certain of our subsidiaries, and exercise other rights of secured creditors. Any default under our or our parent companies’ debt could adversely affect our growth, our financial condition, our results of operations and our and our parent companies’ ~~other notes.~~ability to make payments on our and our parent companies’ debt. See “—Risks Relating to Bankruptcy.” We and our parent companies may incur ~~substantial~~significant additional debt in the future. If current debt ~~levels~~amounts increase, the related risks that we now face will intensify.

The agreements and instruments governing our ~~debt~~ and ~~the debt of~~ our parent ~~companies~~companies’ debt contain restrictions and limitations that could significantly affect our ability to operate our business, as well as significantly affect our and our parent companies’ liquidity.

~~The Charter Operating~~Our credit facilities ~~the bridge loan~~ and the indentures governing our and our parent companies’ debt contain a number of significant covenants that could adversely affect our ability to operate our business, as well as significantly affect our and our parent companies’ liquidity, and therefore could adversely affect our results of operations. These covenants ~~will~~ restrict, among other things, our and our parent companies’ ability to:

~~Table of Contents~~

incur additional debt;

repurchase or redeem equity interests and debt;

·	issue equity;

make certain investments or acquisitions;

pay dividends or make other distributions;

dispose of assets or merge;

enter into related party transactions; and

grant liens and pledge assets.

Furthermore, Charter Operating’s credit facilities require our subsidiaries to, among other things, maintain specified financial ratios, meet specified financial tests and provide audited financial statements, with an unqualified opinion from our independent auditors. See "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources and Description of Our Outstanding Debt" for a summary of our outstanding indebtedness and a description of our credit facilities and other indebtedness and for details on our debt covenants and future liquidity. Charter Operating’s ability to comply with these provisions may be affected by events beyond our control.

The breach of any covenants or obligations in our or our parent companies’ indentures ~~bridge loan~~ or credit facilities, not otherwise waived or amended, could result in a default under the applicable debt ~~agreement or instrument~~obligations and could trigger acceleration of ~~the related debt,~~those obligations, which in turn could trigger cross defaults under other agreements governing our and our parent companies’ long-term indebtedness. ~~See "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources."~~ In addition, the secured lenders under the Charter Operating credit facilities, ~~and~~ the holders of the Charter Operating senior second-lien notes, the secured lenders under the CCO Holdings credit facility, and the holders of the CCH I notes could foreclose on their collateral, which includes equity interests in our subsidiaries, and exercise other rights of secured creditors. Any default under those credit facilities ~~the bridge loan,~~ or the indentures governing our or our parent companies’ ~~notes~~debt could adversely affect our growth, our financial condition, ~~and~~ our results of operations and our ability to make payments on our notes ~~the bridge loan,~~ and ~~Charter Operating’s~~our credit facilities, and could force us to seek the protection of the bankruptcy laws. See “Part I. Item 1. Business – Recent Developments – Charter Operating Credit Facility” and “Risks Relating to Bankruptcy.”

We depend on generating (and having available to the applicable obligor) sufficient cash flow to fund our and our parent companies’ debt obligations, capital expenditures, and ongoing operations. The lenders under our revolving credit facility have refused us access to funds under the Charter Operating revolving credit facilities. Our access to additional financing may be limited, which could adversely affect our financial condition and our ability to conduct our business.

Although Charter Operating has drawn down all but $27 million of the amounts available under the revolving credit facility, we have historically relied on access to credit facilities to fund operations, capital expenditures, and to service our and our parent companies’ debt. Our total potential borrowing availability under Charter Operating’s revolving credit facility was approximately $27 million as of December 31, 2008. A recent draw request by Charter Operating to borrow the remaining amount under the revolving credit facility was not funded by the lenders with the exception of one lender who funded approximately $0.4 million. We believe the lenders will continue to refuse funding under our revolving credit facility. See “Part I. Item 1. Business – Recent Developments – Charter Operating Credit Facility” and “Risks Relating to Bankruptcy.” As a result, we will be dependent on our cash on hand and cash flows from operating activities to fund our debt obligations, capital expenditures and ongoing operations.

Our ability to service our and our parent companies’ debt and to fund our planned capital expenditures and ongoing operations will depend on both our and our parent companies’ ability to generate and grow cash flow and our and our parent companies’ access (by dividend or otherwise) to additional liquidity sources. Our and our parent companies’ ability to generate and grow cash flow is dependent on many factors, including:

·	the impact of competition from other distributors, including but not limited to incumbent telephone companies, direct broadcast satellite operators, wireless broadband providers and DSL providers;

·	difficulties in growing and operating our telephone services, while adequately meeting customer expectations for the reliability of voice services;

·	our ability to adequately meet demand for installations and customer service;

·	our ability to sustain and grow revenues and cash flows from operating activities by offering video, high-speed Internet, telephone and other services, and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition;

·	our ability to obtain programming at reasonable prices or to adequately raise prices to offset the effects of higher programming costs;

·	general business conditions, economic uncertainty or downturn, including the recent volatility and disruption in the capital and credit markets and the significant downturn in the housing sector and overall economy; and

·	the effects of governmental regulation on our business.

Some of these factors are beyond our control. It is also difficult to assess the impact that the general economic downturn and recent turmoil in the credit markets will have on future operations and financial results. However, the general economic downturn has resulted in reduced spending by customers and advertisers, which may have impacted our revenues and our cash flows from operating activities from those that otherwise would have been generated. If we are unable to generate sufficient cash flow or we and our parent companies are unable to access additional liquidity sources, we and our parent companies may not be able to service and repay our and our parent companies’ debt, operate our business, respond to competitive challenges, or fund our and our parent companies’ other ~~debt~~liquidity and capital needs. It is uncertain whether we will be able, under applicable law, to make distributions or otherwise move cash to the relevant entities for payment of interest and principal. See “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Limitations on Distributions” and “–Because of our holding company structure, our outstanding notes are structurally subordinated in right of payment to all liabilities of our subsidiaries. Restrictions in our and our parent companies’ debt instruments and under applicable law limit their ability to provide funds to us or our various debt issuers.”

Because of our holding company structure, our outstanding notes are structurally subordinated in right of payment to all liabilities of our subsidiaries. Restrictions in our subsidiary's debt instruments and under applicable law limit its ability to provide funds to us or our various debt issuers.

Our primary assets are our equity interests in our subsidiaries. Our operating subsidiaries are separate and distinct legal entities and are not obligated to make funds available to us for payments on our notes or other obligations in the form of loans, distributions, or otherwise. Charter Operating’s ability to make distributions to us or the applicable debt issuers to service debt obligations is subject to its compliance with the terms of its credit facilities and indentures, and restrictions under applicable law. See ~~"Item~~“Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — ~~Description~~Liquidity and Capital Resources — Limitations on Distributions” and “— Summary of Restrictive Covenants of Our ~~Outstanding Debt"~~High Yield Notes – Restrictions on Distributions.” Under the Delaware Limited Liability Company Act, we and our subsidiary may only make distributions if the relevant entity has “surplus” as defined in the act. Under fraudulent transfer laws, we and our subsidiaries may not pay dividends if the relevant entity is insolvent or are rendered insolvent thereby. The measures of insolvency for purposes of these fraudulent transfer laws vary depending upon the law applied in any proceeding to determine whether a ~~summary of outstanding indebtedness and a description of credit facilities and other indebtedness.~~

fraudulent transfer has occurred. Generally, however, an entity would be considered insolvent if:

·	the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all its assets;

·	the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

·	it could not pay its debts as they became due.

It is uncertain whether we will have, at the relevant times, sufficient surplus at the relevant subsidiaries to make distributions, including for payments of interest and principal on the debts of the parents of such entities, and there can otherwise be no assurance that we and our subsidiaries will not become insolvent or will be permitted to make distributions in the future in compliance with these restrictions in amounts needed to service our and our parent companies’ indebtedness. Our direct or indirect subsidiaries include the borrowers and guarantors under the Charter Operating credit facilities. Charter Operating is also an obligor and guarantor under senior second-lien notes. As of

December 31, 2008, our total debt was approximately $11.8 billion, of which approximately $10.6 billion was structurally senior to the CCO Holdings notes.

In the event of bankruptcy, liquidation, or dissolution of one or more of our subsidiaries, that subsidiary's assets would first be applied to satisfy its own obligations, and following such payments, such subsidiary may not have sufficient assets remaining to make payments to its parent company as an equity holder or otherwise. In that event:

· the lenders under Charter Operating's credit facilities, whose interests are secured by substantially all of our operating assets, and all holders of other debt of Charter Operating, will have the right to be paid in full before us from any of our subsidiaries' assets; and
· the holders of preferred membership interests in our subsidiary, CC VIII, would have a claim on a portion of its assets that may reduce the amounts available for repayment to holders of our outstanding notes.

All of our and our parent companies’ outstanding debt is subject to change of control provisions. We and our parent companies may not have the ability to raise the funds necessary to fulfill our ~~and our parent companies’~~ obligations under our and our parent companies’ indebtedness following a change of control, which would place us and our parent companies in default under the applicable debt instruments.

We and our parent companies may not have the ability to raise the funds necessary to fulfill our obligations under our and our parent ~~companies’~~companies' notes ~~our bridge loan~~ and our credit facilities following a change of control. Under the indentures governing our and our parent ~~companies’~~companies' notes, upon the occurrence of specified change of control events, ~~each such~~the applicable note issuer is required to offer to repurchase all of its outstanding notes. However, we and our parent companies may not have sufficient access to funds at the time of the change of control event to make the required repurchase of the applicable notes, and all of the notes issuers are limited in their ability to make distributions or other payments to their respective parent company to fund any required repurchase. In addition, a change of control under ~~our~~the Charter Operating credit facilities ~~and bridge loan~~ would result in a default under those credit ~~facilities and bridge loan.~~facilities. Because such credit facilities ~~bridge loan~~ and ~~our subsidiaries’~~the Charter Operating notes are obligations of ~~us or~~ our ~~subsidiaries,~~subsidiary, the credit facilities ~~bridge loan~~ and ~~our subsidiaries’~~the Charter Operating notes would have to be repaid by ~~our subsidiaries~~Charter Operating before their assets could be available to us or our parent companies to repurchase our or our parent companies’ notes. Any failure to make or complete a change of control offer would place the applicable issuer or borrower in default under its notes. The failure of ~~us or~~ our subsidiaries to make a change of control offer or repay the amounts accelerated under their notes and credit facilities ~~and our bridge loan~~ would place ~~us or~~ them in default.

~~Table of Contents~~

~~Paul G. Allen and his affiliates are not obligated to purchase equity from, contribute to or loan funds to us or any of our parent companies.~~

Paul G. Allen and his affiliates are not obligated to purchase equity from, contribute to, or loan funds to us or any of our parent companies.

Risks Related to Our Business

We operate in a very competitive business environment, which affects our ability to attract and retain customers and can adversely affect our business and operations. ~~We have lost a significant number of video customers to direct broadcast satellite competition and further loss of video customers could have a material negative impact on our business.~~

The industry in which we operate is highly competitive and has become more so in recent years. In some instances, we compete against companies with fewer regulatory burdens, easier access to financing, greater personnel resources, greater resources for marketing, greater and more favorable brand name recognition, and long-established relationships with regulatory authorities and customers. Increasing consolidation in the cable industry and the repeal of certain ownership rules ~~may provide~~have provided additional benefits to certain of our competitors, either through access to financing, resources, or efficiencies of scale.

Our principal ~~competitor~~competitors for video services throughout our territory ~~is DBS.~~are DBS providers. The two largest DBS providers are DirecTV and Echostar. Competition from DBS, including intensive marketing efforts ~~and~~with aggressive pricing, exclusive programming and increased high definition broadcasting has had an adverse impact on our ability to retain customers. DBS has grown rapidly over the last several ~~years~~years. DBS companies have also recently announced plans and ~~continues~~technical actions to ~~do so.~~expand their activities in the MDU market. The cable industry, including us, has lost a significant number of ~~subscribers~~video customers to DBS competition, and we face serious challenges in this area in the future. We believe that competition from DBS service providers may present greater challenges in areas of lower population density, and that our systems service a higher concentration of such areas than those of other

Telephone companies, including two major ~~cable service providers.~~

~~Local~~ telephone companies, AT&T and ~~electric utilities~~Verizon, and utility companies can offer video and other services in competition with us, and we expect they will increasingly ~~may~~ do so in the future. Certain telephone companies have begun more extensive deployment of fiber in their networks that enable them to begin providing video services, as well as telephone and high bandwidth Internet access services, to residential and business customers and they are now offering such service in limited areas. SomeUpgraded portions of these ~~telephone companies have obtained,~~networks carry two-way video and ~~are now seeking, franchises or operating authorizations~~data services (DSL and FiOS) and digital voice services that are ~~less burdensome~~similar to ours. In the case of Verizon, high-speed data services (FiOS) operate at speeds as high as or higher than ~~existing~~ours. These services are offered at prices similar to those for comparable Charter ~~franchises.~~

~~The subscription television industry also faces competition from free broadcast television~~services. Based on our internal estimates, we believe that AT&T and ~~from other communications and entertainment media. Further loss of customers~~Verizon are offering these services in areas serving approximately 14% to ~~DBS or other alternative video and Internet services could have a material negative impact on the value~~17% of our ~~business~~estimated homes passed as of December 31, 2008. AT&T and ~~its performance.~~

Verizon have also launched campaigns to capture more of the MDU market. Additional upgrades and product launches are expected in markets in which we operate. With respect to our Internet access services, we face competition, including intensive marketing efforts and aggressive pricing, from telephone companies and other providers of ~~DSL and "dial-up".~~DSL. DSL service is competitive with high-speed Internet service ~~over cable systems.~~and is often offered at prices lower than our Internet services, although often at speeds lower than the speeds we offer. In addition, ~~DBS providers~~in many of our markets, these companies have entered into ~~joint marketing~~co-marketing arrangements with ~~Internet access~~DBS providers to offer ~~bundled~~service bundles combining video services provided by a DBS provider with DSL and ~~Internet~~traditional telephone and wireless services offered by the telephone companies and their affiliates. These service ~~which competes with~~bundles substantially resemble our ~~ability to provide bundled services to our customers.~~bundles. Moreover, as we expand our telephone offerings, we will face considerable competition from established telephone companies and other ~~carriers, including VoIP providers.~~carriers.

The existence of more than one cable system operating in the same territory is referred to as an overbuild. Overbuilds could adversely affect our growth, financial condition, and results of operations, by creating or increasing competition. Based on internal estimates and excluding telephone companies, as of December 31, 2008, we are aware of traditional overbuild situations impacting approximately 8% to 9% of our estimated homes passed, and potential traditional overbuild situations in areas servicing approximately an additional 1% of our estimated homes passed. Additional overbuild situations may occur in other systems.

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

Mergers, joint ventures, and alliances among franchised, wireless, or private cable operators, ~~satellite television~~DBS providers, local exchange carriers, and others, may provide additional benefits to some of our competitors, either through access to financing, resources, or efficiencies of scale, or the ability to provide multiple services in direct competition with us.

In addition to the various competitive factors discussed above, our business is subject to risks relating to increasing competition for the leisure and entertainment time of consumers. Our business competes with all other sources of entertainment and information delivery, including broadcast television, movies, live events, radio broadcasts, home video products, console games, print media, and the Internet. Technological advancements, such as video-on-demand, new video formats, and Internet streaming and downloading, have increased the number of entertainment and information delivery choices available to consumers, and intensified the challenges posed by audience fragmentation. The increasing number of choices available to audiences could also negatively impact advertisers’ willingness to purchase advertising from us, as well as the price they are willing to pay for advertising. If we do not respond appropriately to further increases in the leisure and entertainment choices available to consumers, our competitive position could deteriorate, and our financial results could suffer.

~~Table of Contents~~

We cannot assure you that ~~our cable systems~~the services we provide will allow us to compete effectively. Additionally, as we expand our offerings to include other telecommunications services, and to introduce new and enhanced services, we will be subject to competition from other providers of the services we offer. Competition may reduce our expected growth of future cash flows. We cannot predict the extent to which competition may affect our business and ~~operations in the future.~~

results of operations.

~~We have a history of net losses and expect to continue to experience net losses. Consequently,~~

If our required capital expenditures exceed our projections, we may not have ~~the ability to finance future~~sufficient funding, which could adversely affect our growth, financial condition and results of operations.

~~We have had a history of net losses and~~During the year ended December 31, 2008, we spent approximately $1.2 billion on capital expenditures. During 2009, we expect capital expenditures to continue to report net losses for the foreseeable future. Our net losses are principally attributable to insufficient revenue to cover the combination of operating costs and interest costs on our debt, the depreciation expenses that we incur resulting from the capital investments we have made in our cable properties, and the amortization and impairmentbe approximately $1.2 billion. The actual amount of our ~~franchise intangibles. We expect that these expenses (other than amortization~~capital expenditures depends on the level of growth in high-speed Internet and ~~impairment~~telephone customers, and in the delivery of ~~franchises) will remain significant,~~other advanced broadband services such as additional high-definition channels, faster high-speed Internet services, DVRs and we expect to continue to report net losses for the foreseeable future. We reported losses before cumulative effect of accounting change of $258 million and $2.5 billion for 2005 and 2004, respectively. We reported income before cumulative effect of accounting change of $30 million for 2003. Continued losses would reduce our cash available from operations to service our indebtedness,other customer premise equipment, as well as ~~limit~~the cost of introducing any new services. We may need

additional capital if there is accelerated growth in high-speed Internet customers, telephone customers or increased need to respond to competitive pressures by expanding the delivery of other advanced services. If we cannot provide for such capital spending from increases in our ~~ability to finance~~cash flow from operating activities, additional borrowings, proceeds from asset sales or other sources, our ~~operations.~~growth, competitiveness, financial condition, and results of operations could suffer materially.

We may not have the ability to reduce the high growth rates of, or pass on to our customers, our increasing programming costs, ~~on to our customers,~~ which would adversely affect our cash flow and operating margins.

Programming has been, and is expected to continue to be, our largest operating expense item. In recent years, the cable industry has experienced a rapid escalation in the cost of programming, particularly sports programming. We expect programming costs to continue to increase, and at a higher rate than in 2008, because of a variety of factors including ~~inflationary or negotiated~~amounts paid for retransmission consent, annual increases imposed by programmers and additional programming, including high definition and OnDemand programming, being provided to ~~customers and increased costs to purchase programming.~~customers. The inability to fully pass these programming cost increases on to our customers has had an adverse impact on our cash flow and operating ~~margins. As measured by programming costs, and excluding premium services (substantially all of which were renegotiated and renewed in 2003), as of December 31, 2005, approximately 15% of our current~~margins associated with the video product. We have programming contracts ~~were~~that have expired and ~~approximately another 4% were scheduled to~~others that will expire at or before the end of ~~2006.~~2009. There can be no assurance that these agreements will be renewed on favorable or comparable terms. ~~Our programming costs increased by approximately 7% in 2005 and we expect our programming costs in 2006 to increase at a higher rate than in 2005.~~ To the extent that we are unable to reach agreement with certain programmers on terms that we believe are reasonable we may be forced to remove such programming channels from our line-up, which could result in a further loss of customers.

Increased demands by owners of some broadcast stations for carriage of other services or payments to those broadcasters for retransmission consent are likely to further increase our programming costs. Federal law allows commercial television broadcast stations to make an election between “must-carry” rights and an alternative “retransmission-consent” regime. When a station opts for the latter, cable operators are not allowed to carry the station’s signal without the station’s permission. In some cases, we carry stations under short-term arrangements while we attempt to negotiate new long-term retransmission agreements. If negotiations with these programmers prove unsuccessful, they could require us to cease carrying their signals, possibly for an indefinite period. Any loss of stations could make our ~~required capital expenditures exceed our projections, we may not have sufficient funding,~~video service less attractive to customers, which could ~~adversely affect~~result in less subscription and advertising revenue. In retransmission-consent negotiations, broadcasters often condition consent with respect to one station on carriage of one or more other stations or programming services in which they or their affiliates have an interest. Carriage of these other services may increase our ~~growth, financial condition~~programming expenses and ~~results of operations.~~

~~During~~diminish the ~~year ended December 31, 2005, we spent approximately $1.1 billion on capital expenditures. During 2006, we expect capital expenditures to be approximately $1.0 billion to $1.1 billion. The actual~~ amount of capacity we have available to introduce new services, which could have an adverse effect on our ~~capital expenditures depends on~~business and financial results.

We face risks inherent in our telephone business.

We may encounter unforeseen difficulties as we increase the ~~level~~scale of ~~growth in~~our telephone service offerings. First, we face heightened customer expectations for the reliability of telephone services as compared with our video and high-speed data services. We have undertaken significant training of customer service representatives and technicians, and we will continue to need a highly trained workforce. If the service is not sufficiently reliable or we otherwise fail to meet customer expectations, our telephone business could be adversely affected. Second, the competitive landscape for telephone services is intense; we face competition from providers of Internet ~~and~~ telephone ~~customers and in the delivery of other advanced~~ services, as well as ~~the cost of introducing any new services. We may need additional capital if there is accelerated growth in high-speed Internet customers,~~incumbent telephone ~~customers or~~companies. Further, we face increasing competition for residential telephone services as more consumers in the ~~delivery~~United States are replacing traditional telephone service with wireless service. All of ~~other advanced services. If~~this may limit our ability to grow our telephone service. Third, we ~~cannot obtain such capital from increases~~depend on interconnection and related services provided by certain third parties. As a result, our ability to implement changes as the service grows may be limited. Finally, we expect advances in communications technology, as well as changes in the marketplace and the regulatory and legislative environment. Consequently, we are unable to predict the effect that ongoing or future developments in these areas might have on our ~~cash flow from operating activities, additional borrowings or other sources, our growth, financial condition~~telephone business and ~~results of operations could suffer materially.~~operations.

Our inability to respond to technological developments and meet customer demand for new products and services could limit our ability to compete effectively.

Our business is characterized by rapid technological change and the introduction of new products and ~~services.~~services, some of which are bandwidth-intensive. We cannot assure you that we will be able to fund the capital expenditures necessary to keep pace with ~~unanticipated~~ technological developments, or that we will successfully anticipate the demand of our customers for products and services requiring new ~~technology.~~technology or bandwidth beyond our expectations. Our inability to maintain and expand our upgraded systems and provide advanced services in a timely manner, or to anticipate the

demands of the marketplace, could materially adversely affect our ability to attract and retain customers. Consequently, our growth, financial condition and results of operations could suffer materially.

~~Table~~Our exposure to the credit risks of ~~Contents~~

~~We may not be able to carry out~~ our ~~strategy to improve operating~~customers, vendors and third parties could adversely affect our cash flow, results ~~by standardizing and streamlining~~of operations and ~~procedures.~~financial condition.

~~In prior years, we experienced rapid growth through acquisitions~~We are exposed to risks associated with the potential financial instability of ~~a number~~our customers, many of ~~cable operators~~whom may be adversely affected by the general economic downturn. Dramatic declines in the housing market over the past year, including falling home prices and increasing foreclosures, together with significant increases in unemployment, have severely affected consumer confidence and may cause increased delinquencies or cancellations by our customers or lead to unfavorable changes in the ~~rapid rebuild~~mix of products purchased. The general economic downturn also may affect advertising sales, as companies seek to reduce expenditures and ~~rollout~~conserve cash. Any of ~~advanced services. Our future success will depend in part on~~these events may adversely affect our ability to standardize and streamline our operations. The failure to implement a consistent corporate culture and management, operating or financial systems or procedures necessary to standardize and streamline our operations and effectively operate our enterprise could have a material adverse effect on our business,cash flow, results of operations and financial condition.

In addition, we are susceptible to risks associated with the potential financial instability of the vendors and third parties on which we rely to provide products and services or to which we delegate certain functions. The same economic conditions that may affect our customers, as well as volatility and disruption in the capital and credit markets, also could adversely affect vendors and third parties and lead to significant increases in prices, reduction in output or the bankruptcy of our vendors or third parties upon which we rely. Any interruption in the services provided by our vendors or by third parties could adversely affect our cash flow, results of operation and financial condition.

We depend on third party service providers, suppliers and licensors; thus, if we are unable to procure the necessary services, equipment, software or licenses on reasonable terms and on a timely basis, our ability to offer services could be impaired, and our growth, operations, business, financial results and financial condition could be materially adversely affected.

We depend on third party service providers, suppliers and licensors to supply some of the services, hardware, software and operational support necessary to provide some of our services. We obtain these materials from a limited number of vendors, some of which do not have a long operating history or which may not be able to continue to supply the equipment and services we desire. Some of our hardware, software and operational support vendors, and service providers represent our sole source of supply or have, either through contract or as a result of intellectual property rights, a position of some exclusivity. If demand exceeds these vendors’ capacity or if these vendors experience operating or financial difficulties, or are otherwise unable to provide the equipment or services we need in a timely manner and at reasonable prices, our ability to provide some services might be materially adversely affected, or the need to procure or develop alternative sources of the affected materials or services might delay our ability to serve our customers. These events could materially and adversely affect our ability to retain and attract customers, and have a material negative impact on our operations, business, financial results and financial condition. A limited number of vendors of key technologies can lead to less product innovation and higher costs. For these reasons, we generally endeavor to establish alternative vendors for materials we consider critical, but may not be able to establish these relationships or be able to obtain required materials on favorable terms.

In that regard, we currently purchase set-top boxes from a limited number of vendors, because each of our cable systems use one or two proprietary conditional access security schemes, which allows us to regulate subscriber access to some services, such as premium channels. We believe that the proprietary nature of these conditional access schemes makes other manufacturers reluctant to produce set-top boxes. Future innovation in set-top boxes may be restricted until these issues are resolved. In addition, we believe that the general lack of compatibility among set-top box operating systems has slowed the industry’s development and deployment of digital set-top box applications. In addition, in 2009, we plan to convert from two billing service providers to one. We will be dependent on these vendors for a properly executed conversion and for the ongoing timely and appropriate service from the single remaining vendor.

Malicious and abusive Internet practices could impair our high-speed Internet ~~services~~services.

Our high-speed Internet customers utilize our network to access the Internet and, as a consequence, we or they may become victim to common malicious and abusive Internet activities, such as peer-to-peer file sharing, unsolicited mass advertising (i.e., ~~"spam"~~“spam”) and dissemination of viruses, worms, and other destructive or disruptive software. These activities could have adverse consequences on our network and our customers, including degradation of service, excessive call volume to call centers, and damage to our or our ~~customers’~~customers' equipment and data. Significant incidents could lead to customer dissatisfaction and, ultimately, loss of customers or revenue, in addition to

increased costs ~~to us~~ to service our customers and protect our network. Any significant loss of high-speed Internet customers or revenue, or significant increase in costs of serving those customers, could adversely affect our growth, financial condition and results of operations.

For tax purposes, it is anticipated that Charter will experience a deemed ownership change upon emergence from Chapter 11 bankruptcy, resulting in a material limitation on Charter’s future ability to use a substantial amount of Charter’s existing net operating loss carryforwards.

As of December 31, 2008, Charter had approximately $8.7 billion of federal tax net operating losses, resulting in a gross deferred tax asset of approximately $3.1 billion, expiring in the years 2009 through 2028. In addition, Charter also has state tax net operating losses, resulting in a gross deferred tax asset (net of federal tax benefit) of approximately $325 million, generally expiring in years 2009 through 2028. Due to uncertainties in projected future taxable income and the bankruptcy filing, valuation allowances have been established against the gross deferred tax assets for book accounting purposes, except for deferred benefits available to offset certain deferred tax liabilities. Currently, such tax net operating losses can accumulate and be used to offset most of Charter’s future taxable income. However, an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended, would place significant annual limitations on the use of such net operating losses to offset future taxable income Charter may generate. Most notably, the bankruptcy filing will generate an ownership change upon emergence from Chapter 11 and Charter’s net operating loss carryforwards will be reduced by the amount of any cancellation of debt income resulting from the Proposed Restructuring that is allocable to Charter. A limitation on Charter’s ability to use its net operating losses, in conjunction with the net operating loss expiration provisions, could reduce its ability to use a significant portion of Charter’s net operating losses to offset any future taxable income which may result in Charter being required to make cash tax payments. Charter’s ability to make such income tax payments, if any, will depend at such time on its liquidity or its ability to raise additional capital, and/or on receipt of payments or distributions from Charter Holdco and its subsidiaries, including us. See Note 19 to the accompanying consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data.”

Risks Related to Mr. ~~Allen’s~~Allen's Controlling Position

The failure by ~~Mr.~~Paul G. Allen, our chairman and controlling stockholder, to maintain a minimum voting ~~and economic~~ interest in us could trigger a change of control default under our ~~subsidiary’s~~subsidiary's credit facilities.

The Charter Operating credit facilities provide that the failure by (a) Mr. Allen, (b) his estate, spouse, immediate family members and heirs and (c) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners or other owners of which consist exclusively of Mr. Allen or such other persons referred to in (b) above or a combination thereof to maintain a 35% direct or indirect voting interest in the applicable borrower would result in a change of control default. Such a default could result in the acceleration of repayment of our and our ~~parent companies’~~subsidiary's indebtedness, including borrowings under the Charter Operating credit facilities.

Mr. Allen controls us and may have interests that conflict with ~~your interests.~~the interests of the holders of our notes.

~~Mr. Allen has the ability to control us. Through his control as~~As of December 31, ~~2005 of~~2008, Mr. Allen owned approximately ~~90%~~91% of the voting power of the capital stock of our manager, Charter, ~~Mr. Allen is entitled~~entitling him to elect all but one of Charter’s board ~~members and effectively~~members. In addition, Mr. Allen has the voting power to elect the remaining board member as well. Mr. Allen thus has the ability to control fundamental corporate transactions requiring equity holder approval, including, but not limited to, the election of all of Charter’s directors, approval of merger transactions involving us and the sale of all or substantially all of our assets.

Mr. Allen is not restricted from investing in, and has invested in, and engaged in, other businesses involving or related to the operation of cable television systems, video programming, high-speed Internet service, telephone or business and financial transactions conducted through broadband interactivity and Internet services. Mr. Allen may also engage in other businesses that compete or may in the future compete with us.

Mr. ~~Allen’s~~Allen's control over our management and affairs could create conflicts of interest if he is faced with decisions that could have different implications for him, us and the holders of our notes. Further, Mr. Allen could effectively cause us to enter into contracts with another entity in which he owns an interest, or to decline a transaction into which he (or another entity in which he owns an interest) ultimately enters.

Current and future agreements between us and either Mr. Allen or his affiliates may not be the result of ~~arm’s-length~~arm's-length negotiations. Consequently, such agreements may be less favorable to us than agreements that we could otherwise have entered into with unaffiliated third parties.

We are not permitted to engage in any business activity other than the cable transmission of video, audio and data unless Mr. Allen authorizes us to pursue that particular business activity, which could adversely affect our ability to offer new products and services outside of the cable transmission business and to enter into new businesses, and could adversely affect our growth, financial condition and results of operations.

~~Table of Contents~~

Charter’s certificate of incorporation and Charter ~~Holdco’s~~Holdco's limited liability company agreement provide that Charter, ~~and~~ Charter Holdco and their subsidiaries, including us, ~~and our subsidiaries,~~ cannot engage in any business activity outside the cable transmission business except for specified businesses. This will be the case unless Mr. Allen consents to our engaging in the business activity. The cable transmission business means the business of transmitting video, audio (including telephone services), and data over cable television systems owned, operated, or managed by us from time to time. These provisions may limit our ability to take advantage of attractive business opportunities.

The loss of Mr. ~~Allen’s~~Allen's services could adversely affect our ability to manage our business.

Mr. Allen is Chairman of Charter’s board of directors and provides strategic guidance and other services to Charter. If Charter were to lose his services, our growth, financial condition, and results of operations could be adversely impacted.

The special tax allocation provisions of the Charter Holdco limited liability company agreement may cause Charter in some circumstances to pay more taxes than if the special tax allocation provisions were not in effect.

Charter Holdco's limited liability company agreement provided that through the end of 2003, net tax losses (such net tax losses being determined under the federal income tax rules for determining capital accounts) of Charter Holdco that would otherwise have been allocated to Charter based generally on Charter’s percentage ownership of outstanding common membership units of Charter Holdco, would instead be allocated to the membership units held by Vulcan Cable and CII. The purpose of these special tax allocation provisions was to allow Mr. Allen to take advantage, for tax purposes, of the losses generated by Charter Holdco during such period. In some situations, these special tax allocation provisions could result in Charter having to pay taxes in an amount that is more or less than if Charter Holdco had allocated net tax losses to its members based generally on the percentage of outstanding common membership units owned by such members.

Risks Related to Regulatory and Legislative Matters

Our business is subject to extensive governmental legislation and regulation, which could adversely affect our business.

Regulation of the cable industry has increased cable ~~operators’~~operators' operational and administrative ~~and operational~~ expenses and limited their revenues. Cable operators are subject to, among other things:

rules governing the provision of cable equipment and compatibility with new digital technologies;

rules and regulations relating to subscriber and employee privacy;

limited rate regulation;

·	rules governing the copyright royalties that must be paid for retransmitting broadcast signals;

requirements governing when a cable system must carry a particular broadcast station and when it must first obtain consent to carry a broadcast station;

·	requirements governing the provision of channel capacity to unaffiliated commercial leased access programmers;

·	rules limiting our ability to enter into exclusive agreements with multiple dwelling unit complexes and control our inside wiring;

·	rules, regulations, and regulatory policies relating to provision of voice communications and high-speed Internet service;

·	rules for franchise renewals and transfers; and

other requirements covering a variety of operational areas such as equal employment opportunity, technical standards, and customer service requirements.

Additionally, many aspects of these regulations are currently the subject of judicial proceedings and administrative or legislative proposals. There are also ongoing efforts to amend or expand the federal, state, and local regulation of some of our cable systems, which may compound the regulatory risks we already ~~face.~~face, and proposals that might make it easier for our employees to unionize. Certain states and localities are considering new cable and telecommunications taxes that could increase operating expenses.

Our cable ~~systems are operated under~~system franchises ~~that~~ are subject to non-renewal or termination. The failure to renew a franchise in one or more key markets could adversely affect our business.

Our cable systems generally operate pursuant to franchises, permits, and similar authorizations issued by a state or local governmental authority controlling the public rights-of-way. Many franchises establish comprehensive facilities and service requirements, as well as specific customer service standards and monetary penalties for non-compliance. In many cases, franchises are terminable if the franchisee fails to comply with significant provisions set forth in the franchise agreement governing system operations. Franchises are generally granted for fixed terms and must be periodically renewed. ~~Local franchising~~Franchising authorities may resist granting a renewal if either past performance or the prospective operating proposal is considered inadequate. Franchise authorities often demand concessions or other commitments as a condition to renewal. In some instances, local franchises have not been renewed at expiration, and we have operated and are operating under either temporary operating agreements or without a ~~license~~franchise while negotiating renewal terms with the local franchising authorities. Approximately ~~11%~~10% of our franchises, covering approximately ~~13%~~11% of our ~~analog~~ video customers, were expired as of December 31, ~~2005.~~2008. On January 1, 2009, a number of these expired franchises converted to statewide authorization and were no longer considered expired. Approximately 7%4% of additional franchises, covering approximately an additional 9%4% of our ~~analog~~ video customers, will expire on or before December 31, ~~2006,~~2009, if not renewed prior to expiration.

11The traditional cable franchising regime is currently undergoing significant change as a result of various federal and state actions. Some of the new state franchising laws do not allow us to immediately opt into statewide franchising until (i) we have completed the term of the local franchise, in good standing, (ii) a competitor has entered the market, or (iii) in limited instances, where the local franchise allows the state franchise license to apply. In many cases, state franchising laws, and their varying application to us and new video providers, will result in less franchise imposed requirements for our competitors who are new entrants than for us until we are able to opt into the applicable state franchise.

~~Table of Contents~~

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

Our cable ~~systems are operated under~~system franchises ~~that~~ are non-exclusive. Accordingly, local and state franchising authorities can grant additional franchises and create competition in market areas where none existed previously, resulting in overbuilds, which could adversely affect results of operations.

Our cable ~~systems~~system franchises are ~~operated under non-exclusive franchises granted by~~non-exclusive. Consequently, local ~~franchising authorities. Consequently, local~~and state franchising authorities can grant additional franchises to competitors in the same geographic area or operate their own cable systems. In some cases, local government entities and municipal utilities may legally compete with us without obtaining a franchise from the local franchising authority. In addition, certain telephone companies are seeking authority to operate in ~~local~~ communities without first obtaining a local franchise. As a result, competing operators may build systems in areas in which we hold franchises.

In ~~some cases municipal utilities may legally compete~~a series of recent rulemakings, the FCC adopted new rules that streamline entry for new competitors (particularly those affiliated with ~~us without obtaining~~telephone companies) and reduce franchising burdens for these new entrants. At the same time, a ~~franchise from the local~~substantial number of states recently have adopted new franchising ~~authority.~~

~~Different legislative proposals~~laws. Again, these new laws were principally designed to streamline entry for new competitors, and they often provide advantages for these new entrants that are not immediately available to existing operators. As a result of these new franchising laws and regulations, we have ~~been introduced~~seen an increase in the United States Congress and in some state legislatures that would greatly streamline cable franchising. This legislation is intended to facilitate entry by new competitors, particularly local telephone companies. Such legislation has passed in at least three states in which we have operations and one of these newly enacted statutes is subject to court challenge. Although various legislative proposals provide some regulatory relief for incumbent cable operators, these proposals are generally viewed as being more favorable to new entrants due to a number of varying factors including efforts to withhold streamlined cable franchising from incumbents until after the expiration of their existing franchises. To the extent incumbent cable operators are not able to avail themselves of this streamlined franchising process, such operators may continue to be subject to more onerous franchise requirements at the local level than new entrants. The FCC recently initiated a proceeding to determine whether local franchising authorities are impeding the deployment of competitive cable ~~services through unreasonable franchising requirements~~franchises or operating certificates being issued, and ~~whether such impediments should be preempted. At this time,~~ we ~~are not able~~anticipate that trend to ~~determine what impact such proceeding may have on us.~~

The existence of more than one cable system operating in the same territory is referred to as an overbuild. These overbuilds could adversely affect our growth, financial condition and results of operations by creating or increasing competition. As of December 31, 2005, we are aware of overbuild situations impacting approximately 6% of our estimated homes passed, and potential overbuild situations in areas servicing approximately an additional 4% of our estimated homes passed. Additional overbuild situations may occur in other systems.

continue.

Local franchise authorities have the ability to impose additional regulatory constraints on our business, which could further increase our expenses.

In addition to the franchise agreement, cable authorities in some jurisdictions have adopted cable regulatory ordinances that further regulate the operation of cable systems. This additional regulation increases the cost of operating our business. We cannot assure you that the local franchising authorities will not impose new and more restrictive requirements. Local franchising authorities ~~also~~who are certified to regulate rates in the communities where they operate generally have the power to reduce rates and order refunds on the rates charged for basic ~~services.~~

service and equipment.

Further regulation of the cable industry could cause us to delay or cancel service or programming enhancements, or impair our ability to raise rates to cover our increasing costs, resulting in increased losses.

Currently, rate regulation is strictly limited to the basic service tier and associated equipment and installation activities. However, the FCC and ~~the U.S.~~ Congress continue to be concerned that cable rate increases are exceeding inflation. It is possible that either the FCC or ~~the U.S.~~ Congress will ~~again~~further restrict the ability of cable system operators to implement rate increases. Should this occur, it would impede our ability to raise our rates. If we are unable to raise our rates in response to increasing costs, our losses would increase.

There has been ~~considerable~~ legislative and regulatory interest in requiring cable operators to offer historically bundled programming services on an á la carte basis, or to at least offer a separately available child-friendly ~~"Family Tier."~~“family tier.” It is possible that new marketing restrictions could be adopted in the future. Such restrictions could adversely affect our operations.

~~Table of Contents~~

Actions by pole owners might subject us to significantly increased pole attachment costs.

Pole attachments are cable wires that are attached to utility poles. Cable system attachments to public utility poles historically have been regulated at the federal or state level, generally resulting in favorable pole attachment rates for attachments used to provide cable service. The FCC ~~clarified~~previously determined that the lower cable rate was applicable to the mixed use of a ~~cable operator’s favorable~~ pole ~~rates are not endangered by~~attachment for the provision of both cable and Internet access ~~and~~services. However, in late 2007, the FCC issued a Notice of Proposed Rulemaking in which it “tentatively concludes” that this approach ~~ultimately was upheld by~~should be modified. The change could affect the Supreme Court of the United States. Despite the existing regulatory regime, utility pole owners in many areas are attempting to raise pole attachment fees and impose additional costs on cable operators and others. In addition, the favorable pole attachment rates ~~afforded cable operators under federal law can be increased by utility companies if~~we pay when we offer either data or voice services over our broadband facility. Any changes in the ~~operator provides telecommunications services, as well as cable service, over cable wires attached to utility poles. Any significant increased costs~~FCC approach could ~~have~~result in a ~~material adverse impact on~~substantial increase in our ~~profitability and discourage system upgrades and the introduction~~pole attachment costs.

Increasing regulation of ~~new products and services.~~

~~We may be required to provide access to~~ our ~~networks to other~~ Internet service ~~providers, which could significantly increase our competition and~~product adversely affect our ability to provide new products and services.

