,984 in 1993, $2,785,421 in 1994 and $856,001 for the
five-month period ended May 31, 1995.

3. INTANGIBLE ASSETS

Intangible assets at December 31, consist of the following, and are being
amortized over the indicated periods:

<TABLE>
<CAPTION>
1993 1994
---------- ----------
<S> <C> <C> <C>
Franchise costs............................. $1,006,743 $1,006,743 10 - 15 years
Noncompete agreements....................... 1,115,304 1,115,304 5 years
Excess of cost over net assets of minority
interest acquired......................... 509,629 509,629 40 years
Excess of cost over net assets acquired..... 79,975 79,975 15 years
Trade name.................................. 19,195 19,195 5 years
---------- ----------
Total............................. 2,730,846 2,730,846
Less accumulated amortization............... 1,718,341 1,846,477
---------- ----------
Total............................. $1,012,505 $ 884,369
========== ==========
</TABLE>

Amortization expense related to intangible assets was $314,380 in 1992, $160,344
in 1993, $128,137 in 1994 and $49,057 for the five-month period ended May 31,
1995.

4. DEFERRED COMPENSATION

The Company has an employment agreement with an officer of the Company
providing for deferred compensation based on the increase or decrease in
estimated net worth of the Company, as defined in the agreement. The
accompanying financial statements include a deferred compensation liability
computed only on the increase or decrease in estimated net worth of the Company
that is attributable to Cable Systems. At December 31, 1993 and 1994, the
deferred compensation liability under this agreement that is attributable to
Cable Systems was $1,609,688 and $654,186, respectively. Subsequent to May 31,
1995, advances were paid

F-151
<PAGE> 273

CABLE SYSTEMS OF CABLESOUTH, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

to the officer which eliminated the deferred compensation liability of $737,466
attributable to the Cable Systems at May 31, 1995.

The Company had employment agreements with two other officers of the
Company providing for deferred compensation based upon the increase or decrease
in the estimated net worth of the Cable Systems as defined in their agreements.
At December 31, 1993 and 1994, the deferred compensation under these agreements
was $1,733,660 and $1,472,442, respectively. The outstanding deferred
compensation liability of $1,875,134 at May 31, 1995 was paid to the officers
subsequent to the sale of the Cable Systems (see Note 6).

5. COMMITMENTS AND CONTINGENCIES

There are sundry claims and suits pending against the Company in the
ordinary course of business. In the opinion of the Cable Systems' management,
any ultimate liability in these matters will have no material adverse effect on
the operations or financial position of the Cable Systems.

On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 ("1992 Cable Act"), which substantially
amended the provisions of the Cable Communications Policy Act of 1984 and
greatly expands federal and local regulation of the cable television industry.
Among other matters, the 1992 Cable Act provides for the regulation of rates
charged for basic and cable programming services (other than per-event and
per-channel services), allows broadcast television stations to choose either
"must carry" rights or retransmission consent rights, regulates the sale of
cable programming and implements other operational requirements.

Various provisions of the 1992 Cable Act have been implemented by the FCC
through rulemaking proceedings. The FCC mandated a basic and cable programming
rate freeze, which became effective in April 1993 and was extended to May 15,
1994.

In April 1993, the FCC adopted rate regulations which utilized a benchmark
price cap system for determining the reasonableness of existing basic and cable
programming service rates. The Cable Systems implemented the FCC requirements,
which became effective on September 1, 1993, in a manner that management
believes is in substantial compliance with the regulations promulgated by the
FCC.

On February 22, 1994, the FCC significantly modified the regulations
implemented in September 1993. Among other things, the FCC ordered a further
reduction of up to 7% in basic and cable programming rates in effect on
September 30, 1992, if those rates exceed revised per-channel benchmarks
established by the FCC. These new rules, which became effective July 14, 1994,
result in an overall reduction of up to 17% in basic and cable programming rates
in effect on September 30, 1992, before inflation and other allowable
adjustments.

On November 10, 1994, the FCC announced implementation of new rules which
prescribe the manner in which operators may charge subscribers for new services,
and indicated that a la carte services offered in a package will now be subject
to rate regulation. Management of the Cable Systems believes that the 1992 Cable
Act, as amended, and other related FCC regulations will not have a materially
adverse effect on the Cable SystemsI revenues or its financial position.

6. SALE OF THE CABLE SYSTEMS

Effective May 31, 1995, the Company completed an Asset Purchase Agreement
with Charter Communications III, L.P. to sell all of its operating assets of the
Cable Systems. The sales price of $48,500,000, was a cash transaction.

* * * * *

F-152
<PAGE> 274

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Charter Communications II, L.P.

We have audited the accompanying balance sheets of the Georgia Cable
Television System (sold by Masada Cable Partners, L.P. to Charter Communications
II, L.P.), as of July 31, 1995 and December 31, 1994, and the related statements
of operations, changes in system deficiency and cash flows for the seven months
ended July 31, 1995 and the years ended December 31, 1994 and 1993. These
financial statements are the responsibility of the System's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

As described in Note 1, the System was a part of Masada Cable Partners,
L.P. until July 31, 1995 and, as such, had no separate legal status or
existence. Transactions with Masada Cable Partners, L.P. are described in Notes
2, 4 and 5.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Georgia Cable Television
System (sold by Masada Cable Partners, L.P. to Charter Communications II, L.P.)
at July 31, 1995 and December 31, 1994, and the results of its operations and
its cash flows for the seven months ended July 31, 1995 and the years ended
December 31, 1994 and 1993, in conformity with generally accepted accounting
principles.

ERNST & YOUNG LLP

Birmingham, Alabama,
March 8, 1996

F-153
<PAGE> 275

GEORGIA CABLE TELEVISION SYSTEM
(SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.)

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER
JULY 31, 31,
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....................................... $ 96,849 $ 99,661
Accounts receivable (net of an allowance of $26,000 in 1995).... 30,316 29,651
Prepaid expenses and other...................................... 40,240 19,773
----------- -----------
Total current assets......................................... 167,405 149,085
Net property and equipment (Note 3)............................... 4,295,895 5,671,487
Deferred charges:
Franchise costs................................................. 4,718,377 4,718,377
Acquisition costs............................................... 504,579 475,819
Goodwill........................................................ 981,705 981,705
Other deferred charges.......................................... 336,449 336,448
----------- -----------
6,541,110 6,512,349
Accumulated amortization........................................ (4,293,409) (3,934,218)
----------- -----------
Net deferred charges.............................................. 2,247,701 2,578,131
----------- -----------
$ 6,711,001 $ 8,398,703
========== ==========
LIABILITIES AND SYSTEM DEFICIENCY
Current liabilities:
Accounts payable................................................ $ 35,056 $ 48,331
Subscriber deposits and advance payments........................ 68,889 73,615
Accrued interest................................................ 138,163 72,600
Accrued franchise fee........................................... 78,563 134,313
Accrued programming fee......................................... 136,030 88,124
Accrued pole rent............................................... 25,353 37,942
Other accrued liabilities....................................... 114,604 49,124
----------- -----------
Total current liabilities.................................... 596,658 504,049
Notes payable allocated to the System (Note 4).................... 12,673,546 14,983,262
----------- -----------
Total liabilities....................................... 13,270,204 15,487,311
Contingencies (Note 6)
System capital (deficiency)....................................... (6,559,203) (7,088,608)
----------- -----------
$ 6,711,001 $ 8,398,703
========== ==========
</TABLE>

See accompanying notes.

F-154
<PAGE> 276

GEORGIA CABLE TELEVISION SYSTEM
(SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.)

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SEVEN MONTHS
ENDED JULY 31, YEARS ENDED DECEMBER 31,
1995 1994 1993
-------------- ----------- -----------
<S> <C> <C> <C>
Subscriber service revenue.......................... $ 3,457,665 $ 5,807,796 $ 5,687,344
Operating expenses:
Operating costs................................... 1,615,144 2,566,756 2,750,690
Selling, general and administrative............... 320,611 501,892 609,682
Depreciation...................................... 1,641,993 2,977,823 2,872,267
Amortization...................................... 359,191 617,307 620,742
----------- ----------- -----------
Total operating expenses.................. 3,936,939 6,663,778 6,853,381
----------- ----------- -----------
Loss from operations................................ (479,274) (855,982) (1,166,037)
Other income (expense):
Interest and fees................................. (754,549) (1,191,386) (1,122,391)
Other, net (Note 5)............................... (154,599) (259,130) (229,830)
----------- ----------- -----------
Total other income (expense).............. (909,148) (1,450,516) (1,352,221)
----------- ----------- -----------
Net loss............................................ $ (1,388,422) $(2,306,498) $(2,518,258)
=========== =========== ===========
</TABLE>

See accompanying notes.

F-155
<PAGE> 277

GEORGIA CABLE TELEVISION SYSTEM
(SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.)

STATEMENTS OF CHANGES IN SYSTEM DEFICIENCY

<TABLE>
<CAPTION>
SYSTEM
DEFICIENCY
-----------
<S> <C>
Balance, December 31, 1992...................................................... $(3,481,132)
Net loss...................................................................... (2,518,258)
Net change in current accounts with partnership............................... 704,467
-----------
Balance, December 31, 1993...................................................... (5,294,923)
Net loss...................................................................... (2,306,498)
Net change in current accounts with partnership............................... 512,813
-----------
Balance, December 31, 1994...................................................... (7,088,608)
Net loss...................................................................... (1,388,422)
Net change in current accounts with partnership............................... 1,917,827
-----------
Balance, July 31, 1995.......................................................... $(6,559,203)
===========
</TABLE>

See accompanying notes.

F-156
<PAGE> 278

GEORGIA CABLE TELEVISION SYSTEM
(SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SEVEN MONTHS YEAR ENDED DECEMBER 31,
ENDED JULY 31, ---------------------------
1995 1994 1993
--------------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss........................................... $(1,388,422) $(2,306,498) $(2,518,258)
Net change in current accounts with partnership.... 1,917,827 512,813 704,467
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization.................... 2,001,184 3,595,130 3,493,009
Gain on sale of fixed assets..................... (2,115) (1,900) --
Bad debt expense................................. 26,000 -- --
Changes in operating assets and liabilities:
Accounts receivable........................... (26,665) 34,368 5,544
Prepaid expenses and other.................... (20,467) 30,052 (22,338)
Accounts payable.............................. (13,275) 6,213 (8,201)
Deposits and advances......................... (4,726) (11,027) (8,809)
Accrued interest.............................. 65,563 (145,681) (65,700)
Other accrued liabilities..................... 45,047 52,181 (78,564)
----------- ----------- -----------
Net cash provided by operating
activities............................. 2,599,951 1,765,651 1,501,150
INVESTING ACTIVITIES
Purchase of property and equipment................. (266,401) (521,376) (1,153,174)
Proceeds from sale of fixed assets................. 2,115 2,474 255
Additions to deferred charges...................... (28,761) (15,609) (7,686)
----------- ----------- -----------
Net cash used in investing activities.............. (293,047) (534,511) (1,160,605)
FINANCING ACTIVITIES
Payments on notes payable.......................... (2,309,716) (1,195,702) (351,836)
----------- ----------- -----------
Net cash used in financing activities.............. (2,309,716) (1,195,702) (351,836)
----------- ----------- -----------
Increase (decrease) in cash and cash equivalents... (2,812) 35,438 (11,291)
Cash and cash equivalents at beginning of year..... 99,661 64,223 75,514
----------- ----------- -----------
Cash and cash equivalents at end of year........... $ 96,849 $ 99,661 $ 64,223
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest and fees.................. $ 688,986 $ 1,337,067 $ 1,188,091
=========== =========== ===========
</TABLE>

See accompanying notes.

F-157
<PAGE> 279

GEORGIA CABLE TELEVISION SYSTEM
(SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.)

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

The accompanying financial statements include the accounts of the Georgia
Cable Television System (System) sold by Masada Cable Partners, L.P. (Masada) to
Charter Communications II, L.P. (Charter) pursuant to the sale agreement dated
March 27, 1995 between Masada and Charter. The System has no separate legal
status or existence. These financial statements are presented as if the System
had existed as an entity separate from Masada during the periods presented, and
includes the historical assets, liabilities, sales and expenses that are
directly related to the System's operations. These financial statements include
certain Masada partnership asset, liability and expense allocations, primarily a
portion of Masada's acquisition costs and debt and interest related thereto.

Masada, a Delaware limited partnership, was organized on April 10, 1988 to
acquire, construct and operate cable television systems. The managing general
partner is Masada Cable Management, Inc. and the co-general partner is BHI
Associates III, L.P. (Bariston).

The sale agreement between Masada and Charter generally includes assets to
be purchased by Charter as all tangible property and equipment used in the
operation of the System, cable design and engineering records, marketing
materials, any rights or permits such as franchises, leases, etc., all real
property owned or leased and comprising the System, accounts receivable
pertaining to the System and all prepaid items relating to the System. Assets
not to be purchased include cash on hand, insurance policies and rights
thereunder, bonds or other surety instruments, rights under the master
programming contracts utilized by Masada with respect to the System, any
refundable taxes for periods prior to the closing date, any right to the names
"Masada" or "Premiere" or any derivatives related thereto and the books and
records of Masada, except items previously specifically described.

The financial information presented herein reflects the financial position
and results of operations of the System and is not necessarily indicative of the
financial position or results of operations had the System operated as a
separate, stand-alone entity during the reporting periods. The results of
operations for such periods do not necessarily reflect any trends or future
prospects for the System as an independent entity.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recognition of Revenue

Subscriber service revenue is recognized in the month the cable service is
provided.

Property and Equipment

Property and equipment is stated at cost. Depreciation is calculated on the
straight-line basis using the following useful lives:

<TABLE>
<S> <C>
Buildings and improvements............................................... 31.5 years
Cable distribution systems............................................... 7 years
Computer equipment....................................................... 5 years
Transportation equipment................................................. 5 years
</TABLE>

F-158
<PAGE> 280

GEORGIA CABLE TELEVISION SYSTEM
(SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Deferred Charges

Deferred charges are recorded at cost. Amortization is provided on a
straight-line basis using the following lives:

<TABLE>
<S> <C>
Franchise costs.............................................. 10 years
Debt issuance costs.......................................... Term of the related debt
Acquisition costs............................................ 7 years
Organization costs........................................... 5 years
Goodwill and other........................................... 20 years
</TABLE>

Pending Accounting Pronouncement

In March 1995, the Financial Accounting Standards Board issued Statement
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to disposed of, which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Statement 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. Statement
121 is effective for financial statements for periods beginning on or after
December 15, 1995 although earlier adoption is permitted. Based on present
circumstances, including the terms of the agreement for the sale of the system's
assets, no adjustment to the recorded amounts for system net property and
equipment, franchise costs or goodwill would have been necessary had Statement
121 been adopted as of December 31, 1994.

Cash and Cash Equivalents

The System considers all highly liquid investments with a maturity of three
months or less at the time of purchase to be cash equivalents.

Income Taxes

The accompanying financial statements do not include a provision for income
taxes because the taxable income or loss of the System is included in the tax
returns of the partners.

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
JULY 31, DECEMBER 31
1995 1994
------------ ------------
<S> <C> <C>
Property and equipment:
Land.................................................. $ 116,083 $ 116,083
Buildings and improvements............................ 137,673 137,673
Cable distribution systems............................ 21,070,720 20,822,743
Other equipment....................................... 379,039 381,927
------------ ------------
21,703,515 21,458,426
Accumulated depreciation.............................. (17,407,620) (15,786,939)
------------ ------------
Net property and equipment.............................. $ 4,295,895 $ 5,671,487
============ ============
</TABLE>

F-159
<PAGE> 281

GEORGIA CABLE TELEVISION SYSTEM
(SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. NOTES PAYABLE ALLOCATED TO THE SYSTEM

For purposes of the financial statements presented herein, the System has
been allocated a portion of the term loan and subordinated note payable by
Masada and associated interest and fees. This allocation was determined by
applying the ratio of total System assets to total Masada assets at July 31,
1995. The calculation resulted in 27.7 percent of the debt and related interest
expense being allocated to the Georgia Cable System. In the opinion of
management, this method of allocation is reasonable. Since such debt does not
represent a liability of the System, but rather an allocation of Masada long
term debt, and there are neither repayment terms nor a formal agreement between
the System and Masada, such debt has been classified as noncurrent.

Notes payable allocated to the System consisted of the following:

<TABLE>
<CAPTION>
JULY 31, DECEMBER 31,
1995 1994
----------- -------------
<S> <C> <C>
Revolving credit and term loan.................... $11,842,546 $ 14,029,562
Subordinated notes payable........................ 831,000 953,700
----------- -----------
$12,673,546 $ 14,983,262
=========== ===========
</TABLE>

The terms and conditions of Masada's total term loan and subordinated debt
which has been allocated to the System, as described above, are summarized
below.

Revolving Credit and Term Loan

Masada had a revolving credit and term loan agreement (Term Loan Agreement)
with three financial institutions which provided for aggregate borrowings of up
to $53,000,000 on a revolving basis through March 31, 1993. At that time the
then outstanding loan balance of $50,150,000 converted to a term loan note,
scheduled to be paid in twenty-five quarterly installments in amounts varying
from 2.25% to 7.67% of the original principal balance beginning September 30,
1993. Based on amounts outstanding at December 31, 1994 the schedule of total
debt maturities on the Term Loan Agreement, which includes amounts allocated to
the System, is as follows:

<TABLE>
<CAPTION>
AMOUNT
-----------
<S> <C>
1995.................................................... $ 5,516,500
1996.................................................... 7,021,000
1997.................................................... 9,027,000
1998.................................................... 11,033,000
1999.................................................... 11,534,500
-----------
$44,132,000
===========
</TABLE>

Under the terms of the Term Loan Agreement, Masada has the option to have
interest computed using a LIBOR rate and/or a variable rate. With the variable
selection, the Term Loan Agreement provides for interest to be paid at least
quarterly at the prime rate plus .75%. The variable rate was in effect at July
31, 1995 for all of the principal amount outstanding and was 9.5%.

Borrowings under the Term Loan Agreement are secured by senior liens, in
favor of the lender, on substantially all transferable assets of Masada. Under
the terms of the agreement, Masada pays an annual administration fee of $25,000.

F-160
<PAGE> 282

GEORGIA CABLE TELEVISION SYSTEM
(SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

cash flow, as defined, as compared to debt service (debt service coverage) and
certain ratios of cable subscribers to total debt. Masada is also required to
limit capital expenditures, management and investment banking fees and
distributions to the partners to amounts specified in the agreement.

Subordinated Notes Payable

In connection with the execution of the Term Loan Agreement, Masada
borrowed $3,000,000 on July 11, 1991 under a subordinated note agreement with an
unaffiliated party which is due December 31, 1999. Under the provisions of this
subordinated agreement, interest accrues at 25% per annum with interest payments
which began on October 31, 1993 under one of three options given to the
Partnership, the minimum being the payment of 10% interest quarterly with the
remaining 15% being converted to additional principal. Masada also has the
option to pay interest currently as it becomes due.

Borrowings under the subordinated note agreement are secured by subordinate
liens, in favor of the lender, on substantially all transferable assets of
Masada.

Proceeds from the sale of the System have been used to pay the subordinated
notes in order to obtain release of the liens on assets subject to the sale.

Masada is also required to maintain certain ratios of annualized net
operating income (as defined) to total debt and to limit capital expenditures,
additional indebtedness, management and investment banking fees and
distributions to partners to amounts specified in the agreements.

5. RELATED PARTY TRANSACTIONS

Masada Cable Management, Inc. provides management services to Masada for a
fee of 5% of total revenues. Management fee expense incurred by the System was
approximately $176,400, $296,400, and $291,500 in 1995, 1994 and 1993,
respectively, and is included in other expenses in the accompanying statements
of operations. Accrued management fees were approximately $1,400 and $4,600 at
July 31, 1995 and December 31, 1994, respectively, and are included in other
accrued liabilities in the accompanying balance sheets.

Bariston Associates, Inc. an affiliate of Bariston, provides ongoing
investment banking services to Masada. Fees incurred by the System for these
investment banking services amounted to approximately $40,800, $67,600, and
$63,500 in 1995, 1994, and 1993, respectively, and are included in other
expenses in the accompanying statements of operations.

6. CONTINGENCIES

Congress enacted the Cable Television Consumer Protection and Competition
Act of 1992 (the 1992 Cable Act), which became effective on December 4, 1992.
This legislation caused significant changes to the regulatory environment in
which the cable television industry operates. The 1992 Cable Act generally
allows for a greater degree of regulation of the cable television industry.
Under the 1992 Cable Act's definition of effective competition, nearly all cable
systems in the United States are subject to rate regulation of basic cable
services. In addition, the 1992 Cable Act allows the Federal Communications
Commission (FCC) to regulate rates for nonbasic service tiers other than premium
services in response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and nonbasic services. The FCC's rules became effective on September 1,
1993.

F-161
<PAGE> 283

GEORGIA CABLE TELEVISION SYSTEM
(SOLD BY MASADA CABLE PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

adjusted for inflation, channel modifications, equipment costs and increases in
programming costs. However, the FCC held rate reductions in abeyance in certain
systems. The new regulations became effective on May 15, 1994, but operators
could elect to defer rate reductions to July 14, 1994, so long as they made no
changes in their rates and did not restructure service offerings between May 15
and July 14, 1994.

Management believes that it has generally complied with all provisions of
the 1992 Cable Act, including its cable programming service rate-setting
provisions.

F-162
<PAGE> 284

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Charter Communications II, L.P.

We have audited the accompanying balance sheets of Masada Cable Partners
II, L.P. as of November 30, 1995 and December 31, 1994 and the related
statements of operations, changes in system capital (deficiency) and cash flows
for the eleven months ended November 30, 1995 and the years ended December 31,
1994 and 1993. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Masada Cable Partners II,
L.P. at November 30, 1995 and December 31, 1994 and the results of its
operations and its cash flows for the eleven months ended November 30, 1995 and
the years ended December 31, 1994 and 1993, in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Birmingham, Alabama,
March 8, 1996

F-163
<PAGE> 285

MASADA CABLE PARTNERS II, L.P.
(SOLD TO CHARTER COMMUNICATIONS II, L.P.)

BALANCE SHEETS

<TABLE>
<CAPTION>
NOVEMBER 30, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents..................................... $ 1,351,159 $ 616,196
Accounts receivable........................................... 57,117 42,661
Prepaid expenses and other.................................... 26,303 32,303
------------ ------------
Total current assets....................................... 1,434,579 691,160
Net property and equipment (Note 3)............................. 3,789,466 6,010,617
Deferred charges:
Franchise costs............................................... 14,900,737 14,900,737
Acquisition costs............................................. 881,411 816,070
Non-compete agreement......................................... 1,498,500 1,498,500
Goodwill...................................................... 8,048,603 8,048,603
Other deferred charges........................................ 544,269 544,269
------------ ------------
25,873,520 25,808,179
Accumulated amortization...................................... (14,928,970) (12,965,104)
------------ ------------
Net deferred charges............................................ 10,944,550 12,843,075
------------ ------------
$ 16,168,595 $ 19,544,852
============ ============
LIABILITIES AND SYSTEM CAPITAL (DEFICIENCY)
Current liabilities:
Accounts payable.............................................. $ 33,289 $ 35,704
Subscriber deposits and advance payments...................... -- 22,565
Accrued interest.............................................. 284,948 9,285
Other accrued liabilities..................................... 2,125,965 1,546,291
Note payable in default (Note 4).............................. 18,135,313 18,827,500
------------ ------------
Total current liabilities.................................. 20,579,515 20,441,345
Contingencies (Note 6)
System capital (deficiency)..................................... (4,410,920) (896,493)
------------ ------------
$ 16,168,595 $ 19,544,852
============ ============
</TABLE>

See accompanying notes.

F-164
<PAGE> 286

MASADA CABLE PARTNERS II, L.P.
(SOLD TO CHARTER COMMUNICATIONS II, L.P.)

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
ELEVEN MONTHS
ENDED YEARS ENDED DECEMBER 31,
NOVEMBER 30, ---------------------------
1995 1994 1993
------------- ----------- -----------
<S> <C> <C> <C>
Subscriber service revenue.......................... $ 6,069,189 $ 6,472,490 $ 6,586,699
Operating expenses:
Operating costs................................... 2,830,341 2,821,627 2,705,770
Selling, general and administrative............... 415,563 494,814 607,924
Depreciation...................................... 2,447,397 2,650,006 2,624,183
Amortization...................................... 1,963,866 2,216,675 2,366,752
----------- ----------- -----------
Total operating expenses....................... 7,657,167 8,183,122 8,304,629
----------- ----------- -----------
Loss from operations................................ (1,587,978) (1,710,632) (1,717,930)
Other income (expense):
Interest and fees................................. (1,571,213) (1,549,429) (1,504,203)
Other, net (Note 5)............................... (355,236) (302,910) (352,695)
----------- ----------- -----------
Total other income (expense)........................ (1,926,449) (1,852,339) (1,856,898)
----------- ----------- -----------
Net loss............................................ $(3,514,427) $(3,562,971) $(3,574,828)
=========== =========== ===========
</TABLE>

See accompanying notes.

F-165
<PAGE> 287

MASADA CABLE PARTNERS II, L.P.
(SOLD TO CHARTER COMMUNICATIONS II, L.P.)

STATEMENTS OF CHANGES IN SYSTEM CAPITAL (DEFICIENCY)

<TABLE>
<CAPTION>
SYSTEM
CAPITAL
(DEFICIENCY)
-----------
<S> <C>
Balance, December 31, 1992...................................................... $ 6,241,306
Net loss........................................................................ (3,574,828)
-----------
Balance, December 31, 1993...................................................... 2,666,478
Net loss........................................................................ (3,562,971)
-----------
Balance, December 31, 1994...................................................... (896,493)
Net Loss........................................................................ (3,514,427)
-----------
Balance, November 30, 1995...................................................... $(4,410,920)
===========
</TABLE>

See accompanying notes.

F-166
<PAGE> 288

MASADA CABLE PARTNERS II, L.P.
(SOLD TO CHARTER COMMUNICATIONS II, L.P.)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN
MONTHS
ENDED
NOVEMBER YEARS ENDED DECEMBER 31,
30, ---------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss............................................ $(3,514,427) $(3,562,971) $(3,574,828)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization..................... 4,411,263 4,866,681 4,990,935
Gain on sale of fixed assets...................... (26,353) (625) --
Changes in operating assets and liabilities:
Accounts receivable............................ (14,456) 48,686 33,241
Prepaid expenses and other..................... 6,000 10,321 (20,919)
Accounts payable............................... (2,415) (2,482) (23,217)
Deposits and advances.......................... (22,565) (12,346) (7,305)
Accrued interest............................... 275,663 5,538 (1,623)
Other accrued liabilities...................... 579,674 562,098 477,621
---------- ---------- ----------
Net cash provided by operating activities........... 1,692,384 1,914,900 1,873,905
INVESTING ACTIVITIES
Purchases of property and equipment................. (226,246) (261,530) (307,096)
Proceeds from sale of fixed assets.................. 26,353 2,375 --
Additions to deferred charges....................... (65,341) (16,969) (10,093)
---------- ---------- ----------
Net cash used in investing activities............... (265,234) (276,124) (317,189)
FINANCING ACTIVITIES
Payments on note payable............................ (692,187) (2,215,000) (1,107,500)
---------- ---------- ----------
Net cash used in financing activities............... (692,187) (2,215,000) (1,107,500)
---------- ---------- ----------
Increase (decrease) in cash and cash equivalents.... 734,963 (576,224) 449,216
Cash and cash equivalents at beginning of year...... 616,196 1,192,420 743,204
---------- ---------- ----------
Cash and cash equivalents at end of year............ $ 1,351,159 $ 616,196 $ 1,192,420
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest and fees................ $ 1,571,213 $ 1,543,891 $ 1,505,826
========== ========== ==========
</TABLE>

See accompanying notes.