~~A number of companies, including independent~~There has been continued advocacy by certain Internet ~~service~~content providers and consumer groups for new federal laws or ~~ISPs, have requested local authorities and the FCC~~regulations to require cable operators to provide non-discriminatory access to cable’s broadband infrastructure, so that these companies may deliver Internet services directly to customers over cable facilities. In a June 2005 ruling, commonly referred to as ~~Brand X~~, the Supreme Court upheld an FCC decision (and overruled a conflicting Ninth Circuit opinion) making it much less likely that any nondiscriminatory "open access" requirements (which are generally associated with common carrier regulation of "telecommunications services") will be imposed on the cable industry by local, state or federal authorities. The Supreme Court held that the FCC was correct in classifying cable provided Internet service as an "information service," rather than a "telecommunications service." This favorable regulatory classification limitsadopt so-called “net neutrality” principles limiting the ability of ~~various governmental authorities~~broadband network owners (like us) to ~~impose open~~manage and control their own networks. In August 2005, the FCC issued a nonbinding policy statement identifying four principles to guide its policymaking regarding high-speed Internet and related services. These principles provide that consumers are entitled to: (i) access ~~requirements on cable-provided~~lawful Internet ~~service. Given how recently~~ ~~Brand X~~ ~~was decided, however,~~content of their choice; (ii) run applications and services of their choice, subject to the ~~nature~~needs of ~~any legislative or regulatory response remains uncertain. The imposition~~law enforcement; (iii) connect their choice of ~~open access requirements could materially affect our business.~~

~~If we were required to allocate a portion of our bandwidth capacity to other Internet~~legal devices that do not harm the network; and (iv) enjoy competition among network providers, application and service providers, ~~we believe~~and content providers. In August 2008, the FCC issued an order concerning one Internet network management practice in use by another cable operator, effectively treating the four principles as rules and ordering a change in network management practices. Although that ~~it would impair~~decision is on appeal, additional proposals for new legislation, and for more expansive conditions associated with the broadband provisions of the new American Recovery and Reinvestment Act, could impose additional obligations on high-speed Internet providers. Any such rules or statutes could limit our ability to manage our cable systems (including use for other services), obtain value for use of our ~~bandwidth in ways that would generate maximum revenues.~~cable systems and respond to competitive competitions.

Changes in channel carriage regulations could impose significant additional costs on us.

Cable operators also face significant regulation of their channel carriage. ~~They currently~~We can be required to devote substantial capacity to the carriage of programming that ~~they would~~we might not carry voluntarily, including certain local broadcast ~~signals,~~signals; local public, educational and government access ~~programming,~~(“PEG”) programming; and unaffiliated, commercial leased access ~~programming. This~~programming (required channel capacity for use by persons unaffiliated with the cable operator who desire to distribute programming over a cable system). The FCC adopted a transition plan in 2007 addressing the

cable industry’s broadcast carriage ~~burden could increase~~obligations once the broadcast industry migration from analog to digital transmission is completed, which is expected to occur in June 2009. Under the ~~future, particularly if~~FCC’s transition plan, most cable systems ~~were~~will be required to ~~carry~~offer both ~~the~~an analog and digital ~~versions~~version of local broadcast signals ~~(dual carriage) or~~for three years after the digital transition date. This burden could increase further if we are required to carry multiple ~~program~~programming streams included ~~with~~within a single digital broadcast transmission (multicast carriage)~~. Additional government-mandated~~ or if our broadcast carriage obligations are otherwise expanded. The FCC also adopted new commercial leased access rules which dramatically reduce the rate we can charge for leasing this capacity and dramatically increase our associated administrative burdens. These regulatory changes could disrupt existing programming commitments, interfere with our preferred use of limited channel capacity, and limit our ability to offer services that would maximize ~~customer appeal and~~our revenue potential. ~~Although the FCC issued a decision in February 2005, confirming an earlier ruling against mandating either dual carriage or multicast carriage,~~It is possible that ~~decision has been appealed. In addition, the FCC could reverse its own ruling or Congress could legislate additional carriage obligations.~~other legal restraints will be adopted limiting our discretion over programming decisions.

Offering voice communications service may subject us to additional regulatory burdens, causing us to incur additional costs.

~~In 2002, we began to~~We offer voice communications services ~~on a limited basis~~ over our broadband ~~network. We~~network and continue to ~~explore development~~develop and ~~deployment of Voice over Internet Protocol or~~deploy VoIP services. The ~~regulatory requirements applicable to VoIP service are unclear although the~~ FCC has declared that certain VoIP services are not subject to traditional state public utility regulation. The full extent of the FCC preemption of state and local regulation of VoIP services is not yet clear. Expanding our offering of these services may require us to obtain certain authorizations, including federal ~~state~~ and ~~local~~state licenses. We may not be able to obtain such authorizations in a timely manner, or conditions could be imposed upon such licenses or authorizations that may not be favorable to us. ~~Furthermore,~~The FCC has extended certain traditional telecommunications requirements, such as E911, Universal Service fund collection, CALEA, Customer Proprietary Network Information and telephone relay requirements to many VoIP providers such as us. Telecommunications companies generally are subject to other significant regulation including payments to the Federal Universal Service Fund and the intercarrier compensation regime. In addition, pole attachment rates are higher for providers of telecommunications services than for providers of cable service. If there were to be a final legal

~~Table of Contents~~

~~determination by the FCC, a state Public Utility Commission, or appropriate court that VoIP services are subject to these higher rates, our pole attachment costs could increase significantly,~~ which could ~~adversely affect~~also be extended to VoIP providers. If additional telecommunications regulations are applied to our ~~financial condition and results of operations.~~

VoIP service, it could cause us to incur additional costs.

Item 1B.Unresolved Staff Comments.

None.

Item 2. Properties.

Our principal physical assets consist of cable distribution plant and equipment, including signal receiving, encoding and decoding devices, headend reception facilities, distribution systems, and customer ~~drop~~premise equipment for each of our cable systems.

Our cable plant and related equipment are generally attached to utility poles under pole rental agreements with local public utilities and telephone companies, and in certain locations are buried in underground ducts or trenches. We own or lease real property for signal reception sites, and own most of our service vehicles.

Historically, our subsidiaries have owned the real property and buildings for our data centers, customer contact centers and our divisional administrative offices. Since early 2003 we have reduced our total real estate portfolio square footage by approximately 17% and have decreased our operating annual lease costs by approximately 30%. In addition, Charter has sold $15 million worth of surplus land and buildings. We plan to continue to reduce costs and excess capacity in this area through consolidation of sites within our system footprints. Our subsidiaries generally ~~have leased~~lease space for business offices throughout our operating divisions. Our headend and tower locations are located on owned or leased parcels of land, and we generally own the towers on which our equipment is located. Charter Holdco owns the ~~real property~~land and building for our principal executive ~~offices.~~office.

The physical components of our cable systems require maintenance as well as periodic upgrades to support the new services and products we introduce. We believe that our properties are generally in good operating condition and are suitable for our business operations.

Item 3. Legal Proceedings.

In re Charter Communications, Inc: JPMorgan Chase Bank, N.A. v. Charter Communications Operating, LLC and CCO Holdings, LLC. On March 27, 2009, Charter, Charter Holdings, and all other Charter entities filed a petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. See "Part I. Item 1. Business – Recent Developments – Restructuring." Later on March 27, 2009, JPMorgan Chase Bank, N. A., as Administrative Agent under the Credit Agreement, filed an adversary proceeding in bankruptcy court against Charter Operating and CCO Holdings seeking a declaration that there have been events of default under the Credit Agreement. Such a judgment would prevent Charter Operating and CCO Holdings from reinstating the terms and provisions of the Credit Agreement through the bankruptcy proceeding. Although it has not yet answered the complaint, Charter denies the allegations made by JP Morgan and intends to vigorously contest this matter.

Patent Litigation

Ronald A. Katz Technology Licensing, L.P. v. Charter Communications, Inc. et. al. On September 5, 2006, Ronald A. Katz Technology Licensing, L.P. served a lawsuit on Charter and a group of other companies in the U. S. District Court for the District of Delaware alleging that Charter and the other defendants have infringed its interactive telephone patents. Charter denied the allegations raised in the complaint. On March 20, 2007, the Judicial Panel on Multi-District Litigation transferred this case, along with 24 others, to the U.S. District Court for the Central District of California for coordinated and consolidated pretrial proceedings. Charter is vigorously contesting this matter.

Rembrandt Patent Litigation. On June 1, 2006, Rembrandt Technologies, LP sued Charter and several other cable companies in the U.S. District Court for the Eastern District of Texas, alleging that each defendant's high-speed data service infringes three patents owned by Rembrandt and that Charter's receipt and retransmission of ATSC digital terrestrial broadcast signals infringes a fourth patent owned by Rembrandt (Rembrandt I). On November 30, 2006, Rembrandt Technologies, LP again filed suit against Charter and another cable company in the U.S. District Court for the Eastern District of Texas, alleging patent infringement of an additional five patents allegedly related to high-speed Internet over cable (Rembrandt II). Charter has denied all of Rembrandt’s allegations. On June 18, 2007, the Rembrandt I and Rembrandt II cases were combined in a multi-district litigation proceeding in the U.S. District Court for the District of Delaware. On November 21, 2007, certain vendors of the equipment that is the subject ofRembrandt I and Rembrandt II cases filed an action against Rembrandt in U.S. District Court for the district of Delaware seeking a declaration of non-infringement and invalidity on all but one of the patents at issue in those cases. On January 16, 2008 Rembrandt filed an answer in that case and a third party counterclaim against Charter and the other MSOs for infringement of all but one of the patents already at issue in Rembrandt I and Rembrandt II cases. On February 7, 2008, Charter filed an answer to Rembrandt’s counterclaims and added a counter-counterclaim against Rembrandt for a declaration of non-infringement on the remaining patent. Charter is vigorously contesting the Rembrandt I and Rembrandt II cases.

Verizon Patent Litigation. On February 5, 2008, four Verizon entities sued Charter and two other Charter subsidiaries in the U.S. District Court for the Eastern District of Texas, alleging that the provision of telephone service by Charter infringes eight patents owned by the Verizon entities (Verizon I). A trial is scheduled for February 2010. On December 31, 2008, forty-four Charter entities filed a complaint in the U.S. District Court for the Eastern District of Virginia alleging that Verizon and two of its subsidiaries infringe four patents related to television transmission technology (Verizon II). On February 6, 2009, Verizon responded to the complaint by denying Charter’s allegations, asserting counterclaims for non-infringement and invalidity of Charter’s patents and asserting counterclaims against Charter for infringement of eight patents. On January 15, 2009, Charter filed a complaint in the U.S. District Court for the Southern District of New York seeking a declaration of non-infringement on two patents owned by Verizon (Verizon III). Charter is vigorously contesting the allegations made against it in Verizon I and Verizon II, and is forcefully prosecuting its claims in Verizon II and Verizon III.

We and our parent companies are also defendants or co-defendants in several other unrelated lawsuits claiming infringement of various patents relating to various aspects of our businesses. Other industry participants are also defendants in certain of these cases, and, in many cases including those described above, we expect that any potential liability would be the responsibility of our equipment vendors pursuant to applicable contractual indemnification provisions.

In the event that a court ultimately determines that we infringe on any intellectual property rights, we may be subject to substantial damages and/or an injunction that could require us or our vendors to modify certain products and services we offer to our subscribers, as well as negotiate royalty or license agreements with respect to the patents at issue. While we believe the lawsuits are without merit and intend to defend the actions vigorously, all of these patent lawsuits could be material to our consolidated results of operations of any one period, and no assurance can be given that any adverse outcome would not be material to our consolidated financial condition, results of operations, or liquidity.

Employment Litigation

Sjoblom v. Charter Communications, LLC and Charter Communications, Inc. On August 15, 2007, a class action complaint was filed against Charter in the United States District Court for the Western District of Wisconsin, on behalf of both nationwide and state of Wisconsin classes of certain categories of current and former Charter technicians, alleging that Charter violated the Fair Labor Standards Act and Wisconsin wage and hour laws by failing to pay technicians for certain hours claimed to have been worked. While we believe we have substantial

factual and legal defenses to the claims at issue, in order to avoid the cost and distraction of continuing to litigate the case, we reached a settlement with the plaintiffs, which received final approval from the court on January 26, 2009. We have been subjected, in the normal course of business, to the assertion of other similar claims and could be subjected to additional such claims. We cannot predict the ultimate outcome of any such claims.

Other Proceedings

We and our parent companies also are party to other lawsuits and claims that ~~have arisen~~arise in the ordinary course of conducting ~~its~~our business. ~~In the opinion of management, after taking into account recorded liabilities, the~~The ultimate outcome of these other legal matters pending against us or our parent companies cannot be predicted, and although such lawsuits and claims are not expected individually to have a material adverse effect on our consolidated financial condition, results of operations, or liquidity, such lawsuits could have in the aggregate a material adverse effect on our consolidated financial condition, results of operations, or liquidity. Whether or not we ultimately prevail in any particular lawsuit or claim, litigation can be time consuming and costly and injure our reputation.

1422

~~Table of Contents~~PART II

~~PART II~~

Item 5. Market for Registrant’s Common Equity, ~~and~~ Related Stockholder ~~Matters.~~Matters and Issuer Purchases of Equity Securities.

(A)

Market Information

Our membership interests are not publicly traded.

(B)

Holders

All of the membership interests of CCO Holdings are owned by CCH II and indirectly by Charter Holdings. All of the outstanding capital stock of CCO Holdings Capital Corp. is owned by CCO ~~Holdings.~~Holdings, an indirect subsidiary of Charter.

(C)

Dividends

~~None.~~

None.

(D) ~~Recent Sales~~Securities Authorized for Issuance Under Equity Compensation Plans

The following information is provided as of ~~Unregistered Securities~~December 31, 2008 with respect to equity compensation plans of Charter:

~~During 2005, there were no unregistered sales~~

	Number of Securities				Number of Securities
	to be Issued Upon		Weighted Average		Remaining Available
	Exercise of Outstanding		Exercise Price of		for Future Issuance
	Options, Warrants		Outstanding Options,		Under Equity
Plan Category	and Rights		Warrants and Rights		Compensation Plans

Equity compensation plans approved by security holders	22,043,636	(1)	$	3.82	8,786,240
Equity compensation plans not approved by security holders	289,268	(2)	$	3.91	--

TOTAL	22,332,904		$	3.82	8,786,240

(1)

This total does not include 12,008,625 shares issued pursuant to restricted stock grants made under Charter’s 2001 Stock Incentive Plan, which were or are subject to vesting based on continued employment, or 33,036,871 performance shares issued under Charter’s LTIP plan, which are subject to vesting based on continued employment and Charter’s achievement of certain performance criteria.

(2)	Includes shares of Charter’s Class A common stock to be issued upon exercise of options granted pursuant to an individual compensation agreement with a consultant.

For information regarding securities ~~of CCO Holdings or CCO Holdings Capital Corp. other than those previously reported on a Form 10-Q or Form 8-K.~~issued under Charter’s equity compensation plans, see Note 18 to our accompanying consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data.”

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Reference is made to ~~"Item~~“Part I. Item 1. Business – Recent Developments” which describes the Proposed Restructuring and “Part I. Item 1A. Risk ~~Factors"~~Factors” especially the risk factors “—Risks Relating to Bankruptcy” and ~~"Cautionary~~“Cautionary Statement Regarding Forward-Looking Statements,"” which ~~describes~~describe important factors that could cause actual results to differ from expectations and non-historical information contained herein. In addition, the following discussion should be read in conjunction with the audited consolidated financial statements of CCO Holdings and subsidiaries as of and for the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003.~~2006.

~~Introduction~~Overview

~~We and our parent companies continue to pursue opportunities to improve our and our parent companies’ liquidity. Our and our parent companies’ efforts in this regard have resulted~~CCO Holdings is a broadband communications company operating in the ~~completion~~United States with approximately 5.5 million customers at December 31, 2008. CCO Holdings Capital Corp. is a wholly-owned subsidiary of CCO Holdings and was formed and exists solely as a ~~number~~co-issuer of ~~financing transactions in 2005~~the public debt issued with CCO Holdings. CCO Holdings is a direct subsidiary of CCH II, which is an indirect subsidiary of Charter Holdings. Charter Holdings is an indirect subsidiary of Charter. We offer our customers traditional cable video programming (basic and ~~2006,~~digital, which we refer to as ~~follows:~~

~~the January 2006 sale by our parent companies, CCH II and CCH II Capital Corp.~~"video" service), ~~of an additional $450 million principal amount of their 10.250% senior notes due 2010;~~

~~the October 2005 entry by us into a $600 million senior bridge loan agreement with various lenders (which was reduced to $435 million as a result of the issuance of the CCH II notes);~~

the September 2005 exchange by our direct and indirect parent companies, Charter Holdings, CCH I and CIH, of approximately $6.8 billion in total principal amount of outstanding debt securities of Charter Holdings in a private placement for new debt securities;

~~the August 2005 sale of $300 million of our 8 3/4% senior notes due 2013;~~

~~the March and June 2005 issuance of $333 million of Charter Operating notes in exchange for $346 million of Charter Holdings notes;~~

~~the repurchase during 2005 of $136 million of Charter’s 4.75% convertible senior notes due 2006 leaving $20 million in principal amount outstanding; and~~

~~the March 2005 redemption of all of CC V Holdings, LLC’s outstanding 11.875% senior discount notes due 2008 at a total cost of $122 million.~~

During the years 1999 through 2001, we grew significantly, principally through acquisitions of other cable businesses financed by debt and, to a lesser extent, equity. We have no current plans to pursue any significant acquisitions. However, we may pursue exchanges of non-strategic assets or divestitures, such as the sale of cable systems to Atlantic Broadband Finance, LLC. We therefore do not believe that our historical growth rates are accurate indicators of future growth.

The industry's and our most significant operational challenges include competition from DBS providers and DSL service providers. We believe that competition from DBS has resulted in net analog video customer losses and

~~Table of Contents~~

decreased growth rates for digital video customers. Competition from DSL providers combined with limited opportunities to expand our customer base now that approximately 33% of our analog video customers subscribe to our high-speed Internet access, and telephone services, ~~has resulted in decreased growth rates for high-speed Internet customers. In the recent past, we have grown revenues by offsetting video customer losses with price increases and sales of incremental~~as well as advanced broadband services ~~such~~(such as high-speed Internet, video on demand, digital video recorders and high definition television. We expect to continue to grow revenues through price increases and through continued growth in high-speed Internet and incremental new services including telephone,OnDemand, high definition television ~~VOD~~service and ~~DVR service.~~

Historically, our ability to fund operations and investing activities has depended on our continued access to credit under our credit facilities. We expect we will continue to borrow under our credit facilities from time to time to fund cash needs. The occurrence of an event of default under our credit facilities could result in borrowings from these facilities being unavailable to us and could, in the event of a payment default or acceleration, trigger events of default under our and our parent companies’ outstanding notes and would have a material adverse effect on us. Approximately $30 million of indebtedness under our credit facilities is scheduled to mature during 2006. We expect to fund payment of such indebtedness through borrowings under our revolving credit facilities.

DVR).

~~Overview of Operations~~

Approximately 86% of our revenues for each of the years ended December 31, ~~2005~~2008 and ~~2004, respectively,~~2007 are attributable to monthly subscription fees charged to customers for our video, high-speed Internet, telephone, and commercial services provided by our cable systems. Generally, these customer subscriptions may be discontinued by the customer at any time. The remaining 14% of revenue for fiscal years 2008 and 2007 is derived primarily from advertising revenues, franchise fee revenues ~~which~~(which are collected by us but then paid to local franchising ~~authorities,~~authorities), pay-per-view and ~~VOD~~OnDemand programming ~~where~~(where users are charged a fee for individual programs ~~viewed,~~viewed), installation or reconnection fees charged to customers to commence or reinstate service, and commissions related to the sale of merchandise by home shopping services.

The cable industry's and our most significant competitive challenges stem from DBS providers and DSL service providers. Telephone companies either offer, or are making upgrades of their networks that will allow them to offer, services that provide features and functions similar to our video, high-speed Internet, and telephone services, and they also offer them in bundles similar to ours. We ~~have increased revenues during the past three years, primarily through the sale~~believe that competition from DBS and telephone companies has resulted in net video customer losses. In addition, we face increasingly limited opportunities to upgrade our video customer base now that approximately 62% of our video customers subscribe to our digital video ~~and~~service. These factors have contributed to decreased growth rates for digital video customers. Similarly, competition from high-speed Internet ~~services to new and existing customers and price increases on video services offset~~providers along with increasing penetration of high-speed Internet service in ~~part by dispositions of systems. Going forward, our goal is to increase~~homes with computers has resulted in decreased growth rates for high-speed Internet customers. In the recent past, we have grown revenues by offsetting video customer losses with price increases and sales of incremental ~~advanced~~ services such as ~~telephone,~~ high-speed Internet, ~~video on demand, digital video recorders and~~OnDemand, DVR, high definition ~~television.~~

~~Our success in our efforts~~television, and telephone. We expect to continue to grow revenues through price increases and ~~improve margins~~high-speed Internet upgrades, increases in the number of our customers who purchase bundled services including high-speed Internet and telephone, and through sales of incremental services including wireless networking, high definition television, OnDemand, and DVR services. In addition, we expect to increase revenues by expanding the sales of our services to our commercial customers. However, we cannot assure you that we will be ~~impacted~~able to grow revenues at historical rates, if at all. Dramatic declines in the housing market over the past year, including falling home prices and increasing foreclosures, together with significant increases in unemployment, have severely affected consumer confidence and may cause increased delinquencies or cancellations by our ~~ability~~customers or lead to ~~compete against~~unfavorable changes in the mix of products purchased. The general economic downturn also may affect advertising sales, as companies ~~with easier access~~seek to ~~financing, greater personnel resources, greater brand name recognition, long-established relationships with regulatory authorities~~reduce expenditures and ~~customers,~~conserve cash. Any of these events may adversely affect our cash flow, results of operations and ~~often fewer regulatory burdens. Additionally, controlling our~~financial condition.

Our expenses primarily consist of operating costs, selling, general and administrative expenses, depreciation and amortization expense, impairment of franchise intangibles and interest expense. Operating costs primarily include programming costs, the cost of ~~operations is critical, particularly~~our workforce, cable ~~programming~~service related expenses, advertising sales costs ~~which have historically increased at rates in excess of inflation~~ and ~~are expected to continue to increase.~~franchise fees. Selling, general and administrative expenses primarily include salaries and benefits, rent expense, billing costs, call center costs, internal network costs, bad debt expense, and property taxes. We ~~are attempting to~~ control our costs of operations by maintaining strict controls on expenses. More specifically, we are focused on managing our cost structure by ~~managing our~~improving workforce ~~to control cost increases and improve~~ productivity, and leveraging our ~~size in~~scale, and increasing the effectiveness of our purchasing activities.

Our expenses primarily consist of operating costs, selling, general and administrative expenses, depreciation and amortization expense and interest expense. Operating costs primarily include programming costs,

For the ~~cost of our workforce, cable service related expenses, advertising sales costs, franchise fees and expenses related to customer billings. Our loss from operations decreased from $2.0 billion for~~ year ended December 31, ~~2004 to~~2008, our operating loss from continuing operations was $614 million and for the years ended December 31, 2007 and 2006, income from continuing operations was $548 million and $367 million, respectively. We had a negative operating margin (defined as operating loss from continuing operations divided by revenues) of ~~$343 million~~9% for the year ended December 31, ~~2005. We had a~~2008 and positive operating ~~margin~~margins (defined as operating income ~~(loss)~~ from continuing operations divided by revenues) of 7%9% and ~~a negative operating margin of 41%~~7% for the years ended December 31, ~~2005~~2007 and ~~2004,~~2006, respectively. ~~The improvement~~For the year ended December 31, 2008, the operating loss from ~~a loss from~~continuing operations and negative operating margin is principally due to impairment of franchises incurred during the fourth quarter. The improvement in operating income from continuing operations in 2007 as compared to 2006 and positive operating margin for the ~~year end~~years ended December 31, ~~2005~~2007 and 2006 is principally due to ~~the impairment~~increased sales of ~~franchises of $2.4 billion recorded in the third quarter of 2004 which did not recur in 2005. For the year ended December 31, 2003, income from operations was $516 million~~our bundled services and for the year ended December 31, 2004, our loss from operations was $2.0 billion. We had a negative operating margin of 41% for the year ended December 31, 2004, whereas for the year ending December 31, 2003, we had positive operating margin of 11%. The decline in income from operations and operating margin for the year end December 31, 2004 is principally due to the impairment of franchises of $2.4 billion recorded in the third quarter of 2004. The year ended December 31, 2004 also includes a gain on the sale of certain cable systems to Atlantic Broadband Finance, LLC which is substantially offset by an increase in option compensation expense and special charges when compared to the year ended December 31, 2003. Although we do not expect charges for impairment in the future of comparable magnitude, potential charges could occur due to changes in market conditions.

improved cost efficiencies.

~~Table of Contents~~

We have a history of net losses. ~~Further, we expect to continue to report net losses for the foreseeable future.~~ Our net losses are principally attributable to insufficient revenue to cover the combination of operating ~~costs~~expenses and interest ~~costs~~expenses we incur onbecause of our debt, ~~the~~ depreciation expenses ~~that we incur~~ resulting from the capital investments we have made and continue to make in our cable properties, and the ~~amortization and~~ impairment of our franchise intangibles.

Beginning in 2004 and continuing through 2008, we sold several cable systems to divest geographically non-strategic assets and allow for more efficient operations, while also reducing debt and increasing our liquidity. In 2006, 2007, and 2008, we closed the sale of certain cable systems representing a total of approximately 390,300, 85,100, and 14,100 video customers, respectively. As a result of these sales we have improved our geographic footprint by reducing our number of headends, increasing the number of customers per headend, and reducing the number of states in which the majority of our customers reside. We ~~expect~~also made certain geographically strategic acquisitions in 2006 and 2007, adding 17,600 and 25,500 video customers, respectively.

In 2006, we determined that ~~these expenses (other than impairment~~the West Virginia and Virginia cable systems, which were part of ~~franchises) will remain significant,~~the system sales disclosed above, comprised operations and ~~we therefore expect to continue to report net losses~~cash flows that for financial reporting purposes met the criteria for discontinued operations. Accordingly, the results of operations for the ~~foreseeable future.~~West Virginia and Virginia cable systems (including a gain on sale of approximately $200 million recorded in the third quarter of 2006), have been presented as discontinued operations, net of tax, for the year ended December 31, 2006.

Results of Operations

The following table sets forth the percentages of revenues that items in the accompanying consolidated statements of operations ~~constitute~~constituted for the ~~indicated~~ periods presented (dollars in millions):

Year Ended December 31,

2005

2004

Revenues $ 5,254 100 % $ 4,977 100 %

Costs and Expenses:
Operating (excluding depreciation and amortization) 2,293 44 % 2,080 42 %
Selling, general and administrative 1,034 20 % 971 19 %
Depreciation and amortization 1,499 28 % 1,495 30 %
Impairment of franchises -- -- 2,433 49 %
Asset impairment charges 39 1 % -- --
(Gain) loss on sale of assets, net 6 -- (86 ) (2 )%
Option compensation expense, net 14 -- 31 1 %
Hurricane asset retirement loss 19 -- -- --
Special charges, net 7 -- 104 2 %
Unfavorable contracts and other settlements -- -- (5 ) --

4,911 93 % 7,023 141 %

Income (loss) from operations 343 7 % (2,046 ) (41 )%

Interest expense, net (691 ) (560 )
Gain on derivative instruments and hedging activities, net 50 69
Loss on extinguishment of debt (6 ) (21 )
Other, net 22 3

Loss before minority interest, income taxes and
cumulative effect of accounting change
(282 ) (2,555 )
Minority interest 33 20

Loss before income taxes and cumulative effect of
accounting change
(249 ) (2,535 )

Income tax benefit (expense) (9 ) 35

Loss before cumulative effect of
accounting change (258 ) (2,500 )
Cumulative effect of accounting change, net of tax -- (840 )

Net loss $ (258 ) $ (3,340 )

	Year Ended December 31,
	2008			2007

Revenues	$	6,479	100%	$	6,002	100%

Costs and Expenses:
Operating (excluding depreciation and amortization)		2,792	43%		2,620	44%
Selling, general and administrative		1,401	22%		1,289	21%
Depreciation and amortization		1,310	20%		1,328	22%
Impairment of franchises		1,521	23%		178	3%
Asset impairment charges		--	--		56	1%
Other operating (income) expenses, net		69	1%		(17)	--

		7,093	109%		5,454	91%

Income (loss) from operations		(614)	(9%)		548	9%

Interest expense, net		(818)			(776)
Change in value of derivatives		(62)			(46)
Loss on extinguishment of debt		--			(32)
Other expense, net		(19)			(24)

Loss before income tax expense		(1,513)			(330)
Income tax benefit (expense)		40			(20)

Net loss	$	(1,473)		$	(350)

~~Year Ended December 31, 2005 Compared to Year Ended December 31, 2004~~

~~Revenues.~~The overall increase in revenues in 2005 compared to 2004 is principally the result of an increase of 312,000 and 121,900 high-speed Internet customers and digital video customers, respectively, as well as price increases for video and high-speed Internet services, and is offset partially by a decrease of 107,000 analog video customers and $12 million of credits issued to hurricane Katrina and Rita impacted customers related to service outages. We have restored service to our impacted customers. Included in the reduction in analog video customers and reducing the increase in digital video and high-speed Internet customers are 26,800 analog video customers, 12,000 digital video customers and 600 high-speed Internet customers sold in the cable system sales in Texas and

1725

~~Table of Contents~~

West Virginia, which closed in July 2005. The cable system sales to Atlantic Broadband Finance, LLC, which closed in March and April 2004 and the cable system sales in Texas and West Virginia, which closed in July 2005 (collectively referred to in this section as the "Systems Sales") reduced the increase in revenues by approximately $38 million. Our goal is to increase revenues by improving customer service which we believe will stabilize our analog video customer base and increase the number of our customers who purchase bundled services including high-speed Internet, digital video and telephone services, in addition to VOD, high-definition television and DVR services. In addition, we intend to increase revenues by expanding marketing of our services to our commercial customers.

Revenues.Average monthly revenue per ~~analog~~basic video customer, measured on an annual basis, has increased from ~~$68.02 for the year ended December 31, 2004~~$93 in 2007 to ~~$73.68 for the year ended December 31, 2005 primarily as a result of price increases and incremental revenues from advanced services.~~$105 in 2008. Average monthly revenue per ~~analog~~ video customer represents total annual revenue, divided by twelve, divided by the average number of ~~analog~~basic video customers during the respective period. Revenue growth primarily reflects increases in the number of telephone, high-speed Internet, and digital video customers, price increases, and incremental video revenues from OnDemand, DVR, and high-definition television services, offset by a decrease in basic video customers. Cable system sales, net of acquisitions, in 2007 and 2008 reduced the increase in revenues in 2008 as compared to 2007 by approximately $31 million. See “Part I. Item 1A – Risk Factors – Risks Relating to Bankruptcy – Our operations will be subject to the risks and uncertainties of bankruptcy.”

Revenues by service offering were as follows (dollars in millions):

Year Ended December 31,

2005

2004

2005 over 2004

Revenues

% of Revenues

Revenues

% of Revenues

Change

% Change

Video $ 3,401 65 % $ 3,373 68 % $ 28 1 %
High-speed Internet 908 17 % 741 15 % 167 23 %
Telephone 36 1 % 18 -- 18 100 %
Advertising sales 294 6 % 289 6 % 5 2 %
Commercial 279 5 % 238 5 % 41 17 %
Other 336 6 % 318 6 % 18 6 %

$ 5,254 100 % $ 4,977 100 % $ 277 6 %

	Year Ended December 31,
	2008					2007					2008 over 2007
	Revenues		% of Revenues			Revenues		% of Revenues			Change		% Change

Video	$	3,463		53	%	$	3,392		56	%	$	71		2	%
High-speed Internet		1,356		21	%		1,243		21	%		113		9	%
Telephone		555		9	%		345		6	%		210		61	%
Commercial		392		6	%		341		6	%		51		15	%
Advertising sales		308		5	%		298		5	%		10		3	%
Other		405		6	%		383		6	%		22		6	%

	$	6,479		100	%	$	6,002		100	%	$	477		8	%

Video revenues consist primarily of revenues from ~~analog~~basic and digital video services provided to our non-commercial customers. ~~Approximately $108 million~~Basic video customers decreased by 174,200 customers in 2008, of which 16,700 were related to asset sales, net of acquisitions. Digital video customers increased by 213,000 customers in 2008. The increase was reduced by the sale, net of acquisitions, of 7,600 digital customers. The increase in video revenues is attributable to the following (dollars in millions):

	2008 compared to 2007

Incremental video services and rate adjustments	$	87
Increase in digital video customers		77
Decrease in basic video customers		(72	)
Asset sales, net of acquisitions		(21	)

	$	71

High-speed Internet customers grew by 192,700 customers in 2008. The increase in 2008 was ~~the result~~reduced by asset sales, net of ~~price increases and incremental video~~acquisitions, of 5,600 high-speed Internet customers. The increase in high-speed Internet revenues from ~~existing~~our residential customers and approximately $17 million was the result of an increase in digital video customers. The increases were offset by decreases of approximately $59 million related to a decrease in analog video customers, approximately $29 million resulting from the System Sales and approximately $9 million of credits issued to hurricanes Katrina and Rita impacted customers related to service outages.

~~Approximately $138 million of the increase in revenues from high-speed Internet services provided to our non-commercial customers related~~is attributable to the ~~increase~~following (dollars in the average number of customers receiving high-speed Internet services, whereas approximately $35 million related to the increase in average price of the service. The increase was offset by approximately $3 million of credits issued to hurricanes Katrina and Rita impacted customers related to service outages and $3 million resulting from the System Sales.millions):

	2008 compared to 2007

Increase in high-speed Internet customers	$	113
Rate adjustments and service upgrades		3
Asset sales, net of acquisitions		(3	)

	$	113

Revenues from telephone services increased ~~primarily~~by $220 million in 2008, as a result of an increase of ~~76,100~~389,500 telephone customers in ~~2005.~~2008, offset by a decrease of $10 million, related to lower average rates.

Commercial revenues consist primarily of revenues from services provided to our commercial customers. Commercial revenues increased primarily as a result of increased sales of the Charter Business Bundle® primarily

to small and medium-sized businesses. The increase was reduced by approximately $2 million as a result of asset sales.

Advertising sales revenues consist primarily of revenues from commercial advertising customers, programmers and other vendors. ~~Advertising~~In 2008, advertising sales revenues increased primarily as a result of ~~an increase~~increases in ~~local~~political advertising sales and advertising sales to vendors offset by ~~a decline~~significant decreases in ~~national advertising sales. In addition,~~revenues from the ~~increase was offset by~~automotive and furniture sectors, and a decrease of $1$2 million ~~as a result of the System Sales.~~related to asset sales. For the years ended December 31, ~~2005~~2008 and ~~2004,~~2007, we received ~~$15~~$39 million and ~~$16~~$15 million, respectively, in advertising sales revenues from ~~programmers.~~vendors.

~~Commercial~~Other revenues consist of franchise fees, regulatory fees, customer installations, home shopping, late payment fees, wire maintenance fees and other miscellaneous revenues. For each of the years ended December 31, 2008 and 2007, franchise fees represented approximately 46% of total other revenues. The increase in other revenues in 2008 was primarily ~~of revenues from cable video and high-speed Internet services provided to our commercial customers. Commercial revenues increased primarily as a~~the result of ~~an increase~~increases in ~~commercial high-speed Internet revenues.~~franchise and other regulatory fees and wire maintenance fees. The increase was reduced by approximately $3 million as a result of ~~the System Sales.~~asset sales.

Other revenues consist of revenues from franchise fees, equipment rental, customer installations, home shopping, dial-up Internet service, late payment fees, wire maintenance fees and other miscellaneous revenues. For the years

~~Table of Contents~~Operating expenses

~~ended December 31, 2005 and 2004, franchise fees represented approximately 54% and 52%, respectively, of total other revenues.~~. The increase in other revenues was primarily the result of an increase in franchise fees of $14 million and installation revenue of $8 million offset by a decrease of $2 million in equipment rental and $2 million in processing fees. In addition, other revenues were offset by approximately $2 million as a result of the System Sales.

~~Operating expenses~~. ~~The overall increase in~~our operating expenses ~~was reduced by approximately $15 million as a result of~~is attributable to the ~~System Sales.~~ following (dollars in millions):

	2008 compared to 2007

Programming costs	$	90
Labor costs		44
Franchise and regulatory fees		23
Maintenance costs		19
Costs of providing high-speed Internet and telephone services		5
Other, net		13
Asset sales, net of acquisitions		(22	)

	$	172

Programming costs were ~~$1.4~~approximately $1.6 billion and ~~$1.3~~$1.6 billion, representing ~~62%~~59% and ~~63%~~60% of total operating expenses for the years ended December 31, ~~2005~~2008 and ~~2004,~~2007, respectively. ~~Key expense components as a percentage of revenues were as follows (dollars in millions):~~

Year Ended December 31,

2005

2004

2005 over 2004

% of

% of

%

Expenses

Revenues

Expenses

Revenues

Change

Change

Programming $ 1,417 27% $ 1,319 27% $ 98 7%
Service 775 15% 663 13% 112 17%
Advertising sales 101 2% 98 2% 3 3%

$ 2,293 44% $ 2,080 42% $ 213 10%

Programming costs consist primarily of costs paid to programmers for ~~analog,~~basic, premium, digital, ~~channels~~OnDemand, and pay-per-view programming. The increase in programming ~~was~~costs is primarily a result of ~~price increases, particularly~~annual contractual rate adjustments, offset in ~~sports programming, partially offset~~part by ~~a decrease in analog video customers. Additionally, the increase in programming costs was reduced by $11 million as a result of the Systems Sales.~~asset sales and customer losses. Programming costs were also offset by the amortization of payments received from programmers ~~in support~~ of ~~launches of new channels of $42~~$33 million and ~~$62~~$25 million ~~for the year ended December 31, 2005~~in 2008 and ~~2004,~~2007, respectively. Programming costs for the year ended December 31, 2004 also include a $5 million reduction related to the settlement of a dispute with TechTV, Inc., a related party. See Note 21 to the accompanying consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data."

~~Our cable programming costs have increased in every year we have operated in excess of customary inflationary and cost-of-living increases.~~ We expect ~~them~~programming expenses to continue to increase, and at a higher rate than in 2008, due to a variety of factors, including amounts paid for retransmission consent, annual increases imposed by programmers, and additional programming, including high-definition, OnDemand, and pay-per-view programming, being provided to ~~customers as a result of system rebuilds and bandwidth reallocation, both of which increase channel capacity. In 2006, we expect programming~~our customers.

Labor costs increased primarily due to increase at a higher rate than in 2005. These costs will be determined in part on the outcome of programming negotiations in 2006 and will likely be subject to offsetting events or otherwise affected by factors similar to the ones mentioned in the preceding paragraph. Our increasing programming costs have resulted in declining operating margins for our video services because we have been unable to pass on cost increases to our customers. We expect to partially offset any resulting margin compression from our traditional video services with revenue from advanced video services, increased telephone revenues, high-speed Internet revenues, advertising revenues and commercial service revenues.

Service costs consist primarily of service personnel salaries and benefits, franchise fees, system utilities, cost of providing high-speed Internet and telephone service, maintenance and pole rental expense. Thean increase in ~~service costs resulted primarily from increased labor~~employee base salary and maintenance costs to support improved service levels and our advanced products, increased costs of providing high-speed Internet and telephone service as a result of the increase in these customers and higher fuel prices. The increase in service costs was reduced by $4 million as a result of the System Sales. Advertising sales expenses consist of costs related to traditional advertising services provided to advertising customers, including salaries, benefits and commissions. Advertising sales expenses increased primarily as a result of increased salary, benefit and commission costs.benefits.

~~Table of Contents~~

Selling, general and administrative expenses.The ~~overall~~ increase in selling, general and administrative expenses ~~was reduced by $6 million as a result of~~is attributable to the ~~System Sales. Key components of expense as a percentage of revenues were as follows~~following (dollars in millions):

Year Ended December 31,

2005

2004

2005 over 2004

% of

% of
%

Expenses

Revenues

Expenses

Revenues

Change

Change

General and administrative $ 889 17% $ 849 17% $ 40

5%
Marketing 145 3% 122 2% 23 19%

$ 1,034 20% $ 971 19% $ 63 6%

General and administrative expenses consist primarily of salaries and benefits, rent expense, billing costs, call center costs, internal network costs, bad debt expense and property taxes. The increase in general and administrative expenses resulted primarily from increases in salaries and benefits of $43 million and professional fees associated with consulting services of $18 million both related to investments to improve service levels in our customer care centers as well as an increase of $13 million in legal and other professional fees offset by decreases in bad debt expense of $17 million related to a reduction in the use of discounted pricing, property taxes of $6 million, property and casualty insurance of $6 million and the System Sales of $6 million.

~~Marketing expenses increased as a result of an increased investment in targeted marketing campaigns.~~

2008 compared
to 2007

Marketing costs $ 32
Customer care costs 23
Bad debt and collection costs 17
Stock compensation costs 14
Employee costs 7
Other, net 24
Asset sales, net of acquisitions (5 )

$ 112

Depreciation and amortization.Depreciation and amortization expense ~~increased~~decreased by $4$18 million in ~~2005. The increase~~2008. During 2008, the decrease in depreciation ~~is related to an increase in capital expenditures, which~~ was ~~partially offset by lower depreciation as~~primarily the result of ~~the Systems Sales and~~asset sales, certain assets becoming fully ~~depreciated.~~depreciated, and an $81 million decrease due to the impact of changes in the useful lives of certain assets during 2007, offset by depreciation on capital expenditures.

Impairment of franchises.We ~~performed an~~recorded impairment ~~assessment during the third quarter~~ of ~~2004. The use of lower projected growth rates~~$1.5 billion and ~~the resulting revised estimates of future cash flows in our valuation, primarily as a result of increased competition, led to the recognition of a $2.4 billion impairment charge~~$178 million for the ~~year~~years ended December 31, ~~2004. Our annual assessment~~2008 and 2007, respectively. The impairment recorded in ~~2005 did not result~~2008 was largely driven by lower expected revenue growth resulting from the current economic downturn and increased competition. The impairment recorded in ~~an impairment.~~2007 was largely driven by increased competition.

Asset impairment charges. Asset impairment charges for the year ended December 31, ~~2005 represent~~2007 represents the write-down of assets related to cable asset sales to fair value less costs to sell. See Note 4 to the accompanying consolidated financial statements contained in ~~"Item~~“Item 8. Financial Statements and Supplementary Data."”

Other operating (income) expenses, net. The change in other operating (income) expenses, net is attributable to the following (dollars in millions):

~~(Gain)~~

2008 compared
to 2007

Increase in losses on sales of assets $ 16
Increase in special charges, net 70

$ 86

For more information, see Note 15 to the accompanying consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data.”

Interest expense, net. Net interest expense increased by $42 million in 2008 from 2007. The increase in net interest expense from 2007 to 2008 was a result of average debt outstanding increasing from $9.4 billion in 2007 to $10.3 billion in 2008, offset by a decrease in our average borrowing rate from 7.6% in 2007 to 6.9% in 2008.

Change in value of derivatives. Interest rate swaps are held to manage our interest costs and reduce our exposure to increases in floating interest rates. We expense the change in fair value of derivatives that do not qualify for hedge accounting and cash flow hedge ineffectiveness on interest rate swap agreements. The loss ~~on sale~~from the change in value of ~~assets, net.~~ interest rate swaps increased from $46 million in 2007 to $62 million in 2008.

Loss on ~~sale~~extinguishment of ~~assets~~debt. Loss on extinguishment of debt consists of the following for the ~~year~~years ended December 31, ~~2005 primarily represents the loss recognized on the disposition of plant~~2008 and equipment. Gain on sale of assets for the year ended December 31, 2004 primarily represents the pretax gain of $106 million realized on the sale of systems to Atlantic Broadband Finance, LLC which closed in March2007.

	Year Ended December 31,
	2008		2007

CCO Holdings notes redemption	$	--	$	(19	)
Charter Operating credit facilities refinancing		--		(13	)

	$	--	$	(32	)

For more information, see Notes 9 and ~~April 2004 offset by losses recognized on the disposition of plant and equipment.~~

~~Option compensation expense, net.~~~~Option compensation expense decreased $17 million, or 55%, for the year ended December 31, 2005 compared~~16 to the ~~year ended December 31, 2004. Option compensation~~accompanying consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data.”

Other expense, ~~for~~net. The change in other expense, net is attributable to the ~~year ended December 31, 2005 primarily represents options expensed~~following (dollars in ~~accordance with SFAS No. 123,~~ millions):

	2008 compared to 2007

Decrease in minority interest	$	9
Decrease in loss on investment		1
Other, net		(5	)

	$	5

~~Accounting for Stock-Based Compensation~~
~~(SFAS No. 123)~~. ~~Option compensation expense for the year ended December 31, 2004 primarily represents $22 million related to options expensed in accordance with SFAS No. 123~~. The decrease in option compensation expense is primarily the result of a decrease in the fair value of options granted related to a decrease in the price of Charter’s Class A common stock combined with a decrease in the number of options granted. Additionally,during the year ended December 31, 2004, we expensed approximately $8 million related to a stock option exchange program, under which our employees were offered the right to exchange all stock options (vested and unvested) issued under the 1999 Charter Communications Option Plan and 2001 Stock Incentive Plan that had an exercise price over $10 per share for shares of restricted Charter Class A common stock or, in some instances, cash. ~~See~~

For more information, see Note 17 to the accompanying consolidated financial statements contained in ~~"Item~~“Item 8. Financial Statements and Supplementary ~~Data" for more information regarding our option compensation plans.~~

Data.”

~~Table of Contents~~

~~Hurricane asset retirement loss.~~ ~~Hurricane asset retirement loss represents the loss associated with the write-off of the net book value of assets destroyed by hurricanes Katrina and Rita in the third quarter of 2005.~~

~~Special charges, net~~Income tax benefit (expense).. ~~Special charges~~ Income tax benefit for the year ended December 31, ~~2005 represent approximately $6 million~~2008 was realized as a result of ~~severance and related costs~~the decreases in certain deferred tax liabilities of certain of our ~~management realignment~~indirect subsidiaries, attributable to the write-down of franchise assets for financial statement purposes and ~~$1 million related to legal settlements. Special charges~~not for tax purposes. Income tax benefit for the year ended December 31, ~~2004 represents approximately $85 million as part of a settlement of the consolidated federal class actions, state derivative actions and federal derivative action lawsuits, approximately $10~~2008 included $32 million of ~~litigation costs~~deferred tax benefit related to the ~~settlement~~impairment of a 2004 national class action suit (see Note 22 to the accompanying consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data") and approximately $12 million of severance and related costs of our workforce reduction and realignment. Special charges for the year ended December 31, 2004 were offset by $3 million received from a third party in settlement of a dispute.

~~Unfavorable contracts and other settlements~~. Unfavorable contracts and other settlements for the year ended December 31, 2004 relates to changes in estimated legal reserves established in connection with prior business combinations, which based on an evaluation of current facts and circumstances, are no longer required.

~~Interest expense, net.~~Net interest expense increased by $131 million, or 23%, for the year ended December 31, 2005 compared to the year ended December 31, 2004. The increase in net interest expense was a result of an increase in our average borrowing rate from 6.79% in the year ended December 31, 2004 to 7.61% in the year ended December 31, 2005 and an increase of $753 million in average debt outstanding from $7.8 billion in 2004 to $8.5 billion in 2005.

~~Gain on derivative instruments and hedging activities, net.~~ Net gain on derivative instruments and hedging activities decreased $19 million in the year ended December 31, 2005 compared to the year ended December 31, 2004. The decrease is primarily the result of a decrease in gains on interest rate agreements that do not qualify for hedge accounting under SFAS No. 133, ~~Accounting for Derivative Instruments and Hedging Activities,~~ which decreased from a gain of $65 million for the year ended December 31, 2004 to $47 million for the year ended December 31, 2005. This was coupled with a decrease in gains on interest rate agreements, as a result of hedge ineffectiveness on designated hedges, which decreased from $4 million for the year ended December 31, 2004 to $3 million for the year ended December 31, 2005.

~~Loss on extinguishment of debt.~~Loss on extinguishment of debt for the year ended December 31, 2005 primarily represents losses related to the redemption of our subsidiary’s CC V Holdings, LLC 11.875% notes due 2008. See Note 9 to the accompanying consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data." Loss on extinguishment of debt for the year ended December 31, 2004 represents the write-off of deferred financing fees and third party costs related to the Charter Communications Operating refinancing in April 2004.

~~Other, net.~~ Net other income for the year ended December 31, 2005 represents the gain realized on an exchange of our interest in an equity investee for an investment in a larger enterprise. Net other income for the year ended December 31, 2004 represents gains realized on equity investments.

~~Minority interest.~~ ~~Minority interest represents the 2% accretion of the preferred membership interests in our indirect subsidiary, CC VIII, LLC, and the pro rata share of the profits and losses of CC VIII, LLC.~~

~~Income tax benefit (expense).~~franchises. Income tax expense ~~for the year ended December 31, 2005~~in 2007 was recognized through increases in deferred tax liabilities and current federal and state income tax expenses of certain of our indirect ~~corporate~~ subsidiaries. Income tax ~~benefit~~expense for the year ended December 31, ~~2004 was directly related to the impairment~~2007 includes $18 million of ~~franchises. The deferred~~income tax ~~liabilities of~~expense previously recorded at our indirect corporate subsidiaries decreased as a result of the write-down of franchise assets for financial statement purposes. We do not expect to recognize a similar benefit associated with the impairment of franchises in future periods. However, the actual tax provision calculations in future periods will be the result of current and future temporary differences, as well as future operating results.parent company.

~~Cumulative effect of accounting change, net of tax.~~Cumulative effect of accounting change of $840 million (net of minority interest effects of $19 million and tax effects of $16 million) in 2004 represents the impairment charge recorded as a result of our adoption of Topic D-108.

Net loss.~~Net loss decreased by $3.1 billion in 2005 compared to 2004 as a result of the factors described above.~~ The impact to net loss in ~~2005~~2008 and 2007 as a result of ~~the~~ asset impairment charges, impairment of franchises, and extinguishment of debt was to increase net loss

~~Table of Contents~~

by approximately ~~$45 million. The impact to net loss in 2004 of the impairment of franchises~~$1.5 billion and ~~cumulative effect of accounting change was to increase net loss by approximately $3.0 billion.~~$264 million, respectively.

Liquidity and Capital Resources

Introduction

This section contains a discussion of our liquidity and capital resources, including a discussion of our cash position, sources and uses of cash, access to credit facilities and other financing sources, historical financing activities, cash needs, capital expenditures and outstanding debt.

Recent Developments – Restructuring

On February 12, 2009, Charter reached agreements in principle with the Noteholders holding approximately $4.1 billion in aggregate principal amount of notes issued by our parent companies, CCH I and CCH II. Pursuant to the Restructuring Agreements, on March 27, 2009, we and our parent companies filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code to implement the Proposed Restructuring pursuant to the Plan aimed at improving our parent companies’ capital structure.

The Proposed Restructuring is expected to be funded with cash from operations, the Notes Exchange, the New Debt Commitment, and the Rights Offering for which Charter has received a Back-Stop Commitment from certain Noteholders. In addition to the Restructuring Agreements, the Noteholders have entered into Commitment Letters, pursuant to which they have agreed to exchange and/or purchase, as applicable, certain securities of Charter, as described in more detail below.

Under the Notes Exchange, existing holders of CCH II Notes will be entitled to exchange their CCH II Notes for New CCH II Notes. CCH II Notes that are not exchanged in the Notes Exchange will be paid in cash in an amount equal to the outstanding principal amount of such CCH II Notes plus accrued but unpaid interest to the bankruptcy petition date plus post-petition interest, but excluding any call premiums or prepayment penalties and for the avoidance of doubt, any unmatured interest. The aggregate principal amount of New CCH II Notes to be issued pursuant to the Plan is expected to be approximately $1.5 billion plus accrued but unpaid interest to the bankruptcy petition date plus post-petition interest, but excluding any call premiums or prepayment penalties (collectively, the “Target Amount”), plus an additional $85 million.

Under the Commitment Letters, certain holders of CCH II Notes have committed to exchange, pursuant to the Notes Exchange, an aggregate of approximately $1.2 billion in aggregate principal amount of CCH II Notes, plus accrued but unpaid interest to the bankruptcy petition date plus post-petition interest, but excluding any call premiums or any

prepayment penalties. In the event that the aggregate principal amount of New CCH II Notes to be issued pursuant to the Notes Exchange would exceed the Target Amount, each Noteholder participating in the Notes Exchange will receive a pro rata portion of such Target Amount of New CCH II Notes, based upon the ratio of (i) the aggregate principal amount of CCH II Notes it has tendered into the Notes Exchange to (ii) the total aggregate principal amount of CCH II Notes tendered into the Notes Exchange. Participants in the Notes Exchange will receive a commitment fee equal to 1.5% of the principal amount plus interest on the CCH II Notes exchanged by such participant in the Notes Exchange.

~~Overview~~

Under the New Debt Commitment, certain holders of CCH II Notes have committed to purchase an additional amount of New CCH II Notes in an aggregate principal amount of up to $267 million. Participants in the New Debt Commitment will receive a commitment fee equal to the greater of (i) 3.0% of their respective portion of the New Debt Commitment or (ii) 0.83% of its respective portion of the New Debt Commitment for each month beginning April 1, 2009 during which its New Debt Commitment remains outstanding.

Under the Rights Offering, Charter will offer to existing holders of CCH I Notes that are accredited investors (as defined in Regulation D promulgated under the Securities Act) or qualified institutional buyers (as defined under Rule 144A of the Securities Act), the Rights to purchase shares of the new Class A Common Stock of Charter, to be issued upon our and our parent companies’ emergence from bankruptcy, in exchange for a cash payment at a discount to the equity value of Charter upon emergence. Upon emergence from bankruptcy, Charter’s new Class A Common Stock is not expected to be listed on any public or over-the-counter exchange or quotation system and will be subject to transfer restrictions. It is expected, however, that Charter will thereafter apply for listing of Charter’s new Class A Common Stock on the NASDAQ Stock Market as provided in the Term Sheet. The Rights Offering is expected to generate proceeds of up to approximately $1.6 billion and will be used to pay holders of CCH II Notes that do not participate in the Notes Exchange, repayment of certain amounts relating to the satisfaction of certain swap agreement claims against Charter Operating and for general corporate purposes.

Under the Commitment Letters, the Backstop Parties have agreed to subscribe for their respective pro rata portions of the Rights Offering, and certain of the Backstop Parties have, in addition, agreed to subscribe for a pro rata portion of any Rights that are not purchased by other holders of CCH I Notes in the Rights Offering (the “Excess Backstop”). Noteholders who have committed to participate in the Excess Backstop will be offered the option to purchase a pro rata portion of additional shares of Charter’s new Class A Common Stock, at the same price at which shares of the new Class A Common Stock will be offered in the Rights Offering, in an amount equal to $400 million less the aggregate dollar amount of shares purchased pursuant to the Excess Backstop. The Backstop Parties will receive a commitment fee equal to 3% of its respective equity backstop.

The Restructuring Agreements further contemplate that upon consummation of the Plan (i) CCO Holdings’ and Charter Operating’s notes and bank debt will remain outstanding, (ii) holders of notes issued by CCH II will receive New CCH II Notes pursuant to the Notes Exchange and/or cash, (iii) holders of notes issued by CCH I will receive shares of Charter’s new Class A Common Stock, (iv) holders of notes issued by CIH will receive warrants to purchase shares of common stock in Charter, (v) holders of notes of Charter Holdings will receive warrants to purchase shares of Charter’s new Class A Common Stock, (vi) holders of convertible notes issued by Charter will receive cash and preferred stock issued by Charter, (vii) holders of common stock will not receive any amounts on account of their common stock, which will be cancelled, and (viii) trade creditors will be paid in full. In addition, as part of the Proposed Restructuring, it is expected that consideration will be paid by holders of CCH I Notes to other entities participating in the financial restructuring. The recoveries summarized above are more fully described in the Term Sheet.

Pursuant to the Allen Agreement, in settlement of their rights, claims and remedies against Charter and its subsidiaries, and in addition to any amounts received by virtue of their holding any claims of the type set forth above, upon consummation of the Plan, Mr. Allen or his affiliates will be issued a number of shares of the new Class B Common Stock of Charter such that the aggregate voting power of such shares of new Class B Common Stock shall be equal to 35% of the total voting power of all new capital stock of Charter. Each share of new Class B Common Stock will be convertible, at the option of the holder, into one share of new Class A Common Stock, and will be subject to significant restrictions on transfer. Certain holders of new Class A Common Stock and new Class B Common Stock will receive certain customary registration rights with respect to their shares. Upon consummation of the Plan, Mr. Allen or his affiliates will also receive (i) warrants to purchase shares of new Class A common stock of Charter in an aggregate amount equal to 4% of the equity value of reorganized Charter, after giving effect to the Rights Offering, but prior to the issuance of warrants and equity-based awards provided for by the Plan, (ii) $85 million principal amount of New CCH II Notes, (iii) $25 million in cash for amounts owing to CII under a management agreement, (iv) up to $20 million in cash for reimbursement of fees and expenses in connection

with the Proposed Restructuring, and (v) an additional $150 million in cash. The warrants described above shall have an exercise price per share based on a total equity value equal to the sum of the equity value of reorganized Charter, plus the gross proceeds of the Rights Offering, and shall expire seven years after the date of issuance. In addition, on the effective date of the Plan, CII will retain a 1% equity interest in reorganized Charter Holdco and a right to exchange such interest into new Class A common stock of Charter.

The Restructuring Agreements also contemplate that upon emergence from bankruptcy each holder of 10% or more of the voting power of Charter will have the right to nominate one member of the initial Board for each 10% of voting power; and that at least Charter’s current Chief Executive Officer and Chief Operating Officer will continue in their same positions. The Restructuring Agreements require Noteholders to cast their votes in favor of the Plan and generally support the Plan and contain certain customary restrictions on the transfer of claims by the Noteholders.

In ~~2006, $30~~addition, the Restructuring Agreements contain an agreement by the parties that prior to commencement of the Chapter 11 cases, if performance by us or our parent companies of any term of the Restructuring Agreements would trigger a default under the debt instruments of CCO Holdings and Charter Operating, which debt is to remain outstanding such performance would be deemed unenforceable solely to the extent necessary to avoid such default.

The Restructuring Agreements and Commitment Letters are subject to certain termination events, including, among others:

·	the commitments set forth in the respective Noteholder’s Commitment Letter shall have expired or been terminated;

Charter’s board of directors shall have been advised in writing by its outside counsel that continued pursuit of the Plan is inconsistent with its fiduciary duties, and the board of directors determines in good faith that, (A) a proposal or offer from a third party is reasonably likely to be more favorable to the Company than is proposed under the Term Sheet, taking into account, among other factors, the identity of the third party, the likelihood that any such proposal or offer will be negotiated to finality within a reasonable time, and the potential loss to the company if the proposal or offer were not accepted and consummated, or (B) the Plan is no longer confirmable or feasible;

·	the Plan or any subsequent plan filed by us with the bankruptcy court (or a plan supported or endorsed by us) is not reasonably consistent in all material respects with the terms of the Restructuring Agreements;

·	a disclosure statement order reasonably acceptable to Charter, the holders of a majority of the CCH I Notes held by the Requisite Holders and Mr. Allen has not been entered by the bankruptcy court on or before the 50th day following the bankruptcy petition date;

·	a confirmation order reasonably acceptable to Charter, the Requisite Holders and Mr. Allen is not entered by the bankruptcy court on or before the 130th day following the bankruptcy petition date;

·	any of the Chapter 11 cases of Charter is converted to cases under Chapter 7 of the Bankruptcy Code if as a result of such conversion the Plan is not confirmable;

·	any Chapter 11 cases of Charter is dismissed if as a result of such dismissal the Plan is not confirmable;

·	the order confirming the Plan is reversed on appeal or vacated; and

·	any Restructuring Agreement or the Allen Agreement has terminated or been breached in any material respect subject to notice and cure provisions.

The Allen Agreement contains similar provisions to those provisions of the Restructuring Agreements. There is no assurance that the treatment of creditors outlined above will not change significantly. For example, because the Proposed Restructuring is contingent on reinstatement of the credit facilities and certain notes of Charter Operating and CCO Holdings, failure to reinstate such debt would require Charter to revise the Proposed Restructuring. Moreover, if reinstatement does not occur and current capital market conditions persist, we and our parent companies may not be able to secure adequate new financing and the cost of new financing would likely be materially higher. The Proposed Restructuring would result in the reduction of Charter’s debt by approximately $8 billion.

The above summary of the Restructuring Agreements, Commitment Letters, Term Sheet and Allen Agreement is qualified in its entirety by the full text of the Restructuring Agreements, Commitment Letters, Term Sheet and Allen Agreement, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Annual Report on Form 10-K, and incorporated herein by reference. See “Part I. Item 1A - Risk Factors – Risks Relating to Bankruptcy.”

Recent Developments – Interest Payments

Two of our parent companies, CIH and Charter Holdings, did not make the January Interest Payment on the Overdue Payment Notes. The Indentures for the Overdue Payment Notes permits a 30-day grace period for such interest payments through (and including) February 15, 2009. On February 11, 2009, in connection with the Commitment Letters and Restructuring Agreements, Charter and certain of its subsidiaries also entered into the Escrow Agreement. As required under the Indentures, Charter set a special record date for payment of such interest payments of February 28, 2009. Under the Escrow Agreement, the Ad-Hoc Holders agreed to deposit into an escrow account the Escrow Amount and the Escrow Agent will hold such amounts subject to the terms of the Escrow Agreement. Under the Escrow Agreement, if the transactions contemplated by the Restructuring Agreements are consummated on or before December 15, 2009 or such transactions are not consummated on or before December 15, 2009 due to material breach of the Restructuring Agreements by Charter or its direct or indirect subsidiaries, then the Ad-Hoc Holders will be entitled to receive their pro-rata share of the Escrow Amount. If the transactions contemplated by the Restructuring Agreements are not consummated on or prior to December 15, 2009 for any reason other than material breach of the Restructuring Agreements by Charter or its direct or indirect subsidiaries, then Charter, Charter Holdings, CIH or their designee shall be entitled to receive the Escrow Amount.

One of Charter’s subsidiaries, CCH II, did not make its scheduled payment of interest on March 16, 2009 on certain of its outstanding senior notes. The governing indenture for such notes permits a 30-day grace period for such interest payments, and Charter and its subsidiaries, including CCH II, filed voluntary Chapter 11 Bankruptcy prior to the expiration of the grace period.

Recent Developments – Charter Operating Credit Facility

On February 3, 2009, Charter Operating made a request to the administrative agent under the Credit Agreement, to borrow additional revolving loans under the Credit Agreement. Such borrowing request complied with the provisions of the Credit Agreement including section 2.2 (“Procedure for Borrowing”) thereof. On February 5, 2009, we received a notice from the administrative agent asserting that one or more Events of Default (as defined in the Credit Agreement) had occurred and was continuing under the Credit Agreement. In response, we sent a letter to the administrative agent on February 9, 2009, among other things, stating that no Event of Default under the Credit Agreement occurred or was continuing and requesting the administrative agent to rescind its notice of default and fund Charter Operating’s borrowing request. The administrative agent sent a letter to us on February 11, 2009, stating that it continues to believe that one or more events of default occurred and was continuing. As a result, with the exception of one lender who funded approximately $0.4 million, the lenders under the Credit Agreement have failed to fund Charter Operating’s borrowing request.

On March 27, 2009, JPMorgan Chase Bank, N. A., as Administrative Agent under the Credit Agreement, filed an adversary proceeding in bankruptcy court against Charter Operating and CCO Holdings seeking a declaration that there have been events of default under the Credit Agreement. Such a judgment would prevent Charter Operating and CCO Holdings from reinstating the terms and provisions of the Credit Agreement through the bankruptcy proceeding. Although it has not yet answered the complaint, Charter denies the allegations made by JP Morgan and intends to vigorously contest this matter.

Overview of Our Debt and Liquidity

We have significant amounts of debt. As of December 31, 2008, the accreted value of our total debt was approximately $11.8 billion, as summarized below (dollars in millions):

	December 31, 2008
					Semi-Annual
	Principal		Accreted		Interest Payment	Maturity
	Amount		Value(a)		Dates	Date(b)
CCO Holdings, LLC:
8 3/4% senior notes due 2013	$	800	$	796	5/15 & 11/15	11/15/13
Credit facility		350		350		9/6/14
Charter Communications Operating, LLC:
8.000% senior second-lien notes due 2012		1,100		1,100	4/30 & 10/30	4/30/12
8 3/8% senior second-lien notes due 2014		770		770	4/30 & 10/30	4/30/14
10.875% senior second-lien notes due 2014		546		527	3/15 & 9/15	9/15/14
Credit facilities		8,246		8,246		varies

	$	11,812	$	11,789

(a)	The accreted values presented above generally represent the principal amount of the notes less the original issue discount at the time of sale, plus the accretion to the balance sheet date. However, the current accreted value for

legal purposes and notes indenture purposes (the amount that is currently payable if the debt becomes immediately due) is equal to the principal amount of notes.

(b)

In general, the obligors have the right to redeem all of the notes set forth in the above table in whole or in part at their option, beginning at various times prior to their stated maturity dates, subject to certain conditions, upon the payment of the outstanding principal amount (plus a specified redemption premium) and all accrued and unpaid interest. For additional information see Note 9 to the accompanying consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data.”

In each of 2009, 2010, and 2011, $70 million of our debt ~~matures, and in 2007, an additional $280 million~~ matures. In ~~2008~~2012 and beyond, significant additional amounts will become due under our remaining long-term debt obligations.

The following table summarizes our payment obligations as of December 31, 2008 under our long-term debt and certain other contractual obligations and commitments (dollars in millions).

~~Recent Financing Transactions~~

~~In October 2005,~~

	Payments by Period
			Less than			1-3		3-5	More than
	Total		1 year			years		years	5 years

Contractual Obligations
Long-Term Debt Principal Payments (1)	$	11,812	$	70	$	140	$	3,355	$	8,247
Long-Term Debt Interest Payments (2)		3,184		650		1,238		1,190		106
Payments on Interest Rate Instruments (3)		443		127		257		59		--
Capital and Operating Lease Obligations (4)		96		22		35		21		18
Programming Minimum Commitments (5)		687		315		206		166		--
Other (6)		475		368		88		19		--

Total	$	16,697	$	1,552	$	1,964	$	4,810	$	8,371

(1)		The table presents maturities of long-term debt outstanding as of December 31, 2008. Refer to Notes 9 and 21 to our accompanying consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data” for a description of our long-term debt and other contractual obligations and commitments. The table above does not include the $240 million of Loans Payable – Related Party. See Note 10 to the accompanying consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data.”

(2)		Interest payments on variable debt are estimated using amounts outstanding at December 31, 2008 and the average implied forward London Interbank Offering Rate (LIBOR) rates applicable for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2008. Actual interest payments will differ based on actual LIBOR rates and actual amounts outstanding for applicable periods.

(3)		Represents amounts we will be required to pay under our interest rate swap agreements estimated using the average implied forward LIBOR applicable rates for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2008. As a result of our filing of a Chapter 11 bankruptcy, the counterparties to the interest rate swap agreements have the option to terminate the underlying contract and, upon emergence of Charter from bankruptcy, receive payment for the market value of the interest rate swap agreement as measured on the date the contract is terminated.

(4)		We lease certain facilities and equipment under noncancelable operating leases. Leases and rental costs charged to expense for the years ended December 31, 2008 and 2007 were $24 million and $23 million, respectively.

(5)		We pay programming fees under multi-year contracts ranging from three to ten years, typically based on a flat fee per customer, which may be fixed for the term, or may in some cases escalate over the term. Programming costs included in the accompanying statement of operations were approximately $1.6 billion in each of the years ended December 31, 2008 and 2007. Certain of our programming agreements are based on a flat fee per month or have guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under our programming contracts.

(6)		“Other” represents other guaranteed minimum commitments, which consist primarily of commitments to our billing services vendors.

The following items are not included in the contractual obligations table because the obligations are not fixed and/or determinable due to various factors discussed below. However, we entered into a senior bridge loan agreement with JPMorgan Chase Bank, N.A., Credit Suisse, Cayman Islands Branch and Deutsche Bank AG Cayman Islands Branch (the "Lenders") whereby the Lenders committed to make loans to us in an aggregate amountincur these costs as part of $600 million. Upon the issuance of $450 million of CCH II notes discussed below, the commitment under the bridge loan was reduced to $435 million. We may draw upon the facility between January 2, 2006 and September 29, 2006 and the loans will mature on the sixth anniversary of the first borrowing under the bridge loan.our operations:

We rent utility poles used in our operations. Generally, pole rentals are cancelable on short notice, but we anticipate that such rentals will recur. Rent expense incurred for pole rental attachments for each of the years ended December 31, 2008 and 2007 was $47 million.

We pay franchise fees under multi-year franchise agreements based on a percentage of revenues generated from video service per year. We also pay other franchise related costs, such as public education grants, under multi-year agreements. Franchise fees and other franchise-related costs included in the accompanying statement of operations were $179 million and $172 million for the years ended December 31, 2008 and 2007, respectively.

We also have $158 million in letters of credit, primarily to our various worker’s compensation, property and casualty, and general liability carriers, as collateral for reimbursement of claims. These letters of credit reduce the amount we may borrow under our credit facilities.

Our business requires significant cash to fund debt service costs, capital expenditures and ongoing operations. We have historically funded these requirements through cash flows from operating activities, borrowings under our credit facilities, equity contributions from our parent companies, proceeds from sales of assets, issuances of debt securities, and cash on hand. However, the mix of funding sources changes from period to period. For the year ended December 31, ~~2005,~~2008, we generated ~~$1.0~~$1.5 billion of net cash flows from operating activities, after paying cash interest of ~~$650~~$774 million. In addition, ~~the Company~~we used ~~$1.1~~$1.2 billion for purchases of property, plant and equipment. Finally, we ~~used $574 million of~~generated net cash flows infrom financing ~~activities.~~activities of $689 million, as a result of financing transactions and credit facility borrowings completed during the year ended December 31, 2008. As of December 31, 2008, we had cash on hand of $948 million. We expect that our mix of sources of funds will continue to change in the future based on overall needs relative to our cash flow and on the availability of funds under the Charter Operating credit facilities, ~~of our subsidiaries,~~ our and our parent companies’ access to the debt markets, Charter’s access to the equity markets, the timing of possible asset sales, and based on our ability to generate cash flows from operating activities. ~~We continue to explore asset dispositions as one of several possible actions that~~On a consolidated basis, we ~~could take in the future to improve~~and our ~~liquidity, but we do not presently consider unannounced future asset sales as~~parent companies have a significant ~~source~~level of ~~liquidity.~~debt, which totaled approximately $21.7 billion as of December 31, 2008.

During the fourth quarter of 2008, Charter Operating drew down all except $27 million of amounts available under the revolving credit facility. During the first quarter of 2009, Charter Operating presented a qualifying draw notice to the banks under the revolving credit facility but was refused those funds. See “Part I. Item 1. Business – Recent Developments – Charter Operating Credit Facility.” Additionally, upon filing bankruptcy, Charter Operating will no longer have access to the revolving credit facility and will rely on cash on hand and cash flows from operating activities to fund our projected cash needs. We expect that cash on hand and cash flows from operating activities ~~and the amounts available under our credit facilities and bridge loan~~ will be adequate to ~~meet~~fund our ~~and our parent companies’~~projected cash needs ~~in 2006. We believe that~~through the pendency of our expected Chapter 11 bankruptcy proceedings. Our projected cash ~~flows from operating activities~~needs and amounts available under our credit facilities and bridge loan will not be sufficient to fund our operations and satisfy our and our parent companies’ interest and principal repayment obligations in 2007 and beyond. We have been advised that Charter is working with its financial advisors to address these funding requirements. However, there can be no assurance that such funding will be available to us or our parent companies. In addition, Mr. Allen, Charter’s Chairman and controlling shareholder, and his affiliates are not obligated to purchase equity from, contribute to or loan funds to us or our parent companies.

~~Debt Covenants~~

~~Our ability to operate depends~~projected sources of liquidity depend upon, among other things, our ~~continued access to capital, including credit under~~actual results, the ~~Charter Operating credit facilities~~timing and ~~bridge loan.~~amount of our expenditures, and the outcome of various matters in our Chapter 11 bankruptcy proceedings and financial restructuring. The Charter Operating credit facilities, along with our indentures and bridge loan, contain certain restrictive covenants, some of which require us to maintain specified financial ratios and meet financial tests and to provide audited financial statements with an unqualified opinion from our independent auditors. As of December 31, 2005, we are in compliance with the covenants under our indentures, bridge loan and credit facilities, and we expect to remain in compliance with those covenants for the next twelve months. As of December 31, 2005, our potential availability under our credit facilities totaled approximately $553 million, none of which was limited by covenants. In addition, as of January 2, 2006 we had additional borrowing availability of $600 million under the bridge loan (which was reduced to $435 million as a resultoutcome of the ~~issuance of the CCH II notes). Continued access to our credit facilities and bridge loan~~Proposed Restructuring is subject to ~~our remaining in compliance with these covenants, including covenants tied~~substantial risks. See “Part I. Item 1A. Risk Factors — Risks Relating to ~~our operating performance. If any events of non~~

Bankruptcy.”

~~Table of Contents~~

compliance occur, funding under the credit facilities and bridge loan may not be available and defaults on some or potentially all of our debt obligations could occur. An event of default under any of our debt instruments could result in the acceleration of our payment obligations under that debt and, under certain circumstances, in cross-defaults under our other debt obligations, which could have a material adverse effect on our consolidated financial condition and results of operations.

Parent Company Debt Obligations

~~Any financial or liquidity problems~~As long as Charter’s convertible senior notes remain outstanding and are not otherwise converted into shares of ~~our parent companies could cause serious disruption to our business~~common stock, Charter must pay interest on the convertible senior notes and have a material adverse effect on our business and results of operations. A failure by Charter Holdings, CIH, CCH I or CCH II to satisfy their debt payment obligations or a bankruptcy filing with respect to Charter Holdings, CIH, CCH I or CCH II would giverepay the ~~lenders under our credit facilities the right to accelerate the payment obligations under these facilities. Any such acceleration would be a default under the indenture governing our notes.~~

principal amount. Charter’s ability to make interest payments on its convertible senior notes and ~~in 2006 and 2009,~~ to repay the outstanding principal of its convertible senior notes ~~of $20 million and $863 million, respectively,~~ will depend on its ability to raise additional capital and/or on receipt of payments or distributions from Charter Holdco and its ~~subsidiaries, including us. During 2005, we distributed $925 million of cash to CCH II of which $60 million was subsequently distributed to Charter Holdco.~~subsidiaries. As of December 31, ~~2005,~~2008, Charter Holdco was owed ~~$22~~$13 million in intercompany loans from ~~its subsidiaries,~~Charter Operating and had $1 million in cash, which amounts were available to pay interest and principal on ~~Charter's~~Charter’s convertible senior ~~notes.~~notes to the extent not otherwise used, for example, to satisfy maturities at Charter Holdings. In addition, as long as Charter ~~has $98~~Holdco continues to hold the $137 million of ~~governmental securities pledged as security for~~Charter Holdings’ notes due 2009 and 2010 (as discussed further below), Charter Holdco will receive interest and principal payments from Charter Holdings to the ~~next four scheduled semi-annual~~extent Charter Holdings is able to make such payments. Such amounts may be available to pay interest ~~payments~~and principal on Charter’s ~~5.875%~~ convertible senior ~~notes.~~notes, although Charter Holdco may use those amounts for other purposes.

As of December 31, 2005, Charter Holdings, CIH, CCH I and CCH II had approximately $9.4 billion principal amount of high-yield notes outstanding with approximately $105 million, $0, $684 million and $8.6 billion maturing in 2007, 2008, 2009 and thereafter, respectively. Charter, Charter Holdings, CIH, CCH I and CCH II will need to raise additional capital or receive distributions or payments from us in order to satisfy their debt obligations. However, because of their significant indebtedness, our ability and the ability of our parent companies to raise additional capital at reasonable rates or at all is uncertain.

Distributions by Charter’s subsidiaries to a parent company ~~(including Charter, CCHC, Charter Holdco, Charter Holdings, CIH, CCH I and CCH II)~~ for payment of principal on parent company notes are restricted under the indentures governing ~~the CIH notes, CCH I notes, CCH II notes, CCO Holdings~~our and our parent companies’ notes, and ~~Charter Operating notes~~under our credit facility, unless there is no default under the applicable indenture and credit facilities, and unless each applicable subsidiary’s leverage ratio test is met at the time of such ~~distribution and, in the case of Charter’s convertible senior notes, other specified tests are met.~~distribution. For the quarter ended December 31, ~~2005,~~2008, there was no default under any of these indentures ~~and each such subsidiary met its~~or credit facilities. However, certain of Charter’s subsidiaries did not meet their applicable leverage ratio tests based on December 31, ~~2005~~2008 financial results. ~~Such~~As a result, distributions from certain of Charter’s subsidiaries to their parent companies would have been restricted at such time and will continue to be restricted however, if any such subsidiary fails to meet these tests. In the past, certain subsidiaries have from time to time failed to meet their leverage ratio test. There can be no assurance that they will satisfy theseunless those tests ~~at the time of such distribution.~~are met. Distributions by Charter Operating ~~and CCO Holdings~~ for payment of principal on parent company notes are further restricted by the covenants in ~~the~~its credit ~~facilities and bridge loan, respectively.~~facilities.

Distributions by CIH, CCH I, CCH II, CCO Holdings, and Charter Operating to a parent company for payment of parent company interest are permitted if there is no default under the aforementioned ~~indentures. However, distributions for payment of interest on Charter’s convertible senior notes are further limited to when each applicable subsidiary’s leverage ratio test is met~~indentures and ~~other specified tests are met. There can be no assurance that they will satisfy these tests at the time of such distribution.~~

On January 30, 2006, our parent companies, CCH II and CCH II Capital Corp., issued $450 million in debt securities, the proceeds of which were provided, directly or indirectly, to us. We used such funds to reduce borrowings, but not commitments, under the revolving portion of ourCCO Holdings credit ~~facilities.~~

In September 2005, Charter Holdings and its wholly owned subsidiaries, CCH I and CIH, completed the exchange of approximately $6.8 billion total principal amount of outstanding debt securities of Charter Holdings in a private placement for new debt securities. Holders of Charter Holdings notes due in 2009 and 2010 exchanged $3.4 billion principal amount of notes for $2.9 billion principal amount of new 11% CCH I notes due 2015. Holders of Charter Holdings notes due 2011 and 2012 exchanged $845 million principal amount of notes for $662 million principal amount of 11% CCH I notes due 2015. In addition, holders of Charter Holdings notes due 2011 and 2012 exchanged $2.5 billion principal amount of notes for $2.5 billion principal amount of various series of new CIH notes. Each series of new CIH notes has the same interest rate and provisions for payment of cash interest as the

~~Table of Contents~~

~~series of old Charter Holdings notes for which such CIH notes were exchanged. In addition, the maturities for each series were extended three years.~~

facility.

~~Specific Limitations at Charter Holdings~~

The indentures governing the Charter Holdings notes permit Charter Holdings to make distributions to Charter Holdco for payment of interest or principal on ~~the~~Charter’s convertible senior notes, only if, after giving effect to the distribution, Charter Holdings can incur additional debt under the leverage ratio of 8.75 to 1.0, there is no default under Charter Holdings’ indentures, and other specified tests are met. For the quarter ended December 31, ~~2005,~~2008, there was no default under Charter Holdings’ indentures, the other specified tests were met, and Charter Holdings met its leverage ratio test based on December 31, ~~2005~~2008 financial results. Such distributions would be restricted, however, if Charter Holdings fails to meet these ~~tests.~~tests at the time of the contemplated distribution. In the past, Charter Holdings has from time to time failed to meet this leverage ratio test. There can be no assurance that Charter Holdings will satisfy these tests at the time of ~~such~~the contemplated distribution. During periods in which distributions are restricted, the indentures governing the Charter Holdings notes permit Charter Holdings and its subsidiaries to make specified investments (that are not restricted payments) in Charter Holdco or Charter, up to an amount determined by a formula, as long as there is no default under the indentures.

~~Our ability~~In addition to ~~incur additional debt~~the limitation on distributions under the various indentures discussed above, distributions by Charter’s subsidiaries, including us, may be limited by applicable law, including the ~~restrictive covenants~~Delaware Limited Liability Company Act, under which Charter’s subsidiaries may only make distributions if they have “surplus” as defined in the act. It is uncertain whether we will have sufficient surplus at the relevant subsidiaries to make distributions, including for payment of interest and principal on the debts of the parents of such entities. See “Part I. Item 1A. Risk Factors — Because of our holding company structure, our outstanding notes are structurally subordinated in right of payment to all liabilities of our subsidiaries. Restrictions in our ~~indentures, bridge loan~~subsidiary’s debt instruments and ~~credit facilities. No assurances can be given that we will not experience liquidity problems if we do not obtain sufficient additional financing on a timely basis as~~under applicable law limit their ability to provide funds to us or our various debt becomes due or because of adverse market conditions, increased competition or other unfavorable events. If, at any time, additional capital or borrowing capacity is required beyond amounts internally generated or available under our credit facilities and bridge loan or through additional debt or equity financings, we would consider:

	•	~~issuing equity at a parent company level, the proceeds of which could be loaned or contributed to us;~~

	•	~~issuing debt securities that may have structural or other priority over our existing notes;~~

	•	~~further reducing our expenses and capital expenditures, which may impair our ability to increase revenue;~~

	•	~~selling assets; or~~

	•	~~requesting waivers or amendments with respect to our credit facilities, the availability and terms of which would be subject to market conditions.~~

If the above strategies are not successful, we could be forced to restructure our obligations or seek protection under the bankruptcy laws. In addition, if we find it necessary to engage in a recapitalization or other similar transaction, our noteholders might not receive principal and interest payments to which they are contractually entitled.

issuers.”

~~Issuance of Charter~~

Historical Operating, ~~Notes in Exchange for Charter Holdings Notes~~

~~In March~~Investing, and June 2005, our subsidiary, Charter Operating, consummated exchange transactions with a small number of institutional holders of Charter Holdings 8.25% senior notes due 2007 pursuant to which Charter Operating issued, in private placement transactions, approximately $333 million principal amount of its 8.375% senior second lien notes due 2014 in exchange for approximately $346 million of the Charter Holdings 8.25% senior notes due 2007.

~~Sale of Assets~~Financing Activities

In July 2005, we closed the sale of certain cable systems in Texas and West Virginia and closed the sale of an additional cable system in Nebraska in October 2005 for a total sales price of approximately $37 million, representing a total of 33,000 analog video customers.

In March 2004, we closed the sale of certain cable systems in Florida, Pennsylvania, Maryland, Delaware and West Virginia to Atlantic Broadband Finance, LLC. We closed the sale of an additional cable system in New York to Atlantic Broadband Finance, LLC in April 2004. The total net proceeds from the sale of all of these systems were approximately $735 million. The proceeds were used to repay a portion of our revolving credit facilities.

~~Table of Contents~~

~~Acquisition~~

~~In January 2006, we closed the purchase of certain cable systems in Minnesota from Seren Innovations, Inc. We acquired approximately 18,900 analog video customers~~Cash and ~~14,800 telephone customers for a total purchase price of approximately $43 million.~~

~~Summary of Outstanding Contractual Obligations~~Cash Equivalents.

~~The following table summarizes our payment obligations as of December 31, 2005 under our long-term debt and certain other contractual obligations and commitments (dollars in millions).~~

Payments by Period

Less than

1-3

3-5

More than

Total

1 year

years

years

5 years

Contractual Obligations

Long-Term Debt Principal Payments (1) $ 9,028 $ 30 $ 1,024 $ 2,541 $ 5,433
Long-Term Debt Interest Payments (2) 3,410 581 1,150 1,068 611
Payments on Interest Rate Instruments (3) 18 8 10 -- --
Capital and Operating Lease Obligations (1) 94 20 27 23 24
Programming Minimum Commitments (4) 1,253 342 678 233 --
Other (5) 301 146 70 42 43

Total $ 14,104 $ 1,127 $ 2,959 $ 3,907 $ 6,111

~~(1)~~		The table presents maturities of long-term debt outstanding as of December 31, 2005. Refer to Notes 9 and 22 to our accompanying consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data" for a description of our long-term debt and other contractual obligations and commitments.

~~(2)~~		Interest payments on variable debt are estimated using amounts outstanding at December 31, 2005 and the average implied forward London Interbank Offering Rate (LIBOR) rates applicable for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2005. Actual interest payments will differ based on actual LIBOR rates and actual amounts outstanding for applicable periods.