F-167
<PAGE> 289

MASADA CABLE PARTNERS II, L.P.
(SOLD TO CHARTER COMMUNICATIONS II, L.P.)

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION

The accompanying financial statements of Masada Cable Partners II, L.P.
(Masada II) comprise the accounts of the South Carolina Cable Television System
(System) sold by Masada II to Charter Communications II, L.P. (Charter) pursuant
to the sale agreement dated May 30, 1995 between Masada and Charter. Masada II,
a Delaware limited partnership, was organized on March 27, 1989 to acquire,
construct and operate cable television systems. The managing general partner is
Masada Cable Management II, Inc. and the co-general partner is BHI Associates V,
L. P. (Bariston).

The sale agreement between Masada II and Charter was consummated on
November 30, 1995 and generally included assets to be purchased as all tangible
property and equipment used in the operation of the System, cable design and
engineering records, marketing materials, any rights or permits such as
franchises, leases, etc., all real property owned or leased and comprising the
System, accounts receivable pertaining to the System and all prepaid items
relating to the System. Assets not to be purchased included cash on hand,
insurance policies and rights thereunder, bonds or other surety instruments,
rights under the master programming contracts utilized by Masada II with respect
to the System, any refundable taxes for periods prior to the closing date, any
right to the names "Masada" or "Premiere" or any derivatives related thereto and
the books and records of Masada II, except items previously specifically
described.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recognition of Revenue

Subscriber service revenues are recognized in the month the cable service
is provided.

Property and Equipment

Property and equipment is stated at cost. Depreciation is calculated on the
straight-line basis using the following useful lives:

DEFERRED CHARGES

Deferred charges are recorded at cost. Amortization is provided on a
straight-line basis using the following lives:

<TABLE>
<S> <C>
Franchise costs.............................................. 10 years
Debt issuance costs.......................................... Term of the related debt
Acquisition costs............................................ 7 years
Organization costs........................................... 5 years
Non-compete agreement........................................ 5 years
Goodwill and other........................................... 20 years
</TABLE>

PENDING ACCOUNTING PRONOUNCEMENT

F-168
<PAGE> 290

MASADA CABLE PARTNERS II, L.P.
(SOLD TO CHARTER COMMUNICATIONS II, L.P.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. Statement 121 also addresses the accounting for
long-lived assets that are expected to be disposed of. Statement 121 is
effective for financial statements for periods beginning on or after December
15, 1995 although earlier adoption is permitted. Based on present circumstances,
including the terms of the agreement for the sale of the system's assets, no
adjustment to the recorded amounts for system net property and equipment,
franchise costs or goodwill would have been necessary had Statement 121 been
adopted as of December 31, 1994.

Cash and Cash Equivalents

The System considers all highly liquid investments with a maturity of three
months or less at the time of purchase to be cash equivalents.

Income Taxes

The accompanying financial statements do not include a provision for income
taxes because the taxable income or loss of the System is included in the tax
returns of the partners.

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31:

<TABLE>
<CAPTION>
NOVEMBER 30, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
Property and equipment:
Land.................................................. $ 51,277 $ 51,277
Buildings and improvements............................ 16,800 16,800
Cable distribution systems............................ 18,442,748 18,239,090
Other equipment....................................... 367,902 371,667
------------ ------------
18,878,727 18,678,834
Accumulated depreciation.............................. (15,089,261) (12,668,217)
------------ ------------
Net property and equipment.............................. $ 3,789,466 $ 6,010,617
============ ============
</TABLE>

4. NOTE PAYABLE IN DEFAULT

Masada II had a revolving credit and term loan agreement with two financial
institutions providing for aggregate borrowings up to $30,000,000. Borrowings
under the agreement were permitted on a revolving basis until December 31, 1992,
at which time the then outstanding balance of the loan converted to a term loan
note, payable in 28 quarterly installments beginning March 31, 1993. As of
November 30, 1995, $18,135,313 was outstanding under this agreement.

F-169
<PAGE> 291

MASADA CABLE PARTNERS II, L.P.
(SOLD TO CHARTER COMMUNICATIONS II, L.P.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The schedule of debt maturities under the agreement is as follows:

<TABLE>
<CAPTION>
AMOUNT
-----------
<S> <C>
1995.................................................... $ 2,076,563
1996.................................................... 3,322,500
1997.................................................... 3,876,250
1998.................................................... 4,430,000
1999.................................................... 4,430,000
-----------
$18,135,313
===========
</TABLE>

Interest on the outstanding balance of the loan is payable quarterly, based
upon the prime lending rate plus a variable margin ranging from .5% to 2%. The
variable margin is determined quarterly based upon the ratio of senior debt to
the System's annualized net operating income, as defined. Under the terms of the
agreement, Masada II pays an annual administrative fee of $10,000.

Borrowings under the term loan agreement are secured by substantially all
transferable assets of Masada II.

The agreement contains covenants which require Masada II to maintain
certain levels of net operating income, as defined, as compared to senior debt
(leverage) and basic subscriber equivalents (debt to BSE) and certain ratios of
net cash flows, as defined, to senior debt service (debt service coverage), as
defined. The agreement also places limitations on capital expenditures,
operating leases, management and investment banking fees and distributions to
partners.

As of December 31, 1994, Masada II was in violation of two of these
provisions -- debt service coverage and debt to BSE, and the lenders have the
right to accelerate the loan. Management has not received a waiver for
non-compliance of these restrictive covenants and projects that operating
results for the year ending December 31, 1995 will not be sufficient to cure the
nonmonetary defaults.

It is management's intention to utilize the proceeds from the sale of the
System to pay all principal and interest on the term loan.

5. RELATED PARTY TRANSACTIONS

Masada Cable Management, Inc. provides management services to Masada II for
a fee of 5% of total revenues. Management fee expense incurred by the System was
approximately $315,000, $335,000 and $339,000 in 1995, 1994 and 1993,
respectively, and is included in other expenses in the accompanying statements
of operations. Accrued management fees were approximately $1,074,000 and
$760,000 at November 30, 1995 and December 31, 1994, respectively, and are
included in other accrued liabilities in the accompanying balance sheets.

Bariston Associates, Inc. an affiliate of Bariston, provides ongoing
investment banking services to Masada II. Fees incurred by the System for these
investment banking services amounted to approximately $168,000, $179,000 and
$177,000 in 1995, 1994 and 1993, respectively, and are included in other
expenses in the accompanying statements of operations. Accrued fees to Bariston
were approximately $567,000 and $399,000 at November 30, 1995 and December 31,
1994, respectively, and are included in other accrued liabilities in the
accompanying balance sheets.

F-170
<PAGE> 292

MASADA CABLE PARTNERS II, L.P.
(SOLD TO CHARTER COMMUNICATIONS II, L.P.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. CONTINGENCIES

On February 22, 1994, the FCC adopted several additional rate orders
including an order which revised its earlier announced regulatory scheme with
respect to rates. The FCC's new regulations will generally require rate
reductions, absent a successful cost-of-service showing of 17% of September 30,
1992 rates, adjusted for inflation, channel modifications, equipment costs and
increases in programming costs. However, the FCC held rate reductions in
abeyance in certain systems. The new regulations became effective on May 15,
1994, but operators could elect to defer rate reductions to July 14, 1994, so
long as they made no changes in their rates and did not restructure service
offerings between May 15 and July 14, 1994.

Management believes that it has generally complied with all provisions of
the 1992 Cable Act, including its cable programming service rate-setting
provisions.

7. CONCENTRATION OF CREDIT RISK

The System operates a cable television distribution system located in South
Carolina. The System grants credit to customers for relatively short periods of
time before discontinuing cable service to those customers whose accounts are
delinquent, substantially all of whom are local residents.

F-171
<PAGE> 293

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Cencom Cable Income Partners, L.P.:

We have audited the accompanying combined balance sheets of Cencom Cable
Income Partners, L.P. -- Clarksville, Ft. Gordon, Camp LeJeune, Tryon Systems
(as defined in Note 1) as of December 31, 1995 and 1994, and the related
combined statements of operations, Systems' equity and cash flows for the years
then ended. These combined financial statements are the responsibility of the
Systems' management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cencom Cable Income
Partners, L.P. -- Clarksville, Ft. Gordon, Camp LeJeune, Tryon Systems as of
December 31, 1995 and 1994, and the results of their operations and their cash
flows for the years then ended, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP
St. Louis, Missouri,

February 21, 1996

F-172
<PAGE> 294

INDEPENDENT AUDITORS' REPORT

The Partners
Cencom Cable Income Partners, L.P.:

We have audited the accompanying combined statements of operations,
systems' equity and cash flows for Cencom Cable Income Partners, L.P. --
Clarksville, Ft. Gordon, Camp LeJeune, Tryon Systems for the year ended December
31, 1993. These combined financial statements are the responsibility of the
Partnership'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 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 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 results of operations and the cash flows
of Cencom Cable Income Partners, L.P. -- Clarksville, Ft. Gordon, Camp LeJeune,
Tryon Systems for the year ended December 31, 1993 in conformity with generally
accepted accounting principles.

KPMG PEAT MARWICK LLP

Dallas, Texas
September 15, 1995

F-173
<PAGE> 295

CENCOM CABLE INCOME PARTNERS, L.P. --

CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
A S S E T S
CURRENT ASSETS:
Cash............................................................ $ -- $ --
Accounts receivable, net of allowance for doubtful accounts
of $41,066 and $32,690, respectively......................... 386,651 418,197
Prepaid expenses and other...................................... 134,691 196,156
----------- -----------
Total current assets.................................... 521,342 614,353
PROPERTY, PLANT AND EQUIPMENT..................................... 22,391,436 21,595,627
FRANCHISE COSTS, net of accumulated amortization
of $33,583,860 and $32,528,791, respectively.................... 1,026,095 2,081,164
----------- -----------
$23,938,873 $24,291,144
========== ==========
LIABILITIES AND SYSTEMS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses........................... $ 1,396,066 $ 1,279,866
Subscriber deposits and prepayments............................. 112,815 188,746
----------- -----------
Total current liabilities............................... 1,508,881 1,468,612
----------- -----------
DEFERRED REVENUE.................................................. 97,066 --
COMMITMENTS AND CONTINGENCIES
SYSTEMS' EQUITY................................................... 22,332,926 22,822,532
----------- -----------
$23,938,873 $24,291,144
========== ==========
</TABLE>

The accompanying notes are an integral part of these combined balance sheets.

F-174
<PAGE> 296

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1995 1994 1993
PERIOD ENDED ----------- ----------- -----------
-------------------------
MARCH 29, MARCH 31,
1996 1995
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
SERVICE REVENUES.................. $ 6,169,198 $ 5,513,862 $23,192,025 $20,940,855 $19,861,289
---------- ---------- ----------- ----------- -----------
OPERATING EXPENSES:
Operating, general and
administrative............... 3,007,268 2,695,353 10,763,522 9,776,992 8,658,609
Depreciation and amortization... 1,390,500 1,576,393 5,561,686 5,806,512 7,124,499
Management fee -- related
party........................ 308,435 275,692 1,159,705 1,047,047 993,064
---------- ---------- ----------- ----------- -----------
4,706,203 4,547,438 17,484,913 16,630,551 16,776,172
---------- ---------- ----------- ----------- -----------
Income from
operations............ 1,462,995 966,424 5,707,112 4,310,304 3,085,117
---------- ---------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense................ (619,552) (645,882) (2,593,521) (1,844,111) (1,556,225)
Interest income................. 15,887 13,751 86,920 33,874 28,476
Other, net...................... (10,841) -- -- -- --
---------- ---------- ----------- ----------- -----------
(614,506) (632,131) (2,506,601) (1,810,237) (1,527,749)
---------- ---------- ----------- ----------- -----------
Net income.............. $ 848,489 $ 334,293 $ 3,200,511 $ 2,500,067 $ 1,557,368
========== ========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these combined statements.

F-175
<PAGE> 297

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

COMBINED STATEMENTS OF SYSTEMS' EQUITY

<TABLE>
<CAPTION>
CAPITAL ACCUMULATED SYSTEMS'
CONTRIBUTIONS EARNINGS EQUITY
------------- ----------- -----------
<S> <C> <C> <C>
BALANCE, December 31, 1992.......................... $ 7,840,096 $18,688,722 $26,528,818
Net activity with Parent.......................... (4,373,727) -- (4,373,727)
Net income........................................ -- 1,557,368 1,557,368
----------- ----------- -----------
BALANCE, December 31, 1993.......................... 3,466,369 20,246,090 23,712,459
Net activity with Parent.......................... (3,389,994) -- (3,389,994)
Net income........................................ -- 2,500,067 2,500,067
----------- ----------- -----------
BALANCE, December 31, 1994.......................... 76,375 22,746,157 22,822,532
Net activity with Parent.......................... (3,690,117) -- (3,690,117)
Net income........................................ -- 3,200,511 3,200,511
----------- ----------- -----------
BALANCE, December 31, 1995.......................... (3,613,742) 25,946,668 22,332,926
Net activity with Parent (unaudited).............. (1,031,279) -- (1,031,279)
Net income (unaudited)............................ -- 848,489 848,489
----------- ----------- -----------
BALANCE, March 29, 1996 (unaudited)................. $ (4,645,021) $26,795,157 $22,150,136
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these combined statements.

F-176
<PAGE> 298

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED DECEMBER 31,
------------------------- ---------------------------------------
MARCH 31, 1995 1994 1993
1995 ----------- ----------- -----------
-----------
MARCH 29, (UNAUDITED)
1996
-----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................. $ 848,489 $ 334,293 $ 3,200,511 $ 2,500,067 $ 1,557,368
Adjustments to reconcile net income to
net cash provided by operating
activities --
Depreciation and amortization......... 1,390,500 1,576,393 5,561,686 5,806,512 7,124,499
Changes in assets and liabilities --
Accounts receivable, net............ (53,932) 32,688 31,546 (21,674) (195,859)
Prepaid expenses and other.......... 36,886 34,759 61,465 (32,908) (13,370)
Accounts payable and accrued
expenses......................... (320,637) 257,381 116,200 75,272 66,944
Subscriber deposits and
prepayments...................... (19,055) 2,707 (75,931) 71 11,826
Deferred revenue.................... (2,389) -- 97,066 -- --
----------- ----------- ----------- ----------- -----------
Net cash provided by operating
activities..................... 1,879,862 2,238,221 8,992,543 8,327,340 8,551,408
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment............................. (835,684) (1,078,192) (5,217,158) (4,823,009) (4,076,204)
Other................................... (12,899) (29,515) (85,268) (114,337) (101,477)
----------- ----------- ----------- ----------- -----------
Net cash used in investing
activities..................... (848,583) (1,107,707) (5,302,426) (4,937,346) (4,177,681)
----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in capital account with
parent................................ (1,031,279) (1,130,514) (3,690,117) (3,389,994) (4,373,727)
----------- ----------- ----------- ----------- -----------
Net cash used in financing
activities..................... (1,031,279) (1,130,514) (3,690,117) (3,389,994) (4,373,727)
----------- ----------- ----------- ----------- -----------
CASH, beginning and end of period......... $ -- $ -- $ -- $ -- $ --
=========== =========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these combined statements.

F-177
<PAGE> 299

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

The combined financial statements include the accounts of certain cable
television systems which are owned and operated by Cencom Cable Income Partners,
L.P. (CCIP). Cencom Properties, Inc. is the General Partner (as referred to
herein) of CCIP. These combined financial statements include the historical
assets, liabilities and operations of cable television systems including the
Clarksville Systems, providing service to communities in and around Clarksville
and Ashland City, Tennessee, and Hopkinsville, Kentucky, the Tryon System
located in North Carolina, the Ft. Gordon Army Base System located in Georgia
and the Camp LeJeune Marine Base System located in North Carolina which are
collectively referred to herein as the "Systems."

All intersystem balances and transactions have been eliminated for
presentation in the combined financial statements.

In 1995, CCIP filed with the Securities and Exchange Commission and mailed
to its limited partners a proxy statement proposing to sell the Systems to
Charter Communications II, L.P. (CC-II), an affiliated entity of CCIP. The
proposed sale price of all of the Systems of CCIP is $211,050,000. The proposed
sales transaction has been approved by a majority of the limited partners of
CCIP and is awaiting customary third-party and regulatory approval. The proposed
sale transaction is anticipated to close in March 1996 or shortly thereafter.
However, a purported class action lawsuit on behalf of the CCIP limited partners
has been filed which seeks among other things to enjoin permanently the proposed
sale transaction. On February 15, 1996, all of the plaintiff's claims for
injunctive relief were dismissed (including that which sought to prevent the
consummation of the proposed sale transaction); the plaintiff's claims for money
damages which might result in the proposed sale by CCIP of its assets (including
the proposed sale transaction) remain pending.

As of December 31, 1995, the Systems passed approximately 73,000 homes and
serviced approximately 53,000 basic subscribers in approximately 16 franchise
areas. The Systems comprise approximately 48% of the total CCIP subscribers at
December 31, 1995.

The accompanying combined statements of operations and cash flows for the
periods ended March 29, 1996, and March 31, 1995, and the related combined
statements of Systems' equity for the period ended March 29, 1996, are
unaudited. In the opinion of management, these statements have been prepared on
the same basis as the audited combined financial statements and include all
adjustments necessary (consisting only of normal recurring adjustments) for the
fair presentation of results of operations and cash flows. The results of
operations for the periods ended March 29, 1996, and March 31, 1995, are not
necessarily indicative of the results that may be expected for an entire year.

Revenues

Cable service revenues are recognized when the related services are
provided.

F-178
<PAGE> 300

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Property, Plant and Equipment

Depreciation is provided using the composite method on a straight-line
basis over the estimated useful lives of the assets as follows:

<TABLE>
<S> <C>
Trunk and distribution systems................................... 10 years
Subscriber installations......................................... 10 years
Converters....................................................... 3-5 years
Buildings and headends........................................... 9-20 years
Vehicles and equipment........................................... 4-8 years
Office equipment................................................. 5-10 years
</TABLE>

Franchise Costs

Franchise costs are being amortized using the straight-line method over the
term of the individual franchises.

During 1995, the Systems adopted Statement of Financial Accounting
Standards (SFAS) No. 121, entitled "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of." In accordance with SFAS No.
121, the Systems' management periodically reviews the carrying value of its
long-lived assets, identifiable intangibles and franchise costs in relation to
historical financial results, current business conditions and trends (including
the impact of existing legislation and regulation) to identify potential
situations in which the carrying value of such assets may not be recoverable. If
a review indicates that the carrying value of such assets may not be
recoverable, the carrying value of such assets in excess of their fair value
will be recorded as a reduction of the asset's cost as if a permanent impairment
has occurred. The adoption of SFAS No. 121 did not impact the financial
statements of the Systems.

General and Administrative Expenses

Included in general and administrative expenses is the allocation of
certain expenses incurred by the holding company of CCIP on behalf of the
Systems. These expenses were allocated to the Systems based on the ratio of
total Systems' subscribers to total CCIP subscribers. Management consider this
allocation method to be reasonable for the operations of the Systems. Expense
allocated to Systems totaled $166,830, $259,950 and $201,829 during 1995, 1994
and 1993, respectively.

Intercompany Interest Expense

Interest expense allocated to the Systems has been determined by applying
the ratio of total Systems' subscribers to total CCIP subscribers at each
year-end to total CCIP interest expense for the respective years. Management
considers this allocation method to be reasonable for the operations of the
Systems. CCIP makes disbursements on behalf of the Systems for interest expense.
CCIP maintains a loan agreement with a bank for borrowings up to $80,000,000,
secured by all of CCIP's assets, including the Systems' assets. At December 31,
1995 and 1994, CCIP had borrowings of $76,500,000 and $72,300,000, respectively,
related to this debt agreement. The weighted average borrowings for CCIP for
1995 and 1994 were $73,993,000 and $66,358,000, respectively. The borrowings
pertaining to the Systems are reflected within Systems' Equity. At December 31,
1995 and 1994, the interest rate was 6.9375% and ranged from 7.375% to 9.5%,
respectively.

F-179
<PAGE> 301

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The weighted average interest rates of CCIP for 1995, 1994 and 1993 were 7.30%,
5.73% and 4.60%, respectively.

In November 1990, CCIP issued $30,000,000 of 9.64% Deferred Interest Senior
Notes, which were collateralized by a first lien on all of CCIP's assets (other
than real property), including the Systems' assets, and the General Partner's
interest in CCIP. These notes were retired on May 10, 1993, at their accreted
value of $37,760,962 with funds from the bank loan agreement. Interest expense
related to these notes has been allocated to the Systems in the manner described
in the preceding paragraph.

Income Taxes

Income taxes are the responsibility of the partners of CCIP and as such are
not provided for in the accompanying combined financial statements.

Cash Management and Systems' Equity Account

The cash management function for the Systems is performed by the holding
company of CCIP. Excess cash funds are transferred to the holding company of
CCIP using the Systems' equity account. In addition, the holding company of CCIP
makes disbursements on behalf of the Systems for certain items such as payroll,
payroll taxes, employee benefits and other costs, and incurs debt borrowings for
the Systems. Such amounts are transferred to the Systems through the Systems'
equity account and are recognized in the appropriate expense categories in the
accompanying combined statements of operations.

2. PREPAID EXPENSES AND OTHER:

Prepaid expenses and other consists of the following at December 31:

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Prepaid insurance...................................... $ 2,148 $ 68,368
Prepaid programming.................................... 51,069 57,364
Other prepaid expenses and current assets.............. 81,474 70,424
-------- --------
$134,691 $196,156
======== ========
</TABLE>

3. PROPERTY, PLANT AND EQUIPMENT:

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

<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Trunk and distribution systems.................. $ 24,606,590 $ 22,230,669
Subscriber installations........................ 10,648,609 9,377,158
Converters...................................... 8,146,995 7,002,873
Land, buildings and headends.................... 3,069,627 2,777,722
Vehicles and equipment.......................... 1,980,713 1,878,495
Office equipment................................ 1,378,581 1,347,041
------------ ------------
49,831,115 44,613,958
Less- Accumulated depreciation.................. (27,439,679) (23,018,331)
------------ ------------
$ 22,391,436 $ 21,595,627
============ ============
</TABLE>

F-180
<PAGE> 302

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

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

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Accrued franchise fees.............................. $ 275,905 $ 255,550
Accounts payable.................................... 93,446 173,601
Accrued salary, commission and benefits............. 152,201 169,447
Accrued property tax................................ 317,050 255,163
Accrued pole rental................................. 94,584 --
Other............................................... 462,880 426,105
---------- ----------
$1,396,066 $1,279,866
========== ==========
</TABLE>

5. SYSTEMS' EQUITY:

Systems' equity consists of the following at December 31:

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Capital contributions............................. $(3,613,742) $ 76,375
Accumulated earnings.............................. 25,946,668 22,746,157
----------- -----------
$22,332,926 $22,822,532
=========== ===========
</TABLE>

As of December 31, 1995 and 1994, CCIP had recorded in its capital accounts
an accumulated deficit of approximately $32,900,000 and $25,200,000,
respectively, represented by earnings net of partner distributions.

6. RELATED-PARTY TRANSACTIONS:

During 1994, Cencom Cable Associates, Inc., a former affiliated entity,
assigned management services under contract with CCIP to the General Partner.
The management service contract provides for the payment of fees equal to 5% of
the Systems' gross service revenues. Expenses recognized by the Systems under
this contract were $1,159,705, $1,047,047 and $993,064 during 1995, 1994 and
1993, respectively. Management believes these charges are indicative of the
expense which would have been incurred as a stand-alone entity.

7. COMMITMENTS AND CONTINGENCIES:

Leases

The Systems lease certain facilities and equipment under noncancelable
operating leases. Rent expense incurred under leases during 1995, 1994 and 1993
was $109,411, $93,496 and $90,388, respectively. Future minimum lease payments
are as follows:

<TABLE>
<S> <C>
1996.............................................................. $108,411
1997.............................................................. 91,411
1998.............................................................. 88,837
1999.............................................................. 61,475
2000.............................................................. 25,150
Thereafter........................................................ 108,900
</TABLE>

The Systems rent utility poles in its operations. Generally, pole rental
agreements are short term, but the Systems' management anticipates that such
rentals will recur. Rent expense incurred for pole attachments during 1995, 1994
and 1993 was approximately $378,000, $379,000 and $373,000, respectively.

F-181
<PAGE> 303

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Insurance Coverage

The Systems currently do not have and do not in the near term anticipate
having property and casualty insurance on its underground distribution plant.
Due to large claims incurred by the property and casualty insurance industry,
the pricing of insurance coverage has become inflated to the point where, in the
judgment of the Systems' management, the insurance coverage is cost prohibitive.
Management will continue to monitor the insurance markets to attempt to obtain
coverage for the Systems' distribution plant at reasonable rates.

Litigation

The Systems are a party to lawsuits which are generally incidental to 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
Systems' combined financial position and results of operations.

Reliance Upon U.S. Military

In addition, the Department of Defense has announced numerous military base
closings and reductions to be effective currently and in the near future.
According to published reports available to management, none of the bases served
by the Systems have been listed for closing or reduction. There is no assurance,
however, that additional reductions will not negatively impact future operating
results of the Systems.

8. REGULATION IN THE CABLE INDUSTRY:

1992 Cable Act and FCC Regulation

The 1992 Cable Act and the Federal Communications Commission's (FCC) rules
implementing the 1992 Cable Act have generally increased the administrative and
operational expenses of cable television systems and have resulted in additional
regulatory oversight by the FCC and local franchise authorities. Management is
unable to predict the ultimate effect of the 1992 Cable Act or the ultimate
outcome of various FCC rule-making proceedings or the litigation challenging
various aspects of the 1992 Cable Act and the FCC's regulations implementing the
1992 Cable Act.

F-182
<PAGE> 304

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

authority obtains the right to approve the basic rates charged by the cable
system operator. In regulating the basic service rates, certified local
franchise authorities have the authority to order a rate refund of previously
paid rates determined to be in excess of the maximum permitted reasonable rates.

Under the 1992 Cable Act, rates for cable programming services not carried
on the basic tier (non-basic services) could be regulated by the FCC upon the
filing of a complaint by franchise authorities or subscribers that indicates the
cable operator's rates for these services are unreasonable. Rate complaints have
been filed with the FCC with respect to certain of the Partnership's cable
programming services; none of such complaints have been resolved by the FCC as
of the date of the financial statements. The Telecommunications Act eliminates
regulation of non-basic programming as of March 31, 1999. In the interim, rate
regulation of the non-basic programming tier can only be triggered by a
franchising authority complaint to the FCC. If the FCC determines that the
Systems' non-basic programming service tier rates are unreasonable, the FCC has
the authority to order the Systems to reduce non-basic programming service tier
rates and to refund to customers any overcharges occurring from the filing date
of the rate complaint with the FCC.

Under the FCC's initial rate regulations pursuant to the 1992 Cable Act,
regulated cable systems were required to apply a benchmark formula to determine
their maximum permitted rates. Those systems whose rates were above the
benchmark on September 30, 1992, were required to reduce their rates to the
benchmark or by 10%, whichever was less. Under revised rate regulations adopted
February 1994, regulated cable systems were required to set their rates so that
regulated revenues per subscriber did not exceed September 30, 1992, levels,
reduced by 17% (taking into account the previous 10% reduction).