~~(3)~~		Represents amounts we will be required to pay under our interest rate hedge agreements estimated using the average implied forward LIBOR applicable rates for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2005.

~~(4)~~		We pay programming fees under multi-year contracts ranging from three to ten years typically based on a flat fee per customer, which may be fixed for the term or may in some cases, escalate over the term. Programming costs included in the accompanying statement of operations were $1.4 billion and $1.3 billion for the years ended December 31, 2005 and 2004, respectively. Certain of our programming agreements are based on a flat fee per month or have guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under our programming contracts.

~~(5)~~		~~"Other" represents other guaranteed minimum commitments, which consist primarily of commitments to our billing services vendors.~~

We also rent utility poles used in our operations. Generally, pole rentals are cancelable on short notice, but we anticipate that such rentals will recur. Rent expense incurred for pole rental attachments for the years ended December 31, 2005 and 2004, was $46 million and $43 million, respectively.

We pay franchise fees under multi-year franchise agreements based on a percentage of revenues earned from video service per year. We also pay other franchise related costs, such as public education grants under multi-year agreements. Franchise fees and other franchise-related costs included in the

~~Table of Contents~~

~~accompanying statement of operations were $170 million and $164 million for the years ended December 31, 2005 and 2004, respectively.~~

We also have $165 million in letters of credit, primarily to our various worker’s compensation, property casualty and general liability carriers as collateral for reimbursement of claims. These letters of credit reduce the amount we may borrow under our credit facilities.

~~Historical Operating, Financing and Investing Activities~~

We held $3$948 million in cash and cash equivalents as of December 31, ~~2005~~2008 compared to ~~$546~~$2 million as of December 31, ~~2004. For~~2007. The increase in cash was the ~~year ended December 31, 2005, we generated $1.0 billion~~result of net cash flows from operating activities after paying cash interest of $650 million. In addition, we used approximately $1.1 billion for purchases of property, plant and equipment. Finally, we used $574 million of net cash flows in financing activities.a draw-down on our revolving credit facility.

Operating Activities.Net cash provided by operating activities ~~decreased $118~~increased $94 million ~~or 10%,~~ from ~~$1.2~~$1.4 billion for the year ended December 31, ~~2004~~2007 to ~~$1.0~~$1.5 billion for the year ended December 31, ~~2005. For the year ended December 31, 2005, net cash provided by operating activities decreased~~2008, primarily as a result of revenue growth from high-speed Internet and telephone driven by bundled services, as well as improved cost efficiencies, offset by an increase of $37 million in interest on cash ~~interest expense of $127~~pay obligations and changes in operating assets and liabilities that provided $37 million ~~over~~less cash during the ~~corresponding prior~~same period.

Investing Activities.Net cash used in investing activities for each of the years ended December 31, ~~2005~~2008 and ~~2004~~2007 was ~~$1.0 billion~~$1.2 billion.

Financing Activities. Net cash provided by financing activities was $689 million for the year ended December 31, 2008 and ~~$191~~net cash used in financing activities was $226 million ~~respectively. Investing activities used $827 million more~~for the year ended December 31, 2007. The increase in cash provided during the year ended December 31, 2005 than the corresponding period in 2004 primarily as a result of cash provided by proceeds from the sale of certain cable systems to Atlantic Broadband Finance, LLC in 2004 which did not recur in 2005 combined with increased cash used for capital expenditures.

~~Financing Activities.~~Net cash used in financing activities was $574 million and $515 million for the years ended December 31, 2005 and 2004, respectively. The increase in cash used during the year ended December 31, 2005, as2008 compared to the corresponding period in ~~2004,~~2007 was primarily the result of an increase in ~~distributions offset~~the amount by which borrowings exceeded repayments of long-term debt and a decrease in ~~payments for debt issuance costs.~~distributions.

Capital Expenditures

We have significant ongoing capital expenditure requirements. Capital expenditures were ~~$1.1~~$1.2 billion ~~and $893 million for~~in each of the years ended December 31, ~~2005~~2008 and ~~2004, respectively. The majority of the capital expenditures in 2005 and 2004 related to our customer premise equipment costs.~~2007. See the table below for more details.

Our capital expenditures are funded primarily from cash flows from operating activities and the issuance of ~~debt and borrowings under credit facilities.~~debt. In addition, ~~during the years ended December 31, 2005 and 2004,~~ our liabilities related to capital expenditures ~~increased $13~~decreased by $39 million and ~~decreased $33~~$2 million for the years ended December 31, 2008 and 2007, respectively.

The increase in capital expenditures for 2005 compared to 2004 is the result of expected increases in scalable infrastructure costs related to telephone services, deployment of advanced digital set-top terminals and capital expenditures to replace plant and equipment destroyed by hurricanes Katrina and Rita. During ~~2006,~~2009, we expect capital expenditures to be approximately ~~$1.0 billion to $1.1~~$1.2 billion. We expect ~~that~~ the nature of these expenditures will continue to be composed primarily of purchases of customer premise equipment related to telephone and other advanced services, support capital, and ~~for~~ scalable ~~infrastructure costs. We expect to fund~~infrastructure. The actual amount of our capital expenditures ~~for 2006 primarily from cash flows from operating activities~~depends on the deployment of advanced broadband services and ~~borrowings under our credit facilities.~~offerings. We may need additional capital if there is accelerated growth in high-speed Internet, telephone or digital customers or there is an increased need to respond to competitive pressures by expanding the delivery of other advanced services.

We have adopted capital expenditure disclosure guidance, which was developed by eleven then publicly traded cable system operators, including Charter, with the support of the ~~National Cable & Telecommunications Association ("NCTA").~~NCTA. The disclosure is intended to provide more consistency in the reporting of ~~operating statistics in~~ capital expenditures ~~and customers~~ among peer companies in the cable industry. These disclosure guidelines are not required ~~disclosure~~disclosures under GAAP, nor do they impact our accounting for capital expenditures under GAAP.

~~Table of Contents~~

The following table presents our major capital expenditures categories in accordance with NCTA disclosure guidelines for the years ended December 31, ~~2005~~2008 and ~~2004~~2007 (dollars in millions):

For the years ended December 31,

2005

2004

Customer premise equipment (a) $ 434 $ 451
Scalable infrastructure (b) 174 108
Line extensions (c) 134 131
Upgrade/Rebuild (d) 49 49
Support capital (e) 297 154

Total capital expenditures $ 1,088 $ 893

	For the years ended December 31,
	2008		2007

Customer premise equipment (a)	$	595	$	578
Scalable infrastructure (b)		251		232
Line extensions (c)		80		105
Upgrade/rebuild (d)		40		52
Support capital (e)		236		277

Total capital expenditures	$	1,202	$	1,244

(a)

Customer premise equipment includes costs incurred at the customer residence to secure new customers, revenue units and additional bandwidth revenues. It also includes customer installation costs in accordance with SFAS No. 51, Financial Reporting by Cable Television Companies, and customer premise equipment (e.g., set-top ~~terminals~~boxes and cable modems, etc.).

(b)	Scalable infrastructure includes costs not related to customer premise equipment or our network, to secure growth of new customers, revenue units, and additional bandwidth revenues, or provide service enhancements (e.g., headend equipment).

(c)	Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).

(d)	Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.

(e)	Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles).

Description of Our Outstanding Debt

Overview

As of December 31, ~~2005,~~2008 and 2007, our ~~actual~~ total debt was approximately ~~$9.0 billion, as summarized below (dollars in millions):~~

December 31, 2005

Start Date

Semi-Annual

For Interest

Principal

Accreted

Interest Payment

Payment on

Maturity

Amount

Value(a)

Dates

Discount Notes

Date(b)

CCO Holdings, LLC:

8 3/4% senior notes due 2013 $ 800 $ 794 5/15 & 11/15 11/15/13
Senior floating notes due 2010 550 550
3/15, 6/15,
9/15 & 12/15
12/15/10
Charter Operating:

8% senior second-lien notes due 2012 1,100 1,100 4/30 & 10/30 4/30/12
8 3/8% senior second-lien notes due 2014 733 733 4/30 & 10/30 4/30/14
Renaissance Media Group LLC:

10.000% senior discount notes due 2008 114 115 4/15 & 10/15
10/15/03
4/15/08
Credit Facilities:

Charter Operating (c) 5,731 5,731

$ 9,028 $ 9,023

~~(a)~~

~~The accreted value presented above generally represents the principal amount of the notes less the original issue discount at the time of sale plus the accretion to the balance sheet date.~~

~~(b)~~

In general, the obligors have the right to redeem all of the notes set forth in the above table in whole or part at their option, beginning at various times prior to their stated maturity dates, subject to certain conditions, upon the payment of the outstanding principal amount (plus a specified redemption premium) and all accrued and unpaid interest. For additional information see Note 9 to the accompanying consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data."

~~Table of Contents~~

~~(c)~~

In January 2006, our parent companies, CCH II and CCH II Capital Corp., issued $450 million principal amount of 10.250% senior notes due 2010, the proceeds of which were used to pay down credit facilities.

~~As of December 31, 2005 and 2004, our long-term debt totaled approximately $9.0~~$11.8 billion and ~~$8.3~~$9.9 billion, respectively. This debt was comprised of approximately ~~$5.7~~$8.6 billion and ~~$5.5~~$7.2 billion of credit facility debt and ~~$3.3~~$3.2 billion and ~~$2.8~~$2.7 billion accreted amount of high-yield notes at December 31, ~~2005~~2008 and ~~2004,~~2007, respectively. See the organizational chart on page 5 and the first table under “— Liquidity and Capital Resources — Overview of Our Debt and Liquidity” for debt outstanding by issuer.

As of December 31, ~~2005~~2008 and ~~2004,~~2007, the ~~weighted average interest rate on the credit facility debt was approximately 7.8% and 6.8% and the~~blended weighted average interest rate on our ~~high-yield notes~~debt was ~~approximately 8.3% and 8.2%, respectively, resulting in a blended weighted average interest rate of 8.0%~~6.4% and 7.3%, respectively. The interest rate on approximately ~~51%~~64% and ~~59%~~68% of the total principal amount of our debt was effectively fixed, including the effects of our interest rate hedge agreements, as of December 31, ~~2005~~2008 and ~~2004,~~2007, respectively. The fair value of our high-yield notes was ~~$3.2~~$2.4 billion and ~~$2.9~~$2.6 billion at December 31, ~~2005~~2008 and ~~2004,~~2007, respectively. The fair value of our credit facilities ~~is $5.7~~was $6.2 billion and ~~$5.5~~$6.7 billion at December 31, ~~2005~~2008 and ~~2004,~~2007, respectively. The fair value of high-yield notes iswas based on quoted market prices, and the fair value of the credit facilities iswas based on dealer quotations.

The following description is a summary of certain provisions of our credit facilities and our notes (the “Debt Agreements”). The summary does not restate the terms of the Debt Agreements in their entirety, nor does it describe all terms of the Debt Agreements. The agreements and instruments governing each of the Debt Agreements are complicated and you should consult such agreements and instruments for more detailed information regarding the Debt Agreements.

Credit Facilities – General

Charter Operating Credit Facilities ~~- General~~

~~The~~

Under the terms of the Proposed Restructuring, the Charter Operating credit facilities ~~were amended and restated concurrently with~~will remain outstanding although the ~~sale~~revolving line of $1.5 billion senior second-lien notes in April 2004, among other things, to defer maturities and increase availability under these facilities and to enable Charter Operating to acquire the interests of the lenders under the CC VI Operating, CC VIII Operating and Falcon credit ~~facilities, thereby consolidating all credit facilities under one amended and restated Charter Operating credit agreement.~~

would no longer be available for new borrowings. The Charter Operating credit facilities provide borrowing availability of up to ~~$6.5~~$8.0 billion as follows:

·~~two term facilities:~~

~~(i)~~•

a ~~Term A facility~~term loan with aan initial total principal amount of ~~$2.0 billion, of which 12.5% matures in 2007, 30% matures in 2008, 37.5% matures in 2009 and 20% matures in 2010; and~~

	~~(ii)~~	~~a Term B facility with a total principal amount of $3.0~~$6.5 billion, which ~~shall be~~is repayable in 27 equal quarterly installments, commencing March 31, 2008, and aggregating in each loan year to 1% of the original amount of the ~~Term B facility,~~term loan, with the remaining balance due at final maturity ~~in 2011;~~on March 6, 2014; and
	•	a revolving line of credit of $1.5 billion, with a maturity date on March 6, 2013.

·~~a revolving~~The Charter Operating credit ~~facility,~~facilities also allow us to enter into incremental term loans in ~~a total~~the future with an aggregate amount of ~~$1.5~~up to $1.0 billion, with amortization as set forth in the notices establishing such term loans, but with no amortization greater than 1% prior to the final maturity of the existing term loan. In March 2008, Charter Operating borrowed $500 million principal amount of incremental term loans (the “Incremental Term Loans”) under the Charter Operating credit facilities. The Incremental Term Loans have a final maturity of March 6, 2014 and prior to that date will amortize in ~~2010.~~quarterly principal installments totaling 1% annually beginning on June 30, 2008. The Incremental Term Loans bear interest at LIBOR plus 5.0%, with a LIBOR floor of 3.5%, and are otherwise governed by and subject to the existing terms of the Charter Operating credit facilities. Net proceeds from the Incremental Term Loans were used for general corporate purposes. Although the Charter Operating credit facilities allow for the incurrence of up to an additional $500 million in incremental term loans, no assurance can be given that we could obtain additional incremental term loans in the future if Charter Operating sought to do so especially after filing a Chapter 11 bankruptcy proceeding on March 27, 2009.

Amounts outstanding under the Charter Operating credit facilities bear interest, at Charter Operating’s election, at a base rate or the Eurodollar rate, as defined, plus a margin for Eurodollar loans of up to ~~3.00%~~2.00% for the ~~Term A facility and~~ revolving credit facility and ~~up to 3.25% for the Term B facility, and for base rate loans of up to~~ 2.00% for the ~~Term A facility~~term loan, and ~~revolving credit facility, and up to 2.25% for the Term B facility. A~~ quarterly commitment ~~fee~~fees of ~~up to .75%~~0.5% per annum is payable on the average daily unborrowed balance of the revolving credit ~~facilities.~~facility. If an event of default were to occur, such as a bankruptcy filing, Charter Operating would not be able to elect the Eurodollar rate and would have to pay interest at the base rate plus the applicable margin.

The obligations of ~~our subsidiaries~~Charter Operating under the Charter Operating credit facilities (the ~~"Obligations"~~“Obligations”) are guaranteed by Charter Operating’s immediate parent company, CCO Holdings, and ~~the~~ subsidiaries of Charter Operating, except for certain subsidiaries, including immaterial subsidiaries and subsidiaries precluded from guaranteeing by reason of the provisions of other indebtedness to which they are subject (the ~~"non-guarantor subsidiaries," primarily Renaissance and its subsidiaries)~~“non-guarantor subsidiaries”). The Obligations are also secured by (i) a lien on substantially all of the assets of Charter Operating and its subsidiaries (other than assets of the non-guarantor subsidiaries), to the extent such lien can be perfected under the Uniform Commercial Code by the filing of a financing statement, and (ii) a pledge by CCO Holdings of the equity interests owned by it in Charter Operating or any of Charter ~~Operating's~~Operating’s subsidiaries, as well as intercompany obligations owing to it by any of such entities.

Upon the Charter Holdings Leverage Ratio (as defined in the indenture governing the Charter Holdings senior notes and senior discount notes) being under 8.75 to 1.0, the Charter Operating credit facilities require that the 11.875% notes due 2008 issued by CC V Holdings, LLC be redeemed. Because such Leverage Ratio was determined to be under 8.75 to 1.0, CC V Holdings, LLC redeemed such notes in March 2005, and CC V Holdings, LLC and its subsidiaries (other than non-guarantor subsidiaries) became guarantors of the Obligations and have granted a lien on all of their assets as to which a lien can be perfected under the Uniform Commercial Code by the filing of a financing statement.

2837

~~Table of Contents~~

CCO Holdings Credit Facility

In March 2007, CCO Holdings entered into a credit agreement (the “CCO Holdings credit facility”) which consists of a $350 million term loan facility. Under the terms of the Proposed Restructuring, the CCO Holdings credit facility will remain outstanding. The facility matures in September 2014. The CCO Holdings credit facility also allows us to enter into incremental term loans in the future, maturing on the dates set forth in the notices establishing such term loans, but no earlier than the maturity date of the existing term loans. However, no assurance can be given that such incremental term loans could be obtained if CCO Holdings sought to do so. Borrowings under the CCO Holdings credit facility bear interest at a variable interest rate based on either LIBOR or a base rate plus, in either case, an applicable margin. The applicable margin for LIBOR term loans, other than incremental loans, is 2.50% above LIBOR. If an event of default were to occur, such as a bankruptcy filing, CCO Holdings would not be able to elect the Eurodollar rate and would have to pay interest at the base rate plus the applicable margin. The applicable margin with respect to incremental loans is to be agreed upon by CCO Holdings and the lenders when the incremental loans are established. The CCO Holdings credit facility is secured by the equity interests of Charter Operating, and all proceeds thereof.

Credit Facilities — Restrictive Covenants

Charter Operating Credit Facilities

The Charter Operating credit facilities contain representations and warranties, and affirmative and negative covenants customary for financings of this type. The financial covenants measure performance against standards set for leverage ~~debt service coverage, and interest coverage,~~to be tested as of the end of each quarter. ~~The maximum allowable leverage ratio is 4.25 to 1.0, the minimum allowable interest coverage ratio is 1.25 to 1.0 and the minimum allowable debt service coverage ratio is 1.05 to 1.0.~~ Additionally, the Charter Operating credit facilities contain provisions requiring mandatory loan prepayments under specific circumstances, including ~~when significant amounts~~in connection with certain sales of assets, ~~are sold and~~so long as the proceeds ~~are~~have not been reinvested in ~~assets useful in~~ the ~~business of the borrower within a specified period, and upon the incurrence of certain indebtedness when the ratio of senior first lien debt to operating cash flow is greater than 2.0 to 1.0.~~business.

The Charter Operating credit facilities permit Charter Operating and its subsidiaries to make distributions to pay interest on the ~~CCO~~Charter convertible notes, the CCHC notes, the Charter Holdings ~~senior~~notes, the CIH notes, the CCH I notes, the CCH II ~~senior~~ notes, the ~~CCH I senior~~CCO Holdings notes, the ~~CIH senior notes, the Charter~~CCO Holdings ~~senior notes~~credit facility, and the Charter ~~convertible senior~~Operating second-lien notes, provided that, among other things, no default has occurred and is continuing under the ~~Charter Operating~~ credit facilities. The Charter Operating credit facilities restrict the ability of Charter Operating and its subsidiaries to make distributions for the purpose of repaying indebtedness of their parent companies, except for repayments of certain indebtedness which was existing at the time the credit facilities were amended and restated, provided that certain conditions are met, including the satisfaction of a 1.5 to 1.0 interest coverage ratio test and a minimum available liquidity requirement of $250 million. Conditions to future borrowings include absence of a default or an event of default under the ~~Charter Operating~~ credit facilities, and the continued accuracy in all material respects of the representations and warranties, including the absence since December 31, ~~2003~~2005 of any event, development, or circumstance that has had or could reasonably be expected to have a material adverse effect on our business.

The events of default under the Charter Operating credit facilities include among other things:

~~(i)~~•

the failure to make payments when due or within the applicable grace ~~period,~~period;

~~(ii)~~•

the failure to comply with specified covenants, including, but not limited to, a covenant to deliver audited financial statements for Charter Operating with an unqualified opinion from our independent ~~auditors,~~accountants and without a “going concern” or like qualification or exception;

~~(iii)~~•

the failure to pay or the occurrence of events that cause or permit the acceleration of other indebtedness owing by CCO Holdings, Charter Operating, or Charter Operating’s subsidiaries in amounts in excess of ~~$50~~$100 million in aggregate principal ~~amount,~~amount;

~~(iv)~~•

the failure to pay or the occurrence of events that result in the acceleration of other indebtedness owing by certain of CCO Holdings’ direct and indirect parent companies in amounts in excess of $200 million in aggregate principal ~~amount,~~amount;

~~(v)~~•

Paul Allen and/or certain of his family members and/or their exclusively owned entities (collectively, the ~~"Paul~~“Paul Allen ~~Group"~~Group”) ceasing to have the power, directly or indirectly, to vote at least 35% of the ordinary voting power of Charter ~~Operating,~~Operating;

~~(vi)~~•

the consummation of any transaction resulting in any person or group (other than the Paul Allen Group) having power, directly or indirectly, to vote more than 35% of the ordinary voting power of Charter Operating, unless the Paul Allen Group holds a greater share of ordinary voting power of Charter ~~Operating,~~Operating; and

~~(vii)~~

certain of Charter Operating’s indirect or direct parent companies having indebtedness in excess of $500 million aggregate principal amount which remains undefeased three months prior to the final maturity of such indebtedness, and

~~(viii)~~•

Charter Operating ceasing to be a wholly-owned direct subsidiary of CCO Holdings, except in certain very limited circumstances.

CCO Holdings Credit Facility

The CCO Holdings credit facility contains covenants that are substantially similar to the restrictive covenants for the CCO Holdings notes except that the leverage ratio is 5.50 to 1.0. See “-Summary of Restricted Covenants of Our

High Yield Notes.” The CCO Holdings credit facility contains provisions requiring mandatory loan prepayments under specific circumstances, including in connection with certain sales of assets, so long as the proceeds have not been reinvested in the business. The CCO Holdings credit facility permits CCO Holdings and its subsidiaries to make distributions to pay interest on the Charter convertible senior notes, the CCHC notes, the Charter Holdings notes, the CIH notes, the CCH I notes, the CCH II notes, the CCO Holdings notes, and the Charter Operating second-lien notes, provided that, among other things, no default has occurred and is continuing under the CCO Holdings credit facility.

Outstanding Notes

CCO Holdings, LLC Notes

~~8 ¾% Senior Notes due 2013~~

In November 2003 and August 2005, CCO Holdings and CCO Holdings Capital Corp. jointly issued $500 million and $300 million, respectively, total principal amount of 8¾% senior notes due ~~2013.~~

~~Table of Contents~~

~~Interest on the CCO Holdings~~2013 (the “CCOH 2013 Notes”). The CCOH 2013 Notes are senior ~~notes accrues at 8¾% per year and is payable semi-annually in arrears on each May 15 and November 15.~~

At any time prior to November 15, 2006, the issuers of the CCO Holdings senior notes may redeem up to 35% of the total principal amount of the CCO Holdings senior notes to the extent of public equity proceeds they have received on a pro rata basis at a redemption price equal to 108.75% of the principal amount of CCO Holdings senior notes redeemed, plus any accrued and unpaid interest.

On or after November 15, 2008, the issuers of the CCO Holdings senior notes may redeem all or a part of the notes at a redemption price that declines ratably from the initial redemption price of 104.375% to a redemption price on or after November 15, 2011 of 100.0% of the principal amount of the CCO Holdings senior notes redeemed, plus, in each case, any accrued and unpaid interest.

~~Senior Floating Rate Notes Due 2010~~

~~In December 2004, CCO Holdings and CCO Holdings Capital Corp. jointly issued $550 million total principal amount of senior floating rate notes due 2010.~~

~~The CCO Holdings senior floating rate notes have an annual interest rate of LIBOR plus 4.125%, which resets and is payable quarterly in arrears on each March 15, June 15, September 15 and December 15.~~

At any time prior to December 15, 2006, CCO Holdings and CCO Holdings Capital Corp. may redeem up to 35% of the notes in an amount not to exceed the amount of proceeds of one or more public equity offerings at a redemption price equal to 100% of the principal amount, plus a premium equal to the interest rate per annum applicable to the notes on the date notice of redemption is given, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 65% of the original aggregate principal amount of the notes issued remains outstanding after the redemption.

CCO Holdings and CCO Holdings Capital Corp. may redeem the notes in whole or in part at the issuers’ option from December 15, 2006 until December 14, 2007 for 102% of the principal amount, from December 15, 2007 until December 14, 2008 for 101% of the principal amount and from and after December 15, 2008, at par, in each case, plus accrued and unpaid interest.

~~Additional terms of the CCO Holdings Senior Notes and Senior Floating Rate Notes~~

~~The CCO Holdings notes are general unsecured~~debt obligations of CCO Holdings and CCO Holdings Capital Corp. They rank equally with all other current orand future unsecured, unsubordinated obligations of CCO Holdings and CCO Holdings Capital Corp. ~~The~~, including the CCO Holdings ~~notes~~credit facility. The CCOH 2013 Notes are structurally subordinated to all obligations of subsidiaries of CCO Holdings, including the ~~Renaissance notes, the~~ Charter Operating notes and the Charter Operating credit facilities.

In Under the ~~event of specified change of control events, CCO Holdings must offer to purchase the outstanding CCO Holdings senior notes from the holders at a purchase price equal to 101%~~terms of the ~~total principal amount of the notes, plus any accrued and unpaid interest.~~

~~The indenture governing~~Proposed Restructuring, the CCO Holdings ~~senior~~ notes contains restrictive covenants that limit certain transactions or activities by CCO Holdings and its restricted subsidiaries, including the covenants summarized below. Substantially all of CCO Holdings' direct and indirect subsidiaries are currently restricted subsidiaries.

The covenant in the indenture governing the CCO Holdings senior notes that restricts incurrence of debt and issuance of preferred stock permits CCO Holdings and its subsidiaries to incur or issue specified amounts of debt or preferred stock, if, after giving pro forma effect to the incurrence or issuance, CCO Holdings could meet a leverage ratio (ratio of consolidated debt to four times EBITDA, as defined, from the most recent fiscal quarter for which internal financial reports are available) of 4.5 to 1.0.

In addition, regardless of whether the leverage ratio could be met, so long as no default exists or would result from the incurrence or issuance, CCO Holdings and its restricted subsidiaries are permitted to incur or issue:

~~up to $9.75 billion of debt under credit facilities, including debt under credit facilities outstanding on the issue date of the CCO Holdings senior notes,~~

~~Table of Contents~~

~~up to $75 million of debt incurred to finance the purchase or capital lease of new assets,~~

~~up to $300 million of additional debt for any purpose, and~~

~~other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt, and interest rate swaps to provide protection against fluctuation in interest rates.~~

The restricted subsidiaries of CCO Holdings are generally not permitted to issue debt securities contractually subordinated to other debt of the issuing subsidiary or preferred stock, in either case in any public or Rule 144A offering.

The CCO Holdings indenture permits CCO Holdings and its restricted subsidiaries to incur debt under one category, and later reclassify that debt into another category. The Charter Operating credit facilities generally impose more restrictive limitations on incurring new debt than CCO Holdings' indenture, so our subsidiaries that are subject to credit facilities are not permitted to utilize the full debt incurrence that would otherwise be available under the CCO Holdings indenture covenants.

~~Generally, under CCO Holdings' indenture:~~

CCO Holdings and its restricted subsidiaries are permitted to pay dividends on equity interests, repurchase interests, or make other specified restricted payments only if CCO Holdings can incur $1.00 of new debt under the leverage ratio test, which requires that CCO Holdings meet a 4.5 to 1.0 leverage ratio after giving effect to the transaction, and if no default exists or would exist as a consequence of such incurrence. If those conditions are met, restricted payments are permitted in a total amount of up to 100% of CCO Holdings' consolidated EBITDA, as defined, minus 1.3 times its consolidated interest expense, plus 100% of new cash and appraised non-cash equity proceeds received by CCO Holdings and not allocated to the debt incurrence covenant, all cumulatively from the fiscal quarter commenced October 1, 2003, plus $100 million.

~~In addition, CCO Holdings may make distributions or restricted payments, so long as no default exists or would be caused by the transaction:~~

~~to repurchase management equity interests in amounts not to exceed $10 million per fiscal year;~~

~~to pay, regardless of the existence of any default, pass-through tax liabilities in respect of ownership of equity interests in Charter Holdings or its restricted subsidiaries;~~

~~to pay, regardless of the existence of any default, interest when due on the Charter convertible notes, Charter Holdings notes, CIH notes, CCH I notes and the CCH II notes;~~

to purchase, redeem or refinance Charter Holdings notes, CIH notes, CCH I notes, CCH II notes, Charter notes, and other direct or indirect parent company notes, so long as CCO Holdings could incur $1.00 of indebtedness under the 4.5 to 1.0 leverage ratio test referred to above and there is no default; or

to make other specified restricted payments including merger fees up to 1.25% of the transaction value, repurchases using concurrent new issuances, and certain dividends on existing subsidiary preferred equity interests.

The indenture governing the CCO Holdings senior notes restricts CCO Holdings and its restricted subsidiaries from making investments, except specified permitted investments, or creating new unrestricted subsidiaries, if there is a default under the indenture or if CCO Holdings could not incur $1.00 of new debt under the 4.5 to 1.0 leverage ratio test described above after giving effect to the transaction.

~~Permitted investments include:~~

~~investments by CCO Holdings and its restricted subsidiaries in CCO Holdings and in other restricted subsidiaries, or entities that become restricted subsidiaries as a result of the investment,~~

~~Table of Contents~~

will remain outstanding.

investments aggregating up to 100% of new cash equity proceeds received by CCO Holdings since November 10, 2003 to the extent the proceeds have not been allocated to the restricted payments covenant described above,

~~other investments up to $750 million outstanding at any time, and~~

~~certain specified additional investments, such as investments in customers and suppliers in the ordinary course of business and investments received in connection with permitted asset sales.~~

CCO Holdings is not permitted to grant liens on its assets other than specified permitted liens. Permitted liens include liens securing debt and other obligations incurred under our subsidiaries' credit facilities, liens securing the purchase price of new assets, liens securing indebtedness up to $50 million and other specified liens incurred in the ordinary course of business. The lien covenant does not restrict liens on assets of subsidiaries of CCO Holdings.

CCO Holdings and CCO Holdings Capital, its co-issuer, are generally not permitted to sell all or substantially all of their assets or merge with or into other companies unless their leverage ratio after any such transaction would be no greater than their leverage ratio immediately prior to the transaction, or unless CCO Holdings and its subsidiaries could incur $1.00 of new debt under the 4.50 to 1.0 leverage ratio test described above after giving effect to the transaction, no default exists, and the surviving entity is a U.S. entity that assumes the CCO Holdings senior notes.

CCO Holdings and its restricted subsidiaries may generally not otherwise sell assets or, in the case of restricted subsidiaries, issue equity interests, unless they receive consideration at least equal to the fair market value of the assets or equity interests, consisting of at least 75% in cash, assumption of liabilities, securities converted into cash within 60 days or productive assets. CCO Holdings and its restricted subsidiaries are then required within 365 days after any asset sale either to commit to use the net cash proceeds over a specified threshold to acquire assets, including current assets, used or useful in their businesses or use the net cash proceeds to repay debt, or to offer to repurchase the CCO Holdings senior notes with any remaining proceeds.

CCO Holdings and its restricted subsidiaries may generally not engage in sale and leaseback transactions unless, at the time of the transaction, CCO Holdings could have incurred secured indebtedness in an amount equal to the present value of the net rental payments to be made under the lease, and the sale of the assets and application of proceeds is permitted by the covenant restricting asset sales.

CCO Holdings' restricted subsidiaries may generally not enter into restrictions on their ability to make dividends or distributions or transfer assets to CCO Holdings on terms that are materially more restrictive than those governing their debt, lien, asset sale, lease and similar agreements existing when they entered into the indenture, unless those restrictions are on customary terms that will not materially impair CCO Holdings' ability to repay its notes.

The restricted subsidiaries of CCO Holdings are generally not permitted to guarantee or pledge assets to secure debt of CCO Holdings, unless the guarantying subsidiary issues a guarantee of the notes of comparable priority and tenor, and waives any rights of reimbursement, indemnity or subrogation arising from the guarantee transaction for at least one year.

The indenture also restricts the ability of CCO Holdings and its restricted subsidiaries to enter into certain transactions with affiliates involving consideration in excess of $15 million without a determination by the board of directors that the transaction is on terms no less favorable than arms-length, or transactions with affiliates involving over $50 million without receiving an independent opinion as to the fairness of the transaction to the holders of the CCO Holdings notes.

~~Bridge Loan~~

In October 2005, CCO Holdings and CCO Holdings Capital Corp., as guarantor thereunder, entered into the bridge loan with the Lenders whereby the Lenders have committed to make loans to CCO Holdings in an aggregate amount of $600 million. In January 2006, upon the issuance of $450 million principal amount CCH II notes, the commitment under the bridge loan agreement was reduced to $435 million. CCO Holdings may, subject to certain conditions, including the satisfaction of certain of the conditions to borrowing under the credit facilities, draw upon the facility between January 2, 2006 and September 29, 2006 and the loans will mature on the sixth anniversary of the first borrowing under the bridge loan. Each loan will accrue interest at a rate equal to an adjusted LIBOR rate plus a spread. The spread will initially be 450 basis points and will increase (a) by an additional 25 basis points at

~~Table of Contents~~

the end of the six-month period following the date of the first borrowing, (b) by an additional 25 basis points at the end of each of the next two subsequent three month periods and (c) by 62.5 basis points at the end of each of the next two subsequent three-month periods.

Beginning on the first anniversary of the first date that CCO Holdings borrows under the bridge loan and at any time thereafter, any Lender will have the option to receive "exchange notes" (the terms of which are described below, the "Exchange Notes") in exchange for any loan that has not been repaid by that date. Upon the earlier of (x) the date that at least a majority of all loans that have been outstanding have been exchanged for Exchange Notes and (y) the date that is 18 months after the first date that CCO Holdings borrows under the bridge loan, the remainder of loans will be automatically exchanged for Exchange Notes.

As conditions to each draw, (i) there shall be no default under the bridge loan, (ii) all the representations and warranties under the bridge loan shall be true and correct in all material respects and (iii) all conditions to borrowing under the Charter Operating credit facilities (with certain exceptions) shall be satisfied.

The aggregate unused commitment will be reduced by 100% of the net proceeds from certain asset sales, to the extent such net proceeds have not been used to prepay loans or Exchange Notes. However, asset sales that generate net proceeds of less than $75 million will not be subject to such commitment reduction obligation, unless the aggregate net proceeds from such asset sales exceed $200 million, in which case the aggregate unused commitment will be reduced by the amount of such excess.

CCO Holdings will be required to prepay loans (and redeem or offer to repurchase Exchange Notes, if issued) from the net proceeds from (i) the issuance of equity or incurrence of debt by Charter and its subsidiaries, with certain exceptions, and (ii) certain asset sales (to the extent not used for purposes permitted under the bridge loan).

The covenants and events of default applicable to CCO Holdings under the bridge loan are similar to the covenants and events of default in the indenture for the senior secured notes of CCH I with various additional limitations.

The Exchange Notes will mature on the sixth anniversary of the first borrowing under the bridge loan. The Exchange Notes will bear interest at a rate equal to the rate that would have been borne by the loans. The same mandatory redemption provisions will apply to the Exchange Notes as applied to the loans, except that CCO Holdings will be required to make an offer to redeem upon the occurrence of a change of control at 101% of principal amount plus accrued and unpaid interest.

The Exchange Notes will, if held by a person other than an initial lender or an affiliate thereof, be (a) non-callable for the first three years after the first borrowing date and (b) thereafter, callable at par plus accrued interest plus a premium equal to 50% of the coupon in effect on the first anniversary of the first borrowing date, which premium shall decline to 25% of such coupon in the fourth year and to zero thereafter. Otherwise, the Exchange Notes will be callable at any time at 100% of the amount thereof plus accrued and unpaid interest.

Charter Communications Operating, LLC Notes

OnIn April ~~27,~~ 2004, Charter Operating and Charter Communications Operating Capital Corp. jointly issued $1.1 billion of 8% senior second-lien notes due 2012 and $400 million of 8 3/8% senior second-lien notes due ~~2014, for total gross proceeds of $1.5 billion.~~2014. In March and June 2005, Charter Operating consummated exchange transactions with a small number of institutional holders of Charter Holdings 8.25% senior notes due 2007 pursuant to which Charter Operating issued, in private placement transactions, approximately $333 million principal amount of its 8 3/8% senior second-lien notes due 2014 in exchange for approximately $346 million of the Charter Holdings 8.25% senior notes due 2007. ~~Interest on the~~In March 2006, Charter Operating exchanged $37 million of Renaissance Media Group LLC 10% senior discount notes ~~is payable semi-annually in arrears on each April 30 and October 30.~~

~~The~~due 2008 for $37 million principal amount of Charter Operating 8 3/8% senior second-lien notes ~~were sold~~due 2014. In March 2008, Charter Operating issued $546 million principal amount of 10.875% senior second-lien notes due 2014, guaranteed by CCO Holdings and certain other subsidiaries of Charter Operating, in a private ~~transaction that was~~transaction. Net proceeds from the senior second-lien notes were used to reduce borrowings, but not ~~subject to~~commitments, under the registration requirements of the Securities Act of 1933. The Charter Operating notes are not expected to have the benefit of any exchange or other registration rights, except in specified limited circumstances.

~~On the issue date~~revolving portion of the Charter Operating notes, because of restrictions contained in the Charter Holdings indentures, there were no Charter Operating note guarantees, even though Charter Operating’s immediate parent, CCO Holdings, and certain of our subsidiaries were obligors and/or guarantors under the Charter Operating credit facilities. ~~Upon the occurrence of the guarantee and pledge date (generally, the fifth business day after the Charter Holdings leverage ratio was certified~~

Subject to ~~be below 8.75 to 1.0),~~specified limitations, CCO Holdings and those subsidiaries of Charter

~~Table of Contents~~

Operating that ~~were then~~are guarantors of, or otherwise obligors with respect to, indebtedness under the Charter Operating credit facilities and related obligations ~~were~~are required to guarantee the Charter Operating notes. The note guarantee of each such guarantor is:

a senior obligation of such guarantor;

structurally senior to the outstanding CCO Holdings notes (except in the case of CCO Holdings’ note guarantee, which is structurally pari passu with such senior notes), the outstanding CCH II notes, the outstanding CCH I notes, the outstanding CIH notes, the outstanding Charter Holdings notes and the outstanding Charter convertible senior ~~notes (but subject to provisions in the Charter Operating indenture that permit interest and, subject to meeting the 4.25 to 1.0 leverage ratio test, principal payments to be made thereon); and~~notes;

senior in right of payment to any future subordinated indebtedness of such ~~guarantor.~~guarantor; and

~~As a result of the above leverage ratio test being met, CCO Holdings and certain of its subsidiaries provided the additional guarantees described above during the first quarter of 2005.~~

All the subsidiaries of Charter Operating (except CCO NR Sub, LLC, and certain other subsidiaries that are not deemed material and are designated as nonrecourse subsidiaries under the Charter Operating credit facilities) are restricted subsidiaries of Charter Operating under the Charter Operating notes. Unrestricted subsidiaries generally will not be subject to the restrictive covenants in the Charter Operating indenture.

In the event of specified change of control events, Charter Operating must offer to purchase the Charter Operating notes at a purchase price equal to 101% of the total principal amount of the Charter Operating notes repurchased plus any accrued and unpaid interest thereon.

The limitations on incurrence of debt contained in the indenture governing the Charter Operating notes permit Charter Operating and its restricted subsidiaries that are guarantors of the Charter Operating notes to incur additional debt or issue shares of preferred stock if, after giving pro forma effect to the incurrence, Charter Operating could meet a leverage ratio test (ratio of consolidated debt to four times EBITDA, as defined, from the most recent fiscal quarter for which internal financial reports are available) of 4.25 to 1.0.

In addition, regardless of whether the leverage ratio test could be met, so long as no default exists or would result from the incurrence or issuance, Charter Operating and its restricted subsidiaries are permitted to incur or issue:

upeffectively senior to ~~$6.8 billion of debt under credit facilities (but such incurrence is permitted only by Charter Operating and its restricted subsidiaries that are guarantors~~the relevant subsidiary’s unsecured indebtedness, to the extent of the ~~Charter Operating notes, so long as there are such guarantors), including debt under credit facilities outstanding on the issue date~~value of the ~~Charter Operating notes;~~collateral but subject to the prior lien of the credit facilities.

~~up to $75 million of debt incurred to finance the purchase or capital lease of assets;~~

~~up to $300 million of additional debt for any purpose; and~~

other items of indebtedness for specific purposes such as refinancing of existing debt and interest rate swaps to provide protection against fluctuation in interest rates and, subject to meeting the leverage ratio test, debt existing at the time of acquisition of a restricted subsidiary.

The ~~indenture governing the~~ Charter Operating notes ~~permits Charter Operating to incur debt under one of the categories above,~~ and later reclassify the debt into a different category. The Charter Operating credit facilities generally impose more restrictive limitations on incurring new debt than the Charter Operating indenture, so our subsidiaries that are subject to the Charter Operating credit facilities are not permitted to utilize the full debt incurrence that would otherwise be available under the Charter Operating indenture covenants.

Generally, under Charter Operating’s indenture Charter Operating and its restricted subsidiaries are permitted to pay dividends on equity interests, repurchase interests, or make other specified restricted payments only if Charter Operating could incur $1.00 of new debt under the leverage ratio test, which requires that Charter Operating meet a 4.25 to 1.0 leverage ratio after giving effect to the transaction, and if no default exists or would exist as a consequence of such incurrence. If those conditions are met, restricted payments are permitted in a total amount of up to 100% of Charter Operating’s consolidated EBITDA, as defined, minus 1.3 times its consolidated interest expense, plus 100% of new cash and appraised non-cash equity proceeds received by Charter Operating and not allocated to the debt incurrence covenant, all cumulatively from the fiscal quarter commenced April 1, 2004, plus $100 million.