In September 1995, the FCC developed an abbreviated cost-of-service form
that permits cable operators to recover costs of significant upgrades that
provide benefits to subscribers of regulated cable services. Cable operators
seeking to raise rates to cover costs of an upgrade would submit only the costs
of the upgrade instead of all current costs. In December 1995, the FCC revised
its cost-of-service rules. At this time, the Systems' management is unable to
predict the effect of these revised rules on the Systems' combined financial
position or results of operations.

In another action in September 1995, the FCC established a new optional
rate adjustment methodology that encourages operators to limit their rate
increases to once a year to reflect inflation and changes in external costs and
the number of channels. The rules permit cable operators to "project reasonably"
changes in their costs for the 12 months following the rate change (in an effort
to eliminate delays in recovering costs). The order allows operators to recover
increases in additional types of franchise-requirement costs. Permitted pass-
through increases include increases in the cost of providing institutional
networks, video services, data services to or from governmental and educational
institutions, and certain other cost increases. The Systems' management is
unable to predict the effect of these new rules on the Systems' business.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operator's
marketing costs and may also allow operators to better respond to competition
from alternative providers. The Systems' management is unable to predict if
these

F-183
<PAGE> 305

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

proposed rules will ultimately be promulgated by the FCC, and if they are
promulgated, their effect on the Systems' combined financial position and
results of operations.

While management believes that the Systems have complied in all material
respects with the rate provisions of the 1992 Cable Act, in jurisdictions that
have not yet chosen to certify, refunds covering a one-year period on basic
services may be ordered upon future certification if the Systems are unable to
justify its rates through a benchmark or cost-of-service filing or small system
cost-of-service filing pursuant to FCC rules. Management is unable to estimate
at this time the amount of refunds, if any, that may be payable by the Systems
in the event certain of its rates are successfully challenged by franchising
authorities or found to be unreasonable by the FCC. Management does not believe
that the amount of any such refunds would have a material adverse effect on the
combined financial position or results of operations of the Systems.

"Must Carry" Requirements/"Retransmission Consents"

Under the 1992 Cable Act, cable television operators are subject to
mandatory signal carriage requirements that allow local commercial and
noncommercial television broadcast stations to elect to require a cable system
to carry the station, subject to certain exceptions, or, in the case of
commercial stations, to negotiate for "retransmission consent" to carry the
station. In addition, there are requirements for cable systems to obtain
retransmission consent for all "distant" commercial television stations,
commercial radio stations and certain low power television stations carried by
such system after October 6, 1993. As a result of the mandatory system carriage
rules, some of the Systems have been required to carry television broadcast
stations that otherwise would not have been carried, thereby causing
displacement of possibly more attractive programming.

Franchise Matters

The 1992 Cable Act modified the franchise renewal process to make it easier
for a franchising authority to deny renewal. Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement. Although management believes
that the Partnership has generally met the terms of its franchise agreements and
has provided quality levels of service, and anticipates the Systems' future
franchise renewal prospects generally will be favorable, there can be no
assurance that any such franchises will be renewed or, if renewed, that the
franchising authorities will not impose more onerous requirements on the
Partnership than previously existed.

Recent Telecommunications Legislation

The Telecommunications Act alters federal, state, and local laws and
regulations pertaining to cable television, telecommunications and other
services.

The Telecommunications Act eliminates broadcast/cable cross-ownership
restrictions, but leaves in place FCC regulations prohibiting local
cross-ownership between television stations and cable systems. Certain
provisions of the Telecommunications Act could materially affect the growth and
operation of the cable television industry and the cable services provided by
the Systems. Although the new legislation may substantially lessen regulatory
burdens, the cable television industry may be subject to additional competition
as a result thereof. There are numerous rule makings to be undertaken by the FCC
which will interpret and implement the Telecommunications Act's provisions. In
addition, certain provisions of the Telecommunications Act (such as the
deregulation of cable programming rates) are not immediately effective. Further,

F-184
<PAGE> 306

CENCOM CABLE INCOME PARTNERS, L.P. --
CLARKSVILLE, FT. GORDON, CAMP LEJEUNE, TRYON SYSTEMS

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

certain of the Telecommunications Act's provisions have been and are likely to
be subject to judicial challenges. The Systems are unable at this time to
predict the outcome of such rule-makings or litigation or the substantive effect
of the new legislation and the rule-makings on the combined financial position
and results of operations of the Systems.

9. NET INCOME FOR INCOME TAX PURPOSES:

The following summarizes the differences between CCIP's net income for
financial reporting and federal income tax purposes for the years ended December
31:

<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Net income for financial reporting purposes...... $3,453,270 $3,811,203 $3,367,720
Depreciation differences between financial
reporting and tax reporting.................... 1,804,940 (301,487) 79,190
Amortization differences between financial
reporting and tax reporting.................... 57,969 80,844 609,197
Differences in expenses recorded for financial
reporting and reported for tax purposes........ 844,798 85,052 (16,286)
Revenue reported for tax reporting deferred for
financial reporting............................ 187,957 -- --
Other............................................ 31,496 7,768 --
---------- ---------- ----------
Net income for federal income tax purposes....... $6,380,430 $3,683,380 $4,039,821
========== ========== ==========
</TABLE>

The following summarizes the significant cumulative temporary differences
between CCIP's financial reporting basis and federal income tax reporting basis
as of December 31:

<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Assets:
Accounts receivable................................... $ 95,346 $ 87,228
Franchise costs....................................... 37,384,139 37,326,170
Accrued expenses...................................... 2,520,653 1,667,737
Deferred revenue...................................... 187,957 --
------------ ------------
$ 40,188,095 $ 39,081,135
============ ============
Liabilities -- Property, plant and equipment............ $(19,682,850) $(21,816,974)
============ ============
</TABLE>

As discussed in Note 1, the Systems comprise approximately 48% of CCIP's
total basic subscribers.

F-185
<PAGE> 307

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Cencom Cable Income Partners II, L.P.:

We have audited the accompanying balance sheet of Cencom Cable Income
Partners II, L.P. -- Anderson County System (as defined in Note 1) as of
December 31, 1995, and the related statements of operations, System's equity and
cash flows for the year then ended. These financial statements are the
responsibility of the System's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cencom Cable Income Partners
II, L.P. -- Anderson County System as of December 31, 1995, and the results of
its operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

February 21, 1996

F-186
<PAGE> 308

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
-----------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash............................................................ $ -- $ --
Accounts receivable, net of allowance for doubtful accounts of
$6,776 and $15,368, respectively............................. 117,924 123,399
Prepaid expenses and other...................................... 69,718 32,337
----------- -----------
Total current assets.................................... 187,642 155,736
----------- -----------
PROPERTY, PLANT AND EQUIPMENT..................................... 14,845,960 15,326,732
FRANCHISE COSTS, net of accumulated amortization of
$9,316,917 and $9,266,250, respectively......................... 538,833 589,500
----------- -----------
$15,572,435 $ 16,071,968
=========== ===========
LIABILITIES AND SYSTEM'S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses........................... $ 403,937 $ 755,819
Subscriber deposits and prepayments............................. 2,325 2,400
----------- -----------
Total current liabilities............................... 406,262 758,219
----------- -----------
COMMITMENTS AND CONTINGENCIES
SYSTEM'S EQUITY................................................... 15,166,173 15,313,749
----------- -----------
$15,572,435 $ 16,071,968
=========== ===========
</TABLE>

The accompanying notes are an integral part of these balance sheets.

F-187
<PAGE> 309

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1995
THREE MONTHS ENDED ------------
MARCH 31,
-------------------------
1996 1995
---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
SERVICE REVENUES...................................... $2,008,959 $1,862,514 $ 7,771,085
---------- ---------- ----------
OPERATING EXPENSES:
Operating, general and administrative............... 1,068,830 1,015,057 4,129,365
Depreciation and amortization....................... 864,354 1,135,761 3,832,591
Management fee -- related party..................... 100,410 93,124 388,553
---------- ---------- ----------
2,033,594 2,243,942 8,350,509
---------- ---------- ----------
Loss from operations........................ (24,635) (381,428) (579,424)
---------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest expense.................................... (316,537) (412,604) (1,551,310)
Interest income..................................... 3,323 10,133 53,226
---------- ---------- ----------
(313,214) (402,471) (1,498,084)
---------- ---------- ----------
Net loss.................................... $ (337,849) $ (783,899) $ (2,077,508)
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

F-188
<PAGE> 310

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

STATEMENTS OF SYSTEM'S EQUITY

<TABLE>
<CAPTION>
SYSTEM'S
EQUITY
-----------
<S> <C>
BALANCE, December 31, 1994...................................................... $17,312,705
Net activity with Parent...................................................... 78,552
Net loss...................................................................... (2,077,508)
-----------
BALANCE, December 31, 1995...................................................... 15,313,749
Net activity with Parent (unaudited).......................................... 190,273
Net loss (unaudited).......................................................... (337,849)
-----------
BALANCE, March 31, 1996 (unaudited)............................................. $15,166,173
===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-189
<PAGE> 311

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
--------------------------- 1995
1995 ------------
-----------
1996 (UNAUDITED)
-----------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................ $(337,849) $ (783,899) $ (2,077,508)
Adjustments to reconcile net loss to net cash
provided by operating activities --
Depreciation and amortization....................... 864,354 1,135,761 3,832,591
Changes in assets and liabilities --
Accounts receivable, net....................... 5,475 2,530 (7,979)
Prepaid expenses and other..................... (37,381) (16,881) (48,167)
Accounts payable and accrued expenses.......... (351,882) 21,981 109,544
Subscriber deposits and prepayments............ (75) (25) (122)
--------- ---------- -----------
Net cash provided by operating activities... 142,642 359,467 1,808,359
--------- ---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment.......... (324,331) (373,797) (1,861,230)
Other............................................... (8,584) (24,257) (25,681)
--------- ---------- -----------
Net cash used in investing activities....... (332,915) (398,054) (1,886,911)
--------- ---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in capital account with Parent........... 190,273 38,587 78,552
--------- ---------- -----------
Net cash provided by financing activities........ 190,273 38,587 78,552
--------- ---------- -----------
CASH, beginning and end of period..................... $ -- $ -- $ --
========= ========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-190
<PAGE> 312

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

The financial statements include the accounts of the Anderson County cable
television system which is owned and operated by Cencom Cable Income Partners
II, L.P. (CCIP II). Cencom Properties II, Inc. (Cencom Properties II) is the
General Partner of CCIP II. These financial statements include the historical
assets, liabilities and operations of the Anderson County cable television
system, which provides service to communities in and around Anderson County,
South Carolina, and is referred to herein as the System.

Pursuant to the terms of the CCIP II Partnership Agreement, CCIP II's term
expired on December 31, 1995. Accordingly, Cencom Properties II began
dissolution during 1995 and has accepted bids for sale of certain CCIP II
assets, including those of the System. The highest bid for the System's assets
was submitted by Charter Communications II, L.P., an affiliate of Cencom
Properties II, for $36,700,000, subject to certain working capital adjustments.
In accordance with the terms of the CCIP II Partnership Agreement, the sale of
assets to an affiliate of Cencom Properties II must be approved by a majority of
outstanding Limited Partner interests and is subject to an appraisal process,
which requires that two independent appraisers jointly determine the appraised
value. Cencom Properties II has retained two independent appraisers to satisfy
this requirement and is preparing a disclosure statement for distribution to the
Limited Partners which will describe the various transactions and request
consent for the proposed sale. An asset purchase agreement will be signed
subsequent to Limited Partners' approval. The acquisition of the System is
expected to be consummated in 1997.

All intersystem balances and transactions have been eliminated for
presentation in the combined financial statements.

As of December 31, 1995, the System passed approximately 28,200 homes and
serviced approximately 20,200 basic subscribers in approximately 11 franchise
areas. The System comprises approximately 45% of the total CCIP II subscribers
at December 31, 1995.

The accompanying balance sheet as of March 31, 1996, the related statements
of operations and cash flows for the three months ended March 31, 1996 and 1995,
and the related statement of System's equity for the three months ended March
31, 1996, are unaudited. In the opinion of management, these statements have
been prepared on the same basis as the audited financial statements and include
all adjustments necessary (consisting only of normal recurring adjustments) for
the fair presentation of financial position, results of operations and cash
flows. The results of operations for the three months ended March 31, 1996 and
1995, are not necessarily indicative of the results that may be expected for an
entire year.

Property, Plant and Equipment

F-191
<PAGE> 313

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Depreciation is provided using the composite method on a straight-line
basis over the estimated useful lives of assets as follows:

<TABLE>
<S> <C>
Trunk and distribution systems.................................. 10 years
Subscriber installations........................................ 10 years
Converters...................................................... 3-5 years
Buildings and headends.......................................... 9-20 years
Vehicles and equipment.......................................... 4-8 years
Office equipment................................................ 5-10 years
</TABLE>

Franchise Costs

Franchise costs are being amortized using the straight-line method over the
term of the individual franchises.

During 1995, the System's management adopted Statement of Financial
Accounting Standards (SFAS) No. 121 entitled, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of." In accordance
with SFAS No. 121, the System's management periodically reviews the carrying
value of its long-lived assets, identifiable intangibles and franchise costs in
relation to historical financial results, current business conditions and trends
(including the impact of existing legislation and regulation) to identify
potential situations in which the carrying value of such assets may not be
recoverable. If a review indicates that the carrying value of such assets may
not be recoverable, the carrying value of such assets in excess of their fair
value will be recorded as a reduction of the assets' cost as if a permanent
impairment has occurred. The adoption of SFAS No. 121 did not impact the
financial statements of the System.

Service Revenues

Cable service revenues are recognized when the related services are
provided.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Operating, General and Administrative Expenses

Included in operating, general and administrative expenses is the
allocation of certain expenses incurred by the holding company of CCIP II on
behalf of the System. These expenses were allocated to the System based on the
ratio of total System's subscribers to total CCIP II subscribers. Management
considers this allocation method to be reasonable for the operations of the
System. Expense allocated to the System totaled $101,012 during 1995.

Intercompany Interest Expense

Interest expense allocated to the System has been determined by applying
the ratio of total System's subscribers to total CCIP II subscribers at year-end
to total CCIP II interest expense for the year. Management considers this
allocation method to be reasonable for the operations of the System. CCIP II
makes disbursements on behalf of the System for interest expense. CCIP II
maintains a loan agreement with a consortium of banks for borrowings up to
$65,000,000, secured by all of CCIP II's assets, including the System's assets.
At December 31, 1995, CCIP II had borrowings of $50,000,000 related to this debt
agreement. The weighted average borrowings for CCIP II during 1995 was
$43,163,000. The borrowings

F-192
<PAGE> 314

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

pertaining to the System are reflected within System's Equity. At December 31,
1995, the interest rate was 7.38% and 9.0% for LIBOR and prime, respectively,
and during 1995, interest rates ranged from 6.38% to 7.38% and 8.5% to 9% for
LIBOR and prime, respectively. The weighted average interest rate of CCIP II for
1995 was 7.99%.

Income Taxes

Income taxes are the responsibility of the partners of CCIP II and as such
are not provided for in the accompanying financial statements.

Cash Management and System's Equity Account

The cash management function for the System is performed by the holding
company of CCIP II. Excess cash funds are transferred to the holding company of
CCIP II using the System's equity account. In addition, the holding company of
CCIP II makes disbursements on behalf of the System for certain items such as
payroll, payroll taxes, employee benefits and other costs and incurs debt
borrowings for the System. Such amounts are transferred to the System through
the System's equity account and are recognized in the appropriate expense
categories in the accompanying statement of operations.

2. PREPAID EXPENSES AND OTHER:

Prepaid expenses and other consist of the following:

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
(UNAUDITED)
Prepaid programming....................................... $34,075 $ 21,568
Prepaid pole rental....................................... 28,579 --
Other prepaid expenses and current assets................. 7,064 10,769
------- -------
$69,718 $ 32,337
======= =======
</TABLE>

3. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
------------
(UNAUDITED)
<S> <C> <C>
Trunk and distribution systems.......................... $ 22,261,953 $ 22,195,466
Subscriber installations................................ 4,944,445 4,855,121
Converters.............................................. 1,634,672 1,485,483
Land, buildings and headends............................ 2,164,947 2,150,225
Vehicles and equipment.................................. 717,329 432,593
Office equipment........................................ 182,795 462,923
------------ ------------
31,906,141 31,581,811
Less -- Accumulated depreciation........................ (17,060,181) (16,255,079)
------------ ------------
$ 14,845,960 $ 15,326,732
============ ============
</TABLE>

F-193
<PAGE> 315

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
-----------
(UNAUDITED)
<S> <C> <C>
Accounts payable............................................ $ 13,034 $ 36,530
Accrued salaries and related benefits....................... 27,130 89,462
Accrued franchise fees...................................... 78,881 156,595
Accrued property tax........................................ 152,848 357,158
Other....................................................... 132,044 116,074
-------- --------
$ 403,937 $755,819
======== ========
</TABLE>

5. SYSTEM'S EQUITY:

As of December 31, 1995, CCIP II had recorded in its capital account an
accumulated deficit of approximately $20,381,000, represented by earnings net of
partner distributions.

6. RELATED-PARTY TRANSACTIONS:

During 1994, Cencom Cable Associates, Inc., a former affiliated entity,
assigned management services under contract with CCIP II to Cencom Properties
II. The management service contract provides for the payment of fees equal to 5%
of the System's gross service revenues. Expenses recognized by the System under
this contract were $388,553 during 1995. Management believes these charges are
indicative of the expense which would have been incurred as a stand-alone
entity.

7. COMMITMENT AND CONTINGENCIES:

Leases

The System leases certain facilities and equipment under noncancelable
operating leases. Rent expense incurred under leases during 1995 was
approximately $9,000. Approximate future minimum lease payments are as follows:

<TABLE>
<S> <C>
1996................................................................ $1,400
1997 and thereafter................................................. --
</TABLE>

The System rents utility poles in its operations. Generally, pole rental
agreements are short term, but the System's management anticipates that such
rentals will continue to recur. Rent expense incurred for pole attachments
during 1995 was approximately $112,000.

Insurance Coverage

The System currently does not have and does not in the near term anticipate
having property and casualty insurance on its underground distribution plant.
Due to large claims incurred by the property and casualty insurance industry,
the pricing of insurance coverage has become inflated to the point where, in the
judgment of the System's management, the insurance coverage is cost prohibitive.
Management believes its experience and policy with such insurance coverage is
consistent with general industry practices. Management will continue to monitor
the insurance markets to attempt to obtain coverage for the System's
distribution plant at reasonable rates.

F-194
<PAGE> 316

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Litigation

The System is a party to lawsuits which are generally incidental to 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
System's financial position and results of operations.

8. REGULATION IN THE CABLE INDUSTRY:

1992 Cable Act and FCC Regulation

F-195
<PAGE> 317

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

eliminates regulation of non-basic programming as of March 31, 1999. In the
interim, rate regulation of the non-basic programming tier can only be triggered
by a franchising authority complaint to the FCC. If the FCC determines that the
System's non-basic programming service tier rates are unreasonable, the FCC has
the authority to order the System to reduce non-basic programming service tier
rates and to refund to customers any overcharges occurring from the filing date
of the rate complaint with the FCC.

Under the FCC's initial rate regulations pursuant to the 1992 Cable Act,
regulated cable systems were required to apply a benchmark formula to determine
their maximum permitted rates. Those systems whose rates were above the
benchmark on September 30, 1992, were required to reduce their rates to the
benchmark or by 10%, whichever was less. Under revised rate regulations adopted
February 1994, regulated cable systems were required to set their rates so that
regulated revenues per subscriber did not exceed September 30, 1992, levels,
reduced by 17% (taking into account the previous 10% reduction).

In September 1995, the FCC developed an abbreviated cost-of-service form
that permits cable operators to recover costs of significant upgrades that
provide benefits to subscribers of regulated cable services. Cable operators
seeking to raise rates to cover costs of an upgrade would submit only the costs
of the upgrade instead of all current costs. In December 1995, the FCC revised
its cost-of-service rules. At this time, the System's management is unable to
predict the effect of these revised rules on the System's financial position or
results of operations.

In another action in September 1995, the FCC established a new optional
rate adjustment methodology that encourages operators to limit their rate
increases to once a year to reflect inflation and changes in external costs and
the number of channels. The rules permit cable operators to "project reasonably"
changes in their costs for the 12 months following the rate change (in an effort
to eliminate delays in recovering costs). The order allows operators to recover
increases in additional types of franchise-requirement costs. Permitted pass-
through increases include increases in the cost of providing institutional
networks, video services, data services to or from governmental and educational
institutions, and certain other cost increases. The System's management is
unable to predict the effect of these new rules on the System's business.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operators'
marketing costs and may also allow operators to better respond to competition
from alternative providers. The System's management is unable to predict if
these proposed rules will ultimately be promulgated by the FCC, and if they are
promulgated, their effect on the System's financial position and results of
operations.

While management believes that the System has complied in all material
respects with the rate provisions of the 1992 Cable Act, in jurisdictions that
have not yet chosen to certify, refunds covering a one-year period on basic
services may be ordered upon future certification if the System is unable to
justify its rates through a benchmark or cost-of-service filing or small system
cost-of-service filing pursuant to FCC rules. Management is unable to estimate
at this time the amount of refunds, if any, that may be payable by the System in
the event certain of its rates are successfully challenged by franchising
authorities or found to be unreasonable by the FCC. Management 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 System.

F-196
<PAGE> 318

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

"Must Carry" Requirements/"Retransmission Consents"

Franchise Matters

The 1992 Cable Act modified the franchise renewal process to make it easier
for a franchising authority to deny renewal. Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement. Although management believes
that the System has generally met the terms of its franchise agreements and has
provided quality levels of service, and anticipates the System's future
franchise renewal prospects generally will be favorable, there can be no
assurance that any such franchises will be renewed or, if renewed, that the
franchising authorities will not impose more onerous requirements on the System
than previously existed.

Recent Telecommunications Legislation

The Telecommunications Act alters federal, state and local laws and
regulations pertaining to cable television, telecommunications and other
services. Under the Telecommunications Act, telephone companies can compete
directly with cable operators in the provision of video programming. This new
legislation recognizes several multiple entry options for telephone companies to
provide competitive video programming.

Certain provisions of the Telecommunications Act could materially affect
the growth and operation of the cable television industry and the cable services
provided by the System. Although the new legislation may substantially lessen
regulatory burdens, the cable television industry may be subject to additional
competition as a result thereof. There are numerous rule makings to be
undertaken by the FCC which will interpret and implement the Telecommunications
Act's provisions. In addition, certain provisions of the Telecommunications Act
(such as the deregulation of cable programming rates) are not immediately
effective. Further, certain of the Telecommunications Act's provisions have been
and are likely to be subject to judicial challenges. The System's management is
unable at this time to predict the outcome of such rule-makings or litigation or
the substantive effect of the new legislation and the rule-makings on the
financial position and results of operations of the System.

F-197
<PAGE> 319

CENCOM CABLE INCOME PARTNERS II, L.P. --
ANDERSON COUNTY SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

9. NET LOSS FOR INCOME TAX PURPOSES:

The following reconciliation summarizes the differences between CCIP II's
net loss for financial reporting purposes and net loss for federal income tax
purposes for the year ended December 31, 1995:

<TABLE>
<S> <C>
Net loss for financial reporting purposes.............................. $ (2,292,563)
Depreciation differences between financial reporting and tax
reporting............................................................ 751,650
Equity in loss of unconsolidated Limited Partnership differences
between financial reporting and tax reporting........................ (3,417,920)
Differences in expenses recorded for financial reporting and for tax
purposes............................................................. (364,558)
Revenue reported for tax reporting and deferred for financial
reporting............................................................ 27,904
Other.................................................................. 45,361
-----------
Net loss for federal income tax purposes..................... $ (5,250,126)
===========
Net loss per Limited Partnership unit for federal income tax
purposes................................................... $ (57.17)
===========
</TABLE>

The following summarizes the significant temporary differences between CCIP
II's financial reporting basis and federal income tax reporting basis as of
December 31, 1995:

<TABLE>
<S> <C>
Assets:
Accounts receivable.................................................. $ 31,463
Accrued expenses..................................................... 657,002
Deferred revenue..................................................... 27,904
------------
$ 716,369
===========
Liabilities:
Property, plant and equipment........................................ $(13,979,613)
Investment in unconsolidated Limited Partnership..................... (8,864,469)
------------
$(22,844,082)
===========
</TABLE>

As discussed in Note 1, the System comprises approximately 45% of CCIP II's
total basic subscribers.

F-198
<PAGE> 320

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Cencom Partners, L.P.:

We have audited the accompanying balance sheet of Cencom Partners,
L.P. -- Lincolnton System (as defined in Note 1) as of December 31, 1995, and
the related statements of operations, System's equity and cash flows for the
year then ended. These financial statements are the responsibility of the
System's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cencom Partners,
L.P. -- Lincolnton System as of December 31, 1995, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
March 29, 1996

F-199
<PAGE> 321

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
-----------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash.............................................................. $ -- $ --
Accounts receivable, net of allowance for doubtful accounts of
$5,008 and $5,298, respectively................................ 67,329 49,874
Prepaid expenses and other........................................ 20,868 22,111
----------- -----------
Total current assets........................................... 88,197 71,985
PROPERTY, PLANT AND EQUIPMENT....................................... 8,518,965 8,757,955
FRANCHISE COSTS, net of accumulated amortization of $8,292,088 and
$8,020,648, respectively.......................................... 4,117,691 4,389,131
SUBSCRIBER LISTS, net of accumulated amortization of $4,171,130 and
$3,844,673, respectively.......................................... 684,675 1,011,132
----------- -----------
$13,409,528 $ 14,230,203
=========== ===========
LIABILITIES AND SYSTEM'S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses............................. $ 168,872 $ 295,245
Subscriber deposits and prepayments............................... 23,961 27,241
----------- -----------
Total current liabilities...................................... 192,833 322,486
----------- -----------
DEFERRED REVENUE.................................................... 27,890 28,687
SYSTEM'S EQUITY..................................................... 13,188,805 13,879,030
----------- -----------
$13,409,528 $ 14,230,203
=========== ===========
</TABLE>

The accompanying notes are an integral part of these balance sheets.

F-200
<PAGE> 322

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTHS ENDED DECEMBER
MARCH 31, 31,
----------------------- 1995
1995 -----------
----------
1996 (UNAUDITED)
----------
(UNAUDITED)
<S> <C> <C> <C>
SERVICE REVENUES.......................................... $1,357,224 $1,288,192 $ 5,222,042
---------- ---------- -----------
OPERATING EXPENSES:
Operating, general and administrative................... 679,294 625,162 2,623,219
Depreciation and amortization........................... 1,037,980 1,160,168 4,187,826
Management fee -- related party......................... 67,861 64,410 261,103
---------- ---------- -----------
1,785,135 1,849,740 7,072,148
---------- ---------- -----------
Loss from operations................................. (427,911) (561,548) (1,850,106)
---------- ---------- -----------
OTHER INCOME (EXPENSE):
Interest expense........................................ (270,904) (301,552) (1,137,975)
Interest income......................................... 1,846 687 11,788
Other................................................... (4,643) -- --
---------- ---------- -----------
(273,701) (300,865) (1,126,187)
---------- ---------- -----------
Net loss............................................. $ (701,612) $ (862,413) $(2,976,293)
========== ========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-201
<PAGE> 323

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
STATEMENTS OF SYSTEM'S EQUITY

<TABLE>
<CAPTION>
SYSTEM'S
EQUITY
-----------
<S> <C>
BALANCE, December 31, 1994...................................................... $17,147,315
Net activity with Parent...................................................... (291,992)
Net loss...................................................................... (2,976,293)
-----------
BALANCE, December 31, 1995...................................................... 13,879,030
Net activity with Parent (unaudited).......................................... 11,387
Net loss (unaudited).......................................................... (701,612)
-----------
BALANCE, March 31, 1996 (unaudited)............................................. $13,188,805
===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-202
<PAGE> 324

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTHS ENDED DECEMBER
MARCH 31 31,
----------------------- 1995
1995 -----------
----------
1996 (UNAUDITED)
----------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................ $ (701,612) $ (862,413) $(2,976,293)
Adjustments to reconcile net loss to net cash provided
by operating activities --
Depreciation and amortization........................ 1,037,980 1,160,168 4,187,826
Changes in assets and liabilities --
Accounts receivable, net........................... (17,455) (18,758) 4,309
Prepaid expenses and other......................... 1,243 (9,095) 1,266
Accounts payable and accrued expenses.............. (126,373) (102,871) (35,011)
Subscriber deposits and prepayments................ (3,280) (535) (3,095)
Deferred revenue................................... (797) -- 28,687
---------- ---------- -----------
Net cash provided by operating activities....... 189,706 166,496 1,207,689
---------- ---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment.............. (198,168) (121,971) (770,897)
Other................................................... (2,925) (83,061) (144,800)
---------- ---------- -----------
Net cash used in investing activities........... (201,093) (205,032) (915,697)
---------- ---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in capital account with Parent............... 11,387 38,536 (291,992)
---------- ---------- -----------
Net cash provided by (used in) financing
activities.................................... 11,387 38,536 (291,992)
---------- ---------- -----------
CASH, beginning and end of period......................... $ -- $ -- $ --
========== ========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-203
<PAGE> 325

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

The financial statements include the accounts of the Lincolnton cable
television system which is owned and operated by Cencom Partners, L.P. (CPLP).
Cencom Partners, Inc. (Cencom Partners) is the General Partner of CPLP. These
financial statements include the historical assets, liabilities and operations
of the Lincolnton cable television system, which provides service to communities
in and around Lincolnton, North Carolina, and is referred to herein as the
"System." Cencom Partners is an indirect wholly owned subsidiary of Charter
Communications, Inc. (Charter). Cencom Cable Income Partners II, L.P. (CCIP II),
an affiliate, owns 84.03% of the Limited Partner units of CPLP.

Subsequent to year-end, CPLP entered into an Asset Purchase Agreement to
sell the assets of the System to Charter Communications, L.P. (an affiliated
entity) for a purchase price of $27,500,000, subject to certain working capital
adjustments. The closing date shall be on August 30, 1996, or on any such date
mutually agreed upon by the parties. The asset sale is being effected to satisfy
the requirements by CPLP's senior bank lenders that the credit facility be
repaid in accordance with its terms. CPLP's asset disposition was also commenced
to facilitate the liquidation of CCIP II which requires the liquidation of all
of CCIP II's assets, including its entire ownership interest in CPLP.

All intersystem balances and transactions have been eliminated for
presentation in the financial statements.

As of December 31, 1995, the System passed approximately 28,500 homes and
serviced approximately 14,500 basic subscribers in approximately seven franchise
areas. The System comprises approximately 40% of the total CPLP basic
subscribers at December 31, 1995.

Property, Plant and Equipment

F-204
<PAGE> 326

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

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

Franchise Costs and Subscriber Lists

Franchise costs are being amortized using the straight-line method over the
term of the individual franchises. Subscriber lists are being amortized using
the straight-line method over seven years. The non-compete agreement was being
amortized using the straight-line method over the term of the covenant which was
five years. The non-compete agreement was fully amortized as of December 31,
1995.

Service Revenues

Cable service revenues are recognized when the related services are
provided.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Operating, General and Administrative Expenses

Included in operating, general and administrative expenses is the
allocation of certain expenses incurred by the holding company of CPLP on behalf
of the System. These expenses were allocated to the System based on the ratio of
total System's basic subscribers to total CPLP basic subscribers. Management
considers this allocation method to be reasonable for the operations of the
System. Expenses allocated to the System totaled $55,461 during 1995.

Intercompany Interest Expense

Interest expense allocated to the System has been determined by applying
the ratio of total System's basic subscribers to total CPLP basic subscribers at
year-end to total CPLP interest expense for the year. Management considers this
allocation method to be reasonable for the operations of the System. CPLP makes
disbursements on behalf of the System for interest expense. CPLP maintains a
revolving credit agreement

F-205
<PAGE> 327

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

with a consortium of banks for borrowings up to $48,000,000, secured by all of
CPLP's assets, including the System's assets. At December 31, 1995, CPLP had
borrowings of $34,957,500 related to this credit agreement. The weighted average
borrowings for CPLP during 1995 were $36,439,000. The borrowings pertaining to
the System are reflected within System's Equity. At December 31, 1995, the
interest rate was 7.375% and ranged from 7.375% to 8.175% during 1995. The
weighted average interest rate of CPLP for 1995 was 7.81%.

Income Taxes

Income taxes are the responsibility of the partners of CPLP and as such are
not provided for in the accompanying financial statements.

Cash Management and System's Equity Account

The cash management function for the System is performed by the holding
company of CPLP. Excess cash funds are transferred to the holding company of
CPLP using the System's equity account. In addition, the holding company of CPLP
makes disbursements on behalf of the System for certain items such as payroll,
payroll taxes, employee benefits and other costs and incurs debt borrowings for
the System. Such amounts are transferred to the System through the System's
equity account and are recognized in the appropriate expense categories in the
accompanying statement of operations.

2. PREPAID EXPENSES AND OTHER:

Prepaid expenses and other consist of the following:

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
(UNAUDITED)
Prepaid programming....................................... $20,495 $ 11,640
Other prepaid expenses and current assets................. 373 10,471
----------- -------- ----
$20,868 $ 22,111
=========== ============
</TABLE>

3. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
(UNAUDITED)
Trunk and distribution systems.......................... $11,436,457 $ 11,375,882
Subscriber installations................................ 3,381,397 3,332,794
Converters.............................................. 1,180,214 1,095,257
Land, buildings and headends............................ 599,412 596,426
Vehicles and equipment.................................. 379,917 378,781
Office equipment........................................ 114,612 114,701
----------- ------------
17,092,009 16,893,841
Less- Accumulated depreciation.......................... (8,573,044) (8,135,886)
----------- ------------
$ 8,518,965 $ 8,757,955
=========== ============
</TABLE>

F-206
<PAGE> 328

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
(UNAUDITED)
Accounts payable.......................................... $ 4,646 $ 28,420
Accrued salaries and related benefits..................... 26,734 19,151
Accrued property tax...................................... 49,617 39,567
Accrued franchise fees.................................... 25,274 94,661
Accrued billing expense................................... 17,393 15,295
Other..................................................... 45,208 98,151
-------- --------
$ 168,872 $295,245
======== ========
</TABLE>

5. SYSTEM'S EQUITY:

As of December 31, 1995, CPLP had recorded in its capital account an
accumulated deficit of approximately $11,114,000, represented by earnings net of
partner distributions.

6. RELATED-PARTY TRANSACTIONS:

During 1994, Cencom Cable Associates, Inc., the parent of Cencom Holdings,
assigned management services under contract with the System to Cencom Partners.
The management service contract provides for the payment of fees equal to 5% of
the System's gross service revenues. CPLP has been allowed to defer all such
fees through December 31, 1995. Expenses recognized by the System under this
contract during 1995 were $261,103. Management believes these charges are
indicative of the expense which would have been incurred as a stand-alone
entity.

7. COMMITMENTS AND CONTINGENCIES:

Leases

The System leases certain facilities and equipment under noncancelable
operating leases. Rent expense incurred under leases during 1995 was
approximately $15,000. Approximate future minimum lease payments are as follows:

<TABLE>
<S> <C>
1996 $12,000
1997 12,000
1998 1,500
1999 1,500
2000 1,500
Thereafter 3,000
</TABLE>

F-207
<PAGE> 329

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Insurance Coverage

Litigation

8. REGULATION IN THE CABLE INDUSTRY:

1992 Cable Act and FCC Regulation

F-208
<PAGE> 330

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Under the 1992 Cable Act, rates for cable programming services not carried
on the basic tier (non-basic services) could be regulated by the FCC upon the
filing of a complaint by franchise authorities or subscribers that indicates the
cable operator's rates for these services are unreasonable. Rate complaints have
been filed with the FCC with respect to certain of the System's cable
programming services; none of such complaints have been resolved by the FCC as
of the date of the financial statements. The Telecommunications Act eliminates
regulation of non-basic programming as of March 31, 1999. In the interim, rate
regulation of the non-basic programming tier can only be triggered by a
franchising authority complaint to the FCC. If the FCC determines that the
System's non-basic programming service tier rates are unreasonable, the FCC has
the authority to order the System to reduce non-basic programming service tier
rates and to refund to customers any overcharges occurring from the filing date
of the rate complaint with the FCC.

Under the FCC's initial rate regulations pursuant to the 1992 Cable Act,
regulated cable systems were required to apply a benchmark formula to determine
their maximum permitted rates. Those systems whose rates were above the
benchmark on September 30, 1992, were required to reduce their rates to the
benchmark or by 10%, whichever was less. Under revised rate regulations adopted
February 1994, regulated cable systems were required to set their rates so that
regulated revenues per subscriber did not exceed September 30, 1992, levels,
reduced by 17% (taking into account the previous 10% reduction).

In September 1995, the FCC developed an abbreviated cost-of-service form
that permits cable operators to recover costs of significant upgrades that
provide benefits to subscribers of regulated cable services. Cable operators
seeking to raise rates to cover costs of an upgrade would submit only the costs
of the upgrade instead of all current costs. In December 1995, the FCC revised
its cost-of-service rules. At this time, the System's management is unable to
predict the effect of these revised rules on the System's financial position or
results of operations.

In another action in September 1995, the FCC established a new optional
rate adjustment methodology that encourages operators to limit their rate
increases to once a year to reflect inflation and changes in external costs and
the number of channels. The rules permit cable operators to "project reasonably"
changes in their costs for the 12 months following the rate change (in an effort
to eliminate delays in recovering costs). The order allows operators to recover
increases in additional types of franchise-requirement costs. Permitted pass-
through increases include increases in the cost of providing institutional
networks, video services, data services to or from governmental and educational
institutions, and certain other cost increases. The System's management is
unable to predict the effect of these new rules on the System's business.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operator's
marketing costs and may also allow operators to better response to competition
from alternative providers. The System's management is unable to predict if
these proposed rules will ultimately be promulgated by the FCC, and if they are
promulgated, their effect on the System's financial position and results of
operations.

F-209
<PAGE> 331

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

"Must Carry" Requirements/"Retransmission Consents"

Under the 1992 Cable Act, cable television operators are subject to
mandatory signal carriage requirements that allow local commercial and
noncommercial television broadcast stations to elect to require a cable system
to carry the station, subject to certain exceptions, or, in the case of
commercial stations, to negotiate for "retransmission consent" to carry the
station. In addition, there are requirements for cable systems to obtain
retransmission consent for all "distant" commercial television stations,
commercial radio stations and certain low power television stations carried by
such systems after October 6, 1993. As a result of the mandatory system carriage
rules, the System may be required to carry television broadcast stations that
otherwise would not have been carried, thereby causing displacement of possibly
more attractive programming.

Franchise Matters

The 1992 Cable Act modified the franchise renewal process to make it easier
for a franchising authority to deny renewal. Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement. Although management believes
that the System has generally met the terms of its franchise agreements and has
provided quality levels of service, and anticipates the System's future
franchise renewal prospects generally will be favorable, there can be no
assurance that any such franchises will be renewed or, if renewed, that the
franchising authorities will not impose more onerous requirements on the System
than previously existed.

Recent Telecommunications Legislation

The Telecommunications Act alters federal, state and local laws and
regulations pertaining to cable television, telecommunications and other
services.

F-210
<PAGE> 332

CENCOM PARTNERS, L.P. -
LINCOLNTON SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

challenges. The System's management is unable at this time to predict the
outcome of such rule-makings or litigation or the substantive effect of the new
legislation and the rule-makings on the financial position and results of
operations of the System.

9. NET LOSS FOR INCOME TAX PURPOSES:

The following reconciliation summarizes the differences between CPLP's net
loss for financial reporting and federal income tax purposes for the year ended
December 31, 1995:

<TABLE>
<S> <C>
Net loss for financial reporting purposes................... $(5,835,749)
Depreciation differences between financial reporting
and tax reporting......................................... (299,122)
Amortization differences between financial reporting
and tax reporting......................................... 1,857,724
Differences in expenses recorded for financial reporting
and tax reporting......................................... 7,973
Revenue reported for tax reporting and deferred for
financial reporting....................................... 196,640
Other....................................................... 5,034
-----------
Net loss for federal income tax purposes.................. $(4,067,500)
===========
</TABLE>

The following summarizes the significant temporary differences between
CPLP's financial reporting basis and federal income tax reporting basis as of
December 31, 1995:

<TABLE>
<S> <C>
Assets:
Accounts receivable....................................... $ 21,651
Franchise costs and other assets.......................... 10,437,405
Accrued expenses.......................................... 419,932
Deferred revenue.......................................... 196,640
-----------
$11,075,628
===========
Liabilities- Property, plant and equipment.................. $(9,748,924)
===========
</TABLE>

As discussed in Note 1, the System comprises approximately 40% of CPLP's
total basic subscribers.

F-211
<PAGE> 333

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Cencom Partners, L.P.:

We have audited the accompanying balance sheet of Cencom Partners,
L.P. -- Sanford System (as defined in Note 1) as of December 31, 1995, and the
related statements of operations, System's equity and cash flows for the year
then ended. These financial statements are the responsibility of the System's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cencom Partners,
L.P. -- Sanford System as of December 31, 1995, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

March 29, 1996

F-212
<PAGE> 334

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
-----------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash............................................................. $ -- $ --
Accounts receivable, net of allowance for doubtful accounts of
$7,892 and $11,821, respectively.............................. 54,709 56,288
Prepaid expenses and other....................................... 30,282 23,041
---------- ----------
Total current assets..................................... 84,991 79,329
PROPERTY, PLANT AND EQUIPMENT...................................... 5,714,109 5,864,762
FRANCHISE COSTS, net of accumulated amortization of $7,382,624 and
$7,043,059, respectively......................................... 1,180,055 1,519,620
SUBSCRIBER LISTS, net of accumulated amortization of $2,761,673 and
$2,607,860, respectively......................................... 589,179 742,992
---------- ----------
$ 7,568,334 $8,206,703
========== ==========
LIABILITIES AND SYSTEM'S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses............................ $ 165,633 $ 431,713
Subscriber deposits and prepayments.............................. 23,840 24,080
---------- ----------
Total current liabilities................................ 189,473 455,793
---------- ----------
DEFERRED REVENUE................................................... 95,689 98,423
COMMITMENTS AND CONTINGENCIES
SYSTEM'S EQUITY.................................................... 7,283,172 7,652,487
---------- ----------
$ 7,568,334 $8,206,703
========== ==========
</TABLE>

The accompanying notes are an integral part of these balance sheets.

F-213
<PAGE> 335

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31 DECEMBER 31,
------------------------- 1995
1995 ------------
-----------
1996 (UNAUDITED)
-----------
(UNAUDITED)
<S> <C> <C> <C>
SERVICE REVENUES.......................................... $ 1,167,613 $ 1,090,874 $ 4,522,708
---------- ---------- -----------
OPERATING EXPENSES:
Operating, general and administrative................... 564,506 520,216 2,350,396
Depreciation and amortization........................... 771,018 805,364 2,992,737
Management fee -- related party......................... 58,381 54,544 226,136
---------- ---------- -----------
1,393,905 1,380,124 5,569,269
---------- ---------- -----------
Loss from operations............................ (226,292) (289,250) (1,046,561)
---------- ---------- -----------
INTEREST INCOME (EXPENSE):
Interest expense........................................ (237,041) (263,858) (995,728)
Interest income......................................... 1,614 601 7,907
---------- ---------- -----------
(235,427) (263,257) (987,821)
---------- ---------- -----------
Net loss........................................ $ (461,719) $ (552,507) $ (2,034,382)
========== ========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-214
<PAGE> 336

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

STATEMENTS OF SYSTEM'S EQUITY

<TABLE>
<CAPTION>
SYSTEM'S
EQUITY
-----------
<S> <C>
BALANCE, December 31, 1994...................................... $ 9,834,930
Net activity with Parent...................................... (148,061)
Net loss...................................................... (2,034,382)
-----------
BALANCE, December 31, 1995...................................... 7,652,487
Net activity with Parent (unaudited).......................... 92,404
Net loss (unaudited).......................................... (461,719)
-----------
BALANCE, March 31, 1996 (unaudited)............................. $ 7,283,172
===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-215
<PAGE> 337

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31 DECEMBER 31,
------------------------- 1995
1995 ------------
-----------
1996 (UNAUDITED)
-----------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................ $(461,719) $(552,507) $ (2,034,382)
Adjustments to reconcile net loss to net cash provided
by operating activities--
Depreciation and amortization........................ 771,018 805,364 2,992,737
Changes in assets and liabilities--
Accounts receivable, net........................... 1,579 48,698 60,951
Prepaid expenses and other......................... (7,241) (21,459) (1,051)
Accounts payable and accrued expenses.............. (266,080) 42,717 102,278
Subscriber deposits and prepayments................ (240) (840) (2,780)
Deferred revenue................................... (2,734) -- 98,423
-
--------- ---------
Net cash provided by operating activities....... 34,583 321,973 1,216,176
-
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment.............. (124,427) (293,075) (941,415)
Other................................................... (2,560) (72,677) (126,700)
-
--------- ---------
Net cash used in investing activities........... (126,987) (365,752) (1,068,115)
-
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in capital account with Parent............... 92,404 43,779 (148,061)
-
--------- ---------
Net cash provided by (used in) financing
activities.................................... 92,404 43,779 (148,061)
-
--------- ---------
CASH, beginning and end of period......................... $ -- $ -- $ --
========= ========= =
</TABLE>

The accompanying notes are an integral part of these statements.

F-216
<PAGE> 338

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

The financial statements include the accounts of the Sanford cable
television system which is owned and operated by Cencom Partners, L.P. (CPLP).
Cencom Partners, Inc. (Cencom Partners) is the General Partner of CPLP. These
financial statements include the historical assets, liabilities and operations
of the Sanford cable television systems, which provides service to communities
in and around Sanford, North Carolina, and is referred to herein as the
"System." Cencom Partners is an indirect wholly owned subsidiary of Charter
Communications, Inc. (Charter). Cencom Cable Income Partners II, L.P. (CCIP II),
an affiliate, owns 84.03% of the Limited Partner units of CPLP.

Subsequent to year-end, CPLP entered into an Asset Purchase Agreement to
sell the assets of the System to Charter Communications L.P. (an affiliated
entity) for a purchase price of $20,750,000, subject to certain working capital
adjustments. The closing date shall be on August 30, 1996, or on any such date
mutually agreed upon by the parties. The asset sale is being effected to satisfy
the requirements by CPLP's senior bank lenders that the credit facility be
repaid in accordance with its terms. CPLP's asset disposition was also commenced
to facilitate the liquidation of CCIP II which requires the liquidation of all
of CCIP II's assets, including its entire ownership interest in CPLP.

All intersystem balances and transactions have been eliminated for
presentation in the financial statements.

As of December 31, 1995, the System passed approximately 21,500 homes and
serviced approximately 13,500 basic subscribers in approximately eight franchise
areas. The System comprises approximately 35% of the total CPLP subscribers at
December 31, 1995.

Property, Plant and Equipment

F-217
<PAGE> 339

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

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

Franchise Costs and Subscriber Lists

Service Revenues

Cable service revenues are recognized when the related services are
provided.

Franchise fees collected from cable subscribers and paid to local
franchises are reported as revenues.

Operating, General and Administrative Expenses

Included in operating, general and administrative expenses is the
allocation of certain expenses incurred by the holding company of CPLP on behalf
of the System. These expenses were allocated to the System based on the ratio of
total System's subscribers to total CPLP subscribers. Management considers this
allocation method to be reasonable for the operations of the System. Expenses
allocated to the System totaled $39,789 during 1995.

Intercompany Interest Expense

Interest expense allocated to the System has been determined by applying
the ratio of total System's subscribers to total CPLP subscribers at year-end to
total CPLP interest expense for the year. Management considers this allocation
method to be reasonable for the operations of the System. CPLP makes
disbursements on behalf of the System for interest expense. CPLP maintains a
revolving credit agreement with a

F-218
<PAGE> 340

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

consortium of banks for borrowings up to $48,000,000, secured by all of CPLP's
assets, including the System's assets. At December 31, 1995, CPLP had borrowings
of $34,957,500 related to this credit agreement. The weighted average borrowings
for CPLP during 1995 were $36,439,000. The borrowings pertaining to the System
are reflected within System's Equity. At December 31, 1995, the interest rate
was 7.375% and ranged from 7.375% to 8.175% during 1995. The weighted average
interest rate of CPLP for 1995 was 7.81%.

Income Taxes

Income taxes are the responsibility of the partners of CPLP and as such are
not provided for in the accompanying financial statements.

Cash Management and System's Equity Account

2. PREPAID EXPENSES AND OTHER:

Prepaid expenses and other consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
-----------
(UNAUDITED)
<S> <C> <C>
Prepaid insurance........................................... $ 255 $ 1,309
Prepaid programming......................................... 18,914 11,105
Other prepaid expenses and current assets................... 11,113 10,627
------- -------
$30,282 $ 23,041
======= =======
</TABLE>

3. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
-----------
(UNAUDITED)
<S> <C> <C>
Trunk and distribution systems............................ $ 6,367,013 $ 6,364,826
Subscriber installations.................................. 2,420,302 2,375,039
Converters................................................ 988,091 914,523
Land, buildings and headends.............................. 754,971 751,562
Vehicles and equipment.................................... 252,391 244,568
Office equipment.......................................... 123,199 131,022
----------- -----------
10,905,967 10,781,540
Less -- Accumulated depreciation.......................... (5,191,858) (4,916,778)
----------- -----------
$ 5,714,109 $ 5,864,762
=========== ===========
</TABLE>

F-219
<PAGE> 341

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
-----------
(UNAUDITED)
<S> <C> <C>
Accrued property tax........................................ $ 14,066 $ 33,567
Accrued pole rental......................................... 26,815 66,228
Accrued franchise fees...................................... 30,408 111,012
Other....................................................... 94,344 220,906
-------- --------
$ 165,633 $431,713
======== ========
</TABLE>

5. SYSTEM'S EQUITY:

As of December 31, 1995, CPLP had recorded in its capital account an
accumulated deficit of approximately $11,114,000, represented by earnings net of
partner distributions.

6. RELATED-PARTY TRANSACTIONS:

During 1994, Cencom Cable Associates, Inc., the parent of Cencom Holdings,
assigned management services under contract with the System to Cencom Partners.
The management service contract provides for the payment of fees equal to 5% of
the System's gross service revenues. CPLP has been allowed to defer all such
fees through December 31, 1995. Expenses recognized by the System under this
contract during 1995 were $226,136. Management believes these charges are
indicative of the expense which would have been incurred as a stand-alone
entity.

7. COMMITMENTS AND CONTINGENCIES:

Leases

The System leases certain facilities and equipment under noncancelable
operating leases. Rent expense incurred under leases during 1995 was
approximately $45,700. Approximate future minimum lease payments are as follows:

<TABLE>
<S> <C>
1996............................................................... $45,000
1997............................................................... 17,600
1998............................................................... 17,400
1999............................................................... 17,400
2000............................................................... 15,900
Thereafter......................................................... 14,400
</TABLE>

Insurance Coverage

F-220
<PAGE> 342

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

and policy with such insurance coverage is consistent with general industry
practices. Management will continue to monitor the insurance markets to attempt
to obtain coverage for the System's distribution plant at reasonable rates.

Litigation

8. REGULATION IN THE CABLE INDUSTRY:

1992 Cable Act and FCC Regulation

F-221
<PAGE> 343

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Under the 1992 Cable Act, rates for cable programming services not carried
on the basic tier (non-basic services) could be regulated by the FCC upon the
filing of a complaint by franchise authorities or subscribers that indicates the
cable operator's rates for these services are unreasonable. Rate complaints have
been filed with the FCC with respect to certain of the System's cable
programming services; none of such complaints have been resolved by the FCC as
of the date of the financial statements. The Telecommunications Act eliminates
regulation of non-basic programming as of March 31, 1999. In the interim, rate
regulation of the non-basic programming tier can only be triggered by a
franchising authority complaint to the FCC. If the FCC determines that the
System's non-basic programming service tier rates are unreasonable, the FCC has
the authority to order the System to reduce non-basic programming service tier
rates and to refund to customers any overcharges occurring from the filing date
of the rate complaint with the FCC.

Under the FCC's initial rate regulations pursuant to the 1992 Cable Act,
regulated cable systems were required to apply a benchmark formula to determine
their maximum permitted rates. Those systems whose rates were above the
benchmark on September 30, 1992, were required to reduce their rates to the
benchmark or by 10%, whichever was less. Under revised rate regulations adopted
February 1994, regulated cable systems were required to set their rates so that
regulated revenues per subscriber did not exceed September 30, 1992, levels,
reduced by 17% (taking into account the previous 10% reduction).

In September 1995, the FCC developed an abbreviated cost-of-service form
that permits cable operators to recover costs of significant upgrades that
provide benefits to subscribers of regulated cable services. Cable operators
seeking to raise rates to cover costs of an upgrade would submit only the costs
of the upgrade instead of all current costs. In December 1995, the FCC revised
its cost-of-service rules. At this time, the System's management is unable to
predict the effect of these revised rules on the System's financial position or
results of operations.

In another action in September 1995, the FCC established a new optional
rate adjustment methodology that encourages operators to limit their rate
increases to once a year to reflect inflation and changes in external costs and
the number of channels. The rules permit cable operators to "project reasonably"
changes in their costs for the 12 months following the rate change (in an effort
to eliminate delays in recovering costs). The order allows operators to recover
increases in additional types of franchise-requirement costs. Permitted pass-
through increases include increases in the cost of providing institutional
networks, video services, data services to or from governmental and educational
institutions, and certain other cost increases. The System's management is
unable to predict the effect of these new rules on the System's business.

In November 1995, the FCC proposed to provide cable operators with the
option of establishing uniform rates for similar service packages offered in
multiple franchise areas located in the same region. Under the FCC's current
rules, cable operators subject to rate regulation must establish rates on a
franchise-specific basis. The proposed rules could lower cable operator's
marketing costs and may also allow operators to better respond to competition
from alternative providers. The System's management is unable to predict if
these proposed rules will ultimately be promulgated by the FCC, and if they are
promulgated, their effect on the System's financial position and results of
operations.

F-222
<PAGE> 344

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

the FCC. Management 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 System.

"Must Carry" Requirements/"Retransmission Consents"

Under the 1992 Cable Act, cable television operators are subject to
mandatory signal carriage requirements that allow local commercial and
noncommercial television broadcast stations to elect to require a cable system
to carry the station, subject to certain exceptions, or, in the case of
commercial stations, to negotiate for "retransmission consent" to carry the
station. In addition, there are requirements for cable systems to obtain
retransmission consent for all "distant" commercial television stations,
commercial radio stations and certain low power television stations carried by
such systems after October 6, 1993. As a result of the mandatory system carriage
rules, the System may be required to carry television broadcast stations that
otherwise would not have been carried, thereby causing displacement of possibly
more attractive programming.