~~Table of Contents~~

~~In addition, Charter Operating may make distributions or restricted payments, so long as no default exists or would be caused by the transaction:~~

~~to repurchase management equity interests in amounts not to exceed $10 million per fiscal year;~~

~~regardless of the existence of any default, to pay pass-through tax liabilities in respect of ownership of equity interests in Charter Operating or its restricted subsidiaries;~~

to pay, regardless of the existence of any default, interest when due on the Charter convertible notes, Charter Holdings notes, the CIH notes, the CCH I notes, the CCH II notes and the CCO Holdings notes;

to purchase, redeem or refinance the Charter Holdings notes, the CIH notes, the CCH I notes, the CCH II notes, the CCO Holdings notes, the Charter convertible notes, and other direct or indirect parent company notes, so long as Charter Operating could incur $1.00 of indebtedness under the 4.25 to 1.0 leverage ratio test referred to above and there is no default, or

The indenture governing the Charter Operating notes restricts Charter Operating and its restricted subsidiaries from making investments, except specified permitted investments, or creating new unrestricted subsidiaries, if there is a default under the indenture or if Charter Operating could not incur $1.00 of new debt under the 4.25 to 1.0 leverage ratio test described above after giving effect to the transaction.

~~Permitted investments include:~~

investments by Charter Operating and its restricted subsidiaries in Charter Operating and in other restricted subsidiaries, or entities that become restricted subsidiaries as a result of the investment,

investments aggregating up to 100% of new cash equity proceeds received by Charter Operating since April 27, 2004 to the extent the proceeds have not been allocated to the restricted payments covenant described above,

~~other investments up to $750 million outstanding at any time, and~~

~~certain specified additional investments, such as investments in customers and suppliers in the ordinary course of business and investments received in connection with permitted asset sales.~~

Charter Operating and its restricted subsidiaries are not permitted to grant liens senior to the liens securing the Charter Operating notes, other than permitted liens, on their assets to secure indebtedness or other obligations, if, after giving effect to such incurrence, the senior secured leverage ratio (generally, the ratio of obligations secured by first priority liens to four times EBITDA, as defined, from the most recent fiscal quarter for which internal financial reports are available) would exceed 3.75 to 1.0. Permitted liens include liens securing indebtedness and other obligations under permitted credit facilities, liens securing the purchase price of new assets, liens securing indebtedness of up to $50 million and other specified liens incurred in the ordinary course of business.

Charter Operating and Charter Communications Operating Capital Corp., its co-issuer, are generally not permitted to sell all or substantially all of their assets or merge with or into other companies unless their leverage ratio after any such transaction would be no greater than their leverage ratio immediately prior to the transaction, or unless Charter Operating and its subsidiaries could incur $1.00 of new debt under the 4.25 to 1.0 leverage ratio test described above after giving effect to the transaction, no default exists, and the surviving entity is a U.S. entity that assumes the Charter Operating notes.

Charter Operating and its restricted subsidiaries generally may not otherwise sell assets or, in the case of restricted subsidiaries, issue equity interests, unless they receive consideration at least equal to the fair market value of the assets or equity interests, consisting of at least 75% in cash, assumption of liabilities, securities converted into cash within 60 days or productive assets. Charter Operating and its restricted subsidiaries are then required within 365 days after any asset sale either to commit to use the net cash proceeds over a specified threshold to acquire assets, including current assets, used or useful in their businesses or use the net cash proceeds to repay debt, or to offer to repurchase the Charter Operating notes with any remaining proceeds.

Charter Operating and its restricted subsidiaries may generally not engage in sale and leaseback transactions unless, at the time of the transaction, Charter Operating could have incurred secured indebtedness in an amount equal to the

~~Table of Contents~~

~~present value of the net rental payments to be made under the lease, and the sale of the assets and application of proceeds is permitted by the covenant restricting asset sales.~~

Charter Operating’s restricted subsidiaries may generally not enter into restrictions on their ability to make dividends or distributions or transfer assets to Charter Operating on terms that are materially more restrictive than those governing their debt, lien, asset sale, lease and similar agreements existing when Charter Operating entered into the indenture governing the Charter Operating senior second-lien notes unless those restrictions are on customary terms that will not materially impair Charter Operating’s ability to repay the Charter Operating notes.

The restricted subsidiaries of Charter Operating are generally not permitted to guarantee or pledge assets to secure debt of Charter Operating, unless the guarantying subsidiary issues a guarantee of the notes of comparable priority and tenor, and waives any rights of reimbursement, indemnity or subrogation arising from the guarantee transaction for at least one year.

The indenture also restricts the ability of Charter Operating and its restricted subsidiaries to enter into certain transactions with affiliates involving consideration in excess of $15 million without a determination by the board of directors that the transaction is on terms no less favorable than arms-length, or transactions with affiliates involving over $50 million without receiving an independent opinion as to the fairness of the transaction to the holders of the Charter Operating notes.

Charter Operating and its restricted subsidiaries are generally not permitted to transfer equity interests in restricted subsidiaries unless the transfer is of all of the equity interests in the restricted subsidiary or the restricted subsidiary remains a restricted subsidiary and net proceeds of the equity sale are applied in accordance with the asset sales covenant.

~~Until the guarantee and pledge date, the Charter Operating notes~~related note guarantees are secured by a second-priority lien on all of Charter Operating’s assets that secure the obligations of Charter Operating under the Charter Operating credit facility and specified related obligations. The collateral secures the obligations of Charter Operating with respect to the 8% senior second-lien notes due 2012 and the 8 3/8% senior second-lien notes due 2014 on a ratable basis. The collateral consists of substantially all of Charter Operating’s assets in which security interests may be perfected under the Uniform Commercial Code by filing a financing statement (including capital stock and intercompany obligations), including, but not limited to:

~~all of the capital stock of all of Charter Operating’s direct subsidiaries, including, but not limited to, CCO NR Holdings, LLC; and~~

all intercompany obligations owing to Charter Operating including, but not limited to, intercompany notes from CC VI Operating, CC VIII Operating and Falcon, which notes are supported by the same guarantees and collateral that supported these subsidiaries’ credit facilities prior to the amendment and restatement of the Charter Operating credit facilities.

~~Since the occurrence of the guarantee and pledge date, the collateral for the Charter Operating notes consists of~~ all of Charter Operating’s and its subsidiaries’ assets that secure the obligations of Charter Operating or any subsidiary of Charter Operating with respect to the Charter Operating credit facilities and the related obligations. The collateral currently consists of the capital stock of Charter Operating held by CCO Holdings, all of the intercompany obligations owing to CCO Holdings by Charter Operating or any subsidiary of Charter Operating, and substantially all of Charter Operating’s and the guarantors’ assets (other than the assets of CCO Holdings) in which security interests may be perfected under the Uniform Commercial Code by filing a financing statement (including capital stock and intercompany obligations), including, but not limited to:

with certain exceptions, all capital stock (limited in the case of capital stock of foreign subsidiaries, if any, to 66% of the capital stock of first tier foreign Subsidiaries) held by Charter Operating or any guarantor; and

with certain exceptions, all intercompany obligations owing to Charter Operating or any guarantor.

In March 2005, CC V Holdings, LLC redeemed in full the notes outstanding under the CC V indenture. Following that redemption CC V Holdings, LLC and its subsidiaries guaranteed the Charter Operating credit facilities and the related obligations and secured those guarantees with first-priority liens, and guaranteed the notes and secured the Charter Operating senior second lien notes with second-priority liens, on substantially all of their assets in which

~~Table of Contents~~

~~security interests may be perfected under the Uniform Commercial Code by filing a financing statement (including capital stock and intercompany obligations).~~

In addition, if Charter Operating or its subsidiaries exercise any option to redeem in full the notes outstanding under the Renaissance indenture, then, provided that the Leverage Condition remains satisfied, the Renaissance entities will be required to provide corresponding guarantees of the Charter Operating credit facilities and related obligations and note guarantees and to secure the Charter Operating notes and the Charter Operating credit facilities and related obligations with corresponding liens.

In the event that additional liens are granted by Charter Operating or its subsidiaries to secure obligations under the Charter Operating credit facilities or the related obligations, second priority liens on the same assets will be granted to secure the Charter Operating notes, which liens will be subject to the provisions of an intercreditor agreement (to which none of Charter Operating or its affiliates are parties). Notwithstanding the foregoing sentence, no such second priority liens need be provided if the time such lien would otherwise be granted is not during a guarantee and pledge availability period (when the Leverage Condition is satisfied), but such second priority liens will be required to be provided in accordance with the foregoing sentence on or prior to the fifth business day of the commencement of the next succeeding guarantee and pledge availability period.

~~Renaissance Media Notes~~

The ~~10%~~Charter Operating notes are senior ~~discount~~debt obligations of Charter Operating and Charter Communications Operating Capital Corp. To the extent of the value of the collateral (but subject to the prior lien of the credit facilities), they rank effectively senior to all of Charter Operating’s future unsecured senior indebtedness. Under the terms of the Proposed Restructuring, the Charter Operating notes ~~due 2008 were~~will remain outstanding.

Redemption Provisions of Our High Yield Notes

The various notes issued by ~~Renaissance Media (Louisiana) LLC, Renaissance Media (Tennessee) LLC~~us and ~~Renaissance Media Holdings Capital Corporation,~~our subsidiaries included in the table may be redeemed in accordance with ~~Renaissance Media Group LLC~~the following table or are not redeemable until maturity as ~~guarantor~~indicated:

Note Series	Redemption Dates	Percentage of Principal

CCO Holdings:
8 3/4% senior notes due 2013	November 15, 2008 – November 14, 2009		104.375	%
	November 15, 2009 – November 14, 2010		102.917	%
	November 15, 2010 – November 14, 2011		101.458	%
	Thereafter		100.000	%
Charter Operating:
8% senior second-lien notes due 2012	At any time		*
8 3/8% senior second-lien notes due 2014	April 30, 2009 – April 29, 2010		104.188	%
	April 30, 2010 – April 29, 2011		102.792	%
	April 30, 2011 – April 29, 2012		101.396	%
	Thereafter		100.000	%
10.875% senior second-lien notes due 2014	At any time		**

Charter Operating may, at any time and from time to time, at their option, redeem the outstanding 8% second lien notes due 2012, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the redemption date, plus the Make-Whole Premium. The Make-Whole Premium is an amount equal to the excess of (a) the present value of the remaining interest and principal payments due on an 8% senior second-lien notes due 2012 to its final maturity date, computed using a discount rate equal to the Treasury Rate on such date plus 0.50%, over (b) the outstanding principal amount of such Note.

Charter Operating may redeem the outstanding 10.875% second lien notes due 2014, at their option, on or after varying dates, in each case at a premium, plus the Make-Whole Premium. The Make-Whole Premium is an amount equal to the excess of (a) the present value of the remaining interest and principal payments due on a 10.875% senior second-lien note due 2014 to its final maturity date, computed using a discount rate equal to the Treasury Rate on such date plus 0.50%, over (b) the outstanding principal amount of such note. The Charter Operating 10.875% senior second-lien notes may be redeemed at any time on or after March 15, 2012 at specified prices.

In the ~~United States Trust Company~~event that a specified change of New York as trustee. Renaissance Media Group LLC, which is the direct or indirect parent company of these issuers, is a subsidiary of Charter Operating. The Renaissance 10% notes and the Renaissance guarantee are unsecured, unsubordinated debtcontrol event occurs, each of the ~~issuers and the guarantor, respectively. In October 1998, the~~respective issuers of the ~~Renaissance~~ notes ~~exchanged $163 million of the original issued and~~must offer to repurchase any then outstanding ~~Renaissance~~ notes for an equivalent value of new Renaissance notes. The form and terms of the new Renaissance notes are the same in all material respects as the form and terms of the original Renaissance notes except that the issuance of the new Renaissance notes was registered under the Securities Act.

~~Interest on the Renaissance notes is payable semi-annually in arrears in cash~~ at ~~a rate of 10% per year. The Renaissance notes are redeemable at the option of the issuers thereof, in whole or in part, initially at 105%~~101% of their principal amount ~~at maturity,~~or accrued value, as applicable, plus accrued and unpaid interest, ~~declining to 100%~~if any.

Summary of Restrictive Covenants of Our High Yield Notes

The following description is a summary of certain restrictions of our Debt Agreements. The summary does not restate the terms of the ~~principal amount at maturity, plus accrued interest, on or after April 15, 2006.~~

~~Our acquisition of Renaissance triggered change of control provisions~~Debt Agreements in their entirety, nor does it describe all restrictions of the ~~Renaissance notes that required us to offer to purchase the Renaissance notes at a purchase price equal to 101% of their accreted value on the date~~Debt Agreements. The agreements and instruments governing each of the ~~purchase, plus accrued interest, if any. In May 1999, we made an offer~~Debt Agreements are complicated and you should consult such agreements and instruments for more detailed information regarding the Debt Agreements.

The notes issued by CCO Holdings and Charter Operating (together, the “note issuers”) were issued pursuant to ~~repurchase~~indentures that contain covenants that restrict the ~~Renaissance notes, and holders of Renaissance notes representing 30%~~ability of the ~~total principal amount outstanding at maturity tendered~~note issuers and their ~~Renaissance notes for repurchase.~~subsidiaries to, among other things:

·	incur indebtedness;

·	pay dividends or make distributions in respect of capital stock and other restricted payments;

·	issue equity;

·	make investments;

·	create liens;

·	sell assets;

·	consolidate, merge, or sell all or substantially all assets;

·	enter into sale leaseback transactions;

·	create restrictions on the ability of restricted subsidiaries to make certain payments; or

·	enter into transactions with affiliates.

However, such covenants are subject to a number of important qualifications and exceptions. Below we set forth a brief summary of certain of the restrictive covenants.

Restrictions on Additional Debt

The limitations on incurrence of debt and issuance of preferred stock contained in various indentures permit each of the ~~indenture governing the Renaissance~~respective notes ~~permit Renaissance Media Group~~issuers and its restricted subsidiaries to incur additional debt or issue preferred stock, so long as, ~~they are not in default under~~after giving pro forma effect to the ~~indenture:~~incurrence, the leverage ratio would be below a specified level for each of the note issuers as follows:

Issuer	·	~~if, after giving effect~~Leverage Ratio

CCOH		4.5 to ~~the incurrence, Renaissance Media Group could meet a leverage ratio (ratio of consolidated debt~~1
CCO		4.25 to ~~four times consolidated EBITDA, as defined, from the most recent quarter) of 6.75 to 1.0, and, regardless of whether the leverage ratio could be met,~~1

~~up to the greater of $200 million or 4.5 times Renaissance Media Group's consolidated annualized EBITDA, as defined,~~

In addition, regardless of whether the leverage ratio could be met, so long as no default exists or would result from the incurrence or issuance, each issuer and their restricted subsidiaries are permitted to issue among other permitted indebtedness:

up to an amount ~~equal to 5%~~ of ~~Renaissance Media Group's consolidated total assets to finance the purchase of new assets,~~debt under credit facilities not otherwise allocated as indicated below:

·	CCO Holdings: $9.75 billion

·	Charter Operating: $6.8 billion

up to ~~two times~~$75 million of debt incurred to finance the ~~sum of (a) the net cash proceeds~~purchase or capital lease of new ~~equity issuances and capital contributions, and (b) 80%~~assets;

up to $300 million of the fair market value of property received by Renaissance Media Group or an issuer as a capital contribution, in each case received after the issue date of the Renaissance notes and not allocated to make restricted payments,additional debt for any purpose; and

~~Table of Contents~~

other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt, and interest rate swaps to provide protection against fluctuation in interest rates.

~~The indenture governing the Renaissance notes permits us to incur debt~~Indebtedness under a single facility or agreement may be incurred in part under one of the categories listed above and ~~reclassify~~in part under another, and generally may also later be reclassified into another category including as debt incurred under the leverage ratio. Accordingly, indebtedness under our credit facilities is incurred under a combination of the categories of permitted indebtedness listed above. The restricted subsidiaries of note issuers are generally not permitted to issue subordinated debt ~~into a different category.~~securities.

~~Under~~

Restrictions on Distributions

Generally, under the ~~indenture governing~~various indentures each of the ~~Renaissance notes, Renaissance Media Group~~note issuers and ~~its~~their respective restricted subsidiaries are permitted to pay dividends on or repurchase equity interests, ~~repurchase interests, make restricted investments,~~ or make other specified restricted payments, only if ~~Renaissance Media Group could~~the applicable issuer can incur $1.00 of ~~additional~~new debt under the ~~debt incurrence test, which requires that Renaissance Media Group meet the 6.75 to 1.0~~applicable leverage ratio test after giving effect to the transaction ~~of the indebtedness covenant~~ and ~~that~~if no default exists or would ~~occur~~exist as a consequence ~~thereof.~~of such incurrence. If those conditions are met, ~~Renaissance Media Group and its restricted subsidiaries are permitted to make~~ restricted payments may be made in a total amount ~~not to exceed the result~~ of 100% of Renaissance Media Group's consolidated EBITDA, as defined, minus 130% of its consolidated interest expense, plus 100% of new cash equity proceeds received by Renaissance Media Group and not allocatedup to the ~~indebtedness covenant, plus returns on certain investments, all cumulatively from June 1998. Renaissance Media Group~~following amounts for the applicable issuer as indicated below:

CCO Holdings: the sum of 100% of CCO Holdings’ Consolidated EBITDA, as defined, minus 1.3 times its Consolidated Interest Expense, as defined, plus 100% of new cash and appraised non-cash equity proceeds received by CCO Holdings and not allocated to certain investments, cumulatively from October 1, 2003, plus $100 million; and

Charter Operating: the sum of 100% of Charter Operating’s Consolidated EBITDA, as defined, minus 1.3 times its Consolidated Interest Expense, as defined, plus 100% of new cash and appraised non-cash equity proceeds received by Charter Operating and not allocated to certain investments, cumulatively from April 1, 2004, plus $100 million.

In addition, each of the note issuers may make distributions or restricted payments, so long as no default exists or would be caused by transactions among other distributions or restricted payments:

to repurchase management equity interests in amounts not to exceed $10 million per fiscal year;

regardless of the existence of any default, to pay pass-through tax liabilities in respect of ownership of equity interests in the applicable issuer or its restricted subsidiaries; or

Each of CCO Holdings and ~~its~~Charter Operating and their respective restricted subsidiaries may make distributions or restricted payments: (i) so long as certain defaults do not exist and even if the applicable leverage test referred to above is not met, to enable certain of its parents to pay interest on certain of their indebtedness or (ii) so long as the applicable issuer could incur $1.00 of indebtedness under the applicable leverage ratio test referred to above, to enable certain of its parents to purchase, redeem or refinance certain indebtedness.

Restrictions on Investments

Each of the note issuers and their respective restricted subsidiaries may not make investments except (i) permitted investments upor (ii) if, after giving effect to ~~$2 million in related businesses and other specified permitted~~the transaction, their leverage would be above the applicable leverage ratio.

Permitted investments ~~restricted payments up to $10 million, dividends up to 6% each year of the net cash proceeds of public equity offerings, and other specified restricted payments without meeting the foregoing test.~~include, among others:

~~Renaissance Media Group~~

·	investments in and generally among restricted subsidiaries or by restricted subsidiaries in the applicable issuer;
·	For CCO Holdings:

·	investments aggregating up to $750 million at any time outstanding;

·	investments aggregating up to 100% of new cash equity proceeds received by CCO Holdings since November 10, 2003 to the extent the proceeds have not been allocated to the restricted payments covenant;

·	For Charter Operating:

·	investments aggregating up to $750 million at any time outstanding;

·	investments aggregating up to 100% of new cash equity proceeds received by CCO Holdings since April 27, 2004 to the extent the proceeds have not been allocated to the restricted payments covenant.

Restrictions on Liens

Charter Operating and its restricted subsidiaries are not permitted to grant liens senior to the liens securing the Charter Operating notes, other than permitted liens, on their assets ~~other than specified permitted liens, unless corresponding liens are granted~~ to secure indebtedness or other obligations, if,

after giving effect to such incurrence, the ~~Renaissance notes. Permitted~~senior secured leverage ratio (generally, the ratio of obligations secured by first priority liens to four times EBITDA, as defined, for the most recent fiscal quarter for which internal financial reports are available) would exceed 3.75 to 1.0. The restrictions on liens for each of the other note issuers only applies to liens on assets of the issuers themselves and does not restrict liens on assets of subsidiaries. With respect to all of the note issuers, permitted liens include liens securing ~~debt permitted to be incurred~~indebtedness and other obligations under credit facilities (subject to specified limitations in the case of Charter Operating), liens securing ~~debt incurred under~~ the incurrence of indebtedness test, in amounts up to the greater of $200 million or 4.5 times Renaissance Media Group's consolidated EBITDA, as defined, liens as deposits for acquisitions up to 10% of the estimated purchase price ~~liens securing permitted financings~~ of financed new assets, liens securing ~~debt permitted~~indebtedness of up to ~~be incurred by restricted subsidiaries,~~$50 million and other specified ~~liens incurred in~~liens.

Restrictions on the ~~ordinary course~~Sale of ~~business.~~Assets; Mergers

~~Renaissance Media Group and the~~The note issuers ~~of the Renaissance notes~~ are generally not permitted to sell ~~or otherwise dispose of~~ all or substantially all of their assets or merge with or into other companies unless their ~~consolidated net worth~~leverage ratio after any such transaction would be ~~equal to or~~no greater than their ~~consolidated net worth~~leverage ratio immediately prior to the transaction, or unless ~~Renaissance Media Group could incur $1.00 of additional debt under the debt incurrence test, which would require them to meet a leverage ratio of 6.75 to 1.00~~ after giving effect to the ~~transaction.~~transaction, leverage would be below the applicable leverage ratio for the applicable issuer, no default exists, and the surviving entity is a U.S. entity that assumes the applicable notes.

~~Renaissance Media Group~~The note issuers and ~~its~~their restricted subsidiaries may generally not otherwise sell assets or, in the case of restricted subsidiaries, issue equity interests, in excess of $100 million unless they receive consideration at least equal to the fair market value of the assets or equity interests, consisting of at least 75% in cash, ~~temporary cash investments or~~ assumption of ~~debt. Charter Holdings~~liabilities, securities converted into cash within 60 days, or productive assets. The note issuers and ~~its~~their restricted subsidiaries are then required within ~~12 months~~365 days after any asset sale either to use or commit to use the net cash proceeds over a specified threshold ~~either~~ to acquire assets used or useful in their ~~own or related~~ businesses or use the net cash proceeds to repay specified debt, or to offer to repurchase the ~~Renaissance~~issuer’s notes with any remaining proceeds.

~~Renaissance Media Group~~Restrictions on Sale and ~~its~~Leaseback Transactions

The note issuers and their restricted subsidiaries may generally not engage in sale and leaseback transactions unless, at the time of the transaction, the applicable issuer could have incurred secured indebtedness under its leverage ratio test in an amount equal to the present value of the net rental payments to be made under the lease, ~~term does not exceed three years or~~and the sale of the assets and application of proceeds ~~are applied in accordance with~~is permitted by the covenant ~~limiting~~restricting asset sales.

~~Renaissance Media Group's~~Prohibitions on Restricting Dividends

The note issuers’ restricted subsidiaries may generally not enter into arrangements involving restrictions on their ~~abilities~~ability to make dividends or distributions or transfer assets to ~~Renaissance Media Group except~~the applicable note issuer unless those ~~not~~restrictions with respect to financing arrangements are on terms that are no more restrictive than isthose governing the credit facilities existing when they entered into the applicable indentures or are not materially more restrictive than customary terms in comparable ~~financings.~~financings and will not materially impair the applicable note issuers’ ability to make payments on the notes.

Affiliate Transactions

The restricted subsidiaries of Renaissance Media Group are not permitted to guarantee or pledge assets to secure debt of the Renaissance Media Group or its restricted subsidiaries, unless the guarantying subsidiary issues a guarantee of the Renaissance notes of comparable priority and tenor, and waives any rights of reimbursement, indemnity or subrogation arising from the guarantee transaction.

Renaissance Media Group and its restricted subsidiaries are generally not permitted to issue or sell equity interests in restricted subsidiaries, except sales of common stock of restricted subsidiaries so long as the proceeds of the sale are applied in accordance with the asset sale covenant, and issuances as a result of which the restricted subsidiary is no

~~Table of Contents~~

~~longer a restricted subsidiary and any remaining investment in that subsidiary is permitted by the covenant limiting restricted payments.~~

~~The indenture governing the Renaissance notes~~indentures also ~~restricts~~restrict the ability of ~~Renaissance Media Group~~the note issuers and ~~its~~their restricted subsidiaries to enter into certain transactions with affiliates involving consideration in excess of $2$15 million without a determination by the ~~disinterested members of the~~ board of directors of the applicable note issuer that the transaction ~~is on terms no less favorable than arms length,~~complies with this covenant, or transactions with affiliates involving over $4$50 million ~~with affiliates~~ without receiving an ~~independent~~ opinion as to the fairness to the holders of ~~the~~such transaction ~~to Renaissance Media Group.~~

~~All~~from a financial point of ~~these covenants are subject to additional specified exceptions. In general, the covenants~~view issued by an accounting, appraisal or investment banking firm of ~~our subsidiaries' credit agreements are more restrictive than those of our indentures.~~

national standing.

~~Cross-Defaults~~

Cross Acceleration

Our indentures and those of certain of our parent companies and our subsidiaries include various events of default, including ~~cross-default~~cross acceleration provisions. Under these provisions, a failure by any of the issuers or any of their restricted subsidiaries to pay at the final maturity thereof the principal amount of other indebtedness having a principal amount of $100 million or more (or any other default under any such indebtedness resulting in its acceleration) would result in an event of default under the indenture governing the applicable notes. ~~The Renaissance indenture contains a similar cross-default provision with a $10 million threshold that applies to the issuers of the Renaissance notes and their restricted subsidiaries.~~ As a result, an event of default related to the failure to repay principal at maturity or the acceleration of the indebtedness under the Charter Holdings notes, CIH notes, CCH I notes, CCH II notes, CCO Holdings notes, Charter Operating notes or the Charter Operating credit facilities ~~or the Renaissance notes~~ could cause cross-defaults under our or our parent companies’ ~~and our subsidiaries’~~ indentures.

~~Interest Rate Risk~~

We use interest rate risk management derivative instruments, such as interest rate swap agreements and interest rate collar agreements (collectively referred to herein as interest rate agreements) as required under the terms of the credit facilities of our subsidiaries. Our policy is to manage interest costs using a mix of fixed and variable rate debt. Using interest rate swap agreements, we agree to exchange, at specified intervals through 2007, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. Interest rate collar agreements are used to limit our exposure to, and to derive benefits from, interest rate fluctuations on variable rate debt to within a certain range of rates. Interest rate risk management agreements are not held or issued for speculative or trading purposes.

At December 31, 2005 and 2004, we had outstanding $1.8 billion and $2.7 billion and $20 million and $20 million, respectively, in notional amounts of interest rate swaps and collars, respectively. The notional amounts of interest rate instruments do not represent amounts exchanged by the parties and, thus, are not a measure of our exposure to credit loss. See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk," for further information regarding the fair values and contract terms of our interest rate agreements.

Recently Issued Accounting Standards

In ~~November 2004,~~December 2007, the ~~Financial Accounting Standards Board ("FASB")~~FASB issued SFAS No. ~~153,~~ 141R, Business Combinations: Applying the Acquisition Method~~Exchanges of Non-monetary Assets — An Amendment of APB~~, which provides guidance on the accounting and reporting for business combinations. SFAS No. 29~~. This statement eliminates the exception to fair value~~141R is effective for ~~exchanges of similar productive assets and replaces it with a general exception for exchange transactions that~~fiscal years beginning after December 15, 2008. We will adopt SFAS No. 141R effective January 1, 2009. We do not ~~have commercial substance —~~expect that ~~is, transactions that are not expected to result in significant changes in~~ the cash flows of the reporting entity. We adopted this pronouncement effective April 1, 2005. The exchange transaction discussed in Note 3 to the accompanying consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data", was accounted for under this standard.

~~In December 2004, the FASB issued the revised SFAS No. 123,~~ ~~Share-Based Payment~~, which addresses the accounting for share-based payment transactions in which a company receives employee services in exchange for (a) equity instruments of that company or (b) liabilities that are based on the fair value of the company’s equity instruments or that may be settled by the issuance of such equity instruments. This statement will be effective for us beginning January 1, 2006. Because we adopted the fair value recognition provisionsadoption of SFAS No. ~~123 on January 1, 2003, we do not expect this revised standard to~~141R will have a material impact on our financial statements.

~~Table of Contents~~

In ~~March 2005,~~December 2007, the FASB issued ~~FASB Interpretation~~SFAS No. ~~47,~~ 160, Consolidations~~Accounting~~, which provides guidance on the accounting and reporting for ~~Conditional Asset Retirement Obligations. This interpretation clarifies that~~minority interests in consolidated financial statements. SFAS No. 160 requires losses to be allocated to non-controlling (minority) interests even when such amounts are deficits. As such, future losses will be allocated between Charter and the ~~term "conditional asset retirement obligation" as used in FASB Statement~~Charter Holdco non-controlling interest. SFAS No. ~~143,~~ ~~Accounting for Asset Retirement Obligations,~~ refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. This pronouncement160 is effective for fiscal years ~~ending~~beginning after December 15, ~~2005. The~~2008. We will adopt SFAS No. 160 effective January 1, 2009. We do not expect that the adoption of ~~this interpretation did not~~SFAS No. 160 will have a material impact on our financial statements.

In February 2008, the FASB issued FASB Staff Position (FSP) 157-2, Effective Date of FASB Statement No. 157, which deferred the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 for nonfinancial assets and nonfinancial liabilities. We will apply SFAS No. 157 to nonfinancial assets and nonfinancial liabilities beginning January 1, 2009. We are in the process of assessing the impact of SFAS No. 157 on our financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, which requires companies to disclose their objectives and strategies for using derivative instruments, whether or not designated as hedging instruments under SFAS No. 133. SFAS No. 161 is effective for interim periods and fiscal years beginning after November 15, 2008. We will adopt SFAS No. 161 effective January 1, 2009. We do not expect that the adoption of SFAS No. 161 will have a material impact on our financial statements.

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets, which amends the factors to be considered in renewal or extension assumptions used to determine the useful life of a recognized intangible asset. FSP FAS 142-3 is effective for interim periods and fiscal years beginning after December 15, 2008. We will adopt FSP FAS 142-3 effective January 1, 2009. We do not expect that the adoption of FSP FAS 142-3 will have a material impact on our financial statements.

In May 2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), which specifies that issuers of convertible debt instruments that may be settled in cash upon conversion should separately account for the liability and equity components in a manner reflecting their nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. FSP APB 14-1 is effective for interim periods and fiscal years beginning after December 15, 2008. We will adopt FSP APB 14-1 effective January 1, 2009. We do not expect that the adoption of FSP APB 14-1 will have a material impact on our financial statements.

We do not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on our accompanying financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

We are exposed to various market risks, including fluctuations in interest rates. We use interest rate ~~risk management derivative instruments, such as interest rate~~ swap agreements to manage our interest costs and reduce our exposure to increases in floating interest ~~rate collar agreements (collectively referred to herein as interest rate agreements) as required under the terms of the credit facilities of our subsidiaries.~~rates. Our policy is to manage our exposure to fluctuations in interest ~~costs using~~rates by maintaining a mix of fixed and variable rate ~~debt.~~debt within a targeted range. Using interest rate swap agreements, we agree to exchange, at specified intervals through ~~2007,~~2013, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal ~~amount. Interest rate collar agreements are used to limit our exposure to, and to derive benefits from,~~amounts. At the banks’ option, certain interest rate ~~fluctuations on variable rate debt to within a certain range of rates. Interest rate risk management~~swap agreements ~~are not held or issued for speculative or trading purposes.~~may be extended through 2014.

As of December 31, ~~2005~~2008 and ~~2004,~~2007, our ~~long-term~~total debt ~~totaled~~was approximately ~~$9.0~~$11.8 billion and ~~$8.3~~$9.9 billion, respectively. ~~This debt was comprised of approximately $5.7 billion and $5.5 billion of credit facilities debt and $3.3 billion and $2.8 billion accreted amount of high-yield notes, respectively.~~

As of December 31, ~~2005~~2008 and ~~2004,~~2007, the weighted average interest rate on the credit facility debt was approximately ~~7.8%~~5.5% and 6.8%, respectively, and the weighted average interest rate on ~~our~~the high-yield notes was approximately ~~8.3%~~8.8% and 8.2%, respectively, resulting in a blended weighted average interest rate of ~~8.0%~~6.4% and 7.3%, respectively. The

interest rate on approximately ~~51%~~64% and ~~59%~~68% of the total principal amount of our debt was effectively fixed, including the effects of our interest rate hedge agreements, as of December 31, ~~2005~~2008 and ~~2004,~~2007, respectively. The fair value of our high-yield notes was $3.2 billion and $2.9 billion at December 31, 2005 and 2004, respectively. The fair value of our credit facilities is $5.7 billion and $5.5 billion at December 31, 2005 and 2004, respectively. The fair value of high-yield notes is based on quoted market prices, and the fair value of the credit facilities is based on dealer quotations.

We do not hold or issue derivative instruments for trading purposes. We do, however, have certain interest rate derivative instruments that have been designated as cash flow hedging instruments. Such instruments effectively convert variable interest payments on certain debt instruments into fixed payments. For qualifying hedges, SFAS No. 133 allows derivative gains and losses to offset related results on hedged items in the consolidated statement of operations. We have formally documented, designated and assessed the effectiveness of transactions that receive hedge accounting. For the years ended December 31, ~~2005, 2004~~2008 and ~~2003, net gain (loss) on derivative instruments and hedging activities includes gains of $3 million, $4 million and $8 million, respectively, which represent~~2007, there was no cash flow hedge ineffectiveness on interest rate hedge ~~agreements arising~~agreements. This ineffectiveness arises from differences between ~~the~~ critical terms of the agreements and the related hedged obligations.

Changes in the fair value of interest rate agreements that are designated as hedging instruments of the variability of cash flows associated with floating-rate debt obligations, and that meet the effectiveness criteria of SFAS No. 133 are reported in accumulated other comprehensive loss. For the years ended December 31, ~~2005, 2004~~2008 and ~~2003, a gain~~2007, losses of ~~$16 million, $42~~$180 million and ~~$48~~$123 million, respectively, related to derivative instruments designated as cash flow hedges, ~~was~~were recorded in accumulated other comprehensive loss. The amounts are subsequently reclassified ~~into~~as an increase or decrease to interest expense ~~as a yield adjustment~~ in the same ~~period~~periods in which the related interest on the floating-rate debt obligations affects earnings (losses).

~~Table~~value of ~~Contents~~

derivatives in our statements of operations. For the years ended December 31, ~~2005, 2004~~2008 and ~~2003, net gain (loss) on derivative instruments and hedging activities~~2007, change in value of derivatives includes ~~gains~~losses of ~~$47 million, $65~~$62 million and ~~$57~~$46 million, respectively, ~~for~~resulting from interest rate derivative instruments not designated as hedges.

The table set forth below summarizes the fair values and contract terms of financial instruments subject to interest rate risk maintained by us as of December 31, ~~2005~~2008 (dollars in millions):

2006

2007

2008

2009

2010

Thereafter

Total

Fair Value at December 31, 2005
Debt
Fixed Rate $ -- $ -- $ 114 $ -- $ -- $ 2,633 $ 2,747 $ 2,697
Average Interest Rate -- -- 10.00% -- -- 8.33% 8.40%

Variable Rate $ 30 $ 280 $ 630 $ 779 $ 1,762 $ 2,800 $ 6,281 $ 6,256
Average Interest Rate 7.94% 7.67% 7.67% 7.74% 8.14% 8.07% 7.99%

Interest Rate Instruments
Variable to Fixed Swaps $ 873 $ 975 $ -- $ -- $ -- $ -- $ 1,848 $ 4
Average Pay Rate 8.23% 8.00% -- -- -- -- 8.11%
Average Receive Rate 7.83% 7.77% -- -- -- -- 7.80%

	2009			2010			2011			2012			2013			Thereafter			Total			Fair Value at December 31, 2008
Debt
Fixed Rate	$	--		$	--		$	--		$	1,100		$	800		$	1,316		$	3,216		$	2,428
Average Interest Rate		--			--			--			8.00	%		8.75	%		9.41	%		8.76	%

Variable Rate	$	70		$	70		$	70		$	70		$	1,385		$	6,931		$	8,596		$	6,187
Average Interest Rate		4.20	%		3.52	%		4.59	%		4.87	%		4.76	%		4.87	%		4.83	%

Interest Rate Instruments
Variable to Fixed Swaps	$	--		$	500		$	300		$	2,500		$	1,000		$	--		$	4,300		$	(411	)
Average Pay Rate		--			6.99	%		7.16	%		7.13	%		7.12	%		--			7.11	%
Average Receive Rate		--			2.82	%		3.41	%		4.86	%		4.86	%		--			4.52	%

The notional amounts of interest rate instruments do not represent amounts exchanged by the parties and, thus, are not a measure of our exposure to credit loss. The amounts exchanged are determined by reference to the notional amount and the other terms of the contracts. The estimated fair value approximates the costs (proceeds) to settle the outstanding ~~contracts.~~contracts adjusted for Charter Operating’s credit risk. Interest rates on variable debt are estimated using the average implied forward ~~London Interbank Offering Rate (LIBOR) rates~~LIBOR for the year of maturity based on the yield curve in effect at December 31, ~~2005.~~2008 including applicable bank spread.

At December 31, ~~2005~~2008 and ~~2004,~~2007, we had outstanding ~~$1.8~~$4.3 billion and ~~$2.7~~$4.3 billion, ~~and $20 million and $20 million,~~ respectively, in notional amounts of interest rate ~~swaps and collars, respectively.~~swaps. The notional amounts of interest rate instruments do not represent amounts exchanged by the parties and, thus, are not a measure of exposure to credit loss. The amounts exchanged are determined by reference to the notional amount and the other terms of the contracts.

Item 8. Financial Statements and Supplementary Data.

Our consolidated financial statements, the related notes thereto, and the reports of independent ~~auditors~~accountants are included in this annual report beginning on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

As of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures with respect to the information generated for use in this annual report. The evaluation was based in part upon reports and ~~affidavits~~certifications provided by a number of executives. Based upon, and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective to provide reasonable assurances that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the ~~Commission’s~~SEC’s rules and forms.

There was no change in our internal control over financial reporting during 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~Table of Contents~~

In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon the above evaluation, ~~Charter’s management believes~~we believe that ~~its~~our controls provide such reasonable assurances.

~~Item 9B.~~ ~~Other Information.~~

Robert A. Quigley, Executive Vice President and Chief Marketing Officer, and Charter executed an offer letter dated as of November 22, 2005 pursuant to which Charter agreed to pay him a signing bonus of $200,000 deferred until January 2006; grant options to purchase 145,800 shares of Charter Class A common stock underThere was no change in our ~~2001 Stock Incentive Plan; 83,700 performance shares under our 2001 Stock Incentive Plan; and 50,000 shares of Charter restricted stock which will vest over a three year period.~~

~~Table of Contents~~

~~PART III~~

~~Item 14.~~ ~~Principal Accounting Fees and Services.~~

Audit fees, audit-related fees and all other fees we incurred related to services provided by KPMG LLP ("KPMG") and discussed below represent all fees paid as part of the Charter engagement, including audits performed for Charter and its subsidiaries, including us.

~~Audit Fees~~

We incurred fees and related expenses for professional services rendered by KPMG for the audits of our, our parent companies’ and our subsidiaries’ financial statements (including three parent companies and one subsidiary that are also public registrants), for the review of our, our parent companies’ and our subsidiaries’ interim financial statements and seven offering memorandums and registration statement filings in 2005 and five offering memorandums and registration statement filings in 2004 totaling approximately $6 million in each of 2005 and 2004. Included in the total for each of 2005 and 2004 are fees and related expenses of $2 million for the audit of internal control over financial reporting ~~required~~during the fourth quarter of 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

The following information under ~~Sarbanes-Oxley Section 404.~~“Management’s Report on Internal Control Over Financial Reporting” is not filed but is furnished pursuant to Reg S-K Item 308T, "Internal Control Over Financial Reporting in Exchange Act Periodic Reports of Non-Accelerated Filers and Newly Public Companies."

Charter’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control system was designed to provide reasonable assurance to Charter’s management and board of directors regarding the preparation and fair presentation of published financial statements.

Charter’s management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control — Integrated Framework. Based on management’s assessment utilizing these criteria we believe that, as of December 31, 2008, our internal control over financial reporting was effective.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

~~Audit-Related Fees~~

We incurred fees to KPMG of approximately $0.1 million during the year ended December 31, 2004. These services primarily related to the audit of our 401(k) plan and advisory services associated with our Sarbanes-Oxley Section 404 implementation.

~~All~~ Item 9B. Other ~~Fees~~Information.

None.

PART III

Item 14. Principal Accounting Fees and Services.

Charter’s Audit Committee appoints, retains, compensates and oversees the independent registered public ~~accountants~~accounting firm (subject, if applicable, to board of director and/or ~~shareholder~~stockholder ratification), and approves in advance all fees and terms for the audit engagement and non-audit engagements where ~~nonaudit~~non-audit services are not prohibited by Section 10A of the Securities Exchange Act of 1934, as amended with respect to independent registered public ~~accountants. Preapprovals~~accounting firms. Pre-approvals of non-audit services are sometimes delegated to a single member of the Charter’s Audit Committee. However, any pre-approvals made by Charter’s Audit Committee’s designee are presented at ~~its~~the Charter’s Audit Committee’s next regularly scheduled meeting. Charter’s Audit Committee has an obligation to consult with management on these matters. Charter’s Audit Committee approved 100% of the KPMG fees for the years ended December 31, ~~2005~~2008 and ~~2004.~~2007. Each year, including ~~2005,~~2008, with respect to the proposed audit engagement, Charter’s Audit Committee reviews the proposed risk assessment process in establishing the scope of examination and the reports to be rendered.

In its capacity as a committee of Charter’s Board, Charter’s Audit Committee oversees the work of the independent registered public accounting firm (including resolution of disagreements between management and the public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services. The independent registered public accounting firm reports directly to Charter’s Audit Committee. In performing its functions, Charter’s Audit Committee undertakes those tasks and responsibilities that, in its judgment, most effectively contribute to and implement the purposes of Charter’s Audit Committee charter. For more detail of Charter’s Audit Committee’s authority and responsibilities, see the Charter’s Audit Committee charter ~~set forth~~on Charter’s website, www.charter.com.

Audit Fees

During the years ended December 31, 2008 and 2007, Charter incurred fees and related expenses for professional services rendered by KPMG for the audits of Charter and its subsidiaries’ financial statements (including one subsidiary in ~~Appendix A~~2008 and three subsidiaries in 2007 that are also public registrants), for the review of Charter and its ~~2004 Proxy Statement filed with~~subsidiaries’ interim financial statements and two offering memorandums in each of 2008 and 2007 totaling approximately $3.9 million and $4.2 million, respectively.

Audit-Related Fees

Charter incurred audit-related fees to KPMG of approximately $0.1 million and $0.02 million during the ~~SEC on June 25, 2004.~~years ended December 31, 2008 and 2007, respectively. These services were primarily related to certain agreed-upon procedures.

Tax Fees

None.

All Other Fees

None.

4347

~~Table of Contents~~

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)

The following documents are filed as part of this annual report:

(1)

Financial Statements.

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

(2)

Financial Statement Schedules.

No financial statement schedules are required to be filed by Items 8 and 15(d) because they are not required or are not applicable, or the required information is set forth in the applicable financial statements or notes thereto.

(3)

The index to the exhibits begins on page 47E-1 of this annual report.

We agree to furnish to the SEC, upon request, copies of any long-term debt instruments that authorize an amount of securities constituting 10% or less of the total assets of Charter Holdings and its subsidiaries on a consolidated basis.

4448

~~Table of Contents~~SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, CCO Holdings, LLC and CCO Holdings Capital Corp. ~~have~~Have duly caused this annual report to be signed on ~~their~~its behalf by the undersigned, thereunto duly authorized.

	CCO HOLDINGS, LLC
	Registrant
	By: CHARTER COMMUNICATIONS, INC., Sole Manager
~~Date: March 29, 2006~~	By:	/s/ Neil Smit
		Neil Smit
		President and Chief Executive Officer
Date: March 31, 2009

	CCO HOLDINGS CAPITAL CORP.
	Registrant
~~Date: March 29, 2006~~	By:	/s/ Neil Smit
		Neil Smit
		President and Chief Executive Officer
Date: March 31, 2009

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

	Signature			Title		Date

	/s/ Paul G. Allen			Chairman of the Board of Directors		March ~~29, 2006~~31, 2009
	Paul G. Allen

	/s/ Neil Smit			President, Chief Executive		March ~~29, 2006~~ 31, 2009
	Neil Smit			Officer, Director (Principal Executive Officer)
		~~CCH II~~		CCO Holdings Capital Corp.

	/s/ ~~Jeffrey T. Fisher~~Eloise E. Schmitz			~~Executive Vice President and~~ Chief Financial Officer		March ~~29, 2006~~ 31, 2009
~~Jeffrey T. Fisher~~	Eloise E. Schmitz			(Principal Financial Officer)

~~/s/ Paul E. Martin~~			~~Senior Vice President, Principal Accounting~~		~~March 29, 2006~~
~~Paul E. Martin~~			~~Officer and Corporate Controller (Principal Accounting~~
	/s/ Kevin D. Howard			Vice President, Controller and Chief Accounting Officer		March 31, 2009
	Kevin D. Howard			(Principal Accounting Officer)

	/s/ W. Lance Conn			Director, Charter Communications, Inc.		March ~~29, 2006~~27, 2009
	W. Lance Conn

	/s/ ~~Nathaniel A. Davis~~Rajive Johri			Director, Charter Communications, Inc.		March ~~29, 2006~~ 13, 2009
~~Nathaniel A. Davis~~	Rajive Johri

~~/s/Jonathan L. Dolgen~~			~~Director, Charter Communications, Inc.~~		~~March 29, 2006~~
~~Jonathan L. Dolgen~~

/s/ Robert P. May			Director, Charter Communications, Inc.		March ~~26, 2006~~31, 2009
	Robert P. May

	/s/ David C. Merritt			Director, Charter Communications, Inc.		March ~~29, 2006~~ 31, 2009
	David C. Merritt

	/s/ ~~Marc B. Nathanson~~Jo Allen Patton			Director, Charter Communications, Inc.		March ~~29, 2006~~
~~Marc B. Nathanson~~					31, 2009

~~/s/ Jo Allen Patton~~			~~Director, Charter Communications, Inc.~~		~~March 29, 2006~~
Jo Allen Patton

	/s/ John H. Tory			Director, Charter Communications, Inc.		March ~~29, 2006~~ 31, 2009

~~Table of Contents~~

John H. Tory

/s/ Larry W. Wangberg	Director, Charter Communications, Inc.	March ~~29, 2006~~ 31, 2009
Larry W. Wangberg

46S-1

~~Table of Contents~~Exhibit Index

~~Exhibit Index~~

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

Exhibit		Description

~~2.1~~		Asset Purchase Agreement, dated September 3, 2003, by and between Charter Communications VI, LLC, The Helicon Group, L.P., Hornell Television Service, Inc., Interlink Communications Partners, LLC, Charter Communications Holdings, LLC and Atlantic Broadband Finance, LLC (incorporated by reference to Exhibit 2.1 to Charter Communications, Inc.'s current report on Form 8-K/A filed on September 3, 2003 (File No. 000-27927)).
~~2.2~~		Purchase Agreement dated as of January 26, 2006, by and between CCH II, LLC, CCH II Capital Corp and J.P. Morgan Securities, Inc as Representative of several Purchasers for $450,000,000 10.25% Senior Notes Due 2010 (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K of Charter Communications, Inc. filed on January 27, 2006 (File No. 000-27927)).
~~3.1~~	3.1(a)	Certificate of Formation of CCO Holdings, LLC (incorporated by reference to Exhibit 3.1 to the registration statement on Form S-4 of CCO Holdings, LLC and CCO Holdings Capital Corporation filed on February 6, 2004 (File No. 333-112593)).
~~3.2~~	3.1(b)	Certificate of Correction of Certificate of Formation of CCO Holdings, LLC (incorporated by reference to Exhibit 3.2 to the registration statement on Form S-4 of CCO Holdings, LLC and CCO Holdings Capital Corporation filed on February 6, 2004 (File No. 333-112593)).
~~3.3~~	3.2	Amended and Restated Limited Liability Company Agreement of CCO Holdings, LLC, dated as of June 19, 2003 (incorporated by reference to Exhibit 3.3 to the registration statement on Form S-4 of CCO Holdings, LLC and CCO Holdings Capital Corporation filed on February 6, 2004 (File No. 333-112593)).
~~3.4~~	3.3(a)	Certificate of Incorporation of CCO Holdings ~~LLC~~ Capital Corp. (originally named CC Holdco I Capital Corp.) (incorporated by reference to Exhibit 3.4 to the registration statement on Form S-4 of CCO Holdings, LLC and CCO Holdings Capital Corporation filed on February 6, 2004 (File No. 333-112593)).
~~3.5~~	3.3(b)	Certificate of Amendment of Certificate of Incorporation of CCO Holdings Capital Corp. (incorporated by reference to Exhibit 3.5 to the registration statement on Form S-4 of CCO Holdings, LLC and CCO Holdings Capital Corporation filed on February 6, 2004 (File No. 333-112593)).
~~3.6~~3.4		~~By-laws~~Certificate of Formation of CCO Holdings, ~~Capital Corp.~~LLC (incorporated by reference to Exhibit ~~3.6~~3.1 to the registration statement on Form S-4 of CCO Holdings, LLC and CCO Holdings Capital Corporation filed on February 6, 2004 (File No. 333-112593)).
~~4.1~~	Certain long-term debt instruments, none of which relates to authorized indebtedness that exceeds 10% of the consolidated assets of the Registrants have not been filed as exhibits to this Form 10-K. The Registrants agree to furnish to the Commission upon its request a copy of any instrument defining the rights of holders of long- term debt of the Company and its consolidated subsidiaries.
4.1(a)	Indenture relating to the 9.920% Senior Discount Notes due 2011, dated as of March 17, 1999, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.3(a) to Amendment No. 2 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on June 22, 1999 (File No. 333-77499)).
4.1(b)	First Supplemental Indenture relating to the 9.920% Senior Discount Notes due 2011, dated as of September 28, 2005, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
4.2(a)	Indenture relating to the 10.00% Senior Notes due 2009, dated as of January 12, 2000, between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.1(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)).
4.2(b)	First Supplemental Indenture relating to the 10.00% Senior Notes due 2009, dated as of September 28, 2005, between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee (incorporated by reference to Exhibit 10.5 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).

E-1

4.3(a)	Indenture relating to the 10.25% Senior Notes due 2010, dated as of January 12, 2000, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.2(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)).
4.3(b)	First Supplemental Indenture relating to the 10.25% Senior Notes due 2010, dated as of September 28, 2005, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee (incorporated by reference to Exhibit 10.6 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
4.4(a)	Indenture relating to the 11.75% Senior Discount Notes due 2010, dated as of January 12, 2000, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.3(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)).
4.4(b)	First Supplemental Indenture relating to the 11.75% Senior Discount Notes due 2010, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee, dated as of September 28, 2005 (incorporated by reference to Exhibit 10.7 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
4.5(a)	Indenture dated as of January 10, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.750% senior notes due 2009 (incorporated by reference to Exhibit 4.2(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)).
4.5(b)	First Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.750% Senior Notes due 2009 (incorporated by reference to Exhibit 10.8 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
4.6(a)	Indenture dated as of January 10, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 11.125% senior notes due 2011 (incorporated by reference to Exhibit 4.2(b) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)).
4.6(b)	First Supplemental Indenture dated as of September 28, 2005, between Charter Communications Holdings, LLC, Charter Communications Capital Corporation and BNY Midwest Trust Company governing 11.125% Senior Notes due 2011 (incorporated by reference to Exhibit 10.9 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
4.7(a)	Indenture dated as of January 10, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 13.500% senior discount notes due 2011 (incorporated by reference to Exhibit 4.2(c) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)).
4.7(b)	First Supplemental Indenture dated as of September 28, 2005, between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 13.500% Senior Discount Notes due 2011 (incorporated by reference to Exhibit 10.10 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
4.8(a)	Indenture dated as of May 15, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 9.625% Senior Notes due 2009 (incorporated by reference to Exhibit 10.2(a) to the current report on Form 8-K filed by Charter Communications, Inc. on June 1, 2001 (File No. 000-27927)).
4.8(b)	First Supplemental Indenture dated as of January 14, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 9.625% Senior Notes due 2009 (incorporated by reference to Exhibit 10.2(a) to the current report on Form 8-K filed by Charter Communications, Inc. on January 15, 2002 (File No. 000-27927)).
4.8(c)	Second Supplemental Indenture dated as of June 25, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 9.625% Senior Notes due 2009 (incorporated by reference to Exhibit 4.1 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 6, 2002 (File No. 000-27927)).

E-2

4.8(d)	Third Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Capital Corporation and BNY Midwest Trust Company as Trustee governing 9.625% Senior Notes due 2009 (incorporated by reference to Exhibit 10.11 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
4.9(a)	Indenture dated as of May 15, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.000% Senior Notes due 2011 (incorporated by reference to Exhibit 10.3(a) to the current report on Form 8-K filed by Charter Communications, Inc. on June 1, 2001 (File No. 000-27927)).
4.9(b)	First Supplemental Indenture dated as of January 14, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.000% Senior Notes due 2011 (incorporated by reference to Exhibit 10.3(a) to the current report on Form 8-K filed by Charter Communications, Inc. on January 15, 2002 (File No. 000-27927)).
4.9(c)	Second Supplemental Indenture dated as of June 25, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.000% Senior Notes due 2011 (incorporated by reference to Exhibit 4.2 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 6, 2002 (File No. 000-27927)).
4.9(d)	Third Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing the 10.000% Senior Notes due 2011 (incorporated by reference to Exhibit 10.12 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
4.10(a)	Indenture dated as of May 15, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 11.750% Senior Discount Notes due 2011 (incorporated by reference to Exhibit 10.4(a) to the current report on Form 8-K filed by Charter Communications, Inc. on June 1, 2001 (File No. 000-27927)).
4.10(b)	First Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 11.750% Senior Discount Notes due 2011 (incorporated by reference to Exhibit 10.13 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
4.11(a)	Indenture dated as of January 14, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 12.125% Senior Discount Notes due 2012 (incorporated by reference to Exhibit 10.4(a) to the current report on Form 8-K filed by Charter Communications, Inc. on January 15, 2002 (File No. 000-27927)).
4.11(b)	First Supplemental Indenture dated as of June 25, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 12.125% Senior Discount Notes due 2012 (incorporated by reference to Exhibit 4.3 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 6, 2002 (File No. 000-27927)).
4.11(c)	Second Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 12.125% Senior Discount Notes due 2012 (incorporated by reference to Exhibit 10.14 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
10.1	Form of Restructuring Agreement (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc. filed on February 13, 2009 (File No. 000-27927)).
10.2	Form of Commitment Letter (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc. filed on February 13, 2009 (File No. 000-27927)).
10.3	Term Sheet (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K of Charter Communications, Inc. filed on February 13, 2009 (File No. 000-27927)).
10.4	Restructuring Agreement, dated as of February 11, 2009, by and among Paul G. Allen, Charter Investment, Inc. and Charter Communications, Inc. (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K of Charter Communications, Inc. filed on February 13, 2009 (File No. 000-27927)).
10.5	Indenture dated as of September 28, 2005 among CCH I Holdings, LLC and CCH I Holdings Capital Corp., as Issuers and Charter Communications Holdings, LLC, as Parent Guarantor, and The Bank of New York Trust Company, NA, as Trustee, governing: 11.125% Senior Accreting Notes due 2014, 9.920% Senior Accreting Notes due 2014, 10.000% Senior Accreting Notes due 2014, 11.75% Senior Accreting Notes due 2014, 13.50% Senior Accreting Notes due 2014, 12.125% Senior Accreting Notes due 2015 (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).

E-3

10.6(a)	Indenture dated as of September 28, 2005 among CCH I, LLC and CCH I Capital Corp., as Issuers, Charter Communications Holdings, LLC, as Parent Guarantor, and The Bank of New York Trust Company, NA, as Trustee, governing 11.00% Senior Secured Notes due 2015 (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
10.6(b)	First Supplemental Indenture relating to the 11.00% Senior Secured Notes due 2015, dated as of September 14, 2006, by and between CCH I, LLC, CCH I Capital Corp. as Issuers, Charter Communications Holdings, LLC as Parent Guarantor and The Bank of New York Trust Company, N.A. as trustee (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K of Charter Communications, Inc. on September 19, 2006 (File No. 000-27927)).
10.7	Indenture relating to the 10.25% Senior Notes due 2010, dated as of September 23, 2003, among CCH II, LLC, CCH II Capital Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications Inc. filed on September 26, 2003 (File No. 000-27927)).
10.8	Indenture relating to the 10.25% Senior Notes due 2013, dated as of September 14, 2006, by and between CCH II, LLC, CCH II Capital Corp. as Issuers, Charter Communications Holdings, LLC as Parent Guarantor and The Bank of New York Trust Company, N.A. as trustee (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc. on September 19, 2006 (File No. 000-027927)).
10.9	First Supplemental Indenture relating to the 10.25% Senior Notes due 2013, dated as of July 2, 2008, by and between CCH II, LLC, CCH II Capital Corporation, as Issuers, Charter Communications Holdings, LLC as Parent Guarantor and The Bank of New York Mellon Trust Company, N.A. as trustee (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc. on July 3, 2008 (File No. 000-027927)).
10.10	Exchange and Registration Rights Agreement relating to the issuance of the 10.25% Senior Notes due 2013, dated as of July 2, 2008, by and between CCH II, LLC, CCH II Capital Corporation, Charter Communications Holdings, LLC, Banc of America Securities LLC and Citigroup Global Markets, Inc. (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc. on July 3, 2008 (File No. 000-027927)).
10.11	Indenture relating to the 8 3/4% Senior Notes due 2013, dated as of November 10, 2003, by and among CCO Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo Bank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Charter Communications, Inc.'s current report on Form 8-K filed on November 12, 2003 (File No. 000-27927)).
~~4.2~~		Indenture dated as of December 15, 2004 among CCO Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo Bank, N.A., as trustee (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of CCO Holdings, LLC filed on December 21, 2004 (File No. 333-112593)).
~~4.3(a)~~		Senior Bridge Loan Agreement dated as of October 17, 2005 by and among CCO Holdings, LLC, CCO Holdings Capital Corp., certain lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Securities Inc. and Credit Suisse, Cayman Islands Branch, as joint lead arrangers and joint bookrunners, and Deutsche Bank Securities Inc., as documentation agent. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on October 19, 2005 (File No. 000-27927)).
~~4.3(b)~~		Waiver and Amendment Agreement to the Senior Bridge Loan Agreement dated as of January 26, 2006 by and among CCO Holdings, LLC, CCO Holdings Capital Corp., certain lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Securities Inc. and Credit Suisse, Cayman Islands Branch, as joint lead arrangers and joint bookrunners, and Deutsche Bank Securities Inc., as documentation agent (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc. filed on January 27, 2006 (File No. 000-27927)).
~~10.1~~		Indenture, dated as of April 9, 1998, by among Renaissance Media (Louisiana) LLC, Renaissance Media (Tennessee) LLC, Renaissance Media Capital Corporation, Renaissance Media Group LLC and United States Trust Company of New York, as trustee (incorporated by reference to Exhibit 4.1 to the registration statement on Forms S-4 of Renaissance Media Group LLC, Renaissance Media (Tennessee) LLC, Renaissance Media (Louisiana) LLC and Renaissance Media Capital Corporation filed on June 12, 1998 (File No. 333-56679)).
~~10.2~~	10.12	Indenture relating to the 8% senior second lien notes due 2012 and 8 3/8% senior second lien notes due 2014, dated as of April 27, 2004, by and among Charter Communications Operating, LLC, Charter

~~Table of Contents~~

		Communications Operating Capital Corp. and Wells Fargo Bank, N.A. as trustee (incorporated by reference to Exhibit 10.32 to Amendment No. 2 to the registration statement on Form S-4 of CCH II, LLC filed on May 5, 2004 (File No. 333-111423)).
~~10.3~~10.13	Indenture relating to the 10.875% senior second lien notes due 2014 dated as of March 19, 2008, by and among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp. and Wilmington Trust Company, trustee (incorporated by reference to Exhibit 10.1 to the quarterly report filed on Form 10-Q of Charter Communications, Inc. filed on May 12, 2008 (File No. 000-027927)).
10.14	Collateral Agreement, dated as of March 19, 2008 by and among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp., CCO Holdings, LLC and certain of its subsidiaries in favor of Wilmington Trust Company, as trustee (incorporated by reference to Exhibit 10.2 to the quarterly report filed on Form 10-Q of Charter Communications, Inc. filed on May 12, 2008 (File No. 000-027927)).
10.15(a)	Pledge Agreement made by CCH I, LLC in favor of The Bank of New York Trust Company, NA, as Collateral Agent dated as of September 28, 2005 (incorporated by reference to Exhibit 10.15 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)).
10.15(b)	Amendment to the Pledge Agreement between CCH I, LLC in favor of The Bank of New York Trust Company, N.A., as Collateral Agent, dated as of September 14, 2006 (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K of Charter Communications, Inc. on September 19, 2006 (File No. 000-27927)).
10.16	Consulting Agreement, dated as of March 10, 1999, by and between Vulcan Northwest Inc., Charter Communications, Inc. (now called Charter Investment, Inc.) and Charter Communications Holdings, LLC (incorporated by reference to Exhibit 10.3 to Amendment No. 4 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on July 22, 1999 (File No. 333-77499)).

E-4

10.17	Second Amended and Restated Mutual Services Agreement, dated as of June 19, 2003 between Charter Communications, Inc. and Charter Communications Holding Company, LLC (incorporated by reference to Exhibit 10.5(a) to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 000-27927)).
10.18	Third Amended and Restated Limited Liability Company Agreement for CC VIII, LLC, dated as of October 31, 2005 (incorporated by reference to Exhibit 10.20 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 2, 2005 (File No. 000-27927)).
10.19(a)	Amended and Restated Limited Liability Company Agreement of Charter Communications Operating, LLC, dated as of June 19, 2003 (incorporated by reference to Exhibit No. 10.2 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 000-27927)).
10.19(b)	First Amendment to the Amended and Restated Limited Liability Company Agreement of Charter Communications Operating, LLC, adopted as of June 22, 2004 (incorporated by reference to Exhibit 10.16(b) to the annual report on Form 10-K filed by Charter Communications, Inc. on February 28, 2006 (File No. 000-27927)).
10.20	Amended and Restated Management Agreement, dated as of June 19, 2003, between Charter Communications Operating, LLC and Charter Communications, Inc. (incorporated by reference to Exhibit 10.4 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 333-83887)).
10.21(a)	Stipulation of Settlement, dated as of January 24, 2005, regarding settlement of Consolidated Federal Class Action entitled in Re Charter Communications, Inc. Securities Litigation. (incorporated by reference to Exhibit 10.48 to the Annual Report on Form 10-K filed by Charter Communications, Inc. on March 3, 2005 (File No. 000-27927)).
10.21(b)	Amendment to Stipulation of Settlement, dated as of May 23, 2005, regarding settlement of Consolidated Federal Class Action entitled In Re Charter Communications, Inc. Securities Litigation (incorporated by reference to Exhibit 10.35(b) to Amendment No. 3 to the registration statement on Form S-1 filed by Charter Communications, Inc. on June 8, 2005 (File No. 333-121186)).
10.22	Settlement Agreement and Mutual Release, dated as of February 1, 2005, by and among Charter Communications, Inc. and certain other insureds, on the other hand, and Certain Underwriters at Lloyd's of London and certain subscribers, on the other hand. (incorporated by reference to Exhibit 10.49 to the annual report on Form 10-K filed by Charter Communications, Inc. on March 3, 2005 (File No. 000-27927)).
10.23	Stipulation of Settlement, dated as of January 24, 2005, regarding settlement of Federal Derivative Action, Arthur J. Cohn v. Ronald L. Nelson et al and Charter Communications, Inc. (incorporated by reference to Exhibit 10.50 to the annual report on Form 10-K filed by Charter Communications, Inc. on March 3, 2005 (File No. 000-27927)).
10.24	Settlement Agreement and Mutual Releases, dated as of October 31, 2005, by and among Charter Communications, Inc., Special Committee of the Board of Directors of Charter Communications, Inc., Charter Communications Holding Company, LLC, CCHC, LLC, CC VIII, LLC, CC V, LLC, Charter Investment, Inc., Vulcan Cable III, LLC and Paul G. Allen (incorporated by reference to Exhibit 10.17 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on November 2, 2005 (File No. 000-27927)).
~~10.4~~	10.25	Exchange Agreement, dated as of October 31, 2005, by and among Charter Communications Holding Company, LLC, Charter Investment, Inc. and Paul G. Allen (incorporated by reference to Exhibit 10.18 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on November 2, 2005 (File No. 000-27927)).
~~10.5~~	10.26	CCHC, LLC Subordinated and Accreting Note, dated as of October 31, 2005 (revised) (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K of Charter Communications, Inc. filed on November 4, 2005 (File No. 000-27927)).
~~10.6(a)~~		First Amended and Restated Mutual Services Agreement, dated as of December 21, 2000, by and between Charter Communications, Inc., Charter Investment, Inc. and Charter Communications Holding Company, LLC (incorporated by reference to Exhibit 10.2(b) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)).
~~10.6(b)~~		Letter Agreement, dated June 19, 2003, by and among Charter Communications, Inc., Charter Communications Holding Company, LLC and Charter Investment, Inc. regarding Mutual Services Agreement (incorporated by reference to Exhibit No. 10.5(b) to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 000-27927)).
~~10.6(c)~~		Second Amended and Restated Mutual Services Agreement, dated as of June 19, 2003 between Charter Communications, Inc. and Charter Communications Holding Company, LLC (incorporated by reference to Exhibit 10.5(a) to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 000-27927)).
~~10.7(a)~~		~~Amended and Restated Limited Liability Company Agreement for CC VIII, LLC, dated as of March 31, 2003 (incorporated by reference to Exhibit~~ 10.27 ~~to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).~~
~~10.7(b)~~		Third Amended and Restated Limited Liability Company Agreement for CC VIII, LLC, dated as of October 31, 2005 (incorporated by reference to Exhibit 10.20 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 2, 2005 (File No. 000-27927)).
~~10.8(a)~~		Amended and Restated Limited Liability Company Agreement of Charter Communications Operating, LLC, dated as of June 19, 2003 (incorporated by reference to Exhibit No. 10.2 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 000-27927)).
~~10.8(b)~~		First Amendment to the Amended and Restated Limited Liability Company Agreement of Charter Communications Operating, LLC, adopted as of June 22, 2004 (incorporated by reference to Exhibit 10.16(b) to the annual report on Form 10-K filed by Charter Communications, Inc. on February 28, 2006 (File No.000-27927)).
~~10.9~~		Amended and Restated Management Agreement, dated as of June 19, 2003, between Charter Communications Operating, LLC and Charter Communications, Inc. (incorporated by reference to Exhibit 10.4 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 333-83887)).
~~10.10~~		Amended and Restated Credit Agreement, dated as of March 6, 2007, among Charter Communications Operating, LLC, CCO Holdings, LLC, the lenders from time to time parties thereto and ~~certain lenders and agents named therein dated April 27, 2004 (incorporated~~JPMorgan Chase Bank, N.A., as administrative agent (Incorporated by reference to Exhibit ~~10.25 to Amendment No. 2~~10.1 to the ~~registration statement~~current report on Form ~~S-4~~8-K of ~~CCH II, LLC filed on May 5, 2004 (File No. 333-111423)).~~
~~10.11(a)~~		~~Stipulation of Settlement, dated as of January 24, 2005, regarding settlement of Consolidated Federal Class Action entitled in Re~~ Charter Communications, Inc. ~~Securities Litigation. (incorporated by reference to Exhibit 10.48 to the Annual Report on Form 10-K~~ filed ~~by Charter Communications, Inc.~~ on March ~~3, 2005~~9, 2007 (File No. 000-27927)).
~~10.11(b)~~10.28		~~Amendment to Stipulation~~Amended and Restated Guarantee and Collateral Agreement made by CCO Holdings, LLC, Charter Communications Operating, LLC and certain of ~~Settlement,~~its subsidiaries in favor of JPMorgan Chase Bank, N.A. ,as administrative agent, dated as of ~~May 23, 2005, regarding settlement~~March 18, 1999, as amended and restated as of ~~Consolidated Federal Class Action entitled In Re Charter Communications, Inc. Securities Litigation (incorporated~~March 6, 2007 (Incorporated by reference to Exhibit ~~10.35(b) to Amendment No. 3~~10.2 to the ~~registration statement~~current report on Form ~~S-1 filed by~~8-K of Charter Communications, Inc. filed on ~~June 8, 2005~~March 9, 2007 (File No. ~~333-121186)~~000-27927)).
~~10.12~~		~~Settlement Agreement and Mutual Release, dated as of February 1, 2005, by and among Charter Communications, Inc. and certain other insureds, on the other hand, and Certain Underwriters at Lloyd's of~~

48E-5

~~Table of Contents~~

10.29		~~London~~Credit Agreement, dated as of March 6, 2007, among CCO Holdings, LLC, the lenders from time to time parties thereto and ~~certain subscribers, on the other hand. (incorporated~~Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit ~~10.49~~10.3 to the ~~annual~~current report on Form ~~10-K filed by~~8-K of Charter Communications, Inc. filed on March ~~3, 2005~~9, 2007 (File No. 000-27927)).
~~10.13~~10.30		~~Stipulation~~Pledge Agreement made by CCO Holdings, LLC in favor of ~~Settlement,~~Bank of America, N.A., as Collateral Agent, dated as of ~~January 24, 2005, regarding settlement of Federal Derivative Action, Arthur J. Cohn v. Ronald L. Nelson et al and Charter Communications, Inc. (incorporated~~March 6, 2007 (Incorporated by reference to Exhibit ~~10.50~~10.4 to the ~~annual~~current report on Form ~~10-K filed by~~8-K of Charter Communications, Inc. filed on March ~~3, 2005~~9, 2007 (File No. 000-27927)).
~~10.14(a)~~10.31(a)+		Charter Communications Holdings, LLC 1999 Option Plan (incorporated by reference to Exhibit 10.4 to Amendment No. 4 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on July 22, 1999 (File No. 333-77499)).
~~10.14(b)~~10.31(b)+		Assumption Agreement regarding Option Plan, dated as of May 25, 1999, by and between Charter Communications Holdings, LLC and Charter Communications Holding Company, LLC (incorporated by reference to Exhibit 10.13 to Amendment No. 6 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on August 27, 1999 (File No. 333-77499)).
~~10.14(c)~~10.31(c)+		Form of Amendment No. 1 to the Charter Communications Holdings, LLC 1999 Option Plan (incorporated by reference to Exhibit 10.10(c) to Amendment No. 4 to the registration statement on Form S-1 of Charter Communications, Inc. filed on November 1, 1999 (File No. 333-83887)).
~~10.14(d)~~10.31(d)+		Amendment No. 2 to the Charter Communications Holdings, LLC 1999 Option Plan (incorporated by reference to Exhibit 10.4(c) to the annual report on Form 10-K filed by Charter Communications, Inc. on March 30, 2000 (File No. 000-27927)).
~~10.14(e)~~10.31(e)+		Amendment No. 3 to the Charter Communications 1999 Option Plan (incorporated by reference to Exhibit 10.14(e) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927)).
~~10.14(f)~~10.31(f)+		Amendment No. 4 to the Charter Communications 1999 Option Plan (incorporated by reference to Exhibit 10.10(f) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
~~10.15(a)~~10.32(a)+		Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.25 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on May 15, 2001 (File No. 000-27927)).
~~10.15(b)~~10.32(b)+		Amendment No. 1 to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.11(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
~~10.15(c)~~10.32(c)+		Amendment No. 2 to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.10 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)).
~~10.15(d)~~10.32(d)+		Amendment No. 3 to the Charter Communications, Inc. 2001 Stock Incentive Plan effective January 2, 2002 (incorporated by reference to Exhibit 10.15(c) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927)).
~~10.15(e)~~10.32(e)+		Amendment No. 4 to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.11(e) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
~~10.15(f)~~10.32(f)+		Amendment No. 5 to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.11(f) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)).
~~10.15(g)~~10.32(g)+		Amendment No. 6 to the Charter Communications, Inc. 2001 Stock Incentive Plan effective December 23, 2004 (incorporated by reference to Exhibit 10.43(g) to the registration statement on Form S-1 of Charter Communications, Inc. filed on October 5, 2005 (File No. 333-128838)).
~~10.15(h)~~10.32(h)+		Amendment No. 7 to the Charter Communications, Inc. 2001 Stock Incentive Plan effective August 23, 2005 (incorporated by reference to Exhibit 10.43(h) to the registration statement on Form S-1 of Charter Communications, Inc. filed on October 5, 2005 (File No. 333-128838)).
~~10.15(i)~~10.32(i)+		Description of Long-Term Incentive Program to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit ~~10.11(g)~~10.18(g) to the annual report on Form 10-K filed by Charter Communications ~~Inc.~~Holdings, LLC. on March ~~15, 2004~~31, 2005 (File No. ~~000-27927)~~333-77499)).

E-6

~~10.16+~~	10.33	Description of 2008 Incentive Program to the Charter Communications, Inc. ~~2005 Executive Bonus~~2001 Stock Incentive Plan (incorporated by reference to Exhibit ~~10.51 to the annual report on Form 10-K filed by Charter Communications, Inc. on March 3, 2005 (File No. 000-27927)).~~
~~10.17+~~		2005 Executive Cash Award Plan dated as of June 9, 2005 (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed June 15, 2005 (File No. 000-27927)).

~~Table of Contents~~

~~10.18+~~		Executive Services Agreement, dated as of January 17, 2005, between Charter Communications, Inc. and Robert P. May (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on January 21, 2005 (File No. 000-27927)).
~~10.19+~~		~~Employment Agreement, dated as of October 8, 2001, by and between Carl E. Vogel and Charter Communications, Inc. (Incorporated by reference to Exhibit 10.4~~10,3 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on ~~November 14, 2001~~August 5, 2008 (File No. 000-27927)).
~~10.20+~~10.34+		~~Separation Agreement and Release for Carl E. Vogel, dated as~~Description of ~~February 17, 2005~~Charter Communications, Inc. 2006 Executive Bonus Plan (incorporated by reference to Exhibit ~~99.1 to the current report on Form 8-K filed by Charter Communications, Inc. on February 22, 2005 (File No. 000-27927)).~~
~~10.21+~~		Letter Agreement, dated April 15, 2005, by and between Charter Communications, Inc. and Paul E. Martin (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed April 19, 2005 (File No. 000-27927)).
~~10.22+~~		Restricted Stock Agreement, dated as of July 13, 2005, by and between Robert P. May and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed July 13, 2005 (File No. 000-27927)).
~~10.23+~~		Restricted Stock Agreement, dated as of July 13, 2005, by and between Michael J. Lovett and Charter Communications, Inc. (incorporated by reference to Exhibit 99.2 to the current report on Form 8-K of Charter Communications, Inc. filed July 13, 2005 (File No. 000-27927)).
~~10.24+~~		Employment Agreement, dated as of August 9, 2005, by and between Neil Smit and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on August 15, 2005 (File No. 000-27927)).
~~10.25+~~		Employment Agreement dated as of September 2, 2005, by and between Paul E. Martin and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on September 9, 2005 (File No. 000-27927)).
~~10.26+~~		Employment Agreement dated as of September 2, 2005, by and between Wayne H. Davis and Charter Communications, Inc. (incorporated by reference to Exhibit 99.2 to the current report on Form 8-K of Charter Communications, Inc. filed on September 9, 2005 (File No. 000-27927)).
~~10.27+~~		~~Employment Agreement dated as of October 31, 2005, by and between Sue Ann Hamilton and Charter Communications, Inc. (incorporated by reference to Exhibit 10.21~~10.2 to the quarterly report on Form 10-Q offiled by Charter Communications, Inc. ~~filed~~ on ~~November~~May 2, ~~2005 (File No. 000-27927)).~~
~~10.28+~~		Employment Agreement effective as of October 10, 2005, by and between Grier C. Raclin and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on November 14, 2005 (File No. 000-27927)).
~~10.29+~~		Employment Offer Letter, dated November 22, 2005, by and between Charter Communications, Inc. and Robert A. Quigley (incorporated by reference to 10.68 to Amendment No. 1 to the registration statement on Form S-1 of Charter Communications, Inc. filed on February 2, 2006 (File No. 333-130898)).
~~10.30+~~		Employment Agreement dated as of December 9, 2005, by and between Robert A. Quigley and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on December 13, 2005 (File No. 000-27927)).
~~10.31+~~		Retention Agreement dated as of January 9, 2006, by and between Paul E. Martin and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on January 10, 2006 (File No. 000-27927)).
~~10.32+~~10.35+		~~Employment Agreement dated as of January 20, 2006 by~~Amended and ~~between Jeffrey T. Fisher and Charter Communications, Inc.~~Restated Executive Cash Award Plan (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc. filed ~~on January 27, 2006~~December 6, 2007 (File No. 000-27927)).
~~10.33+~~10.36+		Amended and Restated Employment Agreement, dated as of ~~February 28, 2006~~July 1, 2008, by and between ~~Michael J. Lovett~~Neil Smit and Charter Communications, Inc. (incorporated by reference to Exhibit ~~99.2~~1010.1 to the current report on Form 8-K of Charter Communications, Inc. filed on ~~March 3, 2006~~September 30, 2008 (File No. 000-27927)).
31.1*10.37(a)+	Amended and Restated Employment Agreement between Jeffrey T. Fisher and Charter Communications, Inc., dated as of August 1, 2007 (incorporated by reference to Exhibit 10.2 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on August 2, 2007 (File No. 000-27927)).
10.37(b)+	Separation Agreement and Release between Jeffrey T. Fisher and Charter Communications, inc., dated as of April 4, 2008 (incorporated by reference to Exhibit 10.3 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on May 12, 2008 (File No. 000-27927)).
	Amended and Restated Employment Agreement between Eloise E. Schmitz and Charter Communications, Inc., dated as of July 1, 2008 (incorporated by reference to Exhibit 10.4 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on August 5, 2008 (File No. 000-27927)).
10.38(a)+	Amended and Restated Employment Agreement between Michael J. Lovett and Charter Communications, Inc., dated as of August 1, 2007 (incorporated by reference to Exhibit 10.3 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on August 2, 2007 (File No. 000-27927)).
10.38(b)+	Amendment to the Amended and Restated Employment Agreement between Michael J. Lovett and Charter Communications, Inc., dated as of March 5, 2008 (incorporated by reference to Exhibit 10.5 to the quarterly report on Form 10-Q of Charter Communications, Inc., filed on May 12, 2008 (File No. 000-27927)).
10.39(a)+	Amended and Restated Employment Agreement between Grier C. Raclin and Charter Communications, Inc., dated as of August 1, 2007 (incorporated by reference to Exhibit 10.5 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on August 2, 2007 (File No. 000-27927)).
10.39(b)+	Amendment to the Amended and Restated Employment Agreement between Grier C. Raclin and Charter Communications, Inc., dated as of March 5, 2008 (incorporated by reference to Exhibit 10.6 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on May 12, 2008 (File No. 000-27927)).
10.40(a)+	Amended and Restated Employment Agreement between Marwan Fawaz and Charter Communications, Inc. dated August 1, 2007 (incorporated by reference to Exhibit 10.52(a) to the annual report on Form 10-K of Charter Communications, Inc. filed on March 16, 2009 (File No. 000-27927)).
10.40(b)+	Amendment to Amended and Restated Employment Agreement between Marwan Fawaz and Charter Communications, Inc. dated as of March 5, 2008 (incorporated by reference to Exhibit 10.52(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on March 16, 2009 (File No. 000-27927)).
12.1*	CCO Holdings, LLC’s Computation of Ratio of Earnings to Fixed Charges
31.1*	Certificate of Chief Executive Officer of CCO Holdings, LLC pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the Securities Exchange Act of 1934.
31.2*		Certificate of Chief Financial Officer of CCO Holdings, LLC pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the Securities Exchange Act of 1934.
32.1*	32.3*	Certification of CCO Holdings, LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
32.2*	32.4*	Certification of CCO Holdings, LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).

~~_________~~

*		Document ~~attached~~ attached.
+		Management compensatory plan or arrangement

50E-7

~~Table of Contents~~

INDEX TO FINANCIAL STATEMENTS

		Page

Audited Financial Statements
Report of Independent Registered Public Accounting Firm ~~- Consolidated Financial Statements~~		F-2
Consolidated Balance Sheets as of December 31, ~~2005~~2008 and ~~2004~~2007		F-3
Consolidated Statements of Operations for the Years Ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003~~2006		F-4
Consolidated Statements of Changes in Member’s Equity (Deficit) for the Years Ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003~~2006		F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003~~2006		F-6
Notes to Consolidated Financial Statements		F-7

F-1

~~Table of Contents~~

Report of Independent Registered Public Accounting Firm

ToThe Manager and the ~~Board~~Member of ~~Directors~~

CCO Holdings, LLC:

We have audited the accompanying consolidated balance sheets of CCO Holdings, LLC and subsidiaries (the Company) as of December 31, ~~2005~~2008 and ~~2004,~~2007, and the related consolidated statements of operations, changes in member’s equity (deficit), and cash flows for each of the years in the three-year period ended December 31, ~~2005.~~2008. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CCO Holdings, LLC and subsidiaries as of December 31, ~~2005~~2008 and ~~2004,~~2007, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, ~~2005,~~2008, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that CCO Holdings, LLC will continue as a going concern. As discussed in Note 72 to the consolidated financial statements, ~~effective September 30, 2004, the Company adopted EITF Topic D-108,~~ ~~Use~~CCO Holdings, LLC’s ultimate parent, Charter Communications, Inc. and its subsidiaries, including CCO Holdings, LLC (collectively, Charter) have filed voluntary petitions for relief under Chapter 11 of the ~~Residual Method~~United States Bankruptcy Code, primarily as a result of the following matters: (i) Charter’s significant indebtedness; (ii) Charter’s ability to ~~Value Acquired Assets Other than Goodwill~~.

~~As discussed~~raise additional capital given its current leverage; and (iii) the potential inability of certain of Charter’s subsidiaries to make distributions for payments of interest and principal on the debts of the parents of such subsidiaries due in 2009 based on the availability of funds and restrictions under Charter’s applicable debt instruments and under applicable law. These matters raise substantial doubt about CCO Holdings, LLC’s ability to continue as a going concern. Management’s plans in regard to these matters are described in Note ~~17 to the~~2. The consolidated financial statements ~~effective January 1, 2003,~~do not include any adjustments that might result from the ~~Company adopted Statement~~outcome of ~~Financial Accounting Standards No. 123,~~ ~~Accounting for Stock-Based Compensation~~~~, as amended by Statement of Financial Accounting Standards No. 148,~~ ~~Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of FASB Statement No. 123~~.this uncertainty.