Franchise Matters

The 1992 Cable Act modified the franchise renewal process to make it easier
for a franchising authority to deny renewal. Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement. Although management believes
that the System has generally met the terms of its franchise agreements and has
provided quality levels of service, and anticipates the System's future
franchise renewal prospects generally will be favorable, there can be no
assurance that any such franchises will be renewed or, if renewed, that the
franchising authority will not impose more onerous requirements on the System
than previously existed.

Recent Telecommunications Legislation

The Telecommunications Act alters federal, state and local laws and
regulations pertaining to cable television, telecommunications and other
services.

Certain provisions of the Telecommunications Act could materially affect
the growth and operation of the cable television industry and the cable services
provided by the System. Although the new legislation may substantially lessen
regulatory burdens, the cable television industry may be subject to additional
competition as a result thereof. There are numerous rule-makings to be
undertaken by the FCC which will interpret and implement the Telecommunications
Act's provisions. In addition, certain provisions of the Telecommunications Act
(such as the deregulation of cable programming rates) are not immediately
effective. Further, certain of the Telecommunications Act's provisions have been
and are likely to be subject to judicial challenges. The System's management is
unable at this time to predict the outcome of such rule-makings or litigation or
the substantive effect of the new legislation and the rule-makings on the
financial position and results of operations of the System.

F-223
<PAGE> 345

CENCOM PARTNERS, L.P. -

SANFORD SYSTEM

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

9. NET LOSS FOR INCOME TAX PURPOSES:

The following reconciliation summarizes the differences between CPLP's net
loss for financial reporting and federal income tax purposes for the year ended
December 31, 1995:

<TABLE>
<S> <C>
Net loss for financial reporting purposes....................... $(5,835,749)
Depreciation differences between financial reporting and tax
reporting..................................................... (299,122)
Amortization differences between financial reporting and tax
reporting..................................................... 1,857,724
Differences in expenses recorded for financial reporting and tax
reporting..................................................... 7,973
Revenue reported for tax reporting and deferred for financial
reporting..................................................... 196,640
Other........................................................... 5,034
-----------
Net loss for federal income tax purposes.............. $(4,067,500)
===========
</TABLE>

The following summarizes the significant temporary differences between
CPLP's financial reporting basis and federal income tax reporting basis as of
December 31, 1995:

<TABLE>
<S> <C>
Assets:
Accounts receivable........................................... $ 21,651
Franchise costs and other assets.............................. 10,437,405
Accrued expenses.............................................. 419,932
Deferred revenue.............................................. 196,640
-----------
$11,075,628
===========
Liabilities -- Property, plant and equipment.................... $(9,748,924)
===========
</TABLE>

As discussed in Note 1, the System comprises approximately 35% of CPLP's

total basic subscribers.

F-224
<PAGE> 346

REPORT OF INDEPENDENT AUDITORS

To the Partners

Prime Cable of Hickory, L.P.

We have audited the balance sheets of Prime Cable of Hickory, L.P. as of
December 31, 1995 and 1994 and the related statements of operations, changes in
partners' capital deficiency, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the 1995 and 1994 financial statements referred to above
present fairly, in all material respects, the financial position of Prime Cable
of Hickory, L.P. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

ERNST & YOUNG LLP

Austin, Texas

March 4, 1996

F-225
<PAGE> 347

PRIME CABLE OF HICKORY, L.P.

BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
(THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
ASSETS (NOTE 5)
Cash and cash equivalents................................................ $ 1,613 $ 788
Accounts receivable, trade, net of allowance for doubtful accounts of $58
in 1995 and $30 in 1994................................................ 368 328
Prepaid expenses......................................................... 18 18
Inventories.............................................................. 457 19
Property, plant and equipment, at cost:
Cable television distribution systems.................................. 24,612 23,215
Transportation equipment............................................... 471 432
Furniture and fixtures................................................. 623 439
Buildings and land..................................................... 772 734
------- -------
26,478 24,820
Less accumulated depreciation.......................................... (18,329) (15,963)
------- -------
Net property, plant and equipment................................... 8,149 8,857
Intangible assets, net (Note 4).......................................... 1,748 3,546
Deferred debt issuance costs, net........................................ 1,149 657
Other assets............................................................. 12 6
------- -------
Total assets...................................................... $13,514 $14,219
======= =======
LIABILITIES AND PARTNERS' CAPITAL DEFICIENCY
Accounts payable......................................................... $ 277 $ 213
Accounts payable, affiliates............................................. 84 57
Accrued interest......................................................... 666 627
Other accrued expenses................................................... 1,538 1,347
Subscriber deposits and unearned income.................................. 292 271
Bank debt (Note 5)....................................................... 33,884 33,200
Subordinated debt (Note 6)............................................... 4,458 3,803
------- -------
Total liabilities................................................. 41,199 39,518
------- -------
Commitments and Contingencies (Note 7)
Partners' capital deficiency (Notes 6 and 7):
General partner (3,200 units outstanding).............................. 1,455 1,455
Limited partners (4,179 units outstanding)............................. 3,547 3,547
Limited partners' purchase warrants.................................... 1,187 1,187
Accumulated deficit...................................................... (33,874) (31,488)
------- -------
Total partners' capital deficiency................................ (27,685) (25,299)
------- -------
Total liabilities and partners' capital deficiency................ $13,514 $14,219
======= =======
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-226
<PAGE> 348

PRIME CABLE OF HICKORY, L.P.

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

(THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Revenues............................................................... $ 12,715 $ 11,628
Operating expenses:
Cable television system expenses..................................... 6,468 5,570
Management fees and expenses and
programming discount adjustments (Note 7)......................... 1,070 979
Depreciation and amortization........................................ 4,154 4,142
-------- --------
Income from operations................................................. 1,023 937
Interest income........................................................ 44 24
Interest expense....................................................... (3,453) (2,764)
Gain on disposal of fixed assets....................................... 1
-------- --------
Net loss............................................................... $ (2,386) $ (1,802)
======== ========
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-227
<PAGE> 349

PRIME CABLE OF HICKORY, L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL DEFICIENCY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
LIMITED
PARTNERS'
GENERAL LIMITED PURCHASE
PARTNER PARTNERS WARRANTS TOTAL
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Balances, December 31, 1993...................... $ (8,902) $(15,782) $1,187 $(23,497)
Net loss for the year ended December 31,
1994........................................ (553) (1,249) (1,802)
-------- -------- -------- --------
Balances, December 31, 1994...................... (9,455) (17,031) 1,187 (25,299)
Net loss for the year ended December 31,
1995........................................ (774) (1,612) (2,386)
-------- -------- -------- --------
Balances, December 31, 1995...................... $(10,229) $(18,643) $1,187 $(27,685)
======== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-228
<PAGE> 350

PRIME CABLE OF HICKORY, L.P.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
(THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
1995 1994
------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................................. $(2,386) $ (1,802)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization......................................... 4,154 4,142
Amortization of deferred debt issuance costs and discount............. 188 69
Increase in deferred interest on subordinated debt.................... 280 238
Gain on disposal of fixed assets...................................... (1)
------ ------
2,236 2,646
Net (increase) decrease in accounts receivable, prepaid expenses and
other assets....................................................... (46) (121)
Net increase in accounts payable, accounts payable-affiliates, accrued
interest and expenses, and subscriber deposits and unearned
income............................................................. 717 934
------ ------
Net cash provided by operating activities............................. 2,907 3,459
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment and inventories............ (2,096) (2,247)
Proceeds from sale of assets.......................................... 10 2
------ ------
Net cash used in investing activities................................. (2,086) (2,245)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank debt borrowings.................................... 1,265 34,131
Repayment of bank debt................................................ (581) (28,638)
Repayment of subordinated debt........................................ (6,000)
Increase in deferred debt issuance costs.............................. (680) (709)
------ ------
Net cash provided by (used in) financing activities................... 4 (1,216)
------ ------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS:..................................................... 825 (2)
Cash and cash equivalents, beginning of year.......................... 788 790
------ ------
Cash and cash equivalents, end of year................................ $ 1,613 $ 788
====== ======
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash interest paid.................................................... $ 2,945 $ 2,122
====== ======
Programming discount notes issued..................................... $ 374 $ 340
====== ======
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-229
<PAGE> 351

PRIME CABLE OF HICKORY, L.P.
NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION

Prime Cable of Hickory, L.P. (the "Partnership"), a Delaware limited
partnership, was formed on November 21, 1986 to acquire and operate the cable
television system in the Hickory, North Carolina area. On December 18, 1986 the
Partnership was capitalized with a contribution of $1,500,000 from the general
partner Prime Venture I, Inc. ("Prime Venture"), contributions totaling
$3,463,000 from the limited partners and $1,187,000 from the sale of limited
partnership purchase warrants. On March 12, 1987, Prime Venture converted 100
general partnership units to limited partnership units and subsequently sold
them for a price equal to the per unit contribution of the original limited
partners.

Losses of the Partnership are first allocated proportionately based on the
partners' capital accounts until all capital accounts are reduced to zero.
Second, losses are allocated to those partners that have made loans to the
Partnership until each such partner has a negative capital account equal to the
outstanding principal of the loans. Thereafter, losses are allocated based on
the number of units of partnership interest held.

Partnership profits are first allocated proportionately to those partners
with negative capital accounts until all accounts are zero. Second, profits are
allocated to those partners whose capital account is less than that partner's
contributions reduced by distributions of the Partnership ("Adjusted Capital
Contribution") until all partners have capital accounts that are equal to the
partner's Adjusted Capital Contribution. For purposes of these allocations, the
limited partnership purchase warrants will have a stated capital account of
$280,000 upon exercise. Thereafter, profits are allocated based on the number of
units of partnership interest held.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Inventories

Inventories are carried at the lower of cost (weighted average unit cost)
or market.

Property, Plant and Equipment

Depreciation is computed by the straight-line method over the estimated
useful lives of the assets. The composite method and a ten-year life are used
for cable television distribution systems. Under the composite method, proceeds
from the retirement of cable television distribution system assets are credited
to the allowance for depreciation. Gains or losses on disposition of property,
plant and equipment (other than cable television distribution systems) are
credited or charged to income. The Partnership charges maintenance and repairs
to expense as incurred. Expenditures for major renewals and betterments are
capitalized.

Intangible Assets

Excess cost over net assets acquired arising from the acquisition of the
cable television systems is being amortized over ten years. Franchise costs are
being amortized over the lives of the franchises, an average of ten years. It is
the Partnership's policy to value intangible assets at the lower of unamortized
cost or fair value. Management reviews the valuation and amortization of
intangible assets on a periodic basis, taking into consideration any events or
circumstances which might result in diminished fair value.

Deferred Debt Issuance Costs

Debt issuance costs are deferred and amortized over the term of the related
debt using a method that approximates the interest method.

Advertising Expense

The Partnership expenses advertising costs as incurred. Advertising
expenses, net of reimbursements, were approximately $155,000 and $102,000, for
1995 and 1994, respectively.

F-230
<PAGE> 352

PRIME CABLE OF HICKORY, L.P.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED

Income Taxes

The Partnership as an entity pays no income taxes, although it is required
to file federal and state income tax returns for informational purposes only.
All income or loss "flows through" to the individual partners as specified in
the partnership agreement.

Statement of Cash Flows

For purposes of the Statement of Cash Flows, the Partnership considers
highly liquid investments with a maturity of three months or less, when
acquired, to be cash equivalents.

Concentrations of Credit Risk

Financial instruments which potentially subject the Partnership to
concentrations of credit risk are primarily cash, temporary investments, and
accounts receivable. The Partnership invests excess cash in high quality
short-term liquid money instruments issued by highly-rated financial
institutions. At December 31, 1995, substantially all of the Partnership's cash
balances were invested in short-term liquid money instruments. Though limited to
one geographical area, the concentration of credit risk with respect to
receivables is minimized due to the large number of customers, individually
small balances, short payment terms, and required deposits.

Reclassifications

Certain amounts from prior years have been reclassified for comparative
purposes.

Use of Estimates

3. ACQUISITION OF CABLE TELEVISION SYSTEMS

The cable television system in the Hickory, North Carolina area was
acquired on December 18, 1986 for $31,171,000, including acquisition expenses,
pursuant to an agreement entered into by Prime Venture and subsequently assigned
to the Partnership. On September 9, 1987, the cable television system in the
Maiden, North Carolina area was acquired by the Partnership for $2,932,000,
including acquisition expenses. Both acquisitions were accounted for as purchase
transactions with the acquisition cost allocated to the tangible and
identifiable intangible assets of the systems based upon current values. The
allocations resulted in an excess of cost over assets acquired of $1,905,000.

F-231
<PAGE> 353

PRIME CABLE OF HICKORY, L.P.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED

4. INTANGIBLE ASSETS

Intangible assets consisted of the following (thousands of dollars):

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1995 1994
-------- --------
<S> <C> <C>
Franchise costs.............................................. $ 16,010 $ 16,010
Excess of acquisition costs over net assets acquired......... 1,905 1,905
-------- --------
17,915 17,915
Less accumulated amortization................................ (16,167) (14,369)
-------- --------
Intangible assets, net....................................... $ 1,748 $ 3,546
======== ========
</TABLE>

5. BANK DEBT

Bank debt consisted of the following (thousands of dollars):

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1995 1994
-------- --------
<S> <C> <C>
Bank credit agreement
Revolving loan............................................. $ 25,900 $ 25,200
Term loan.................................................. 7,984 8,000
-------- --------
$ 33,884 $ 33,200
======== ========
</TABLE>

On July 1, 1994, the Partnership entered into a loan agreement which
provides for total borrowings of $32,000,000 under a revolving loan commitment
and $8,000,000 under a term loan commitment. Proceeds from the bank loan
agreement were used to pay in full the previous credit agreements. The loans
bear interest, payable quarterly, at the bank prime rate plus 1.375% for
revolving loan advances and 2.0% for term loan advances. At the Partnership's
option, all or a specified portion of the indebtedness may be fixed for a period
ranging from one month to one year at the Eurodollar rate (adjusted for reserve
requirements) plus 2.375% for revolving loan advances and plus 3% for term loan
advances. The interest rates are subject to reduction by up to 1.25% if certain
financial tests are met. Based on the financial results for the quarter ended
December 31, 1995, the interest rates for the term and revolving loans were
reduced by .25%, for the succeeding quarter. At December 31, 1995, the rates of
interest, including adjustments, were fixed under three-month Eurodollar
contracts at 8.7% and 8.1% for the term and revolving loans, respectively.

Line of credit fees equal to .5% per annum on the unborrowed balance of the
revolving loan commitment and an agents fee of $25,000 per annum are payable
quarterly.

Bank fees and legal fees totaling $709,000 were paid in connection with the
initial funding of the loan agreement. An additional facility fee of $680,000
was paid on March 31, 1995. Fees paid will be amortized to interest expense over
the life of the loan agreement.

While the Partnership may elect to reduce amounts due and available under
the loan agreement through prepayments of not less than $200,000, a mandatory
prepayment is required each May for the prior year ended December 31, if the
Partnership's Operating Cash Flow (defined as net income before extraordinary
items and gains and losses on asset sales, plus interest expense, bank fees,
income taxes, depreciation, amortization, management fees and expenses and other
non-cash expenses) exceeds payments made for management fees and expenses,
capital expenditures, capital lease obligations, required debt service and bank
fees, taxes, and permitted investments and expenditures. The Partnership is
required to make a prepayment in the amount of 75% of such excess. No prepayment
is required in 1996. Additionally, a mandatory prepayment may be required in the
event of asset sales (other than dispositions of obsolete inventory and
equipment in the

F-232
<PAGE> 354

PRIME CABLE OF HICKORY, L.P.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED

ordinary course of business) or private or public debt or equity offerings. All
such prepayments permanently reduce the amounts due and available under the
revolving and term loans on a pro-rata basis.

Beginning March 31, 1997, the $32,000,000 revolving loan commitment, as
adjusted for the 1995 mandatory prepayment, is reduced at the end of each
calendar quarter as follows:

QUARTERLY REDUCTION OF
REVOLVING LOAN COMMITMENT

The revolving loan facility matures June 30, 2002.

Advances under the term loan agreement are due in full on June 30, 2002.
The loans are collateralized by essentially all the assets of the Partnership.
In addition, Prime II Management, L.P. ("PMLP") has pledged future proceeds
under the management agreement to the bank as additional collateral (Note 7).
The bank cannot exercise its rights under the assignment except in the event of
a default.

The terms of the bank loan agreement restrict certain activities of the
Partnership, the most significant of which include limitations on additional
indebtedness, investments and distributions. In addition, certain financial
ratios must be maintained.

6. SUBORDINATED DEBT

Subordinated debt consisted of the following (thousands of dollars):

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1995 1994
------ ------
<S> <C> <C>
5% Capital Note............................................ $1,513 $1,460
Discount Savings Note (Note 7)............................. 2,945 2,343
------ ------
$4,458 $3,803
====== ======
</TABLE>

In connection with the acquisition of the cable television system, the
Partnership issued an unsecured 5% Capital Note for $1,037,000 (the "Note"). The
Note is due December 31, 1998 and interest accrues at 5% per annum (360 day
basis). The Note is convertible at any time into 1,221 limited partnership
units. Upon the sale of substantially all of the assets of the Partnership or
the sale by the partners of substantially all of their aggregate interest in the
Partnership, the Note is due in full.

The Note is subordinate to the bank loan agreement. No payments of
principal or interest due under the Note may be made until the bank loan
agreement is paid in full. The balance of the Note at December 31, 1995 and 1994
included accrued interest of $476,000 and $423,000, respectively.

7. COMMITMENTS AND CONTINGENCIES

Management Agreement

The Partnership is a party to a management agreement with PMLP, an
affiliate of the general partner. Under the terms of the management agreement,
PMLP manages all aspects of daily operation of the Partnership's cable
television systems. In consideration for its services to the Partnership, PMLP
receives fees

F-233
<PAGE> 355

PRIME CABLE OF HICKORY, L.P.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED

equal to 5% of gross revenues, as well as reimbursement of certain expenses
incurred by PMLP attributable to services provided to the Partnership.

In connection with the agreement, the Partnership incurred $669,000 and
$619,000 in management fees and reimbursable expenses for the years ended
December 31, 1995 and 1994, respectively.

Programming Discount Agreement

Under the terms of an agreement between the Partnership and an affiliate of
one of the limited partners, the Partnership is included under such affiliate's
contracts with programming service suppliers, thus allowing the Partnership to
obtain programming at more favorable rates. The difference between those rates
and the rates otherwise available to the Partnership (the "Programming Discount
Adjustments") accrue to the benefit of the limited partner's affiliate.
Programming Discount Adjustments expensed during the years ended December 31,
1995 and 1994 totaled $401,000 and $360,000, respectively, with the
corresponding liability included in "other accrued expenses" on the balance
sheet.

A promissory note (the "Discount Savings Note"), for the calendar year
total of the Programming Discount Adjustments, plus accrued interest, is issued
by March 30 of the following year. The note is subordinate to the bank loan
agreement. The Programming Discount Adjustments and Discount Savings Note accrue
interest at 11% per annum. The Programming Discount Adjustments, the Discount
Savings Note and interest earned on both are due in full upon the sale of
substantially all the assets of the Partnership, the dissolution or liquidation
of the Partnership, a merger of the Partnership with or into any other person,
or the payment in full of the debt outstanding under the bank loan agreement.

At December 31, 1995, Discount Savings Notes in the aggregate principal
amount of $2,068,000 were outstanding with deferred interest of $877,000. At
December 31, 1994, Discount Savings Notes in the principal amount of $1,693,000
were outstanding with deferred interest of $650,000.

Redemption of Equity Securities

Under the terms of an agreement among the partners and the holder of the 5%
Capital Note, after November 21, 1992 any one of the original limited partners,
or the holder of the 5% Capital Note, or a holder of securities equal to or
convertible or exercisable into 1,000 limited partnership units may request the
Partnership to redeem all or any portion of the requesting party's ownership
interest at the appraised market value. The Partnership must notify all other
holders of equity securities of the request and redeem any of those securities
as requested. No requests for redemption have been received as of December 31,
1995.

Leases

The Partnership, as an integral part of its cable operations, has entered
into short-term operating lease contracts for pole use. Approximate annual
minimum aggregate rentals under such leases amount to $224,000 at December 31,
1995. Rent expense for the years ended December 31, 1995 and 1994 was $196,000
and $172,000, respectively.

Employee Benefit Plan

The Partnership participates with other affiliated entities in a defined
contribution pension plan covering substantially all full-time employees who
have completed one year of service. The plan is subject to the provisions of
Internal Revenue Code Sec. 401(k). Partnership contributions are determined as a
percent of each participating employee's contribution and are at the discretion
of the plan's sponsor, PMLP. Partnership contributions totaled $17,000 and
$16,000 for fiscal years 1995 and 1994, respectively.

F-234
<PAGE> 356

PRIME CABLE OF HICKORY, L.P.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED

Cable Service Rate Regulation

On April 1, 1993, the Federal Communications Commission ("FCC") adopted
rules governing rates charged by cable operators for the basic service tier of
channels, the installation, lease and maintenance of equipment (such as
converter boxes and remote control units) used by subscribers to receive this
tier, and for cable programming services other than programming offered on a
per-channel or per-program basis (the "regulated services"). To comply with the
regulations, the Partnership implemented various subscriber service and rate
changes effective September 1, 1993. These changes resulted in a reduction of
total monthly revenue of approximately 4%.

On March 30, 1994, the FCC released revisions to its April 1, 1993 rate
regulations. The revisions required cable operators to implement additional rate
rollbacks using complex benchmark calculations, or alternatively, to justify
higher rates based on a cost-of-service showing. The Partnership elected to file
cost-of-service showings with local franchising authorities and the FCC where
required. Management of the Partnership believes that rates in effect at March
1994 were supportable under the cost-of-service rules, and therefore, no rate
rollbacks were implemented in connection with these 1994 FCC revisions.
Subsequent rate adjustments have been made utilizing cost-of-service methodology
with adjustments as provided by FCC rules.

The regulated services rates charged by the Partnership may be reviewed by
local franchising authorities (for basic service) or the FCC (for cable
programming service). Refund liability for basic service rates is limited to a
one-year period. As of December 31, 1995, three local franchising authorities
which have jurisdiction over certain partnership operations have elected to
regulate rates, and all three have approved the Partnership's basic service
rates in connection with the cost-of-service showings filed by the Partnership
in August 1994. Therefore, there are no potential refund liabilities for basic
service at this time. Refund liability for cable programming service rates may
be calculated from the date a complaint alleging an unreasonable rate for cable
programming service is filed with the FCC until the rate reduction is
implemented. A complaint by a subscriber has been filed with and accepted by the
FCC in one franchise area. However, the Partnership's filing made in response to
that complaint related to the period prior to July 15, 1994 has been approved by
the FCC; therefore, any potential liability for cable programming service
refunds would be limited to the period subsequent to July 15, 1994 for this
area.

Management of the Partnership believes that it has complied in all material
respects with the provisions of the FCC rules and regulations and that the
Partnership is, therefore, not liable for any refunds. Accordingly, no provision
has been made in the financial statements for any potential refunds. The FCC
rules and regulations are, however, subject to judgmental interpretations, and
the impact of potential rate changes or refunds ordered by the FCC could cause
the Partnership to make refunds and/or to be in default on certain debt
covenants.

In February 1996, a telecommunications bill was signed into federal law
which significantly impacts the cable industry. Most notably, the bill allows
cable system operators to provide telephony services, allows telephone companies
to offer video services, and it provides for deregulation of cable programming
service rates by 1999. The impact of the bill cannot be determined at this time,
but it is not expected to have a significant adverse impact on the financial
position or results of operations of the Partnership.

F-235
<PAGE> 357

PRIME CABLE OF HICKORY, L.P.

BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
(THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
---------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and cash equivalents.............................................. $ 1,436 $ 1,613
Accounts receivable, trade, net of allowance for doubtful accounts
of $67 in 1996 and $58 in 1995....................................... 347 368
Prepaid expenses....................................................... 73 18
Inventories............................................................ 450 457
Property, plant and equipment, at cost:
Cable television distribution systems................................ 25,158 24,612
Transportation equipment............................................. 493 471
Furniture and fixtures............................................... 656 623
Buildings and land................................................... 783 772
--------- ------------
27,090 26,478
Less accumulated depreciation........................................ (18,899) (18,329)
--------- ------------
Net property, plant and equipment................................. 8,191 8,149
Intangible assets, net of accumulated amortization of $16,616 in 1996
and $16,167 in 1995.................................................. 1,299 1,748
Deferred debt issuance costs, net...................................... 1,095 1,149
Other assets........................................................... 9 12
--------- ------------
Total assets...................................................... $ 12,900 $ 13,514
======== ==========
LIABILITIES AND PARTNERS' CAPITAL DEFICIENCY
Accounts payable....................................................... $ 344 $ 277
Accounts payable, affiliates........................................... 83 84
Accrued interest....................................................... 617 666
Other accrued expenses................................................. 1,009 1,538
Subscriber deposits and unearned income................................ 315 292
Bank debt.............................................................. 33,884 33,884
Subordinated debt...................................................... 4,954 4,458
--------- ------------
Total liabilities................................................. 41,206 41,199
--------- ------------
Commitments and Contingencies
Partners' capital deficiency:
General partner (3,200 units outstanding)............................ 1,455 1,455
Limited partners (4,179 units outstanding)........................... 3,547 3,547
Limited partners' purchase warrants.................................. 1,187 1,187
Accumulated deficit.................................................... (34,495) (33,874)
--------- ------------
Total partners' capital deficiency................................ (28,306) (27,685)
--------- ------------
Total liabilities and partners' capital deficiency................ $ 12,900 $ 13,514
======== ==========
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-236
<PAGE> 358

PRIME CABLE OF HICKORY, L.P.

STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995

(THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
1996 1995
--------- ------------
(UNAUDITED)
<S> <C> <C>
Revenues............................................................... $ 3,324 $ 3,013
Operating expenses:
Cable television system expenses..................................... 1,832 1,513
Management fees and expenses and programming discount adjustments.... 282 249
Depreciation and amortization........................................ 1,019 1,020
------ ------
Income from operations................................................. 191 231
Interest income........................................................ 16 6
Interest expense....................................................... (828) (819)
------ ------
Net loss.......................................................... $ (621) $ (582)
====== ======
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-237
<PAGE> 359

PRIME CABLE OF HICKORY, L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL DEFICIENCY

FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND THE YEARS ENDED DECEMBER 31, 1995
AND 1994

(THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
LIMITED
PARTNERS'
GENERAL LIMITED PURCHASE
PARTNER PARTHERS WARRANTS TOTAL
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Balances, December 31, 1993...................... $ (8,902) $(15,782) $1,187 $(23,497)
Net loss for the year ended
December 31, 1994........................... (553) (1,249) (1,802)
-------- -------- ------ --------
Balances, December 31, 1994...................... (9,455) (17,031) 1,187 (25,299)
Net loss for the year ended
December 31, 1995........................... (774) (1,612) (2,386)
-------- -------- ------ --------
Balances, December 31, 1995...................... (10,229) (18,643) 1,187 (27,685)
Net loss for the quarter ended
March 31, 1996 (unaudited)..................... (60) (561) (621)
-------- -------- ------ --------
Balances, March 31, 1996 (unaudited)............. $(10,289) $(19,204) $1,187 $(28,306)
======== ======== ====== ========
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-238
<PAGE> 360

PRIME CABLE OF HICKORY L.P.

STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
-----------------
1996 1995
------ ------
(UNAUDITED)
<S> <C> <C>
Cash flow from operating activities:
Net loss................................................................. $ (621) $ (582)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization......................................... 1,019 1,020
Amortization of deferred debt issuance costs and discount............. 54 26
Increase in deferred interest on subordinated debt.................... 80 70
------ ------
532 534
Net (increase) decrease in accounts receivable, prepaid expenses and
other assets.......................................................... (31) 64
Net (decrease) increase in accounts payable, accounts payable-affiliates,
accrued interest and expenses, and subscriber deposits and unearned
income................................................................ (73) 231
------ ------
Net cash provided by operating activities................................ 428 829
------ ------
Cash flow from investing activities:
Purchases of property, plant and equipment and inventories............... (605) (467)
------ ------
Net cash used in investing activities.................................... (605) (467)
------ ------
Cash flows from financing activities:
Proceeds from bank debt borrowings....................................... 500
Repayment of bank debt................................................... (500)
Increase in deferred debt issuance costs................................. (680)
------ ------
Net cash (used in) provided by financing activities...................... 0 (680)
------ ------
Net (decrease) increase in cash and cash equivalents:...................... (177) (318)
Cash and cash equivalents, beginning of period........................... 1,613 788
------ ------
Cash and cash equivalents, end of period................................. $1,436 $ 470
====== ======
Supplemental cash flow information:
Cash interest paid....................................................... $ 726 $ 706
====== ======
Programming discount notes issued........................................ $ 416 $ 374
====== ======
</TABLE>

The accompanying notes are an integral part of the financial statements.

F-239
<PAGE> 361

PRIME CABLE OF HICKORY, L.P.

NOTES TO FINANCIAL STATEMENTS

Please refer to the notes attached to the December 31, 1995 audited
financial statements for additional disclosures that are an integral part of the
financial information presented in the preceding financial statements. As of
March 31, 1996, there have been no significant changes to those notes, except
for the following:

1. SUBSEQUENT EVENTS

In May 1996, the Partnership entered into a letter of intent with Charter
Communications, Inc. for the sale of substantially all the Partnership assets. A
definitive agreement is expected to be signed in the near future, with the sale
anticipated to occur in late 1996 or early 1997. The financial statements do not
include any adjustments that might result from the outcome of this sale.

F-240
<PAGE> 362

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Charter Communications II, L.P.

We have audited the accompanying balance sheets of the Alabama Cable
Television System to be sold by Masada Cable Partners, L.P. to Charter
Communications II, L.P., as of December 31, 1995 and 1994 and the related
statements of operations, changes in system capital (deficiency) and cash flows
for the years ended December 31, 1995, 1994 and 1993. These financial statements
are the responsibility of the System's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

As described in Note 1, the System was a part of Masada Cable Partners,
L.P. as of December 31, 1995 and, as such, had no separate legal status or
existence. Transactions with Masada Cable Partners, L.P. are described in Notes
2, 4 and 5.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Alabama Cable Television
System to be sold by Masada Cable Partners, L.P. to Charter Communications II,
L.P. at December 31, 1995 and 1994, and the results of its operations and its
cash flows for the years ended December 31, 1995, 1994 and 1993, in conformity
with generally accepted accounting principles.

ERNST & YOUNG LLP

March 15, 1996

F-241
<PAGE> 363

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....................................... $ 25,142 $ 18,523
Accounts receivable............................................. 32,344 7,043
Prepaid expenses and other...................................... 24,082 26,341
----------- -----------
Total current assets.................................... 81,568 51,907
Net property and equipment (Note 3)............................... 2,210,856 3,856,649
DEFERRED CHARGES:
Franchise costs................................................. 1,718,973 1,718,973
Acquisition costs............................................... -- 95,715
Goodwill........................................................ 93,650 93,650
Other deferred charges.......................................... 267,500 267,500
----------- -----------
2,080,123 2,175,838
Accumulated amortization........................................ (1,483,409) (1,269,461)
----------- -----------
Net deferred charges.............................................. 596,714 906,377
----------- -----------
$ 2,889,138 $ 4,814,933
=========== ===========
LIABILITIES AND SYSTEM DEFICIENCY
CURRENT LIABILITIES:
Accounts payable................................................ $ 67,848 $ 37,524
Subscriber deposits and advance payments........................ 26,278 26,447
Accrued interest................................................ 79,480 35,991
Accrued franchise fee........................................... 31,956 39,956
Accrued programming fee......................................... 86,052 68,418
Accrued pole rent............................................... 35,608 29,458
Other accrued liabilities....................................... 80,115 50,575
----------- -----------
Total current liabilities............................... 407,337 288,369
Notes payable allocated to the System (Note 4).................... 4,890,000 7,428,003
----------- -----------
Total liabilities................................................. 5,297,337 7,716,372
Contingencies (Note 6)
System capital (deficiency)....................................... (2,408,199) (2,901,439)
----------- -----------
$ 2,889,138 $ 4,814,933
========== ==========
</TABLE>

See accompanying notes.

F-242
<PAGE> 364

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------------------
1995 1994 1993
---------- ----------- ----------
<S> <C> <C> <C>
Subscriber service revenue............................ $4,714,553 $ 4,572,941 $4,588,831
OPERATING EXPENSES:
Operating costs..................................... 2,036,943 1,901,208 1,868,394
Selling, general and administrative................. 281,079 308,340 308,165
Depreciation........................................ 1,954,743 2,465,685 2,432,460
Amortization........................................ 199,545 213,349 215,341
---------- ----------- ----------
Total operating expenses.................... 4,472,310 4,888,582 4,824,360
---------- ----------- ----------
Income (loss) from operations......................... 242,243 (315,641) (235,529)
OTHER INCOME (EXPENSE):
Interest and fees................................... (662,369) (563,730) (537,158)
Other, net (Note 5)................................. (299,573) (168,417) (152,504)
---------- ----------- ----------
Total other income (expense).......................... (961,942) (732,147) (689,662)
---------- ----------- ----------
Net loss.............................................. $ (719,699) $(1,047,788) $ (925,191)
========== =========== ==========
</TABLE>

See accompanying notes.

F-243
<PAGE> 365

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

STATEMENTS OF CHANGES IN SYSTEM CAPITAL (DEFICIENCY)

<TABLE>
<CAPTION>
SYSTEM CAPITAL
(DEFICIENCY)
--------------
<S> <C>
BALANCE, December 31, 1992..................................................... $ 823,223
Net loss..................................................................... (925,191)
Net change in current accounts with partnership.............................. (1,186,287)
------------
BALANCE, December 31, 1993..................................................... (1,288,255)
Net loss..................................................................... (1,047,788)
Net change in current accounts with partnership.............................. (565,396)
------------
BALANCE, December 31, 1994..................................................... (2,901,439)
Net loss..................................................................... (719,699)
Net change in current accounts with partnership.............................. 1,212,939
------------
BALANCE, December 31, 1995..................................................... $ (2,408,199)
============
</TABLE>

See accompanying notes.

F-244
<PAGE> 366

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss............................................ $ (719,699) $(1,047,788) $ (925,191)
Net change in current accounts with partnership..... 1,212,939 (565,396) (1,186,287)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization..................... 2,154,288 2,679,034 2,647,801
Gain on sale of fixed assets...................... (775) -- (5,195)
Changes in operating assets and liabilities:
Accounts receivable............................... (25,301) 12,764 49,839
Prepaid expenses and other........................ 2,259 19,422 (18,174)
Accounts payable.................................. 30,324 (2,469) 1,152
Deposits and advances............................. (169) (7,009) (7,224)
Accrued interest.................................. 43,489 (73,733) (33,026)
Other accrued liabilities......................... 45,324 7,961 (71,909)
----------- ----------- -----------
Net cash provided by operating activities........... 2,742,679 1,022,786 451,786
INVESTING ACTIVITIES
Purchase of property and equipment.................. (308,950) (311,417) (271,102)
Proceeds from sale of fixed assets.................. 775 -- 8,319
Additions to deferred charges....................... -- (7,785) (6,581)
Disposals of deferred charges....................... 110,118 -- --
----------- ----------- -----------
Net cash used in investing activities............... (198,057) (319,202) (269,364)
FINANCING ACTIVITIES
Payments on notes payable........................... (2,538,003) (704,738) (176,859)
----------- ----------- -----------
Net cash used in financing activities............... (2,538,003) (704,738) (176,859)
----------- ----------- -----------
Increase (decrease) in cash and cash equivalents.... 6,619 (1,154) 5,563
Cash and cash equivalents at beginning of year...... 18,523 19,676 14,113
----------- ----------- -----------
Cash and cash equivalents at end of year............ $ 25,142 $ 18,523 $ 19,676
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest and fees................... $ 665,618 $ 664,367 $ 597,222
=========== =========== ===========
</TABLE>

See accompanying notes.

F-245
<PAGE> 367

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995 AND 1994

1. ORGANIZATION AND BASIS OF PRESENTATION

The accompanying financial statements include the accounts of the Alabama
Cable Television System (System) to be sold by Masada Cable Partners, L.P.
(Masada) to Charter Communications II, L.P. (Charter) pursuant to a sale
agreement between Masada and Charter. The System has no separate legal status or
existence. These financial statements are presented as if the System had existed
as an entity separate from Masada during the periods presented, and includes the
historical assets, liabilities, sales and expenses that are directly related to
the System's operations. These financial statements include certain Masada
partnership asset, liability and expense allocations, primarily a portion of
Masada's acquisition costs and debt and interest related thereto.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recognition of Revenue

Subscriber service revenue is recognized in the month the cable service is
provided.

Property and Equipment

Property and equipment is stated at cost. Depreciation is calculated on the
straight-line basis using the following useful lives:

Deferred Charges

Deferred charges are recorded at cost. Amortization is provided on a
straight-line basis using the following lives:

<TABLE>
<S> <C>
Franchise costs......................................................... 10 years
Debt issuance costs..................................................... Term of the
related debt
Acquisition costs....................................................... 7 years
Organization costs...................................................... 5 years
Goodwill and other...................................................... 20 years
</TABLE>

F-246
<PAGE> 368

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Pending Accounting Pronouncement

In March 1995, the Financial Accounting Standards Board issued Statement
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of, which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Statement 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. Statement
121 is effective for financial statements for periods beginning on or after
December 15, 1995 although earlier adoption is permitted. Based on present
circumstances, no adjustment to the recorded amounts for System net property and
equipment, franchise costs or goodwill would have been necessary had Statement
121 been adopted as of December 31, 1995.

Cash and Cash Equivalents

The System considers all highly liquid investments with a maturity of three
months or less at the time of purchase to be cash equivalents.

Income Taxes

The accompanying financial statements do not include a provision for income
taxes because the taxable income or loss of the System is included in the tax
returns of the partners.

Management Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of management's estimates and
assumptions. Actual results could differ from these estimates.

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------
1995 1994
------------ ------------
<S> <C> <C>
Property and equipment:
Land.................................................. $ 10,000 $ 10,000
Buildings and improvements............................ 123,900 123,900
Cable distribution systems............................ 17,348,991 17,129,035
Other equipment....................................... 268,874 229,796
------------ ------------
17,751,765 17,492,731
Accumulated depreciation.............................. (15,540,909) (13,636,082)
------------ ------------
Net property and equipment.............................. $ 2,210,856 $ 3,856,649
============ ============
</TABLE>

4. NOTES PAYABLE ALLOCATED TO THE SYSTEM

F-247
<PAGE> 369

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

allocation of Masada long term debt, and there are neither repayment terms nor a
formal agreement between the System and Masada, such debt has been classified as
noncurrent. Management believes the market value of its notes payable
approximates the carrying value in the accompanying balance sheets due to the
variable rate of interest on the notes payable.

Notes payable allocated to the System consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1995 1994
---------- ----------
<S> <C> <C>
Revolving credit and term loan.............................. $4,890,000 $6,955,203
Subordinated notes payable.................................. -- 472,800
---------- ----------
$4,890,000 $7,428,003
========== ==========
</TABLE>

The terms and conditions of Masada's total term loan and subordinated debt
which has been allocated to the System, as described above, are summarized
below.

Revolving Credit and Term Loan

Concurrent with the sale of the Georgia Cable Television System by Masada
in July 1995, the purchaser remitted directly to Canadian Imperial Bank of
Commerce $17,752,875 towards the principal resulting in a new principal balance
of $25,000,000. On the same day, the existing term loan was replaced with a new
facility, secured by substantially all remaining transferable assets of Masada
as noted below. Interest on the loan is payable quarterly and the entire
principal balance is due on January 31, 1997.

Under the terms of the Term Loan Agreement, Masada has the option to have
interest computed using a LIBOR rate and/or a variable rate. With the LIBOR
selection, the Term Loan Agreement provides for interest to be paid quarterly at
a rate based on LIBOR plus a variable margin ranging from 3.00% to 3.50%. The
LIBOR rate was in effect at December 31, 1995 for all of the principal amount
outstanding and was 5.9375%.

Under the provisions of the agreement, Masada is required to maintain
certain levels of annualized net operating income, as defined, as compared to
total debt (total leverage), senior debt (senior leverage) and net cash flow, as
defined, as compared to debt service (debt service coverage) and certain ratios
of cable subscribers to total debt. Masada is also required to limit capital
expenditures, management and investment banking fees and distributions to the
partners to amounts specified in the agreement.

Subordinated Notes Payable

F-248
<PAGE> 370

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

payment of 10% interest quarterly with the remaining 15% being converted to
additional principal. Masada also has the option to pay interest currently as it
becomes due.

Borrowings under the subordinated note agreement are secured by subordinate
liens, in favor of the lender, on substantially all transferable assets of
Masada.

Proceeds from the sale of the Georgia Cable Television System by Masada in
July 1995 have been used to pay the subordinated notes in order to obtain
release of the liens on assets subject to the sale.

5. RELATED PARTY TRANSACTIONS

Masada Cable Management, Inc. provides management services to Masada for a
fee of 5% of total revenues. Management fee expense incurred by the System was
approximately $245,100, $236,600, and $238,000 in 1995, 1994 and 1993,
respectively, and is included in other expenses in the accompanying statements
of operations. Accrued management fees were approximately $7,800 and $3,600 at
December 31, 1995 and 1994, respectively, and are included in other accrued
liabilities in the accompanying balance sheets.

Bariston Associates, Inc. an affiliate of Bariston, provides ongoing
investment banking services to Masada. Fees incurred by the System for these
investment banking services amounted to approximately $52,500, $51,400, and
$52,300 in 1995, 1994, and 1993, respectively, and are included in other
expenses in the accompanying statements of operations.

6. CONTINGENCIES

Management believes that it has generally complied with all provisions of
the 1992 Cable Act, including its cable programming service rate-setting
provisions.

F-249
<PAGE> 371

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

BALANCE SHEET
(UNAUDITED)

<TABLE>
<CAPTION>
MARCH 31
---------------------------
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....................................... $ 6,556 $ 9,152
Accounts receivable............................................. 9,768 --
Prepaid expenses and other...................................... 54,316 115,632
------------- -------------
Total current assets.................................... 70,640 124,784
Net property and equipment (Note 4)............................... 1,899,945 3,308,310
DEFERRED CHARGES:
Franchise costs................................................. 1,718,974 1,718,974
Acquisition costs............................................... 10,659 89,102
Goodwill........................................................ 93,650 93,650
Other deferred charges.......................................... 223,862 267,498
------------- -------------
2,047,145 2,169,224
Accumulated amortization........................................ (1,536,749) (1,322,425)
------------- -------------
Net deferred charges.............................................. 510,396 846,799
------------- -------------
$ 2,480,981 $ 4,279,893
============= =============
LIABILITIES AND SYSTEM DEFICIENCY
CURRENT LIABILITIES:
Accounts payable................................................ $ 67,048 $ 116,188
Subscriber deposits and advance payments........................ 26,342 28,579
Accrued interest................................................ 50,240 48,457
Accrued franchise fee........................................... 8,084 8,760
Accrued programming fee......................................... 82,728 70,969
Accrued pole rent............................................... 15,336 21,093
Other accrued liabilities....................................... 96,882 69,923
------------- -------------
Total current liabilities............................... 346,660 363,969
Notes payable allocated to the System (Note 5).................... 3,514,075 6,776,001
------------- -------------
Total liabilities....................................... 3,860,735 7,139,970
System capital (deficiency)....................................... (1,379,754) (2,860,077)
------------- -------------
$ 2,480,981 $ 4,279,893
============= =============
</TABLE>

See accompanying notes.

F-250
<PAGE> 372

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

STATEMENT OF OPERATIONS

(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Subscriber service revenue.......................................... $1,230,254 $1,170,429
OPERATING EXPENSES:
Operating costs................................................... 612,045 524,228
Selling, general and administrative............................... 13,763 27,477
Depreciation...................................................... 349,299 619,461
Amortization...................................................... 53,340 53,943
----------- -----------
Total operating expenses.................................. 1,028,447 1,225,109
----------- -----------
Income from operations.............................................. 201,807 (54,680)
Other income (expense):
Interest and fees................................................. (138,864) (169,876)
Other, net........................................................ 21,149 (38,866)
----------- -----------
Total other income (expense).............................. (117,715) (208,742)
----------- -----------
Net income.......................................................... $ 84,092 $ (263,422)
=========== ===========
</TABLE>

F-251
<PAGE> 373

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE

PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

STATEMENT OF CHANGES IN SYSTEM DEFICIENCY

(UNAUDITED)

<TABLE>
<CAPTION>
SYSTEM
DEFICIENCY
-----------
<S> <C>
BALANCE, DECEMBER 31, 1994...................................................... $(2,901,439)
Net income.................................................................... (263,422)
Net change in current accounts with partnership............................... 304,784
-----------
BALANCE, MARCH 31, 1995......................................................... (2,860,077)
BALANCE, DECEMBER 31, 1995...................................................... (2,408,199)
Net income.................................................................... 84,092
Net change in current accounts with partnership............................... 944,353
-----------
BALANCE, MARCH 31, 1996......................................................... $(1,379,754)
===========
</TABLE>

See accompanying notes.

F-252
<PAGE> 374

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

STATEMENT OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31
-------------------------
1996 1995
----------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income......................................................... $ 84,092 $(263,422)
Net change in current accounts with partnership.................... 944,353 304,784
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization.................................... 402,639 673,404
Gain on sale of fixed assets..................................... (1,069) (575)
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable........................................... 22,576 7,043
Prepaid expenses and other.................................... (30,234) (89,291)
Accounts payable.............................................. (800) 78,664
Deposits and advances......................................... 64 2,132
Accrued interest.............................................. (29,240) 12,466
Other accrued liabilities..................................... (30,702) (17,661)
----------- ---------
Net cash provided by operating activities.......................... 1,361,679 707,544
INVESTING ACTIVITIES
Purchase of property and equipment................................. (60,066) (139,340)
Proceeds from sale of fixed assets................................. 22,748 68,793
Additions to deferred charges...................................... -- --
Disposals of deferred charges...................................... 32,978 5,635
----------- ---------
Net cash used in investing activities.............................. (4,340) (64,912)
FINANCING ACTIVITIES
Payments on notes payable.......................................... (1,375,925) (652,002)
----------- ---------
Net cash used in financing activities.............................. (1,375,925) (652,002)
----------- ---------
Decrease in cash and cash equivalents.............................. (18,586) (9,370)
Cash and cash equivalents at beginning of period................... 25,142 18,522
----------- ---------
Cash and cash equivalents at end of period......................... $ 6,556 $ 9,152
=========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest and fees.................................... $ 107,117 $ 157,410
=========== =========
</TABLE>

See accompanying notes.

F-253
<PAGE> 375

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

MARCH 31, 1996 AND 1995

1. ORGANIZATION AND BASIS OF PRESENTATION

The accompanying financial statements include the accounts of the Alabama
Cable Television System (System) to be sold by Masada Cable Partners, L.P.
(Masada) to Charter Communications II, L.P. (Charter) pursuant to a potential
sale agreement between Masada and Charter. At March 31, 1996 and 1995, the
System has no separate legal status or existence. Masada, a Delaware limited
partnership, was organized on April 10, 1988 to acquire, construct and operate
cable television systems. The managing general partner is Masada Cable
Management, Inc. and the co-general partner is BHI Associates III, L.P.
(Bariston).

2. BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission for unaudited interim financial information. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted.

The accompanying financial statements include the accounts of the System as
described above. These statements are presented as if the System had existed as
an entity separate from Masada during the periods presented, and includes the
historical assets, liabilities, sales and expenses that are directly related to
the System's operations. These financial statements include certain Masada
partnership asset, liability and expense allocations, primarily a portion of
Masada's acquisition costs and debt and interest related thereto.

The financial information presented herein reflects the financial position
and results of operations of the System and is not necessarily indicative of the
financial position or results of operations had the System operated as a
separate, stand-alone entity during the reporting period. The results of
operations for such period does not necessarily reflect any trends or future
prospects for the System as an independent entity.

3. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS

The financial statements as of March 31, 1996 and 1995, are unaudited;
however, in the opinion of management, such statements include all adjustments
necessary for a fair presentation of the results for the periods presented.
Interim results are not necessarily indicative of results for a full year.

4. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
MARCH 31
-----------------------------
1996 1995
------------ ------------
<S> <C> <C>
Property and equipment:
Land.................................................. $ 10,000 $ 10,000
Buildings and improvements............................ 123,900 123,900
Cable distribution systems............................ 17,399,588 17,184,513
Other equipment....................................... 256,748 216,274
------------ ------------
17,790,236 17,534,687
Accumulated depreciation.............................. (15,890,291) (14,226,377)
------------ ------------
Net property and equipment.............................. $ 1,899,945 $ 3,308,310
============ ============
</TABLE>

F-254
<PAGE> 376

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

5. NOTES PAYABLE ALLOCATED TO THE SYSTEM

For purposes of the financial statements presented herein, the System has
been allocated a portion of the term loan and subordinated note payable by
Masada and associated interest and fees. This allocation was determined by
applying the ratio of total System assets to total Masada assets, excluding cash
on hand. The calculation resulted in 14.1% and 14.8% of the debt and related
interest expense being allocated to the Alabama Cable System at March 31, 1996
and 1995 respectively. In the opinion of management, this method of allocation
is reasonable. Since such debt does not represent a liability of the System, but
rather an allocation of Masada long term debt, and there are neither repayment
terms nor a formal agreement between the System and Masada, such debt has been
classified as noncurrent. Management believes the market value of its notes
payable approximates the carrying value in the accompanying balance sheet due to
the variable rate of interest on the notes payable.

Notes payable allocated to the System consisted of the following:

<TABLE>
<CAPTION>
MARCH 31
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Revolving credit and term loan.............................. $3,514,075 $6,331,701
Subordinated notes payable.................................. -- 444,300
---------- ----------
$3,514,075 $6,776,001
========== ==========
</TABLE>

The terms and conditions of Masada's total term loan and subordinated debt
which has been allocated to the System, as described above, are summarized
below.

Revolving Credit and Term Loan

Under the terms of the Term Loan Agreement, Masada has the option to have
interest computed using a LIBOR rate and/or a variable rate. With the LIBOR
selection, the Term Loan Agreement provides for interest to be paid quarterly at
a rate based on LIBOR plus a variable margin ranging from 3.00% to 3.50%. The
LIBOR rate was in effect at March 31, 1996 and 1995 for all of the principal
amount outstanding and was 8.4375% and 8.1875% respectively.

F-255
<PAGE> 377

ALABAMA CABLE TELEVISION SYSTEM TO BE SOLD BY MASADA CABLE
PARTNERS, L.P. TO CHARTER COMMUNICATIONS II, L.P.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

subscribers to total debt. Masada is also required to limit capital
expenditures, management and investment banking fees and distributions to the
partners to amounts specified in the agreement.

Subordinated Notes Payable

In connection with the execution of the Term Loan Agreement, Masada
borrowed $3,000,000 on July 11, 1991 under a subordinated note agreement with an
unaffiliated party which is due December 31, 1999. Under the provisions of this
subordinated agreement, interest accrues at 25% per annum with interest payments
which began on October 31, 1993 under one of three options given to Masada, the
minimum being the payment of 10% interest quarterly with the remaining 15% being
converted to additional principal. Masada also has the option to pay interest
currently as it becomes due.

Borrowings under the subordinated note agreement are secured by subordinate
liens, in favor of the lender, on substantially all transferable assets of
Masada.

F-256
<PAGE> 378

CHARTER COMMUNICATIONS HOLDINGS PROPERTIES, INC.

BALANCE SHEET

<TABLE>
<CAPTION>
MARCH 31,
1996
--------------
<S> <C>
(UNAUDITED)
ASSETS
INVESTMENT IN UNCONSOLIDATED LIMITED PARTNERSHIP............................... $795,449
--------------
$795,449
===========
LIABILITIES AND SHAREHOLDER'S INVESTMENT
COMMITMENTS AND CONTINGENCIES..................................................
SHAREHOLDER'S INVESTMENT:
Common stock, $.01 par value, 1,000 shares authorized, 1 share issued and
outstanding.............................................................. $ 1
Additional paid-in-capital................................................ 944,542
Accumulated deficit....................................................... (148,994)
Receivable from shareholder............................................... (100)
--------------
Total shareholder's investment....................................... $795,449
===========
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-257
<PAGE> 379

CHARTER COMMUNICATIONS HOLDINGS PROPERTIES, INC.

NOTES TO BALANCE SHEET

(UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

Charter Communications Holdings Properties, Inc. (Holdings Properties), a
Delaware corporation, is a wholly owned subsidiary of CharterComm Holdings, L.P.
(CharterComm Holdings) and was formed for the purpose of acting as the 1%
General Partner in Charter Communications Southeast Holdings, L.P. (Southeast
Holdings). Holdings Properties acquired its 1% interest through a contribution
agreement with CharterComm Holdings. CharterComm Holdings became the sole
shareholder of Holdings Properties by acquiring one share of common stock on
March 28, 1996, and holds a 99% limited partnership interest in Southeast
Holdings. Holdings Properties has no operations.

The accompanying consolidated balance sheet as of March 31, 1996, and the
notes thereto, are unaudited. In the opinion of management, this statement has
been prepared in conformity with generally accepted accounting principles and
includes all adjustments necessary (consisting only of normal recurring
adjustments) for the fair presentation of financial position.

2. INVESTMENT IN UNCONSOLIDATED LIMITED PARTNERSHIP:

Holdings Properties records its general partnership investment in Southeast
Holdings on the equity method. Under this method, investments are originally
recorded at cost and are subsequently adjusted to recognize Holdings Properties'
share of Southeast Holding's net earnings or losses as they occur, to record
preference allocations (as discussed in Note 3) and to record distributions when
received.

Summary unaudited financial information of Southeast Holdings as of March
31, 1996, and for the three months then ended, which is not consolidated with
the operation results of Holdings Properties, is as follows:

<TABLE>
<CAPTION>
(UNAUDITED)
-----------
<S> <C>
Current assets............................................. $ 8,730,715
Noncurrent assets-primarily investment in cable television
properties............................................... 544,654,843
-----------
Total assets..................................... $553,385,558
===========
</TABLE>

<TABLE>
<CAPTION>
(UNAUDITED)
-----------
<S> <C>
Current liabilities........................................ $14,318,683
Long-term debt............................................. 450,920,811
Other long-term liabilities................................ 8,591,178
Partners' capital.......................................... 79,554,886
-----------
Total liabilities and partners' capital.......... $553,385,558
===========
Service revenues........................................... $23,844,174
===========
Loss from operations....................................... $ (160,611)
===========
Net loss................................................... $(6,890,300)
===========
</TABLE>

F-258
<PAGE> 380

CHARTER COMMUNICATIONS HOLDINGS PROPERTIES, INC.

NOTES TO BALANCE SHEET -- (CONTINUED)

(UNAUDITED)

3. REDEMPTION PREFERENCE ALLOCATION:

During 1995 and a portion of 1996, Southeast Holdings had outstanding
Redeemable Preferred Limited units which, based on their redemption clauses,
were entitled to a preference return. As a result, Holdings Properties has been
allocated a portion of the total redemption preference allocation in the amount
of $60,101 as of March 31, 1996, which has been reflected as a reduction to
additional paid-in capital.

4. CONTINGENCY:

As the General Partner of Southeast Holdings, Holdings Properties remains
contingently liable for any liabilities incurred by Southeast Holdings in excess

of its assets.

F-259
<PAGE> 381

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Charter Communications Southeast Properties, Inc.:

We have audited the accompanying balance sheet of Charter Communications
Southeast Properties, Inc. as of December 31, 1995. This financial statement is
the responsibility of the Company's management. Our responsibility is to express
an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above present fairly, in all
material respects, the financial position of Charter Communications Southeast
Properties, Inc. as of December 31, 1995, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 17, 1996

F-260
<PAGE> 382

CHARTER COMMUNICATIONS SOUTHEAST PROPERTIES, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
--------- ------------
<S> <C> <C>
(UNAUDITED)
ASSETS
INVESTMENT IN UNCONSOLIDATED LIMITED PARTNERSHIP.................. $1,520,722 $316,482
--------- ------------
$1,520,722 $316,482
========= ============
LIABILITIES AND SHAREHOLDER'S INVESTMENT
COMMITMENTS AND CONTINGENCIES.....................................
SHAREHOLDER'S INVESTMENT:
Common stock, $.01 par value, 1,000 shares authorized, 1
share issued and outstanding................................ $ 1 $ 1
Additional paid-in-capital................................... 1,668,292 436,808
Accumulated deficit.......................................... (147,471) (120,227)
Receivable from shareholder.................................. (100) (100)
--------- ------------
Total shareholder's investment.......................... $1,520,722 $316,482
========= ============
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-261
<PAGE> 383

CHARTER COMMUNICATIONS SOUTHEAST PROPERTIES, INC.

NOTES TO BALANCE SHEET

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

Charter Communications Southeast Properties, Inc. (Southeast Properties), a
Delaware corporation, is a wholly owned subsidiary of Charter Communications
Southeast Holdings, L.P. (Southeast Holdings) and was formed for the purpose of
acting as the 1% General Partner in Charter Communications Southeast, L.P.
(Southeast). Southeast Properties acquired its 1% interest through a
contribution agreement between Southeast Properties and Southeast Holdings.
Southeast Holdings became the sole shareholder of Southeast Properties by
acquiring one share of common stock on December 29, 1995, and also holds a 99%
limited partnership interest in Southeast. Southeast Properties has no
operations.

The accompanying balance sheet as of March 31, 1996, and the notes thereto,
are unaudited. In the opinion of management, this statement has been prepared on
the same basis as the audited financial statements and includes all adjustments
necessary (consisting only of normal recurring adjustments) for the fair
presentation of financial position.

2. INVESTMENT IN UNCONSOLIDATED LIMITED PARTNERSHIP:

Southeast Properties records its general partnership investment in
Southeast on the equity method. Under this method, investments are originally
recorded at cost and are subsequently adjusted to recognize Southeast
Properties' share of Southeast's net earnings or losses as they occur, to record
preference allocations (as discussed in Note 3) and to record distributions when
received.

Summary financial information of Southeast as of March 31, 1996, and for
the three months then ended and as of December 31, 1995, and for the year ended
December 31, 1995, which is not consolidated with the operating results of
Southeast Properties, is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------
MARCH 31, 1996
--------------
(UNAUDITED)
--------------
<S> <C> <C>
Current assets.......................................... $ 8,857,995 $ 9,161,673
Noncurrent assets-primarily investment in cable
television properties................................. 541,530,859 416,449,754
-------------- -----------------
Total assets.................................. $550,388,854 $ 425,611,427
============== =================
Current liabilities..................................... $ 13,915,418 $ 28,634,576
Long-term debt, less current maturities................. 375,800,000 259,125,000
Other long-term liabilities -- primarily Redeemable
Preferred Limited and Special Limited Partner units... 8,601,178 106,203,692
Partners' capital....................................... 152,072,258 31,648,159
-------------- -----------------
Total liabilities and partners' capital....... $550,388,854 $ 425,611,427
============== =================
Service revenues........................................ $ 23,844,174 $ 72,830,913
============== =================
Loss from operations.................................... $ (160,611) $ (8,206,746)
============== =================
Net loss................................................ $ (6,787,693) $ (27,536,001)
============== =================
</TABLE>

F-262
<PAGE> 384

CHARTER COMMUNICATIONS SOUTHEAST PROPERTIES, INC.

NOTES TO BALANCE SHEET -- (CONTINUED)

3. REDEMPTION PREFERENCE ALLOCATION:

During 1995 and a portion of 1996, Southeast had outstanding Redeemable
Preferred Limited units which, based on their redemption clauses, were entitled
to a preference return. As a result, Southeast Properties has been allocated a
portion of the total redemption preference allocations in the amounts of $60,101
and $37,291 as of March 31, 1996, and December 31, 1995, respectively, which
have been reflected as a reduction to additional paid-in capital.

4. CONTINGENCY:

As the General Partner of Southeast, Southeast Properties remains
contingently liable for any liabilities incurred by Southeast in excess of its
assets.

F-263
<PAGE> 385

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 386

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

NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE ISSUERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF
THE ISSUERS SINCE THE DATE HEREOF.
------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary................... 4
Risk Factors......................... 16
The Exchange Offer................... 24
The Company.......................... 31
Use of Proceeds...................... 33
Capitalization....................... 34
Selected Historical and Pro Forma
Combined Financial Data............ 35
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 42
Unaudited Pro Forma Financial
Statements......................... 50
Business............................. 58
Management........................... 77
Certain Relationships and Related
Transactions....................... 80
Principal Security Holders........... 83
The Partnership Agreements........... 84
Description of Notes................. 89
Description of Other Indebtedness.... 113
Plan of Distribution................. 115
Legal Matters........................ 115
Independent Certified Public
Accountants........................ 116
Available Information................
Glossary............................. 118
Index to Financial Statements........ F-1
- --------------------------------------------
- --------------------------------------------
</TABLE>

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

$125,000,000

LOGO

CHARTER
COMMUNICATIONS
SOUTHEAST, L.P.

CHARTER
COMMUNICATIONS SOUTHEAST
CAPITAL CORPORATION
11 1/4% SERIES B SENIOR NOTES
DUE 2006
--------------------------------------
PROSPECTUS
--------------------------------------

, 1996

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 387

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation has the power to indemnify a director, officer,
employee or agent of the corporation and certain other persons serving at the
request of the corporation in related capacities against amounts paid and
expenses incurred in connection with an action or proceeding to which he is or
is threatened to be made a party by reason of such position, if such person
shall have acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe his conduct was
unlawful, provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter as
to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances. Southeast Capital's
Certificate of Incorporation provides that Southeast Capital shall indemnify its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law.

Southeast Capital's Certificate of Incorporation also provides that no
director shall be liable to the Company or its stockholders for monetary damages
for breach of his fiduciary duty as director, except for liability (i) of any
breach of the director's duty of loyalty to Southeast Capital or its
stockholders, (ii) for acts or omissions not in good faith or which involved
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law or (iv) for any transaction in which the
director derived an improper personal benefit.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits.

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- ------------------------------------------------------------------------------------
<C> <S>
1.1 Purchase Agreement dated March 28, 1996, between the Issuers and the Initial
Purchasers named therein.
3.1 Certificate of Limited Partnership of Charter Southeast.
3.2 Amended and Restated Agreement of Limited Partnership of Charter Southeast.
</TABLE>

<TABLE>
<C> <S>
3.3 Certificate of Incorporation of Southeast Capital.
3.4 By-laws of Southeast Capital.
4.1 Indenture dated March 15, 1996, among the Issuers and Harris Trust and Savings Bank,
as Trustee.
4.2 Registration Rights Agreement dated March 28, 1996, between the Issuers and the
Initial Purchasers.
4.3 Purchase Agreement dated March 28, 1996, between the Issuers and the Initial
Purchasers named therein (included in Exhibit 1.1).
4.4 Form of Old Note (included in Exhibit 4.1).
4.5 Form of New Note (included in Exhibit 4.1).
*5.1 Opinion of Paul, Hastings, Janofsky & Walker, including consent.
10.1 Amended and Restated Loan Agreement dated as of March 28, 1996, among Charter
Communications, L.P., the Banks, Toronto Dominion (Texas), Inc., PNC Bank, National
Association and Credit Lyonnais Cayman Island Branch, as Co-Agents, Toronto Dominion
(Texas), Inc., as Agent, and Toronto Dominion (Texas), Inc., as Administrative
Agent.
10.2 Amended and Restated Revolving Credit Agreement dated as of March 28, 1996, among
Charter Communications II, L.P., Charter Communications III, L.P., Peachtree Cable
TV, Inc., the Banks, Credit Lyonnais New York Branch and Toronto Dominion (Texas),
Inc., as Arranging Agents, NationsBank of Texas, N.A. and CIBC Inc., as Managing
Agents, Toronto Dominion (Texas), Inc., as Administrative Agent and Credit Lyonnais
New York Branch, as Documentation Agent.
10.3 Management Agreement dated March 28, 1996, between Charter Holdings and Charter.
10.4 Management Agreement dated March 28, 1996, between Charter Southeast and Charter
Holdings.
10.5 Management Agreement dated March 28, 1996, between Charter Southeast and CC-I.
10.6 Management Agreement dated March 28, 1996, between Charter Southeast and CC-II.
10.7 Management Agreement dated March 28, 1996, between CC-II and CCIP.
</TABLE>

II-1
<PAGE> 388

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- ------------------------------------------------------------------------------------
<C> <S>
10.8 Management Agreement dated March 28, 1996, between Charter Southeast and CCIP.
10.9 Management Agreement dated March 28, 1996, between Charter Southeast and CCIP.
10.10 Asset Purchase Agreement dated as of July 1, 1995, among CCIP, Charter
Communications Properties, Inc., CC-II and CC-I.
10.11 Certificate of Limited Partnership of CC-I.
10.12 Amended and Restated Agreement of Limited Partnership of CC-I dated March 28, 1996.
10.13 Certificate of Limited Partnership of CC-II.
10.14 Amended and Restated Agreement of Limited Partnership of CC-II dated March 28, 1996.
10.15 Certificate of Limited Partnership of CC-III.
10.16 Amended and Restated Agreement of Limited Partnership of CC-III dated March 28,
1996.
10.17 Articles of Organization of Peachtree.
10.18 By-laws of Peachtree.
21.1 List of Subsidiaries of Registrants.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Holben, Boak, Cooper & Co.
*23.3 Consent of KPMG Peat Marwick LLP.
*23.4 Consent of Deloitte & Touche LLP.
*23.5 Consent of Ernst & Young LLP.
*23.6 Consent of Ernst & Young LLP.
25.1 Statement of Eligibility of Harris Trust and Savings Bank, as Trustee, on Form T-1.
*99.1 Letter of Transmittal.
</TABLE>

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

* Filed herewith.

(b) Financial Statement Schedules.

Reports of Independent Certified Public Accountants incorporated by
reference herein.

ITEM 22. UNDERTAKINGS

The Issuers hereby undertake with respect to the securities offered by
them:

1. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Act") may be permitted as to
directors, officers and controlling persons of Registrant has been advised
that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event a claim for indemnification against such liabilities (other than
the payment by Registrant of expenses incurred or paid by a director,
officer or controlling person of Registrant in the successful defense of
any action, suit, or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

2. The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day
of receipt of such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.

3. The undersigned Registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject of
and included in the registration statement when it became effective.

4. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.

II-2
<PAGE> 389

5. The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) (sec.230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

II-3
<PAGE> 390

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of St. Louis, State of
Missouri, on the 24th day of June, 1996.

CHARTER COMMUNICATIONS
SOUTHEAST, L.P.

By: CHARTER COMMUNICATIONS
SOUTHEAST PROPERTIES, INC.,
its General Partner

By: /s/ JERALD L. KENT

------------------------------------
Name: Jerald L. Kent
Title: President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------- --------------
<S> <C> <C>
/s/ JERALD L. KENT President and Director of Southeast June 24, 1996
- ------------------------------------------ Capital and Southeast Properties
Jerald L. Kent
/s/ BARRY L. BABCOCK Chairman and Director of Southeast June 24, 1996
- ------------------------------------------ Capital and Southeast Properties
Barry L. Babcock
/s/ HOWARD L. WOOD Chairman of the Management June 24, 1996
- ------------------------------------------ Committee and Director of
Howard L. Wood Southeast Capital and Southeast
Properties
/s/ THOMAS C. DIRCKS Director of Southeast Properties June 24, 1996
- ------------------------------------------
Thomas C. Dircks
/s/ JEFFREY C. SANDERS Executive Vice President and Chief June 24, 1996
- ------------------------------------------ Financial Officer (Principal
Jeffrey C. Sanders Financial Officer) of Southeast
Capital and Southeast Properties
/s/ DONALD J. VOLLMAYER Controller of Southeast Capital and June 24, 1996
- ------------------------------------------ Southeast Properties
Donald J. Vollmayer
</TABLE>

II-4
<PAGE> 391

SIGNATURES

CHARTER COMMUNICATIONS SOUTHEAST
CAPITAL CORPORATION

By: /s/ JERALD L. KENT

--------------------------------------
Name: Jerald L. Kent
Title: President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

II-5
<PAGE> 392

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------- ------------
<C> <S> <C>
1.1 Purchase Agreement dated March 28, 1996, between the Issuers and the
Initial Purchasers named therein.
3.1 Certificate of Limited Partnership of Charter Southeast.
3.2 Amended and Restated Agreement of Limited Partnership of Charter
Southeast.
</TABLE>

<TABLE>
<C> <S> <C>
3.3 Certificate of Incorporation of Southeast Capital.
3.4 By-laws of Southeast Capital.
4.1 Indenture dated March 15, 1996, among the Issuers and Harris Trust and
Savings Bank, as Trustee.
4.2 Registration Rights Agreement dated March 28, 1996, between the Issuers
and the Initial Purchasers.
4.3 Purchase Agreement dated March 28, 1996, between the Issuers and the
Initial Purchasers named therein (included in Exhibit 1.1).
4.4 Form of Old Note (included in Exhibit 4.1).
4.5 Form of New Note (included in Exhibit 4.1).
*5.1 Opinion of Paul, Hastings, Janofsky & Walker, including consent.
10.1 Amended and Restated Loan Agreement dated as of March 28, 1996, among
Charter Communications, L.P., the Banks, Toronto Dominion (Texas), Inc.,
PNC Bank, National Association and Credit Lyonnais Cayman Island Branch,
as Co-Agents, Toronto Dominion (Texas), Inc., as Agent, and Toronto
Dominion (Texas), Inc., as Administrative Agent.
10.2 Amended and Restated Revolving Credit Agreement dated as of March 28,
1996, among Charter Communications II, L.P., Charter Communications III,
L.P., Peachtree Cable TV, Inc., the Banks, Credit Lyonnais New York
Branch and Toronto Dominion (Texas), Inc., as Arranging Agents,
NationsBank of Texas, N.A. and CIBC Inc., as Managing Agents, Toronto
Dominion (Texas), Inc., as Administrative Agent and Credit Lyonnais New
York Branch, as Documentation Agent.
10.3 Management Agreement dated March 28, 1996, between Charter Holdings and
Charter.
10.4 Management Agreement dated March 28, 1996, between Charter Southeast and
Charter Holdings.
10.5 Management Agreement dated March 28, 1996, between Charter Southeast and
CC-I.
10.6 Management Agreement dated March 28, 1996, between Charter Southeast and
CC-II.
10.7 Management Agreement dated March 28, 1996, between CC-II and CCIP.
10.8 Management Agreement dated March 28, 1996, between Charter Southeast and
CCIP.
10.9 Management Agreement dated March 28, 1996, between Charter Southeast and
CCIP.
10.10 Asset Purchase Agreement dated as of July 1, 1995, among CCIP, Charter
Communications Properties, Inc., CC-II and CC-I.
10.11 Certificate of Limited Partnership of CC-I.
10.12 Amended and Restated Agreement of Limited Partnership of CC-I dated March
28, 1996.
10.13 Certificate of Limited Partnership of CC-II.
10.14 Amended and Restated Agreement of Limited Partnership of CC-II dated
March 28, 1996.
</TABLE>

<PAGE> 393

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------- ------------
<C> <S> <C>
10.15 Certificate of Limited Partnership of CC-III.
10.16 Amended and Restated Agreement of Limited Partnership of CC-III dated
March 28, 1996.
10.17 Articles of Organization of Peachtree.
10.18 By-laws of Peachtree.
21.1 List of Subsidiaries of Registrants.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Holben, Boak, Cooper & Co.
*23.3 Consent of KPMG Peat Marwick LLP.
*23.4 Consent of Deloitte & Touche LLP.
*23.5 Consent of Ernst & Young LLP.
*23.6 Consent of Ernst & Young LLP.
25.1 Statement of Eligibility of Harris Trust and Savings Bank, as Trustee, on
Form T-1.
*99.1 Letter of Transmittal.
</TABLE>

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

* Filed herewith.

<PAGE> 1
Exhibit 5.1

PAUL, HASTINGS, JANOFSKY & WALKER

June 25, 1996

Charter Communications Southeast, L.P.
Charter Communications Southeast Capital Corporation
12444 Powerscourt Drive, Suite 400
St. Louis, Missouri 63131

CHARTER COMMUNICATIONS SOUTHEAST, L.P.
CHARTER COMMUNICATIONS SOUTHEAST CAPITAL CORPORATION
REGISTRATION STATEMENT ON FORM S-4 (REG. NO. 333-3772)
------------------------------------------------------

Ladies and Gentlemen:

This opinion is delivered in our capacity as counsel to
Charter Communications Southeast, L.P. and Charter Communications Southeast
Capital Corporation (collectively, the "Issuers") in connection with the
Issuers' registration statement on Form S-4 (File No. 333-3772) (the
"Registration Statement") filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, relating to the offering by the
Issuers of up to $125,000,000 aggregate principal amount of 11 1/4% Series B
Senior Notes due 2006 (the "Notes").

In connection with this opinion, we have examined copies or
originals of such documents, resolutions, certificates and instruments of the
Issuers as we have deemed necessary to form a basis for the opinion hereinafter
expressed. In addition, we have reviewed certificates of public officials,
statutes, records and other instruments and documents as we have deemed
necessary to form a basis for the opinion hereinafter expressed. In our
examination of the foregoing, we have assumed, without independent
<PAGE> 2
Charter Communications Southeast, L.P.
June 25, 1996
Page 2

investigation, (i) the genuineness of all signatures, and the authority of all
persons or entities signing all documents examined by us and (ii) the
authenticity of all documents submitted to us as originals and the conformity to
authentic original documents of all copies submitted to us as certified,
conformed or photostatic copies. With regard to certain factual matters, we have
relied, without independent investigation or verification, upon statements and
representations of representatives of the Issuers.

Based upon and subject to the foregoing, we are of the opinion
that, as of the date hereof, when the Notes have been duly authenticated by
the Trustee and duly executed and delivered on behalf of the Issuers against
payment therefor as contemplated by Registration Statement, the Notes will
be legally issued and will constitute binding obligations of the Issuers.

We hereby consent to being named as counsel to the Issuers in
the Registration Statement, to the references therein to our firm under the
caption "Legal Matters" and to the inclusion of this opinion as an exhibit to
the Registration Statement. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Commission thereunder.

Very truly yours,

/s/ Paul, Hastings, Janofsky & Walker

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated March 29, 1996, relating to the consolidated financial statements of
Charter Communications Southeast Holdings, L.P. as of and for the years ended
December 31, 1995 and 1994, (and to all references to our Firm) included in or
made a part of this Registration Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
June 18, 1996

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated June 17, 1996, relating to the financial statements of Charter
Communications Southeast Holdings Capital Corporation as of and for the three
months ended March 31, 1996 (and to all references to our Firm) included in or
made a part of this Registration Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

<PAGE> 2

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated March 29, 1996, relating to the consolidated financial statements of
Charter Communications Southeast, L.P. as of and for the years ended December
31, 1995 and 1994, (and to all references to our Firm) included in or made a
part of this Registration Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated June 17, 1996, relating to the financial statements of Charter
Communications Southeast Capital Corporation as of and for the three months
ended March 31, 1996 (and to all references to our Firm) included in or made a
part of this Registration Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

<PAGE> 3

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated February 23, 1996, relating to the consolidated financial statements of
Charter Communications II, L.P. as of and for the year ended December 31, 1995,
(and to all references to our Firm) included in or made a part of this
Registration Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated February 23, 1996, relating to the financial statements of Charter
Communications, L.P. as of and for the years ended December 31, 1995 and 1994,
(and to all references to our Firm) included in or made a part of this
Registration Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

<PAGE> 4

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated September 22, 1995, relating to the combined financial statements of The
Subscriber/Citation Cable Systems for the four months ended April 30, 1994 and
as of and for the year ended December 31, 1993, (and to all references to our
Firm) included in or made a part of this Registration Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated September 22, 1995, relating to the combined financial statements of The
Jefferson/LaGrange Cable Systems for the four months ended April 30, 1994 and as
of and for the year ended December 31, 1993, (and to all references to our Firm)
included in or made a part of this Registration Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

<PAGE> 5

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated June 23, 1995, relating to the combined financial statements of Cencom
Cable Operating Systems as of and for the year ended December 31, 1994, (and to
all references to our Firm) included in or made a part of this Registration
Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated February 21, 1996, relating to the combined financial statements of Cencom
Cable Income Partners, L.P. - Clarksville, Ft. Gordon, Camp LeJeune, Tryon
Systems as of and for the years ended December 31, 1995 and 1994, (and to all
references to our Firm) included in or made a part of this Registration
Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

<PAGE> 6

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated March 29, 1996, relating to the financial statements of Cencom Cable
Income Partners II, L.P. - Anderson County System as of and for the year ended
December 31, 1995 (and to all references to our Firm) included in or made a part
of this Registration Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated March 29, 1996, relating to the financial statements of Cencom Partners,
L.P. - Lincolnton System as of and for the year ended December 31, 1995 (and to
all references to our Firm) included in or made a part of this Registration
Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

<PAGE> 7

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated March 29, 1996, relating to the financial statements of Cencom Partners,
L.P. - Sanford System as of and for the year ended December 31, 1995 (and to all
references to our Firm) included in or made a part of this Registration
Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated June 17, 1996, relating to the financial statements of Charter
Communications Southeast Properties, Inc., as of December 31, 1995 (and to all
references to our Firm) included in or made a part of this Registration
Statement No. 333-3772.

ARTHUR ANDERSEN LLP

St. Louis, Missouri,

June 18, 1996

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated March 14, 1996, relating to the financial statements of Peachtree Cable
TV, Inc. as of December 31, 1994 and 1993 and for the four months ended April
30, 1995 and the years ended December 31, 1994 and 1993 (and to all references
to our Firm) included in or made a part of this Registration Statement No.
333-3772.

HOLBEN, BOAK, COOPER & CO.

Denver, Colorado

June 19, 1996

<PAGE> 1

EXHIBIT 23.3

INDEPENDENT AUDITORS' CONSENT

The Board of Directors

Charter Communications:

We consent to the use of our reports included herein and to the reference
to our firm under the heading "Independent Certified Public Accountants" in the
registration statement.

KPMG Peat Marwick LLP

Dallas, Texas

June 19, 1996

<PAGE> 1

EXHIBIT 23.4

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Charter
Communications Southeast, L.P. and Charter Communications Southeast Capital
Corporation on Form S-4 of our report dated March 5, 1996, relating to the
financial statements of the Cable Systems of CableSouth, Inc. as of December 31,
1993 and 1994, and for each of the three years in the period ended December 31,
1994 and for the five-month period ended May 31, 1995, which appears in this
Registration Statement.

We also consent to the reference to us under the heading "Independent
Certified Public Accountants" in such Registration Statement.

DELOITTE & TOUCHE LLP

Birmingham, Alabama

June 20, 1996

<PAGE> 1

EXHIBIT 23.5

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Independent
Certified Public Accountants" and to the use of our reports dated March 8, 1996,
with respect to the financial statements of the Georgia Cable Television System
(sold by Masada Cable Partners, L.P. to Charter Communications II, L.P.), Masada
Cable Partners II, L.P. (sold to Charter Communications II, L.P.), and our
report dated March 15, 1996, with respect to the financial statements of the
Alabama Cable Television System (to be sold by Masada Cable Partners, L.P. to
Charter Communications II, L.P.), in Amendment No. 1 to the Registration
Statement (Form S-4) and related Prospectus for the $125,000,000, 11.25% Senior
Notes due 2006 of Charter Communications Southeast, L.P. and Charter
Communications Southeast Capital Corporation.

ERNST & YOUNG LLP

Birmingham, Alabama

June 24, 1996

<PAGE> 1

EXHIBIT 23.6

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm relating to the financial statements of
Prime Cable of Hickory, L.P. under the caption "Independent Certified Public
Accountants" and to the use of our report dated March 4, 1996, with respect to
the financial statements of Prime Cable of Hickory, L.P. included in Amendment
No. 1 to the Registration Statement (Form S-4, No. 333-3772) and related
Prospectus of Charter Communications Southeast, L.P. and Charter Communications
Southeast Capital Corporation.

ERNST & YOUNG LLP

Austin, Texas

June 24, 1996

<PAGE> 1
Exhibit 99.1

LETTER OF TRANSMITTAL
To Tender
11 1/4% Senior NotEs
due March 15, 2006
of Charter Communications Southeast, L.P. and Charter Communications Southeast
Capital Corporation
Pursuant to the Prospectus
dated _____________, 1996

- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ___________,
1996 UNLESS EXTENDED (AS SO EXTENDED, THE "EXPIRATION DATE"). EXCEPT AS PROVIDED
UNDER APPLICABLE SECURITIES LAWS, TENDERS OF OLD NOTES (AS DEFINED HEREIN) MAY
BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE UNLESS SUCH OLD NOTES HAVE BEEN ACCEPTED FOR EXCHANGE BY CHARTER
COMMUNICATIONS SOUTHEAST, L.P. AND CHARTER COMMUNICATIONS SOUTHEAST CAPITAL
CORPORATION PRIOR THERETO.
- --------------------------------------------------------------------------------

To: HARRIS TRUST AND SAVINGS BANK, EXCHANGE AGENT

BY MAIL, BY HAND OR OVERNIGHT DELIVERY: BY FACSIMILE:

Charter Communications Southeast, L.P. and (312) 765-1697
Charter Communications Southeast Capital
Corporation CONFIRMATION AND
c/o Harris Trust and Savings Bank INFORMATION:
311 West Monroe Street
Chicago, Illinois 60606 (312) 461-6852
Attn: M. Callahan

Delivery of this Letter of Transmittal to an address other than as set
forth above or transmission of instructions via a facsimile number other than
the one listed above will not constitute a valid delivery.