~~/s/ KPMG LLP~~

St. Louis, Missouri

~~February 27, 2006~~

March 30, 2009

F-2

~~Table of Contents~~

CCO HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in millions)

	December 31,					December 31,
	2005		2004			2008			2007

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	3	$	546		$	948		$	2
Accounts receivable, less allowance for doubtful accounts of
$17 and $15, respectively		212		175
$18 and $18, respectively							221			220
Prepaid expenses and other current assets		22		20			23			24
Total current assets		237		741			1,192			246

INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net of accumulated
depreciation of $6,712 and $5,142, respectively		5,800		6,110
depreciation of $7,191 and $6,432, respectively							4,959			5,072
Franchises, net		9,826		9,878			7,384			8,942
Total investment in cable properties, net		15,626		15,988			12,343			14,014

OTHER NONCURRENT ASSETS		224		235			211			186

Total assets	$	16,087	$	16,964		$	13,746		$	14,446

LIABILITIES AND MEMBER’S EQUITY
LIABILITIES AND MEMBER’S EQUITY (DEFICIT)

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	875	$	901		$	909		$	929
Payables to related party		95		24			236			192
Current portion of long-term debt							70			--
Total current liabilities		970		925			1,215			1,121

LONG-TERM DEBT		9,023		8,294			11,719			9,859
LOANS PAYABLE - RELATED PARTY		22		29
DEFERRED MANAGEMENT FEES - RELATED PARTY		14		14
LOANS PAYABLE – RELATED PARTY							240			332
DEFERRED MANAGEMENT FEES – RELATED PARTY							14			14
OTHER LONG-TERM LIABILITIES		392		493			695			545
MINORITY INTEREST		622		656			676			663

MEMBER’S EQUITY:
Member’s equity		5,042		6,568
Accumulated other comprehensive income (loss)		2		(15	)
Member’s equity (deficit)							(510	)		2,035
Accumulated other comprehensive loss							(303	)		(123	)

Total member’s equity		5,044		6,553
Total member’s equity (deficit)							(813	)		1,912

Total liabilities and member’s equity	$	16,087	$	16,964
Total liabilities and member’s equity (deficit)						$	13,746		$	14,446

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

F-3

~~Table of Contents~~

CCO HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in millions)

Year Ended December 31,

2005

2004

2003

REVENUES $ 5,254 $ 4,977 $ 4,819

COSTS AND EXPENSES:
Operating (excluding depreciation and amortization) 2,293 2,080 1,952
Selling, general and administrative 1,034 971 940
Depreciation and amortization 1,499 1,495 1,453
Impairment of franchises -- 2,433 --
Asset impairment charges 39 -- --
(Gain) loss on sale of assets, net 6 (86 ) 5
Option compensation expense, net 14 31 4
Hurricane asset retirement loss 19 -- --
Special charges, net 7 104 21
Unfavorable contracts and other settlements -- (5 ) (72 )

4,911 7,023 4,303

Income (loss) from operations 343 (2,046 ) 516

OTHER INCOME AND EXPENSES:
Interest expense, net (691 ) (560 ) (500 )
Gain on derivative instruments and hedging activities, net 50 69 65
Loss on extinguishment of debt (6 ) (21 ) --
Other, net 22 3 (9 )

(625 ) (509 ) (444 )

Income (loss) before minority interest, income taxes and cumulative effect of accounting change (282 ) (2,555 ) 72

MINORITY INTEREST 33 20 (29 )

Income (loss) before income taxes and cumulative effect of accounting change (249 ) (2,535 ) 43

INCOME TAX BENEFIT (EXPENSE) (9 ) 35 (13 )

Income (loss) before cumulative effect of accounting change (258 ) (2,500 ) 30

CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX -- (840 ) --

Net income (loss) $ (258 ) $ (3,340 ) $ 30

	Year Ended December 31,
	2008			2007			2006

REVENUES	$	6,479		$	6,002		$	5,504

COSTS AND EXPENSES:
Operating (excluding depreciation and amortization)		2,792			2,620			2,438
Selling, general and administrative		1,401			1,289			1,165
Depreciation and amortization		1,310			1,328			1,354
Impairment of franchises		1,521			178			--
Asset impairment charges		--			56			159
Other operating (income) expenses, net		69			(17	)		21

		7,093			5,454			5,137

Operating income (loss) from continuing operations		(614	)		548			367

OTHER INCOME AND EXPENSES:
Interest expense, net		(818	)		(776	)		(766	)
Change in value of derivatives		(62	)		(46	)		6
Loss on extinguishment of debt		--			(32	)		(27	)
Other expense, net		(19	)		(24	)		(4	)

		(899	)		(878	)		(791	)

Loss from continuing operations, before income tax expense		(1,513	)		(330	)		(424	)

INCOME TAX BENEFIT (EXPENSE)		40			(20	)		(7	)

Loss from continuing operations		(1,473	)		(350	)		(431	)

INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX		--			--			238

Net loss	$	(1,473	)	$	(350	)	$	(193	)

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

F-4

~~Table of Contents~~

~~F-17~~F-16

~~Table of Contents~~

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, ~~2005, 2004~~2008, 2007 AND ~~2003~~2006

(dollars in millions, except where indicated)

~~each of~~

legal purposes and notes indenture purposes (the amount that is currently payable if the ~~next two subsequent three-month periods. The Company will be required~~debt becomes immediately due) is equal to ~~prepay loans from~~ the net proceeds from (i) the issuance of equity or incurrence of debt by Charter and its subsidiaries, with certain exceptions, and (ii) certain asset sales (to the extent not used for other purposes permitted under the bridge loan).

In August 2005, the Company issued $300 million in debt securities, the proceeds of which were used for general corporate purposes, including the payment of distributions to its parent companies, including Charter Holdings, to pay interest expense.

In March and June 2005, Charter Operating consummated exchange transactions with a small number of institutional holders of Charter Holdings 8.25% senior notes due 2007 pursuant to which Charter Operating issued, in private placements, approximately $333 million principal amount of ~~new notes with terms identical~~notes. See Note 25 related to ~~Charter Operating's 8.375% senior second lien notes due 2014 in exchange for approximately $346 million of~~ the ~~Charter Holdings 8.25% senior notes due 2007. The Charter Holdings notes received in the exchange were thereafter distributed to Charter Holdings and cancelled.~~Proposed Restructuring.

~~Loss on Extinguishment of Debt~~CCO Holdings Notes

In March 2005, CCO Holdings’ subsidiary, CC V Holdings, LLC, redeemed all of its 11.875% notes due 2008, at 103.958% of principal amount, plus accrued and unpaid interest to the date of redemption. The total cost of redemption was approximately $122 million and was funded through borrowings under the Charter Operating credit facilities. The redemption resulted in a loss on extinguishment of debt for the year ended December 31, 2005 of approximately $5 million. Following such redemption, CC V Holdings, LLC and its subsidiaries (other than non-guarantor subsidiaries) guaranteed the Charter Operating credit facilities and granted a lien on all of their assets as to which a lien can be perfected under the Uniform Commercial Code by the filing of a financing statement.

In April 2004, CCO Holdings’ indirect subsidiaries, Charter Operating and Charter Communications Operating Capital Corp., sold $1.5 billion of senior second-lien notes in a private transaction. Additionally, Charter Operating amended and restated its $5.1 billion credit facilities, among other things, to defer maturities and increase availability under those facilities to approximately $6.5 billion, consisting of a $1.5 billion six-year revolving credit facility, a $2.0 billion six-year term loan facility and a $3.0 billion seven-year term loan facility. Charter Operating used the additional borrowings under the amended and restated credit facilities, together with proceeds from the sale of the Charter Operating senior second-lien notes to refinance the credit facilities of its subsidiaries, CC VI Operating Company, LLC ("CC VI Operating"), Falcon Cable Communications, LLC ("Falcon Cable"), and CC VIII Operating, LLC ("CC VIII Operating"), all in concurrent transactions. In addition, Charter Operating was substituted as the lender in place of the banks under those subsidiaries’ credit facilities. These transactions resulted in a net loss on extinguishment of debt of $21 million for the year ended December 31, 2004.

~~CCO Holdings Notes.~~

~~8 ¾% Senior Notes due 2013~~

~~In November 2003 and August 2005, CCO Holdings and CCO Holdings Capital Corp. jointly issued $500 million and $300 million, respectively, total principal amount of 8¾% senior notes due 2013.~~ The CCO Holdings notes are ~~general unsecured~~senior debt obligations of CCO Holdings and CCO Holdings Capital Corp. They rank equally with all other current orand future unsecured, unsubordinated obligations of CCO Holdings and CCO Holdings Capital Corp. The CCO Holdings notes are structurally subordinated to all obligations of subsidiaries of CCO ~~Holdings’ subsidiaries,~~Holdings, including ~~the Renaissance notes,~~ the Charter Operating notes and the Charter Operating credit facilities. ~~As of December 31, 2005, there was $800 million in total principal amount outstanding and $794 million in accreted value outstanding.~~

~~Interest on the CCO Holdings senior notes accrues at 8¾% per year and is payable semi-annually in arrears on each May 15 and November 15.~~

~~F-18~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

~~on a pro rata basis at a redemption price equal to 108.75% of the principal amount of CCO Holdings senior notes redeemed, plus any accrued and unpaid interest.~~

On or after November 15, 2008, the issuers of the CCO Holdings 8 ¾% senior notes may redeem all or a part of the notes at a redemption price that declines ratably from the initial redemption price of 104.375% to a redemption price on or after November 15, 2011 of 100.0% of the principal amount of the CCO Holdings 8 ¾% senior notes redeemed, plus, in each case, any accrued and unpaid interest.

In the event of specified change of control events, CCO Holdings must offer to purchase the outstanding CCO Holdings senior notes from the holders at a purchase price equal to 101% of the total principal amount of the notes, plus any accrued and unpaid interest.

~~Senior Floating Rate~~Charter Operating Notes ~~Due 2010~~

~~In December 2004, CCO Holdings and CCO Holdings Capital Corp. jointly issued $550 million total principal amount of senior floating rate notes due 2010.~~ The CCO Holdings notes are general unsecured obligations of CCO Holdings and CCO Holdings Capital Corp. They rank equally with all other current or future unsubordinated obligations of CCO Holdings and CCO Holdings Capital Corp. The CCO Holdings notes are structurally subordinated to all obligations of CCO Holdings’ subsidiaries, including the Renaissance notes, the Charter Operating notes ~~and the Charter Operating credit facilities.~~

~~Interest on the CCO Holdings~~are senior ~~floating rate notes accrues at the LIBOR rate (4.53% and 2.56% as~~debt obligations of December 31, 2005 and 2004, respectively) plus 4.125% annually, from the date interest was most recently paid. Interest is reset and payable quarterly in arrears on each March 15, June 15, September 15 and December 15.

At any time prior to December 15, 2006, the issuers of the senior floating rate notes may redeem up to 35% of the notes in an amount not to exceed the amount of proceeds of one or more public equity offerings at a redemption price equal to 100% of the principal amount, plus a premium equal to the interest rate per annum applicable to the notes on the date notice of redemption is given, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 65% of the original aggregate principal amount of the notes issued remains outstanding after the redemption.

The issuers of the senior floating rate notes may redeem the notes in whole or in part at the issuers’ option from December 15, 2006 until December 14, 2007 for 102% of the principal amount, from December 15, 2007 until December 14, 2008 for 101% of the principal amount and from and after December 15, 2008, at par, in each case, plus accrued and unpaid interest.

The indentures governing the CCO Holdings senior notes contain restrictive covenants that limit certain transactions or activities by CCO Holdings and its restricted subsidiaries. Substantially all of CCO Holdings’ direct and indirect subsidiaries are currently restricted subsidiaries.

~~Charter Operating Notes~~. ~~On April 27, 2004,~~ Charter Operating and Charter Communications Operating Capital Corp. jointly issued $1.1 billion of 8% senior second-lien notes due 2012 and $400 million of 8 3/8% senior second-lien notes due 2014, for total gross proceeds of $1.5 billion. In March and June 2005, Charter Operating consummated exchange transactions with a small number of institutional holders of Charter Holdings 8.25% senior notes due 2007 pursuant to which Charter Operating issued, in private placement transactions, approximately $333 million principal amount of its 8 3/8% senior second-lien notes due 2014 in exchange for approximately $346 millionTo the extent of the ~~Charter Holdings 8.25% senior notes due 2007. Interest on~~value of the ~~Charter Operating notes is payable semi-annually in arrears on each April 30 and October 30.~~

~~F-19~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

~~The Charter Operating notes were sold in a private transaction that was not~~collateral (but subject to the ~~registration requirements~~prior lien of the ~~Securities Act~~credit facilities), they rank effectively senior to all of ~~1933.~~Charter Operating’s future unsecured senior indebtedness. The collateral currently consists of the capital stock of Charter Operating ~~notes are not expected to have the benefit of any exchange or other registration rights, except in specified limited circumstances. On the issue date~~held by CCO Holdings, all of the intercompany obligations owing to CCO Holdings by Charter Operating ~~notes, because~~or any subsidiary of ~~restrictions contained in the Charter Holdings indentures, there were no~~ Charter Operating, ~~note guarantees, even though~~and substantially all of Charter ~~Operating's immediate parent,~~Operating’s and the guarantors’ assets (other than the assets of CCO Holdings, and certain of the Company’s subsidiaries were obligors and/or guarantors under the Charter Operating credit facilities. Upon the occurrence of the guarantee and pledge date (generally, the fifth business day after the Charter Holdings leverage ratio was certified to be below 8.75 to 1.0),Holdings). CCO Holdings and those subsidiaries of Charter Operating that ~~were then~~are guarantors of, or otherwise obligors with respect to, indebtedness under the Charter Operating credit facilities and related obligations, ~~were required to~~ guarantee the Charter Operating notes. ~~The note guarantee of each such guarantor is:~~

~~a senior obligation of such guarantor;~~

~~structurally senior to the outstanding CCO Holdings notes (except in the case of CCO Holdings' note guarantee, which is structurally~~ ~~pari passu~~ with such senior notes), the outstanding CCH II notes, the outstanding CCH I notes, the outstanding CIH notes, the outstanding Charter Holdings notes and the outstanding Charter convertible senior notes (but subject to provisions in the Charter Operating indenture that permit interest and, subject to meeting the 4.25 to 1.0 leverage ratio test, principal payments to be made thereon); and

~~senior in right of payment to any future subordinated indebtedness of such guarantor.~~

Charter Operating may, at any time and from time to time, at their option, redeem the outstanding 8% second lien notes due 2012, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the redemption date, plus the Make-Whole Premium. The Make-Whole Premium is an amount equal to the excess of (a) the present value of the remaining interest and principal payments due on an 8% senior second-lien note due 2012 to its final maturity date, computed using a discount rate equal to the Treasury Rate on such date plus 0.50%, over (b) the outstanding principal amount of such Note.

AsOn or after April 30, 2009, Charter Operating may redeem all or a ~~result~~part of the ~~above leverage ratio test being met,~~8 3/8% senior second lien notes at a redemption price that declines ratably from the initial redemption price of 104.188% to a redemption price on or after April 30, 2012 of 100% of the principal amount of the 8 3/8% senior second lien notes redeemed plus in each case accrued and unpaid interest.

In March 2008, Charter Operating issued $546 million principal amount of 10.875% senior second-lien notes due 2014, guaranteed by CCO Holdings and certain ~~of its subsidiaries provided the additional guarantees described above during the first quarter of 2005.~~

~~All the~~other subsidiaries of Charter Operating, ~~(except CCO NR Sub, LLC, and certain other subsidiaries that are~~in a private transaction. Net proceeds from the senior second-lien notes were used to reduce borrowings, but not ~~deemed material and are designated as nonrecourse subsidiaries~~commitments, under the revolving portion of the Charter Operating credit ~~facilities) are restricted subsidiaries~~facilities.

The Charter Operating 10.875% senior second-lien notes may be redeemed at the option of Charter Operating ~~under~~on or after varying dates, in each case at a premium, plus the Make-Whole Premium. The Make-Whole Premium is an amount equal to the excess of (a) the present value of the remaining interest and principal payments due on a 10.875% senior second-lien note due 2014 to its final maturity date, computed using a discount rate equal to the Treasury Rate on such date plus 0.50%, over (b) the outstanding principal amount of such note. The Charter Operating ~~notes. Unrestricted subsidiaries generally will not~~10.875% senior second-lien notes may be ~~subject to the restrictive covenants in the Charter Operating indenture.~~

redeemed at any time on or after March 15, 2012 at specified prices. In the event of specified change of control events, Charter Operating must offer to purchase the Charter

F-17

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

Operating 10.875% senior second-lien notes at a purchase price equal to 101% of the total principal amount of the Charter Operating notes repurchased plus any accrued and unpaid interest thereon.

The indenture governing the Charter Operating senior notes contains restrictive covenants that limit certain transactions or activities by Charter Operating and its restricted subsidiaries. Substantially all of Charter Operating’s direct and indirect subsidiaries are currently restricted subsidiaries.

~~Renaissance Notes.~~In connection with the acquisition of Renaissance in April 1999, the Company assumed $163 million principal amount at maturity of 10.000% senior discount notes due 2008 of which $49 million was repurchased in May 1999. The Renaissance notes bear interest, payable semi-annually, on April 15 and October 15. The Renaissance notes are due on April 15, 2008. As of December 31, 2005, there was $114 million in total principal amount outstanding and $115 million in accreted value outstanding.

~~CC V Holdings Notes.~~~~These notes were redeemed on March 14, 2005 and are therefore no longer outstanding.~~

High-Yield Restrictive Covenants; Limitation on Indebtedness.

The indentures governing the CCO Holdings and Charter Operating notes ~~of the Company’s subsidiaries~~ contain certain covenants that restrict the ability of CCO Holdings, CCO Holdings Capital Corp., Charter Operating, Charter Communications Operating Capital Corp., ~~Renaissance Media Group,~~ and all of their restricted subsidiaries to:

~~F-20~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

incur additional debt;

pay dividends on equity or repurchase equity;

make investments;

sell all or substantially all of their assets or merge with or into other companies;

sell assets;

enter into sale-leasebacks;

in the case of restricted subsidiaries, create or permit to exist dividend or payment restrictions with respect to the bond issuers, guarantee their parent companies debt, or issue specified equity interests;

engage in certain transactions with affiliates; and

grant liens.

CCO Holdings Credit Facility

The CCO Holdings credit facility consists of a $350 million term loan. The term loan matures on September 6, 2014. The CCO Holdings credit facility also allows the Company to enter into incremental term loans in the future, maturing on the dates set forth in the notices establishing such term loans, but no earlier than the maturity date of the existing term loans. However, no assurance can be given that the Company could obtain such incremental term loans if CCO Holdings sought to do so. Borrowings under the CCO Holdings credit facility bear interest at a variable interest rate based on either LIBOR or a base rate plus, in either case, an applicable margin. The applicable margin for LIBOR term loans, other than incremental loans, is 2.50% above LIBOR. The applicable margin with respect to the incremental loans is to be agreed upon by CCO Holdings and the lenders when the incremental loans are established. The CCO Holdings credit facility is secured by the equity interests of Charter Operating, and all proceeds thereof.

Charter Operating Credit Facilities

The Charter Operating credit facilities were amended and restated concurrently with the sale of $1.5 billion senior second-lien notes in April 2004, among other things, to defer maturities and increase availability under these facilities and to enable Charter Operating to acquire the interests of the lenders under the CC VI Operating, CC VIII Operating and Falcon credit facilities, thereby consolidating all credit facilities under one amended and restated Charter Operating credit agreement.

The Charter Operating credit facilities provide borrowing availability of up to ~~$6.5~~$8.0 billion as follows:

·~~two term facilities:~~

~~(i)~~·

a ~~Term A facility~~term loan with aan initial total principal amount of ~~$2.0 billion, of which 12.5% matures in 2007, 30% matures in 2008, 37.5% matures in 2009 and 20% matures in 2010; and~~

~~(ii)~~

~~a Term B facility with a total principal amount of $3.0~~$6.5 billion, which ~~shall be~~is repayable in 27 equal quarterly installments, commencing March 31, 2008, and aggregating in each loan year to 1% of the original amount of the ~~Term B facility,~~term loan, with the remaining balance due at final maturity ~~in 2011;~~on March 6, 2014; and

a revolving line of credit ~~facility, in a total amount~~ of $1.5 billion, with a maturity date ~~in 2010.~~on March 6, 2013.

The Charter Operating credit facilities also allow the Company to enter into incremental term loans in the future with an aggregate amount of up to $1.0 billion, with amortization as set forth in the notices establishing such term loans, but with no amortization greater than 1% prior to the final maturity of the existing term loan. In March 2008, Charter Operating borrowed $500 million principal amount of incremental term loans (the “Incremental Term Loans”) under the Charter Operating credit facilities. The Incremental Term Loans have a final maturity of March 6, 2014 and prior to this date will amortize in quarterly principal installments totaling 1% annually beginning on June 30, 2008. The Incremental Term Loans bear interest at LIBOR plus 5.0%, with a LIBOR floor of 3.5%, and are otherwise governed by and subject to the existing terms of the Charter Operating credit facilities. Net proceeds from the Incremental Term Loans were used for general corporate purposes. Although the Charter Operating credit facilities allow for the incurrence of up to an additional $500 million in incremental term loans, no assurance can be given that additional incremental term loans could be obtained in the future if Charter Operating sought to do so especially after filing a Chapter 11 bankruptcy proceeding on March 27, 2009. See Note 25.

F-18

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

Amounts outstanding under the Charter Operating credit facilities bear interest, at Charter Operating’s election, at a base rate or the Eurodollar rate ~~(4.06%~~(1.46% to ~~4.50%~~3.50% as of December 31, ~~2005~~2008 and ~~2.07%~~4.87% to ~~2.28%~~5.24% as of December 31, ~~2004)~~2007), as defined, plus a margin for Eurodollar loans of up to ~~3.00%~~2.00% for the ~~Term A facility and~~ revolving credit facility and ~~up to 3.25% for the Term B facility, and for base rate loans of up to~~ 2.00% for the ~~Term A facility~~term loan, and ~~revolving credit facility, and up to 2.25% for the Term B facility. A~~ quarterly commitment fee of ~~up to .75%~~0.5% per annum is payable on the average daily unborrowed balance of the revolving credit ~~facilities.~~facility.

The obligations of ~~our subsidiaries~~Charter Operating under the Charter Operating credit facilities (the ~~"Obligations"~~“Obligations”) are guaranteed by Charter Operating’s immediate parent company, CCO Holdings, and the subsidiaries of Charter Operating, except for certain subsidiaries, including immaterial subsidiaries and subsidiaries precluded from guaranteeing by reason of ~~the~~ provisions of other indebtedness to which they are subject (the ~~"non-guarantor subsidiaries," primarily Renaissance and its subsidiaries)~~“non-guarantor subsidiaries”). The Obligations are also secured by (i) a lien on substantially all of the assets of Charter Operating and its subsidiaries (other than assets of the non-guarantor subsidiaries), ~~to the extent such lien can be perfected under the Uniform Commercial Code by the filing of a financing statement,~~ and (ii) a pledge by CCO Holdings of the equity interests owned by it in Charter Operating or any of Charter Operating’s subsidiaries, as well as intercompany obligations owing to it by any of such entities.

~~F-21~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

subsidiaries (other than non-guarantor subsidiaries) became guarantors of the Obligations and have granted a lien on all of their assets as to which a lien can be perfected under the Uniform Commercial Code by the filing of a financing statement.

As of December 31, ~~2005,~~2008, outstanding borrowings under the Charter Operating credit facilities were approximately ~~$5.7~~$8.2 billion and the unused total potential availability was approximately ~~$553 million, none of which was limited by covenant restrictions.~~$27 million.

~~Charter Operating~~ Credit Facilities — Restrictive Covenants

Charter Operating Credit Facilities

The Charter Operating credit facilities contain representations and warranties, and affirmative and negative covenants customary for financings of this type. The financial covenants measure performance against standards set for leverage ~~debt service coverage, and interest coverage,~~to be tested as of the end of each quarter. ~~The maximum allowable leverage ratio is 4.25 to 1.0 until maturity, tested as of the end of each quarter beginning September 30, 2004.~~ Additionally, the Charter Operating credit facilities contain provisions requiring mandatory loan prepayments under specific circumstances, including ~~when significant amounts~~in connection with certain sales of assets, ~~are sold and~~so long as the proceeds ~~are~~have not been reinvested in ~~assets useful in~~ the ~~business of the borrower within a specified period, and upon the incurrence of certain indebtedness when the ratio of senior first lien debt to operating cash flow is greater than 2.0 to 1.0.~~business.

The Charter Operating credit facilities permit Charter Operating and its subsidiaries to make distributions to pay interest on the Charter ~~Operating senior second-lien~~convertible notes, the Charter Holdings notes, the CIH notes, the CCH I notes, the CCH II ~~senior~~ notes, the CCO Holdings ~~senior~~ notes, the ~~Charter convertible senior notes, the CCHC notes~~CCO Holdings credit facility, and the Charter ~~Holdings~~Operating senior second-lien notes, provided that, among other things, no default has occurred and is continuing under the Charter Operating credit facilities. Conditions to future borrowings include absence of a default or an event of default under the Charter Operating credit facilities, and the continued accuracy in all material respects of the representations and warranties, including the absence since December 31, ~~2003~~2005 of any event, development, or circumstance that has had or could reasonably be expected to have a material adverse effect on ~~our~~the Company’s business.

The events of default under the Charter Operating credit facilities include, among other things:

the failure to make payments when due or within the applicable grace period,

the failure to comply with specified covenants, including but not limited to a covenant to deliver audited financial statements for Charter Operating with an unqualified opinion from ~~our~~the Company’s independent ~~auditors,~~accountants and without a “going concern” or like qualification or exception.

F-19

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

Charter Operating ceasing to be a wholly-owned direct subsidiary of CCO Holdings, except in certain very limited circumstances.

~~F-22~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

CCO Holdings ~~Bridge Loan~~

~~In October 2005, CCO Holdings and CCO Holdings Capital Corp., as guarantor thereunder, entered into the Bridge Loan) with JPMorgan Chase Bank, N.A.,~~ Credit Suisse, Cayman Islands Branch and Deutsche Bank AG Cayman Islands Branch (the "Lenders") whereby the Lenders committed to make loans to CCO Holdings in an aggregate amount of $600 million. In January 2006, upon the issuance of $450 million of CCH II notes discussed above, the commitment under the bridge loan agreement was reduced to $435 million. CCO Holdings may draw upon the facility between January 2, 2006 and September 29, 2006 and the loans will mature on the sixth anniversary of the first borrowing under the Bridge Loan.

Beginning on the first anniversary of the first date that CCO Holdings borrows under the Bridge Loan and at any time thereafter, any Lender will have the option to receive "exchange notes" (the terms of which are described below, the "Exchange Notes") in exchange for any loan that has not been repaid by that date. Upon the earlier of (x) the date that at least a majority of all loans that have been outstanding have been exchanged for Exchange Notes and (y) the date that is 18 months after the first date that CCO Holdings borrows under the Bridge Loan, the remainder of loans will be automatically exchanged for Exchange Notes.

As conditions to each draw, (i) there shall be no default under the Bridge Loan, (ii) all the representations and warranties under the bridge loan shall be true and correct in all material respects and (iii) all conditions to borrowing under the Charter Operating credit facilities (with certain exceptions) shall be satisfied.Facility

The ~~aggregate unused commitment will be reduced by 100% of the net proceeds from certain asset sales,~~CCO Holdings credit facility contains covenants that are substantially similar to the ~~extent such net~~restrictive covenants for the CCO Holdings notes. The CCO Holdings credit facility contains provisions requiring mandatory loan prepayments under specific circumstances, including in connection with certain sales of assets, so long as the proceeds have not been ~~used to prepay loans or Exchange Notes. However, asset sales that generate net proceeds of less than $75 million will not be subject to such commitment reduction obligation, unless~~reinvested in the ~~aggregate net proceeds from such asset sales exceed $200 million, in which case the aggregate unused commitment will be reduced by the amount of such excess.~~

business. The CCO Holdings ~~will be required to prepay loans (and redeem or offer to repurchase Exchange Notes, if issued) from the net proceeds from (i) the issuance of equity or incurrence of debt by Charter~~credit facility permits CCO Holdings and its subsidiaries ~~with certain exceptions,~~to make distributions to pay interest on the Charter convertible senior notes, the Charter Holdings notes, the CIH notes, the CCH I notes, the CCH II notes, the CCO Holdings notes, and ~~(ii) certain asset sales (to~~ the ~~extent not used for purposes permitted~~Charter Operating second-lien notes, provided that, among other things, no default has occurred and is continuing under the ~~bridge loan).~~CCO Holdings credit facility.

~~The covenants and events of default applicable to CCO Holdings under the Bridge Loan are similar to the covenants and events of default in the indenture for the senior secured notes of CCH I.~~

The Exchange Notes will mature on the sixth anniversary of the first borrowing under the Bridge Loan. The Exchange Notes will bear interest at a rate equal to the rate that would have been borne by the loans. The same mandatory redemption provisions will apply to the Exchange Notes as applied to the loans, except that CCO Holdings will be required to make an offer to redeem upon the occurrence of a change of control at 101% of principal amount plus accrued and unpaid interest.

~~F-23~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

Based upon outstanding indebtedness as of December 31, ~~2005,~~2008, the amortization of term loans, scheduled reductions in available borrowings of the revolving credit facilities, and the maturity dates for all senior and subordinated notes and debentures, total future principal payments on the total borrowings under all debt agreements as of December 31, ~~2005,~~2008, are as follows:

Year

Amount

2006 $ 30
2007 280
2008 744
2009 779
2010 1,762
Thereafter 5,433

$ 9,028

Year	Amount

2009	$	70
2010		70
2011		70
2012		1,170
2013		2,185
Thereafter		8,247

	$	11,812

For the amounts of debt scheduled to mature during 2006, it is management’s intent to fund the repayments from borrowings on the Company’s revolving credit facility. The accompanying consolidated balance sheet reflects this intent by presenting all debt balances as long-term while the table above reflects actual debt maturities

10. Loans Payable - Related Party

Loans payable-related party as of December 31, 2008 consists of loans from Charter Holdco and CCH II to the ~~stated date.~~Company of $13 million and $227 million, respectively. Loans payable-related party as of December 31, 2007 consists of loans from Charter Holdco and CCH II to Charter Operating of $123 million and $209 million, respectively.

~~10.~~11. Minority Interest

Minority interest on the Company’s consolidated balance sheets as of December 31, ~~2005~~2008 and ~~2004 primarily~~2007 represents Mr. Paul G. Allen’s, Charter’s chairman and controlling shareholder, 5.6% preferred membership interests in CC VIII, LLC ("(“CC ~~VIII"~~VIII”), an indirect subsidiary of the Company, of $676 million and $663 million, respectively. CII owns 30% of the CC VIII preferred membership interests. CCH I, the Company’s indirect parent, directly owns the remaining 70% of these preferred interests. The common membership interests in CC VIII are indirectly owned by Charter Operating. As a result, minority interest at CCO Holdings represents 100% of ~~$622 million and $656 million, respectively. As more fully described in Note 21, this preferred interest arises from approximately $630 million of~~the preferred membership units issued by CC VIII in connection with an acquisition in February 2000 and was the subject of a dispute between Charter and Mr. Allen, Charter’s Chairman and controlling shareholder that was settled October 31, 2005. In conjunction with the settlement of this dispute and the related change in ownership interest, approximately 18.6% of CC VIII’s income or losses are allocated to minorityinterests. Minority interest in the ~~Company’s~~accompanying consolidated statements of operations ~~including amounts estimated in prior years and~~includes the 2% accretion of the preferred membership ~~interests.~~interests plus approximately 18.6% of CC VIII’s income, net of accretion.

F-20

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

12. Comprehensive Loss

~~11.~~~~Comprehensive Income (Loss)~~

Certain marketable equity securities are classified as available-for-sale and reported at market value with unrealized gains and losses recorded as accumulated other comprehensive loss on the accompanying consolidated balance sheets. Additionally, theThe Company reports changes in the fair value of interest rate agreements designated as hedging the variability of cash flows associated with floating-rate debt obligations, that meet the effectiveness criteria of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, in accumulated other comprehensive loss. Comprehensive loss for the years ended December 31, ~~2005~~2008, 2007, and ~~2004~~2006 was ~~$241~~$1.7 billion, $474 million, and ~~$3.3 billion,~~$194 million, respectively. ~~Comprehensive income for the year ended December 31, 2003 was $78 million.~~

~~12.~~13. Accounting for Derivative Instruments and Hedging Activities

The Company uses interest rate ~~risk management derivative instruments, such as interest rate~~ swap agreements ~~and interest rate collar agreements (collectively referred to herein as interest rate agreements)~~ to manage its interest ~~costs.~~costs and reduce the Company’s exposure to increases in floating interest rates. The Company’s policy is to manage its exposure to fluctuations in interest ~~costs using~~rates by maintaining a mix of fixed and variable rate ~~debt.~~debt within a targeted range. Using interest rate swap agreements, the Company ~~has agreed~~agrees to exchange, at specified intervals through ~~2007,~~2013, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal ~~amount. Interest rate collar agreements are used to limit~~amounts. At the ~~Company’s exposure to and benefits from~~banks’ option, certain interest rate ~~fluctuations on variable rate debt to within a certain range of rates.~~swap agreements may be extended through 2014.

~~F-24~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

The ~~Company~~Company’s hedging policy does not permit it to hold or issue derivative instruments for speculative trading purposes. The Company does, however, have certain interest rate derivative instruments that have been designated as cash flow hedging instruments. Such instruments effectively convert variable interest payments on certain debt instruments into fixed payments. For qualifying hedges, SFAS No. 133 allows derivative gains and losses to offset related results on hedged items in the consolidated statement of operations. The Company has formally documented, designated and assessed the effectiveness of transactions that receive hedge accounting. For the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003, net gain on derivative instruments and hedging activities~~2006, change in value of derivatives includes gains of ~~$3 million, $4 million~~$0, $0, and $8$2 million, respectively, which represent cash flow hedge ineffectiveness on interest rate hedge ~~agreements arising~~agreements. This ineffectiveness arises from differences between ~~the~~ critical terms of the agreements and the related hedged obligations.

Changes in the fair value of interest rate agreements that are designated as hedging instruments of the variability of cash flows associated with floating-rate debt obligations, and that meet the effectiveness criteria specified by SFAS No. 133 are reported in accumulated other comprehensive loss. For the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003, a gain~~2006, losses of ~~$16~~$180 million, ~~$42~~$123 million and ~~$48~~$1 million, respectively, related to derivative instruments designated as cash flow hedges, ~~was~~were recorded in accumulated other comprehensive loss. The amounts are subsequently reclassified ~~into~~as an increase or decrease to interest expense ~~as a yield adjustment~~ in the same ~~period~~periods in which the related interest on the floating-rate debt obligations affects earnings (losses).

Certain interest rate derivative instruments are not designated as hedges as they do not meet the effectiveness criteria specified by SFAS No. 133. However, management believes such instruments are closely correlated with the respective debt, thus managing associated risk. Interest rate derivative instruments not designated as hedges are marked to fair value, with the impact recorded as ~~gain (loss) on derivative instruments and hedging activities~~ a change in value of derivatives in the Company’s consolidated ~~statement~~statements of operations. For the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003, net gain on derivative instruments~~2006, change in value of derivatives includes losses of $62 million and ~~hedging activities includes~~$46 million and gains of ~~$47 million, $65 million and $57~~$4 million, respectively, ~~for~~resulting from interest rate derivative instruments not designated as hedges.

As of December 31, ~~2005, 2004~~2008, 2007, and ~~2003,~~2006, the Company had outstanding ~~$1.8~~$4.3 billion, ~~$2.7~~$4.3 billion, and ~~$3.0~~$1.7 billion, ~~and $20 million, $20 million and $520 million, respectively,~~ in notional amounts of interest rate swaps ~~and collars, respectively.~~outstanding. The notional amounts of interest rate instruments do not represent amounts exchanged by the parties and, thus, are not a measure of exposure to credit loss. The amounts exchanged are determined by reference to the notional amount and the other terms of the contracts.

~~13.~~14. Fair Value of Financial Instruments

The Company has estimated the fair value of its financial instruments as of December 31, ~~2005~~2008 and ~~2004~~2007 using available market information or other appropriate valuation methodologies. Considerable judgment, however, is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented in the accompanying consolidated financial statements are not necessarily indicative of the amounts the Company would realize in a current market exchange.

F-21

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

The carrying amounts of cash, receivables, payables and other current assets and liabilities approximate fair value because of the short maturity of those instruments. ~~The Company is exposed to market price risk volatility with respect to investments in publicly traded and privately held entities.~~

The fair value of interest rate agreements represents the estimated amount the Company would receive or pay upon termination of the ~~agreements.~~agreements adjusted for Charter Operating’s credit risk. Management believes that the sellers of the interest rate agreements will be able to meet their obligations under the agreements. In addition, some of the interest rate agreements are with certain of the participating banks under the Company’s credit facilities, thereby reducing the exposure to credit loss. The Company has policies regarding the financial stability and credit standing of major counterparties. Nonperformance by the counterparties is not anticipated nor would it have a material adverse effect on the Company’s consolidated financial condition or results of operations.

The estimated fair value of the Company’s notes ~~and interest rate agreements~~ at December 31, ~~2005~~2008 and ~~2004~~2007 are based on quoted market prices and the fair value of the credit facilities is based on dealer quotations.

~~F-25~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

A summary of the carrying value and fair value of the Company’s debt ~~and related interest rate agreements~~ at December 31, ~~2005~~2008 and ~~2004~~2007 is as follows:

2005

2004

Carrying

Fair

Carrying

Fair

Value

Value

Value

Value
Debt

CCO Holdings debt $ 1,344 $ 1,299 $ 1,050 $ 1,064
Charter Operating debt 1,833 1,821 1,500 1,563
Credit facilities 5,731 5,719 5,515 5,502
Other 115 114 229 236
Interest Rate Agreements

Assets (Liabilities)
Swaps (4) (4) (69) (69)
Collars -- -- (1) (1)

	2008				2007
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Debt
CCO Holdings debt	$	796	$	505	$	795	$	761
Charter Operating debt		2,397		1,923		1,870		1,807
Credit facilities		8,596		6,187		7,194		6,723

The Company adopted SFAS No. 157, Fair Value Measurements, on its financial assets and liabilities effective January 1, 2008, and has an established process for determining fair value. The Company has deferred adoption of SFAS No. 157 on its nonfinancial assets and liabilities including fair value measurements under SFAS No. 142 and SFAS No. 144 of franchises, goodwill, property, plant, and equipment, and other long-term assets until January 1, 2009 as permitted by FASB Staff Position (“FSP”) 157-2. Fair value is based upon quoted market prices, where available. If such valuation methods are not available, fair value is based on internally or externally developed models using market-based or independently-sourced market parameters, where available. Fair value may be subsequently adjusted to ensure that those assets and liabilities are recorded at fair value. The Company’s methodology may produce a fair value that may not be indicative of net realizable value or reflective of future fair values, but the Company believes its methods are appropriate and consistent with other market peers. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value estimate as of the Company’s reporting date.

SFAS No. 157 establishes a three-level hierarchy for disclosure of fair value measurements, based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, as follows:

·	Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

·	Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

·	Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Interest rate derivatives are valued using a present value calculation based on an implied forward LIBOR curve (adjusted for Charter Operating’s credit risk) and are classified within level 2 of the valuation hierarchy. The Company’s interest rate derivatives are accounted for at fair value on a recurring basis and totaled $411 million and

F-22

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

$169 million as of December 31, 2008 and 2007, respectively. The weighted average interest pay rate for the Company’s interest rate swap agreements was ~~9.51%~~4.93% and ~~8.07%~~4.93% at December 31, ~~2005~~2008 and ~~2004,~~2007, respectively.

15. Other Operating (Income) Expenses, Net

~~14.~~~~Revenues~~

~~Revenues~~Other operating (income) expenses, net consist of the following for the years presented:

Year Ended December 31,

2005

2004

2003

Video $ 3,401 $ 3,373 $ 3,461
High-speed Internet 908 741 556
Telephone 36 18 14
Advertising sales 294 289 263
Commercial 279 238 204
Other 336 318 321

$ 5,254 $ 4,977 $ 4,819

	Year Ended December 31,
	2008		2007			2006

(Gain) loss on sale of assets, net	$	13	$	(3	)	$	8
Special charges, net		56		(14	)		13

	$	69	$	(17	)	$	21

(Gain) loss on sale of assets, net

(Gain) loss on sale of assets represents the (gain) loss recognized on the sale of fixed assets and cable systems.

Special charges, net

~~15.~~Special charges, net for the year ended December 31, 2008 includes severance charges and litigation related items, including settlement costs associated with the Sjoblom ~~Operating Expenses~~litigation (see Note 21), offset by favorable insurance settlements related to hurricane Katrina claims. Special charges, net for the year ended December 31, 2007, primarily represents favorable legal settlements of approximately $20 million offset by severance associated with the closing of call centers and divisional restructuring. Special charges, net for the year ended December 31, 2006 primarily represent severance associated with the closing of call centers and divisional restructuring.

~~Operating expenses consist~~16. Loss on Extinguishment of ~~the following~~Debt

	Year Ended December 31,
	2008		2007			2006

CCO Holdings notes redemption	$	--	$	(19	)	$	--
Charter Operating credit facilities refinancing		--		(13	)		(27	)

	$	--	$	(32	)	$	(27	)

In April 2007, CCO Holdings redeemed $550 million of its senior floating rate notes due December 15, 2010 resulting in a loss on extinguishment of debt of approximately $19 million for the ~~years presented:~~year ended December 31, 2007, included in loss on extinguishment of debt on the Company’s consolidated statements of operations.

Year Ended December 31,

2005

2004

2003

Programming $ 1,417 $ 1,319 $ 1,249
Service 775 663 615
Advertising sales 101 98 88

$ 2,293 $ 2,080 $ 1,952
In March 2007, Charter Operating refinanced its facilities resulting in a loss on extinguishment of debt for the year ended December 31, 2007 of approximately $13 million included in loss on extinguishment of debt on the Company’s consolidated statements of operations.

In April 2006, Charter Operating completed a $6.85 billion refinancing of its credit facilities including a new $350 million revolving/term facility (which converts to a term loan no later than April 2007), a $5.0 billion term loan due in 2013 and certain amendments to the existing $1.5 billion revolving credit facility. In addition, the refinancing reduced margins on Eurodollar rate term loans to 2.625% from a weighted average of 3.15% previously and margins on base rate term loans to 1.625% from a weighted average of 2.15% previously. Concurrent with this refinancing, the CCO Holdings bridge loan was terminated. The refinancing resulted in a loss on extinguishment of debt for the year ended December 31, 2006 of approximately $27 million.