The undersigned acknowledges receipt and review of the Prospectus dated
________________, 1996 (the "Prospectus") of Charter Communications Southeast,
L.P., a Delaware limited partnership, and Charter Communications Southeast
Capital Corporation, a Delaware corporation (collectively, the "Issuers") and
this Letter of Transmittal relating to the Issuers' 11 1/4% Senior Notes due
March 15, 2006 (the "Old Notes"), which constitutes the Issuers' offer (the
"Exchange Offer") to exchange Old Notes for new notes (the "New Notes") in
accordance with the terms and conditions described in the Prospectus.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Prospectus.

This Letter of Transmittal must be used if (i) Old Notes are to be
physically delivered herewith, (ii) delivery of Old Notes is to be made by
book-entry transfer to the Exchange Agent's account at The Depository Trust
Company (the "Book-Entry Transfer Facility") pursuant to the procedures set
forth in "The Exchange Offer--Procedures for Tendering" in the Prospectus, or
(iii) the guaranteed delivery procedures described in the Prospectus under "The
Exchange Offer--Guaranteed Delivery Procedures" are to be utilized. Delivery of
documents to a Book-Entry Transfer Facility does not constitute delivery to the
Exchange Agent.

A holder who wishes to tender Old Notes must, at a minimum, complete
columns (1) and (3) in the box below, captioned "Description of Old Notes," and
sign in the box below captioned "Sign Here." If only columns (1) and (3) are
completed, the holder will be deemed to have tendered all Old Notes listed in
column (3) of the box captioned "Description of Old Notes." If a holder wishes
to tender less than all of such Old Notes, column (4) must be completed in full,
and such holder should refer to Instruction 4 of the instructions hereto (the
"Instructions") regarding completion of this Letter of Transmittal.
<PAGE> 2
Holders who desire to tender their Old Notes and (i) whose Old Notes
are not immediately available, (ii) who cannot deliver their Old Notes, this
Letter of Transmittal and all other documents required hereby to the Exchange
Agent prior to the Expiration Date, or (iii) who cannot complete the procedure
for book-entry transfer on a timely basis, must tender their Old Notes pursuant
to the guaranteed delivery procedure forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2.

If the undersigned is not the person in whose name the Old Notes
tendered are registered on the books of the Issuers, a properly completed bond
power must be obtained from the registered holder of such Old Notes and
submitted with this Letter of Transmittal in order to tender them pursuant to
this Letter of Transmittal. See Instructions 1 and 5.

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE
COMPLETING ANY INFORMATION BELOW.

Ladies and Gentlemen:

Pursuant to the offer by the Issuers to exchange up to $125,000,000
principal amount of Old Notes for up to $125,000,000 principal amount of New
Notes, upon the terms and subject to the conditions set forth in the Prospectus
and this Letter of Transmittal, the undersigned hereby tenders to the Issuers
the Old Notes indicated below. Accrued interest on Old Notes accepted for
exchange will be paid to, but not including, the date of issuance of the New
Notes (the "Interest Payment").

Subject to and effective upon acceptance for exchange of the Old Notes
tendered herewith, the undersigned hereby exchanges, assigns and transfers to or
upon the order of the Issuers all right, title and interest in and to all the
Old Notes that are being tendered hereby, and irrevocably constitutes and
appoints the Exchange Agent the true and lawful agent and attorney-in-fact of
the undersigned (with full knowledge that the Exchange Agent also acts as the
agent of the Issuers) with respect to such Old Notes, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to (a) present such Old Notes and all evidences of
transfer and authenticity to, or upon the order of, the Issuers for registration
in the name of the undersigned on the books of the Issuers if the undersigned is
not currently the registered holder thereof, (b) deliver certificates for such
Old Notes, or transfer ownership of such Old Notes on the account books
maintained by the Book-Entry Transfer Facility, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
the Issuers upon receipt by the Exchange Agent as the undersigned's agent, of
the Interest Payment and the New Notes to be issued in exchange therefor, (c)
present such Old Notes for cancellation and transfer on the books of the Issuers
and (d) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Old Notes, all in accordance with the terms of the Exchange
Offer.

The undersigned hereby represents and warrants that the undersigned
owns the Old Notes tendered within the meaning of Rule 144 under the Securities
Exchange Act of 1934, as amended, and has full power and authority to tender,
exchange, assign and transfer the Old Notes tendered hereby, and that when the
same are accepted for exchange and exchanged by the Issuers, the Issuers will
acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The undersigned will, upon request, execute and deliver any additional documents
deemed by the Exchange Agent or the Issuers to be necessary or desirable to
complete the exchange, assignment and transfer of the Old Notes tendered hereby.

The undersigned further represents and warrants that (i) this Exchange
Offer is being made in reliance on an interpretation by the staff of the
Securities and Exchange Commission that the New Notes may be offered for resale,
resold and otherwise transferred by the holders thereof without compliance with
the registration and prospectus delivery provisions of the Securities Act of
1933, as amended (the "Securities Act"), (ii) the New Notes are being obtained
in the ordinary course of business of the person receiving such New Notes,
whether or not such person is the holder of the Old Notes, (iii) no such person
has any arrangement with any person to participate in the distribution of such
New Notes and (iv) no such person is an "affiliate" of either of the Issuers
within the meaning of Rule 405 under the Securities Act. If the undersigned is
not a broker-dealer, the undersigned represents that it is not engaged in, and
does not intend to engage in, a distribution of the New Notes. If the
undersigned is a broker-dealer that will receive New Notes for its own account
in exchange for Old Notes that were acquired as a result of market-making
activities or other trading activities, it agrees that it will deliver a
prospectus in connection with any resale of such

2
<PAGE> 3
New Notes; however, by so agreeing and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

Listed below are the Old Notes tendered by the undersigned upon the
terms and conditions set forth in the Prospectus and this Letter of Transmittal.
The undersigned understands that the minimum permitted tender is $1,000
principal amount of Old Notes and that all other tenders must be in integral
multiples of $1,000.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES
- --------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
PRINCIPAL AMOUNT
CERTIFICATE TENDERED (MUST
NUMBER(S)* BE AN INTEGRAL
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (ATTACH SEPARATE LIST AGGREGATE PRINCIPAL MULTIPLE OF
(PLEASE FILL IN, IF BLANK) IF NECESSARY) AMOUNT OF OLD NOTES $1,000)**
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
------------------------------------------------- ----------------------- --------------------- ------------------

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

- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Need not be completed by holders tendering by book-entry transfer.

** Need not be completed by holders who wish to tender all Old Notes listed.
Unless otherwise indicated in column (4), the holder(s) will be deemed to
have tendered the entire aggregate principal amount represented by the
Old Notes listed in column (3).

NOTE: SIGNATURES MUST BE PROVIDED IN THE BOX BELOW CAPTIONED "SIGN HERE."
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE EXCHANGE AGENT'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:

Name of Tendering Institution:______________________________________________

Account Number:_____________________________________________________________
at The Depository Trust Company.

Transaction Code Number:____________________________________________________

/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:

Name(s) of Registered Holder(s):____________________________________________

Date of Execution of Notice of Guaranteed Delivery:_________________________

Name of Eligible Institution that Guaranteed Delivery:______________________

If Delivery is by Book-Entry Transfer, provide Account Number:______________
at The Depository Trust Company.

/ / CHECK HERE IF OLD NOTES ARE BEING DELIVERED HEREWITH

3
<PAGE> 4
TO BE COMPLETED BY ALL TENDERING HOLDERS OF OLD NOTES

PAYOR'S NAME: _____________________________________________

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN
THE BOX AT RIGHT AND CERTIFY BY TIN:_____________________________________
SIGNING AND DATING BELOW Social Security Number or Employer Identification Number

<S> <C> <C>
--------------------------------------------------------------------------------------------------
SUBSTITUTE PART 2--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (SEE
Form W-9 INSTRUCTIONS)

Department of the Treasury --------------------------------------------------------------------------------------------------
Internal Revenue Service CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT (1) the number shown on this form is
my correct TIN (or I am waiting for a number to be issued to me), and (2) I am not subject to
Payor's Request for backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been
Taxpayer notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a
Identification result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am
Number (TIN) no longer subject to backup withholding.
and Certification

Signature:____________________________________ Date:________________________________
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Instructions for Parts 1 and 2. Individuals (including sole
proprietors) are not exempt from backup withholding. Corporations are exempt
from backup withholding for certain payments, such as interest and dividends.
For a complete list of exempt payees, please consult your tax advisor. If you
are exempt from backup withholding, you should still complete this form to avoid
possible erroneous backup withholding. Enter your correct Taxpayer
Identification Number ("TIN") in Part 1, write "Exempt" in Part 2, and sign and
date the form. If you are a nonresident alien or a foreign entity not subject to
backup withholding, you must provide to the Issuers a completed Form W-8,
Certificate of Foreign Status.

INSTRUCTIONS FOR CERTIFICATION. YOU MUST CROSS OUT ITEM (2) IN THE BOX
MARKED "CERTIFICATION" IN THE SUBSTITUTE FORM W-9 ABOVE IF YOU HAVE BEEN
NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE
OF UNDER-REPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN. NOTE: FAILURE TO
COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY
PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER.

* * *

Upon satisfaction or waiver of the conditions to the Exchange Offer,
the Issuers will accept promptly after the Expiration Date all properly tendered
Old Notes and will deliver the New Notes in exchange therefor promptly after
acceptance of such Old Notes. Interest on Old Notes accepted for exchange in the
Exchange Offer will accrue to, but not include, the Expiration Date.

For purposes of the Exchange Offer, the Issuers will be deemed to have
accepted for exchange tendered Old Notes if, as and when the Issuers give oral
or written notice to the Exchange Agent of their acceptance for exchange of the
tenders of such Old Notes. New Notes will be delivered by deposit of the same
with the Exchange Agent, which will act as agent for tendering holders for the
purpose of receiving New Notes from the Issuers and transmitting the same to
such holders.

All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, trustees in bankruptcy, legal representatives,
successors and assigns of the undersigned.

EXCEPT AS PROVIDED UNDER APPLICABLE SECURITIES LAWS, TENDERS OF OLD
NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON
THE EXPIRATION DATE UNLESS SUCH OLD NOTES HAVE BEEN ACCEPTED FOR EXCHANGE BY THE
ISSUERS PRIOR THERETO.

4
<PAGE> 5
The Issuers may, in their sole discretion, extend the period of time
for which the Exchange Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date to which the Exchange Offer has been
extended. The Issuers shall make a public announcement of any such extension of
the Exchange Offer no later than 9:00 a.m. New York City time, on the next
business day after the previously scheduled Expiration Date.

In the event the Issuers should modify the consideration offered for
Old Notes in the Exchange Offer, such modified consideration would be paid to
all holders of Old Notes accepted in the Exchange Offer, including those holders
who tendered before the announcement of such modification. If the consideration
is modified, the Exchange Offer will remain open at least ten (10) business days
from the date the Issuers give notice, by public announcement or otherwise, of
such modification, as required by applicable law.

The undersigned understands that tenders of Old Notes pursuant to any
one of the procedures described in the Prospectus under the caption "The
Exchange Offer--Procedures for Tendering" and in the Instructions hereto will
constitute a binding agreement between the undersigned and the Issuers upon the
terms and subject to the conditions of the Exchange Offer.

Unless otherwise indicated under "Special Issuance Instructions" below,
please (i) issue the New Notes and (ii) return any Old Notes not tendered or not
exchanged, in the Name(s) of the undersigned (and, in the case of Old Notes
tendered by book-entry transfer, by credit to the account at the Book-Entry
Transfer Facility designated above). Similarly, unless otherwise indicated under
"Special Delivery Instructions" below, please mail (i) the New Notes and (ii)
any certificates for Old Notes not tendered or not exchanged (and accompanying
documents, as appropriate), to the undersigned at the address shown in the box
captioned "Description of Old Notes" above. In the event that both "Special
Issuance Instructions" and "Special Delivery Instructions" are completed, please
issue the New Notes, return any Old Notes not tendered or not exchanged and mail
any check and any certificates to the person(s) and address(es) so indicated.
The undersigned recognizes that the Issuers have no obligation pursuant to the
"Special Issuance Instructions" and "Special Delivery Instructions" to transfer
any Old Notes from the name(s) of the registered holder(s) thereof if the
Issuers do not accept for exchange any of the Old Notes so tendered.

The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. By completing the box entitled "Description of Old Notes"
and signing this Letter of Transmittal, the undersigned will be deemed to have
tendered the Old Notes indicated in such box, and will receive New Notes in
exchange for such Old Notes.

5
<PAGE> 6
- --------------------------------------------------------------------------------

SPECIAL ISSUANCE INSTRUCTIONS
(See Instruction 7)

To be completed ONLY if (i) the New Notes and/or (ii) the Old Notes (if
any) not tendered or not exchanged are to be issued in the name of someone other
than the undersigned, or if Old Notes delivered by book-entry transfer that are
not tendered or not exchanged are to be returned by credit to an account
maintained at a Book-Entry Transfer Facility other than as designed above.

(Check appropriate boxes)
/ / New Notes / / Old Notes

Name____________________________________________________________________________
(Please Print)

Address_________________________________________________________________________

_________________________________________________________________________
(Include Zip Code)

_________________________________________________________________________
(Taxpayer ID or Social Security Number)

(Taxpayer ID or Social Security Number)

/ / Credit untendered or unexchanged Old Notes delivered by book-entry transfer
to the Book-Entry Transfer Facility account at The Depository Trust Company.

Account Number _________________________________________________________________

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

SPECIAL DELIVERY INSTRUCTIONS
(See Instruction 7)

To be completed ONLY if (i) the New Notes and/or (ii) the Old Notes (if
any) not tendered or not exchanged are to be mailed to someone other than the
undersigned or to the undersigned at an address other than that shown in the box
captioned "Description of Old Notes" above.

(Check appropriate boxes)
/ / New Notes / / Old Notes

Name____________________________________________________________________________

Address_________________________________________________________________________

________________________________________________________________________________
(Include Zip Code)

________________________________________________________________________________
(Taxpayer ID or Social Security Number)

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

6
<PAGE> 7
- --------------------------------------------------------------------------------
SIGN HERE

TO BE COMPLETED BY ALL TENDERING HOLDERS
(INCLUDING THOSE COMPLETING THE NOTICE OF GUARANTEED DELIVERY)

____________________________________ _____________________________________
Signature of Owner Signature of Owner (If more than one)

Dated: _______________, 1996 Area Code and Telephone Number: _________________

(Must be signed by registered holder(s) exactly as name(s) appear(s) on Old
Notes or on a security position listing or by person(s) authorized to become
registered holder(s) by Old Notes and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, agent or other person acting in a fiduciary or
representative capacity, please provide the following information and see
Instruction 5.)

Name(s)_____________________________ Address______________________________

____________________________________ _____________________________________
(PLEASE PRINT) (INCLUDE ZIP CODE)

Capacity (full title)_______________ Area Code and Telephone No.__________

Taxpayer ID or Social Security Number(s)________________________________________

GUARANTEE OF SIGNATURE(S) (If required--see Instructions 1 and 5)

Name of Firm________________________ Authorized Signature_________________
Address and Telephone
Number of Firm______________________ Print name___________________________

____________________________________ Title________________________________

____________________________________ Dated__________________________, 1996

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

7
<PAGE> 8
INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is a
member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States (an "Eligible
Institution"). Signatures on this Letter of Transmittal need not be guaranteed
if (a) this Letter of Transmittal is signed by the registered holder(s) of the
Old Notes tendered herewith (which term, for purposes of this Letter of
Transmittal, shall include any participant in one of the Book-Entry Transfer
Facilities whose name appears on a security position listing as the owner of the
Old Notes tendered herewith) and such holder(s) have not completed either the
box captioned "Special Issuance Instructions" or the box captioned "Special
Delivery Instructions" on this Letter of Transmittal or (b) such Old Notes are
tendered for the account of an Eligible Institution. See Instruction 5.

2. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES. This Letter of
Transmittal is to be used if (i) Old Notes are to be forwarded to the Exchange
Agent herewith, (ii) delivery of Old Notes is to be made by book-entry transfer
to the Exchange Agent's account at one of the Book-Entry Transfer Facilities
pursuant to the procedures set forth in the Prospectus under the caption "The
Exchange Offer--Procedures for Tendering" or (iii) the guaranteed delivery
procedures described under the same caption and under "--Guaranteed Delivery
Procedures" in the Prospectus are to be utilized.

All physically delivered Old Notes, or a confirmation of a book-entry
transfer into the Exchange Agent's account at one of the Book-Entry Transfer
Facilities of all Old Notes tendered herewith, as well as a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) and all other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at its address set forth on the front page of this Letter of
Transmittal prior to the Expiration Date.

Holders who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available, (ii) who cannot deliver their Old Notes, this Letter
of Transmittal and all other documents required hereby to the Exchange Agent
prior to the Expiration Date, or (iii) who cannot complete the procedure for
book-entry transfer on a timely basis, must tender their Old Notes pursuant to
the guaranteed delivery procedures set forth in the Prospectus. Pursuant to such
procedures: (a) such tender must be made by or through an Eligible Institution,
(b) a properly completed and duly executed Notice of Guaranteed Delivery setting
forth the name and address of the holder of Old Notes, the certificate number(s)
of such Old Notes and the principal amount of Old Notes to be delivered, stating
that tender is being made thereby and guaranteeing that the certificate(s)
representing the Old Notes, the Letter of Transmittal and all other documents
required thereby will be deposited by the Eligible Institution with the Exchange
Agent within five business days after the Expiration Date and (c) all physically
delivered Old Notes in proper form for transfer (or a confirmation of a
book-entry transfer into the Exchange Agent's account at one of the Book-Entry
Transfer Facilities of all Old Notes so delivered), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and all
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent within five business days after the Expiration Date, all as
provided in the Prospectus under the caption "The Exchange Offer--Guaranteed
Delivery Procedures".

THE METHOD OF DELIVERY OF OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS IS
AT THE OPTION AND RISK OF THE TENDERING HOLDER. IF OLD NOTES ARE SENT BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED,
AND ENOUGH TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

No alternative, conditional or contingent tenders will be accepted. By
executing this Letter of Transmittal (or a facsimile hereof), the tendering
holder waives any right to receive any notice of the acceptance for exchange of
the Old Notes.

3. INADEQUATE SPACE. If the space provided is inadequate, the aggregate
principal amount of the Old Notes being tendered and the certificate numbers (if
available) must be listed on a separate schedule signed by the tendering holder
and attached hereto.

8
<PAGE> 9
4. PARTIAL TENDERS. Tenders of the Old Notes will be accepted only in
integral multiples of $1,000. If tenders are to be made with respect to less
than the entire principal amount of any Old Notes, the holder must fill in the
principal amount of Old Notes which are tendered in column (4) of the box
captioned "Description of Old Notes." The entire principal amount of Old Notes
delivered to the Exchange Agent will be deemed to have been tendered unless
otherwise indicated in Column (4). In the case of partial tenders, Old Notes in
fully registered form for the principal amount of Old Notes not tendered will be
sent to the person(s) signing this Letter of Transmittal, unless otherwise
indicated in the appropriate box on this Letter of Transmittal, promptly after
the Expiration Date.

5. SIGNATURES ON LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS.
The signature(s) of the registered holder(s) on this Letter of Transmittal must
correspond with the name(s) as written on the face of the Old Notes, without
alteration, enlargement or any change whatsoever.

If any of the Old Notes are held of record by two or more joint owners,
all such owners must sign this Letter of Transmittal. If any of the Old Notes
are registered in different names, it will be necessary to complete, sign and
submit as many separate copies of this Letter of Transmittal as there are names
in which Old Notes are held.

If this Letter of Transmittal is signed by the registered holder(s) of
the Old Notes, no endorsements of Old Notes or separate bond powers are
required. If, however, the Interest Payments are to be made, the New Notes are
to be issued, or Old Notes not tendered or not exchanged are to be issued or
returned in the name(s) of any person(s) or address(es) other than those of the
registered holder(s), then endorsements of certificates transmitted hereby and
separate bond powers are required, and signatures on any such Old Notes or bond
powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Old Notes, such Old Notes must be endorsed or
accompanied by appropriate bond powers, in either case signed exactly as the
name(s) of the registered holder(s) on such Old Notes. Signature(s) on any such
Old Notes or bond powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal or any Old Notes or bond powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation, agent or other person acting in a fiduciary or
representative capacity, such person must so indicate when signing and proper
evidence, satisfactory to the Issuers, of the authority of such person to so act
must be submitted with this Letter of Transmittal (unless waived by the
Issuers).

6. TRANSFER TAXES. The Issuers will pay or cause to be paid security
transfer taxes, if any, with respect to the exchange and transfer of Old Notes
pursuant to the Exchange Offer. If, however, New Notes are to be issued to, or
Old Notes not tendered or not exchanged are to be delivered to or are to be
issued or registered in the name of, any person other than the registered
holder(s), or if tendered Old Notes are to be registered in the name of any
person other than the transferor of Old Notes to the Issuers or its order
pursuant to the Exchange Offer, then the amount of any such security transfer
taxes (whether imposed on the registered holder(s), such other person or
otherwise) will be payable by the tendering holder. If satisfactory evidence of
the payment of such tax, or exemption therefrom, is not submitted with this
Letter of Transmittal, the amount of such transfer taxes will be billed directly
to such tendering holder.

Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed this Letter of
Transmittal.

7. SPECIAL ISSUANCE AND DELIVERY INSTRUCTION. If any of (i) the New
Notes or (ii) any Old Notes not tendered or not exchanged are to be issued or
returned to or in the name of a person other than the person(s) signing this
Letter of Transmittal, or if any of (i) the New Notes or (ii) any Old Notes not
tendered or not exchanged, are to be mailed to a person other than the person(s)
signing this Letter of Transmittal at an address other than that shown above,
the applicable box(es) on this Letter of Transmittal should be completed.
Holders tendering Old Notes by book-entry transfer may request that the Old
Notes not tendered or not exchanged be credited to an account maintained at one
of the Book-Entry Transfer Facilities. If no instructions are given, such Old
Notes not tendered will be returned to the name and address of the person
signing this Letter of Transmittal, or, at the Issuers' option, by crediting the
account of the Book-Entry Transfer Facility so designated.

9
<PAGE> 10
8. SUBSTITUTE FORM W-9. Federal income tax law generally requires that
a tendering holder whose Old Notes are accepted for payment provide the Exchange
Agent (as payor) with his correct TIN, which, in the case of a holder who is an
individual, is his social security number. If the Exchange Agent is not provided
with the correct TIN or an adequate basis for an exemption, such holder may be
subject to a penalty imposed by the Internal Revenue Service. In addition,
backup withholding at the rate of 31% may be imposed upon the gross proceeds
resulting from the Exchange Offer. If withholding results in an overpayment of
taxes, a holder may be eligible for a refund. In order to avoid such backup
withholding, each tendering holder must provide the Exchange Agent with such
holder's correct TIN by completing the Substitute Form W-9 (the "Form") set
forth in this Letter of Transmittal. Certain holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. To prevent possible erroneous
backup withholding, an exempt holder must enter its correct TIN in Part 1 of the
Form, write "Exempt" in Part 2 of such Form, and sign and date the Form. In
order for a nonresident alien or foreign entity to qualify as exempt, such
person must submit a completed Form W-8, entitled "Certificate of Foreign
Status." Such Forms W-8 may be obtained from the Exchange Agent. If a holder
does not have a TIN, such holder should write "Applied For" in the space for the
TIN; if notice of the TIN assigned to such holder is not received by the
Exchange Agent within 60 days, backup withholding will begin and continue until
the Exchange Agent is in receipt of notice of such TIN. Note: Writing "Applied
For" on the Form means that a holder has already applied for a TIN or that a
holder intends to apply for a TIN.

Failure to complete the Substitute Form W-9 will not, by itself, cause
Old Notes to be deemed invalidly tendered, but may require the Exchange Agent to
withhold 31% of the amount of any payments made to the tendering holder. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained.

9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Prospectus and this Letter of
Transmittal may be directed to the Exchange Agent at the address or telephone
number set forth in this Letter of Transmittal.

10. SATISFACTION AND WAIVER OF CONDITIONS. All questions as to the
validity, form, eligibility (including time of receipt), acceptance for exchange
or withdrawal of any tender of Old Notes pursuant to any of the procedures
described herein or in the Prospectus will be determined by the Issuers in their
sole discretion, which determination shall be final and binding on all parties.
The Issuers reserve the absolute right to reject any and all Old Notes not
properly tendered or any Old Notes the Issuers' acceptance for exchange of which
may, in the opinion of the Issuers or its counsel, be unlawful. The Issuers also
reserve the absolute right to amend, waive or modify any of the conditions of
the Exchange Offer as set forth in the Prospectus under the caption "The
Exchange Offer--Conditions," or to waive any defect or irregularity in any
tender with respect to any particular Old Notes or any particular holder. The
interpretation of the terms and conditions of the Exchange Offer (including this
Letter of Transmittal and the Instructions hereto) by the Issuers shall be final
and binding on all parties. Unless waived by the Issuers, any defects or
irregularities in connection with the tender of Old Notes must be cured within
such time as the Issuers shall determine. Neither the Issuers, the Exchange
Agent nor any other person will be under any duty to give notification of any
defects or irregularities with respect to tenders of Old Notes, nor shall any of
them incur any liability for failure to give any such modification.

11. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any tendering
holder whose Old Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at its address set forth on the front page of this
Letter of Transmittal for further instructions.

12. WITHDRAWAL. Except as otherwise provided below, tenders of Old
Notes pursuant to the Exchange Offer are irrevocable and no withdrawal rights
are being afforded to holders of Old Notes. EXCEPT AS PROVIDED UNDER APPLICABLE
SECURITIES LAWS, TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE UNLESS SUCH OLD NOTES HAVE BEEN
ACCEPTED FOR EXCHANGE PRIOR THERETO. To be effective with respect to the tender
of Old Notes, a notice of withdrawal must (i) be given in writing or by
facsimile transmission and be timely received by the Exchange Agent at its
address set forth on the front page of this Letter of Transmittal before
acceptance by the of the Old Notes relating to such withdrawal, (ii) specify the
name(s) of the person(s) who tendered the Old Notes and the principal amount of
Old Notes to be withdrawn, (iii) where Old Notes have been delivered or
otherwise identified to the Exchange Agent, specify the name(s) in which such
Old Notes are registered (if different

10
<PAGE> 11
from the person(s) tendering the Old Notes) and the certificate numbers of the
particular Old Notes to be withdrawn, (iv) if Old Notes have been tendered
pursuant to the procedure for book-entry transfer, specify the name, account
number and Book-Entry Transfer Facility to be credited with the withdrawn Old
Notes, and (v) be signed by the holder of Old Notes in the same manner as the
original signature on this Letter of Transmittal (including any required
signature guarantees) or be accompanied by evidence satisfactory to the Exchange
Agent that the person withdrawing the tender has succeeded to beneficial
ownership of the Old Notes prior to the physical release of Old Notes to be
withdrawn.

Withdrawals of tenders of Old Notes may not be rescinded, and any Old
Notes withdrawn will thereafter be deemed not validly tendered for purposes of
the Exchange Offer; provided, however, that withdrawn Old Notes may be tendered
by following one of the procedures described in the Prospectus under the caption
"The Exchange Offer--Procedures for Tendering" at any time prior to the
Expiration Date.

The Exchange Agent for the Exchange Offer is:

Harris Trust and Savings Bank

By Mail, By Hand or Overnight Delivery: By Facsimile:

311 West Monroe Street (312) 765-1697
Chicago, Illinois 60606
Attention: M. Callahan Confirmation and Information:

(312) 461-6852