~~F-26~~F-23

~~Table of Contents~~

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, ~~2005, 2004~~2008, 2007 AND ~~2003~~2006

(dollars in millions, except where indicated)

~~16.~~~~Selling, General and Administrative Expenses~~

17. Other Expense, Net

~~Selling, general and administrative expenses consist~~

Other expense, net consists of the following for ~~the~~ years presented:

Year Ended December 31,

2005

2004

2003

General and administrative $ 889 $ 849 $ 833
Marketing 145 122 107

$ 1,034 $ 971 $ 940

	Year Ended December 31,
	2008			2007			2006

Minority interest (Note 11)	$	(13	)	$	(22	)	$	(20	)
Gain (loss) on investment		(1	)		(2	)		13
Other, net		(5	)		--			3

	$	(19	)	$	(24	)	$	(4	)

~~Components of selling expense are included in general and administrative and marketing expense.~~

~~17.~~18. Stock Compensation Plans

Charter ~~grants~~has stock ~~options, restricted stock and other incentive~~ compensation ~~pursuant to the 2001 Stock Incentive Plan of Charter~~plans (the ~~"2001 Plan"~~“Plans”)~~. Prior to 2001, options were granted under the 1999 Option Plan of Charter Holdco (the "1999 Plan").~~

The 1999 Plan provided for the grant of options to purchase membership units in Charter Holdco to current and prospective employees and consultants of Charter Holdco and its affiliates and current and prospective non-employee directors of Charter. Options granted generally vest over five years from the grant date, with 25% vesting 15 months after the anniversary of the grant date and ratably thereafter. Options not exercised accumulate and are exercisable, in whole or in part, in any subsequent period, but not later than 10 years from the date of grant. Membership units received upon exercise of the options are automatically exchanged into Class A common stock of Charter on a one-for-one basis.

~~The 2001 Plan provides~~ which provide for the grant of non-qualified stock options, stock appreciation rights, dividend equivalent rights, performance units and performance shares, share awards, phantom stock and/or shares of restricted stock ~~(not~~(shares of restricted stock not to exceed ~~20,000,000)~~20.0 million shares of Charter Class A common stock), as each term is defined in the ~~2001 Plan.~~Plans. Employees, officers, consultants and directors of ~~the Company~~Charter and its subsidiaries and affiliates are eligible to receive grants under the 2001 Plan. Options granted generally vest over four years from the grant date, with 25% vesting on the anniversary of the grant date and ratably thereafter. Generally, options expire 10 years from the grant date.

Plans. The 2001 Stock Incentive Plan allows for the issuance of up to a total of ~~90,000,000~~90.0 million shares of Charter Class A common stock (or units convertible into Charter Class A common stock). The total shares available reflect a July 2003 amendment to the 2001 Plan approved by the board of directors and the shareholders of Charter to increase available shares by 30,000,000 shares. In 2001, any shares covered by options that terminated under the 1999 Plan were transferred to the 2001 Plan, and no new options can be granted under the 1999 Plan.

In the years ended December 31, 2005, 2004 and 2003, certain directors were awarded a total of 492,225, 182,932 and 80,603 shares, respectively, of restricted Charter Class A common stock of which 44,121 shares had been cancelled as of December 31, 2005. The shares vest one year from the date of grant. In 2005, 2004 and 2003, in connection with new employment agreements, certain officers were awarded 2,987,500, 50,000 and 50,000 shares, respectively, of restricted Charter Class A common stock of which 68,750 shares had been cancelled as of December 31, 2005. The shares vest annually over a one to three-year period beginning from the date of grant. As of December 31, 2005, deferred compensation remaining to be recognized in future period totaled $2 million.

~~F-27~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

A summary of the activity for Charter’s stock options, excluding granted shares of restricted Charter Class A common stock, for the years ended December 31, 2005, 2004 and 2003, is as follows (amounts in thousands, except per share data):

2005

2004

2003

Weighted

Weighted

Weighted

Average

Average

Average

Exercise

Exercise

Exercise

Shares

Price

Shares

Price

Shares

Price

Options outstanding, beginning of period 24,835 $ 6.57 47,882 $ 12.48 53,632 $ 14.22
Granted 10,810 1.36 9,405 4.88 7,983 3.53
Exercised (17) 1.11 (839) 2.02 (165) 3.96
Cancelled (6,501) 7.40 (31,613) 15.16 (13,568) 14.10

Options outstanding, end of period 29,127 $ 4.47 24,835 $ 6.57 47,882 $ 12.48

Weighted average remaining contractual life 8 years 8 years 8 years

Options exercisable, end of period 9,999 $ 7.80 7,731 $ 10.77 22,861 $ 16.36

Weighted average fair value of options granted $ 0.65 $ 3.71 $ 2.71

~~The following table summarizes information about stock options outstanding and exercisable as of December 31, 2005:~~

Options Outstanding

Options Exercisable

Weighted-

Weighted-

Average

Weighted-

Average

Weighted-

Remaining

Average

Remaining

Average
Range of

Number

Contractual

Exercise

Number

Contractual

Exercise
Exercise Prices

Outstanding

Life

Price

Exercisable

Life

Price

(in thousands)

(in thousands)

$ 1.11 — $ 1.60 12,565 9 years $ 1.39 1,297 9 years $ 1.49
$ 2.85 — $ 4.56 5,906 7 years 3.40 3,028 7 years 3.33
$ 5.06 — $ 5.17 6,970 8 years 5.15 2,187 8 years 5.13
$ 9.13 — $ 13.68 1,712 6 years 10.96 1,513 6 years 11.10
$ 13.96 — $ 23.09 1,974 4 years 19.24 1,974 4 years 19.24

On January 1, 2003, the Company adopted the fair value measurement provisions of SFAS No. 123, under which the Company recognizes compensation expense of a stock-based award to an employee over the vesting period based on the fair value of the award on the grant date. Adoption of these provisions resulted in utilizing a preferable accounting method as the consolidated financial statements present the estimated fair value of stock-based compensation in expense consistently with other forms of compensation and other expense associated with goods and services received for equity instruments. In accordance with SFAS No. 123, the fair value method will be applied only to awards granted or modified after January 1, 2003, whereas awards granted prior to such date will continue to be accounted for under APB No. 25, unless they are modified or settled in cash. The ongoing effect on consolidated results of operations or financial condition will be dependent upon future stock based compensation awards granted. The Company recorded $14 million, $31 million and $4 million of option compensation expense for the years ended December 31, 2005, 2004 and 2003, respectively.

~~F-28~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

In January 2004, Charter began an option exchange program in which the Company offered its employees the right to exchange all stock options (vested and unvested) under the 1999 Charter Communications Option Plan and 2001 Stock Incentive Plan that had an exercise price over $10 per share for shares of restricted Charter Class A common stock or, in some instances, cash. Based on a sliding exchange ratio, which varied depending on the exercise price of an employees outstanding options, if an employee would have received more than 400 shares of restricted stock in exchange for tendered options, Charter issued that employee shares of restricted stock in the exchange. If, based on the exchange ratios, an employee would have received 400 or fewer shares of restricted stock in exchange for tendered options, Charter instead paid the employee cash in an amount equal to the number of shares the employee would have received multiplied by $5.00. The offer applied to options (vested and unvested) to purchase a total of 22,929,573 shares of Charter Class A common stock, or approximately 48% of Charter’s 47,882,365 total options issued and outstanding as of December 31, 2003. Participation by employees was voluntary. Those members of Charter's board of directors who were not also employees of the Company or any of its subsidiaries were not eligible to participate in the exchange offer.

In the closing of the exchange offer on February 20, 2004, Charter accepted for cancellation eligible options to purchase approximately 18,137,664 shares of its Class A common stock. In exchange, Charter granted 1,966,686 shares of restricted stock, including 460,777 performance shares to eligible employees of the rank of senior vice president and above, and paid a total cash amount of approximately $4 million (which amount includes applicable withholding taxes) to those employees who received cash rather than shares of restricted stock. The restricted stock was granted on February 25, 2004. Employees tendered approximately 79% of the options eligible to be exchanged under the program.

The cost to the Company of the stock option exchange program was approximately $10 million, with a 2004 cash compensation expense of approximately $4 million and a non-cash compensation expense of approximately $6 million to be expensed ratably over the three-year vesting period of the restricted stock in the exchange.

~~In January 2004, the Compensation Committee of the board of directors of Charter approved~~Under Charter's Long-Term Incentive Program ~~("LTIP"~~(“LTIP”), ~~which is~~ a program administered under the 2001 Stock Incentive ~~Plan. Under the LTIP,~~Plan, employees of Charter and its subsidiaries whose pay classifications ~~exceed~~exceeded a certain level ~~are~~were eligible in 2006 and 2007 to receive stock options, and more senior level employees ~~are~~were eligible to receive stock options and performance ~~shares.~~units. The stock options vest 25% on each of the first four anniversaries of the date of grant. Generally, options expire 10 years from the grant date. The performance units became performance shares ~~vest~~ on or about the ~~third~~first anniversary of the grant date, ~~and shares of Charter Class A common stock are issued,~~ conditional upon Charter's performance against financial performance measures established by Charter’s management and approved by its board of directors as of the time of the award. The performance shares become shares of Charter ~~granted 3.2 million~~Class A common stock on the third anniversary of the grant date of the performance units. In March 2008, Charter adopted the 2008 incentive program to allow for the issuance of performance units and ~~6.9 million shares in 2005~~restricted stock under the 2001 Stock Incentive Plan and ~~2004, respectively,~~for the issuance of performance cash. Under the 2008 incentive program, subject to meeting performance criteria, performance units and performance cash are deposited into a performance bank of which one-third of the balance is paid out each year. Restricted stock granted under this program vests annually over a three-year period beginning from the date of grant. During the year ended December 31, 2008, Charter granted $8 million of performance cash under Charter’s 2008 incentive program and recognized ~~expense of $1~~$2 million ~~and $8 million in the first three quarters of 2005 and 2004, respectively. However, in the fourth quarter of 2005 and 2004, the Company reversed the entire $1 million and $8 million, respectively,~~ of expense ~~based on the Company’s assessment of the probability of achieving the financial performance measures established by Charter and required to be met~~ for the performance shares to vest. In February 2006, Charter’s Compensation Committee approved a modification to the financial performance measures required to be met for the 2005 performance shares to vest after which management believes that a approximately 2.5 million of the performance shares are likely to vest. As such, expense of approximately $3 million will be amortized over the remaining two year ~~service period.~~ended December 31, 2008.

~~18.~~~~Hurricane Asset Retirement Loss~~

Certain of the Company’s cable systems in Louisiana suffered significant plant damage as a result of hurricanes Katrina and Rita in September 2005. As a result, the Company wrote off $19 million of its plants’ net book value in the third quarter of 2005.

~~F-29~~F-24

~~Table of Contents~~

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, ~~2005, 2004~~2008, 2007 AND ~~2003~~2006

(dollars in millions, except where indicated)

~~19.Special Charges~~A summary of the activity for Charter’s stock options for the years ended December 31, 2008, 2007, and 2006, is as follows (amounts in thousands, except per share data):

	2008					2007					2006
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price

Outstanding, beginning of period		25,682		$	4.02		26,403		$	3.88		29,127		$	4.47
Granted		45			1.19		4,549			2.77		6,065			1.28
Exercised		(53	)		1.18		(2,759	)		1.57		(1,049	)		1.41
Cancelled		(3,630	)		5.27		(2,511	)		2.98		(7,740	)		4.39

Outstanding, end of period		22,044		$	3.82		25,682		$	4.02		26,403		$	3.88

Weighted average remaining contractual life	6 years					7 years					8 years

Options exercisable, end of period		15,787		$	4.53		13,119		$	5.88		10,984		$	6.62

Weighted average fair value of options granted	$	0.90				$	1.86				$	0.96

The following table summarizes information about Charter’s stock options outstanding and exercisable as of December 31, 2008 (amounts in thousands, except per share data):

						Options Outstanding				Options Exercisable
							Weighted-				Weighted-
							Average	Weighted-			Average	Weighted-
							Remaining	Average			Remaining	Average
Range of						Number	Contractual	Exercise		Number	Contractual	Exercise
Exercise Prices						Outstanding	Life	Price		Exercisable	Life	Price


	$	1.00	—	$	1.36	8,278	7 years		1.17	5,528	7 years	1.17
	$	1.53	—	$	1.96	2,821	6 years		1.55	2,178	6 years	1.55
	$	2.66	—	$	3.35	4,981	7 years		2.89	2,229	6 years	2.92
	$	4.30	—	$	5.17	3,566	5 years		5.00	3,454	5 years	5.02
	$	9.13	—	$	12.27	1,008	3 years		11.19	1,008	3 years	11.19
	$	13.96	—	$	20.73	1,168	1 year		18.41	1,168	1 year	18.41
	$	21.20	—	$	23.09	222	2 years		22.86	222	2 years	22.86

F-25

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

A summary of the activity for Charter’s restricted Class A common stock for the years ended December 31, 2008, 2007, and 2006, is as follows (amounts in thousands, except per share data):

	2008				2007				2006
			Weighted				Weighted				Weighted
			Average				Average				Average
			Grant				Grant				Grant
	Shares		Price		Shares		Price		Shares		Price

Outstanding, beginning of period		4,112	$	2.87		3,033	$	1.96		4,713	$	2.08
Granted		10,761		0.85		2,753		3.64		906		1.28
Vested		(2,298)		2.36		(1,208)		1.83		(2,278)		1.62
Cancelled		(566)		1.57		(466)		4.37		(308)		4.37

Outstanding, end of period		12,009	$	1.21		4,112	$	2.87		3,033	$	1.96

A summary of the activity for Charter’s performance units and shares for the years ended December 31, 2008, 2007, and 2006, is as follows (amounts in thousands, except per share data):

	2008				2007				2006
			Weighted				Weighted				Weighted
			Average				Average				Average
			Grant				Grant				Grant
	Shares		Price		Shares		Price		Shares		Price

Outstanding, beginning of period		28,013	$	2.16		15,206	$	1.27		5,670	$	3.09
Granted		10,137		0.84		14,797		2.95		13,745		1.22
Vested		(1,562)		1.49		(41)		1.23		--		--
Cancelled		(3,551)		2.08		(1,949)		1.51		(4,209)		3.58

Outstanding, end of period		33,037	$	1.80		28,013	$	2.16		15,206	$	1.27

As of December 31, 2008, deferred compensation remaining to be recognized in future periods totaled $41 million.

In the ~~fourth~~first quarter of ~~2002,~~2009, the ~~Company began a workforce reduction program~~majority of restricted stock and ~~consolidation of its operations from three divisions~~performance units and ~~ten regions into five operating divisions, eliminating redundant practices~~shares were forfeited, and ~~streamlining its management structure. The Company has recorded special charges as a result of reducing its workforce, executive severance and consolidating administrative offices~~the remaining will be cancelled in ~~2003, 2004 and 2005. The activity associated~~connection with ~~this initiative is summarized in~~ the ~~table below.~~Proposed Restructuring. See Note 25.

Severance/Leases

Litigation

Other

Total
Special Charge

Balance at December 31, 2002 $ 31

Special Charges 26 $ -- $ (5) $ 21
Payments (43)
Balance at December 31, 2003 14

Special Charges 12 $ 92 $ -- $ 104
Payments (20)
Balance at December 31, 2004 6

Special Charges 6 $ 1 $ -- $ 7
Payments (8)
Balance at December 31, 2005 $ 4

For the year ended December 31, 2003, the severance and lease costs were offset by a $5 million settlement from the Internet service provider Excite@Home related to the conversion of high-speed Internet customers to Charter Pipeline service in 2001. For the year ended December 31, 2004, special charges include approximately $85 million, as part of a settlement of the consolidated federal class action and federal derivative action lawsuits and approximately $10 million of litigation costs related to the settlement of a 2004 national class action suit (see Note 22). For the year ended December 31, 2004, special charges were offset by $3 million received from a third party in settlement of a legal dispute. For the year ended December 31, 2005, special charges also include approximately $1 million related to various legal settlements.

~~20.~~19. Income Taxes

CCO Holdings is a single member limited liability company not subject to income tax. CCO Holdings holds all operations through indirect subsidiaries. The majority of these indirect subsidiaries are limited liability companies that are ~~also~~ not subject to income tax. However, certain of the limited liability companies are subject to state income tax. In addition, certain of CCO Holdings’ indirect subsidiaries are corporations that are subject to income tax.

For the year ended December 31, 2008, the Company recorded income tax benefit related to decreases in deferred tax liabilities of certain of its indirect subsidiaries attributable to the write-down of franchise assets for financial statement purposes and not for tax purposes. For the years ended December 31, ~~2005~~2007 and ~~2003,~~2006, the Company recorded income tax expense related to increases in deferred tax liabilities and current federal and state income taxes primarily related to differences in accounting for franchises at our indirect corporate ~~subsidiaries. For~~subsidiaries and limited liability companies that are subject to income tax. However, the ~~year ended December 31, 2004,~~actual tax provision calculations in future periods will be the ~~Company recorded income tax benefit for its indirect corporate subsidiaries primarily related to~~result of current and future temporary differences, ~~between book and tax accounting for franchises, primarily resulting from the impairment recorded during 2004.~~as well as future operating results.

~~F-30~~F-26

~~Table of Contents~~

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, ~~2005, 2004~~2008, 2007 AND ~~2003~~2006

(dollars in millions, except where indicated)

Current and deferred income tax benefit (expense) ~~benefit~~ is as follows:

December 31,

2005

2004

2003
Current expense:
Federal income taxes $ (2) $ (2) $ (1)
State income taxes
(4)
(4) (1)

Current income tax expense (6) (6) (2)

Deferred benefit (expense):
Federal income taxes (3) 50 (10)
State income taxes -- 7 (1)

Deferred income tax benefit (expense) (3) 57 (11)

Total income benefit (expense) $
(9)
$ 51 $ (13)

	December 31,
	2008			2007			2006
Current expense:
Federal income taxes	$	(2	)	$	(3	)	$	(3	)
State income taxes		(5	)		(5	)		(4	)

Current income tax expense		(7	)		(8	)		(7	)

Deferred benefit (expense):
Federal income taxes		28			4			--
State income taxes		19			(16	)		--

Deferred income tax benefit (expense)		47			(12	)		--

Total income benefit (expense)	$	40		$	(20	)	$	(7	)

~~The Company recorded the portion of the income~~Income tax benefit ~~associated with the adoption of EITF Topic D-108 as a $16 million reduction of the cumulative effect of accounting change on the accompanying statement of operations~~ for the year ended December 31, ~~2004.~~2008 included $32 million of deferred tax benefit related to the impairment of franchises. Income tax for the year ended December 31, 2007 includes $18 million of deferred income tax expense previously recorded at the Company’s indirect parent company. This adjustment should have been recorded by the Company in prior periods.

The Company’s effective tax rate differs from that derived by applying the applicable federal income tax rate of 35%, and average state income tax rate of 2.3%, 2.9%, and 5% for the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003~~2006, respectively, as follows:

December 31,

2005

2004

2003

Statutory federal income taxes $ 87 $ 887 $ (15)
State income taxes, net of federal benefit 12 127 (2)
Losses allocated to limited liability companies not subject
to income taxes

(128)
(943) 30
Valuation allowance used (provided) 20 (20) (26)

Income tax benefit (expense) (9) 51 (13)
Less: cumulative effect of accounting change -- (16) --

Income tax benefit (expense) $ (9) $ 35 $ (13)

	December 31,
	2008			2007			2006

Statutory federal income tax benefit	$	530		$	116		$	149
Statutory state income tax benefit, net		35			10			21
Losses allocated to limited liability companies not subject to income taxes		(565	)		(127	)		(165	)
Franchises		47			(12	)		--
Valuation allowance provided and other		(7	)		(7	)		(12	)

Income tax benefit (expense)	$	40		$	(20	)	$	(7	)

~~F-31~~F-27

~~Table of Contents~~

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, ~~2005, 2004~~2008, 2007 AND ~~2003~~2006

(dollars in millions, except where indicated)

The tax effects of these temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, ~~2005~~2008 and ~~2004~~2007 for the indirect ~~corporate~~ subsidiaries of the Company which are included in long-term liabilities are presented below.

December 31,

2005

2004
Deferred tax assets:
Net operating loss carryforward $ 80 $ 95
Other 6 8

Total gross deferred tax assets 86 103
Less: valuation allowance (51) (71)

Net deferred tax assets $ 35 $ 32

Deferred tax liabilities:
Property, plant & equipment $ (41) $ (39)
Franchises (207) (201)

Gross deferred tax liabilities (248) (240)

Net deferred tax liabilities $ (213) $ (208)

	December 31,
	2008			2007
Deferred tax assets:
Net operating loss carryforward	$	97		$	111
Other		2			8

Total gross deferred tax assets		99			119
Less: valuation allowance		(60	)		(70	)

Deferred tax assets	$	39		$	49

Deferred tax liabilities:
Property, plant & equipment	$	(36	)	$	(37	)
Franchises		(182	)		(238	)

Deferred tax liabilities		(218	)		(275	)

Net deferred tax liabilities	$	(179	)	$	(226	)

As of December 31, ~~2005 and 2004,~~2008, the Company ~~has~~had deferred tax assets of ~~$86~~$99 million, ~~and $103 million, respectively,~~ which primarily relate to net operating loss carryforwards of certain of its indirect corporate ~~subsidiaries.~~subsidiaries and limited liability companies subject to state income tax. These net operating loss carryforwards (generally expiring in years ~~2006~~2009 through ~~2025),~~2028) are subject to certain return limitations. ~~Valuation allowances~~A valuation allowance of ~~$51~~$60 million ~~and $71 million exist~~exists with respect to these ~~carryforwards~~carry forwards as of December 31, ~~2005 and 2004, respectively.~~2008.

~~In assessing the realizability of deferred~~No tax ~~assets, management considers whether it is more likely than not that some portion~~years for Charter or all of the deferred tax assets will be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management believes that the deferred tax assets will be realized prior to the expiration of the tax net operating loss carryforwards in 2006 through 2025, except for those tax net operating loss carryforwards that may be subject to certain limitations. Because of the uncertainty associated in realizing the deferred tax assets associated with the potentially limited tax net operating loss carryforwards, valuation allowances have been established except for deferred tax assets available to offset deferred tax liabilities.

Charter Holdco, isour indirect parent companies, are currently under examination by the Internal Revenue ~~Service for the tax~~Service. Tax years ending ~~December 31, 2002~~2006, 2007 and ~~2003. The results of the Company (excluding the Company’s indirect corporate subsidiaries) for these years are~~2008 remain subject to ~~this~~ examination. ~~Management does not expect the results of this examination to have a material adverse effect on the Company’s consolidated financial condition or results of operations.~~

~~21.~~In January 2007, the Company adopted FIN 48, Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. The Company does not believe it has taken any significant positions that would not meet the “more likely than not” criteria and require disclosure.

20. Related Party Transactions

The following sets forth certain transactions in which the Company and the directors, executive officers, and affiliates of the Company are involved. Unless otherwise disclosed, management believes ~~that~~ each of the transactions described below was on terms no less favorable to the Company than could have been obtained from independent third parties.

Charter is a party to management arrangements with Charter Holdco and certain of its subsidiaries. Under these agreements, Charter ~~provides~~and Charter Holdco provide management services for the cable systems owned or operated by ~~its~~their subsidiaries. The

~~F-32~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

management services include such services as centralized customer billing services, data processing and related support, benefits administration and coordination of insurance coverage and self-insurance programs for medical, dental and workers’ compensation claims. Costs associated with providing these services are ~~billed and~~ charged directly to the Company’s operating subsidiaries and are included within operating costs in the accompanying consolidated statements of operations. Such costs totaled ~~$212~~$213 million, ~~$202~~$213 million, and ~~$210~~$231 million for the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003,~~2006, respectively. All other costs incurred on ~~the~~ behalf of Charter’s operating subsidiaries are considered a part of the management fee and are recorded as a component of

F-28

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

selling, general and administrative expense, in the accompanying consolidated financial statements. For the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003,~~2006, the management fee charged to the Company’s operating subsidiaries approximated the expenses incurred by Charter Holdco and Charter on behalf of the Company’s operating subsidiaries. The Company’s previous credit facilities ~~prohibit~~prohibited payments of management fees in excess of 3.5% of revenues until repayment of the outstanding indebtedness. In the event any portion of the management fee due and payable iswas not paid, it iswould be deferred by Charter and accrued as a liability of such subsidiaries. Any deferred amount of the management fee ~~will~~would bear interest at the rate of 10% per year, compounded annually, from the date it was due and payable until the date ~~it is~~ paid.

Mr. Allen, the controlling shareholder of Charter, and a number of his affiliates have interests in various entities that provide services or programming to Charter’s subsidiaries. Given the diverse nature of Mr. Allen’s investment activities and interests, and to avoid the possibility of future disputes as to potential business, Charter and Charter Holdco, under the terms of their respective organizational documents, may not, and may not allow their subsidiaries to engage in any business transaction outside the cable transmission business except for certain existing approved investments. Charter or Charter Holdco or any of their subsidiaries may not pursue, or allow their subsidiaries to pursue, a business transaction outside of this scope, unless Mr. Allen consents to Charter or its subsidiaries engaging in the business transaction. The cable transmission business means the business of transmitting video, audio, including telephone, and data over cable systems owned, operated or managed by Charter, Charter Holdco or any of their subsidiaries from time to time.

Mr. Allen or his affiliates own or have owned equity interests or warrants to purchase equity interests in various entities with which the Company does business or which provides it with products, services or programming. Among these entities are ~~TechTV L.L.C. ("TechTV"),~~ Oxygen Media Corporation ("(“Oxygen ~~Media"~~Media”), Digeo, Inc. (“Digeo”), ~~Click2learn, Inc., Trail Blazer Inc., Action Sports Cable Network ("Action Sports")~~ and Microsoft Corporation. ~~In May 2004, TechTV was sold to an unrelated third party.~~ Mr. Allen owns 100% of the equity of Vulcan Ventures Incorporated ("(“Vulcan ~~Ventures"~~Ventures”) and Vulcan Inc. and is the president of Vulcan Ventures. Ms. Jo Allen Patton is a director of the Company and the President and Chief Executive Officer of Vulcan Inc. and is a director and Vice President of Vulcan Ventures. Mr. Lance Conn is a director of the Company and is Executive Vice President of Vulcan Inc. and Vulcan Ventures. ~~Mr. Savoy was a vice president and a director of Vulcan Ventures until his resignation in September 2003 and he resigned as a director of Charter in April 2004.~~ The various cable, media, Internet and telephone companies in which Mr. Allen has invested may mutually benefit one another. The Company can give no assurance, nor should you expect, that any of these business relationships will be successful, that the Company will realize any benefits from these relationships or that the Company will enter into any business relationships in the future with Mr. Allen’s affiliated companies.

Mr. Allen and his affiliates have made, and in the future likely will make, numerous investments outside of the Company and its business. The Company cannot ~~assure~~provide any assurance that, in the event that the Company or any of its subsidiaries enter into transactions in the future with any affiliate of Mr. Allen, such transactions will be on terms as favorable to the Company as terms it might have obtained from an unrelated third party. Also, conflicts could arise with respect to the allocation of corporate opportunities between the Company and Mr. Allen and his affiliates. The Company has not instituted any formal plan or arrangement to address potential conflicts of interest.

~~The~~In 2009, pursuant to indemnification provisions in the October 2005 settlement with Mr. Allen regarding the CC VIII interest, the Company ~~received or receives programming for broadcast via its cable systems from TechTV (now G4), Oxygen Media and Trail Blazers~~reimbursed Vulcan Inc. The Company pays a fee for the programming service generally based on the number of customers receiving the service. Such fees for the years ended December 31, 2005, 2004 and 2003 were each less than 1% of total operatingapproximately $3 million in legal expenses.

~~F-33~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

~~Tech TV.~~ The Company received from TechTV programming for distribution via its cable system pursuant to an affiliation agreement. The affiliation agreement provided, among other things, that TechTV must offer Charter certain terms and conditions that are no less favorable in the affiliation agreement than are given to any other distributor that serves the same number of or fewer TechTV viewing customers. Additionally, pursuant to the affiliation agreement, the Company was entitled to incentive payments for channel launches through December 31, 2003.

In March 2004, Charter Holdco entered into agreements with Vulcan Programming and TechTV, which provide for (i) Charter Holdco and TechTV to amend the affiliation agreement which, among other things, revises the description of the TechTV network content, provides for Charter Holdco to waive certain claims against TechTV relating to alleged breaches of the affiliation agreement and provides for TechTV to make payment of outstanding launch receivables due to Charter Holdco under the affiliation agreement, (ii) Vulcan Programming to pay approximately $10 million and purchase over a 24-month period, at fair market rates, $2 million of advertising time across various cable networks on Charter cable systems in consideration of the agreements, obligations, releases and waivers under the agreements and in settlement of the aforementioned claims and (iii) TechTV to be a provider of content relating to technology and video gaming for Charter's interactive television platforms through December 31, 2006 (exclusive for the first year). For the years ended December 31, 2005 and 2004, the Company recognized approximately $1 million and $5 million, respectively, of the Vulcan Programming payment as an offset to programming expense.

Oxygen. Oxygen Media LLC ("Oxygen") provides programming content ~~aimed at~~to the ~~female audience for distribution over cable systems and satellite. On July 22, 2002, Charter Holdco entered into~~Company pursuant to a carriage ~~agreement with Oxygen whereby the Company agreed to carry programming content from Oxygen.~~agreement. Under the carriage agreement, the Company ~~currently makes~~paid Oxygen ~~programming available to~~ approximately 5$6 million, ~~of its video customers. In August 2004, Charter Holdco~~$8 million, and Oxygen entered into agreements that amended and renewed the carriage agreement. The amendment to the carriage agreement (a) revised the number of the Company's customers to which Oxygen programming must be carried and$8 million for which the Company must pay, (b) released Charter Holdco from any claims related to the failure to achieve distribution benchmarks under the carriage agreement, (c) required Oxygen to make payment on outstanding receivables for launch incentives due to the Company under the carriage agreement; and (d) requires that Oxygen provide its programming content to the Company on economic terms no less favorable than Oxygen provides to any other cable or satellite operator having fewer subscribers than the Company. The renewal of the carriage agreement (a) extends the period that the Company will carry Oxygen programming to its customers through January 31, 2008, and (b) requires license fees to be paid based on customers receiving Oxygen programming, rather than for specific customer benchmarks. For the years ended December 31, ~~2005, 2004~~2008, 2007, and 2003, the Company paid Oxygen approximately $9 million, $13 million and $9 million, respectively. In addition, Oxygen pays the Company launch incentives for customers launched after the first year of the term of the carriage agreement up to a total of $4 million. The Company recorded approximately $0.1 million related to these launch incentives as a reduction of programming expense for the year ended December 31, 2005 and $1 million for each of the years ended December 31, 2004 and 2003,2006, respectively.

In ~~August 2004, Charter Holdco and Oxygen also~~2005, pursuant to an amended ~~the~~ equity issuance agreement, ~~to provide for the issuance of~~Oxygen Media delivered 1 million shares of Oxygen Preferred Stock with a liquidation preference of $33.10 per share plus accrued dividends to Charter Holdco. In November 2007, Oxygen was sold to an unrelated third party and Charter Holdco ~~on February 1, 2005 in place of the $34~~received approximately $35 million of unregistered shares of Oxygen Media common stock required under the original equity issuance agreement. Oxygen Media delivered these shares in March 2005. The preferred stock is convertible into common stock after December 31, 2007 at a conversion ratio, the numerator of which is therepresenting its liquidation preference on its preferred stock. Mr. Allen and ~~the denominator which is the fair market value per share of Oxygen Media common stock on the conversion date.~~

The Company recognized the guaranteed value of the investment over the life of the carriage agreement as a reduction of programming expense. For the years ended December 31, 2005, 2004 and 2003, the Company recorded approximately $2 million, $13 million, and $9 million, respectively, as a reduction of programming expense. The carrying value of the Company’s investmenthis affiliates also no longer have an interest in ~~Oxygen was approximately $33 million and $32 million as of December 31, 2005 and 2004, respectively.~~Oxygen.

~~F-34~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

Digeo, Inc. In March 2001, Charter ~~Communications~~ Ventures ~~LLC ("Charter Ventures")~~ and Vulcan Ventures Incorporated formed DBroadband Holdings, LLC for the sole purpose of purchasing equity interests in Digeo. In connection with the execution of the broadband carriage agreement, DBroadband Holdings, LLC purchased an equity interest in Digeo funded by contributions from

F-29

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

Vulcan ~~Ventures. The~~Ventures Incorporated. At that time, the equity interest iswas subject to a priority return of capital to Vulcan Ventures up to the amount contributed by Vulcan Ventures on Charter Ventures’ behalf. After Vulcan Ventures ~~recovers~~recovered its amount contributed ~~and any cumulative loss allocations,~~(the “Priority Return”), Charter Ventures ~~has~~should have had a 100% profit interest in DBroadband Holdings, LLC. Charter Ventures iswas not required to make any capital contributions, including capital calls to ~~Digeo.~~DBroadband Holdings, LLC. DBroadband Holdings, LLC is therefore was not included in the Company’s consolidated financial statements. Pursuant to an amended version of this arrangement, in 2003, Vulcan Ventures contributed a total of $29 million to Digeo, $7 million of which was contributed on Charter Ventures’ behalf, subject to Vulcan Ventures’ aforementioned priority return. Since the formation of DBroadband Holdings, LLC, Vulcan Ventures has contributed approximately $56 million on Charter Ventures’ behalf.

On ~~September 27, 2001, Charter~~October 3, 2006, Vulcan Ventures and Digeo ~~Interactive amended the broadband carriage agreement. According~~recapitalized Digeo. In connection with such recapitalization, DBroadband Holdings, LLC consented to the ~~amendment,~~conversion of its preferred stock holdings in Digeo ~~Interactive would provide~~to common stock, and Vulcan Ventures surrendered its Priority Return to Charter the content for enhanced "Wink" interactive television services, known as Charter Interactive Channels ("i-channels"). In order to provide the i-channels, Digeo Interactive sublicensed certain Wink technologies to Charter. CharterVentures. As a result, DBroadband Holdings, LLC is ~~entitled to share in the revenues generated by the i-channels. Currently, the Company’s digital video customers who receive i-channels receive the service at no additional charge.~~

On September 28, 2002, Charter entered into a second amendment to its broadband carriage agreement with Digeo Interactive. This amendment superseded the amendment of September 27, 2001. It provided for the development by Digeo Interactive of future features to benow included in the ~~Basic i-TV service~~Company’s consolidated financial statements. Such amounts are immaterial. After the recapitalization, DBroadband Holdings, LLC owns 1.8% of Digeo, Inc’s common stock. Digeo, Inc. is therefore not included in the Company’s consolidated financial statements. In December 2007, the Digeo, Inc. common stock was transferred to ~~be provided by Digeo~~Charter Operating, and for Digeo’s development of an interactive "toolkit" to enable Charter to develop interactive local content. Furthermore, Charter could request that Digeo Interactive manage local content for a fee. The amendment provided for Charter to pay for development of the Basic i-TV service as well as license fees for customers who would receive the service, and for Charter and Digeo to split certain revenues earned from the service. DBroadband Holdings, LLC was dissolved.

The Company paid Digeo Interactive approximately ~~$3 million, $3 million~~$0, $0, and $4$2 million for the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003,~~2006, respectively, for customized development of the i-channels and the local content tool kit. ~~This amendment expired pursuant to its terms on December 31, 2003. Digeo Interactive is continuing to provide the Basic i-TV service on a month-to-month basis.~~

On June 30, 2003, Charter Holdco entered into an agreement with Motorola, Inc. for the purchase of 100,000 ~~digital video recorder ("DVR"')~~DVR units. The software for these DVR units is being supplied by Digeo Interactive, LLC under a license agreement entered into in April 2004. ~~Under the~~Pursuant to a software license agreement with Digeo Interactive ~~granted to Charter Holdco~~for the right to use Digeo's proprietary software for ~~the number of~~ DVR units, that Charter deployed from a maximum of 10 headends through year-end 2004. This maximum number of headends restriction was expanded and eventually eliminated through successive agreement amendments and the date for entering into license agreements for units deployed was extended. The license granted for each unit deployed under the agreement is valid for five years. In addition, Charter will pay certain other fees including a per-headend license fee and maintenance fees. Maximum license and maintenance fees during the term of the agreement are expected to be approximately $7 million. The agreement provides that Charter is entitled to receive contract terms, considered on the whole, and license fees, considered apart from other contract terms, no less favorable than those accorded to any other Digeo customer. The Company paid approximately $1 million, $2 million, and $3 million in license and maintenance fees in ~~2005.~~2008, 2007, and 2006, respectively.

~~In April 2004,~~The Company paid approximately $1 million, $10 million, and $11 million for the ~~Company launched DVR service using units containing the Digeo software~~years ended December 31, 2008, 2007, and 2006, respectively, in ~~its Rochester, Minnesota market using a broadband media center that is~~capital purchases under an ~~integrated set-top terminal with a cable converter, DVR hard drive and connectivity to other consumer electronics devices (such as stereos, MP3 players, and digital cameras).~~

~~In May 2004, Charter Holdco entered into a binding term sheet~~agreement with Digeo Interactive for the development, testing and purchase of 70,000 Digeo PowerKey DVR units. The term sheet provided that the parties would proceed in good faith to negotiate, prior to year-end 2004, definitive agreements for the development, testing and purchase of the DVR units and that the parties would enter into a license agreement for Digeo's proprietary software on terms

~~F-35~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

substantially similar to the terms of the license agreement described above. In November 2004, Charter Holdco and Digeo Interactive executed the license agreement and in December 2004, the parties executed the purchase agreement, each on terms substantially similar to the binding term sheet. Product development and testing has been completed. Total purchase price and license and maintenance fees during the term of the definitive agreements are expected to be approximately $41 million. The definitive agreements are terminable at no penalty to Charter in certain circumstances.

In May 2008, Charter Operating entered into an agreement with Digeo Interactive, LLC, a subsidiary of Digeo, Inc., for the minimum purchase of high-definition DVR units for approximately $21 million. This minimum purchase commitment is subject to reduction as a result of certain specified events such as the failure to deliver units timely and catastrophic failure. The ~~Company paid~~software for these units is being supplied under a software license agreement with Digeo Interactive, LLC; the cost of which is expected to be approximately ~~$10 million and $1~~$2 million for the ~~years~~initial licenses and on-going maintenance fees of approximately $0.3 million annually, subject to reduction to coincide with any reduction in the minimum purchase commitment. For the year ended December 31, ~~2005 and 2004, respectively, in capital purchases~~2008, Charter has purchased approximately $1 million of DVR units from Digeo Interactive, LLC under ~~this agreement.~~these agreements.

~~CC VIII.~~ As part of the acquisition of the cable systems owned by Bresnan Communications Company Limited Partnership in February 2000, CC VIII, LLC, CCO Holdings’ indirect limited liability company subsidiary, issued, after adjustments, 24,273,943 Class A preferred membership units (collectively, the "CC VIII interest") with a value and an initial capital account of approximately $630 million to certain sellers affiliated with AT&T Broadband, subsequently owned by Comcast Corporation (the "Comcast sellers"). Mr. Allen granted the Comcast sellers the right to sell to him the CC VIII interest for approximately $630 million plus 4.5% interest annually from February 2000 (the "Comcast put right"). In April 2002, the Comcast sellers exercised the Comcast put right in full, and this transaction was consummated on June 6, 2003. Accordingly, Mr. Allen became the holder of the CC VIII interest, indirectly through an affiliate. In the event of a liquidation of CC VIII, Mr. Allen would be entitled to a priority distribution with respect to a 2% priority return (which will continue to accrete). Any remaining distributions in liquidation would be distributed to CC V Holdings, LLC and Mr. Allen in proportion to CC V Holdings, LLC's capital account and Mr. Allen's capital account (which will equal the initial capital account of the Comcast sellers of approximately $630 million, increased or decreased by Mr. Allen's pro rata share of CC VIII’s profits or losses (as computed for capital account purposes) after June 6, 2003).

An issue arose as to whether the documentation for the Bresnan transaction was correct and complete with regard to the ultimate ownership of the CC VIII interest following consummation of the Comcast put right. Thereafter, the board of directors of Charter formed a Special Committee of independent directors to investigate the matter and take any other appropriate action on behalf of Charter with respect to this matter. After conducting an investigation of the relevant facts and circumstances, the Special Committee determined that a "scrivener’s error" had occurred in February 2000 in connection with the preparation of the last-minute revisions to the Bresnan transaction documents and that, as a result, Charter should seek the reformation of the Charter Holdco limited liability company agreement, or alternative relief, in order to restore and ensure the obligation that the CC VIII interest be automatically exchanged for Charter Holdco units. The Special Committee further determined that, as part of such contract reformation or alternative relief, Mr. Allen should be required to contribute the CC VIII interest to Charter Holdco in exchange for 24,273,943 Charter Holdco membership units. The Special Committee also recommended to the board of directors of Charter that, to the extent the contract reformation is achieved, the board of directors should consider whether the CC VIII interest should ultimately be held by Charter Holdco or Charter Holdings or another entity owned directly or indirectly by them.

Mr. Allen disagreed with the Special Committee’s determinations described above and so notified the Special Committee. Mr. Allen contended that the transaction was accurately reflected in the transaction documentation and contemporaneous and subsequent company public disclosures. The Special Committee and Mr. Allen determined to utilize the Delaware Court of Chancery's program for mediation of complex business disputes in an effort to resolve the CC VIII interest dispute.

As of October 31, 2005, Mr. Allen, the Special Committee, Charter, Charter Holdco and certain of their affiliates, agreed to settle the dispute, and execute certain permanent and irrevocable releases pursuant to the Settlement Agreement and Mutual Release agreement dated October 31, 2005 (the "Settlement"). Pursuant to the Settlement, Charter Investment, Inc. ("CII") has retained 30% of its CC VIII interest (the "Remaining Interests"). The Remaining Interests are subject to certain drag along, tag along and transfer restrictions as detailed in the revised CC VIII Limited Liability Company Agreement. CII transferred the other 70% of the CC VIII interest directly and indirectly, through Charter Holdco, to a newly formed entity, CCHC (a direct subsidiary of Charter Holdco and the direct parent of Charter Holdings). Of the 70% of the CC VIII preferred interests, 7.4% has been transferred by CII to CCHC for a subordinated exchangeable note with an initial accreted value of $48 million, accreting at 14%, compounded quarterly, with a 15-year maturity (the "Note"). The remaining 62.6% has been transferred by CII to

~~F-36~~F-30

~~Table of Contents~~

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, ~~2005, 2004~~2008, 2007 AND ~~2003~~2006

(dollars in millions, except where indicated)

~~Charter Holdco, in accordance with the terms of the settlement for no additional monetary consideration. Charter Holdco contributed the 62.6% interest to CCHC.~~

As part of the Settlement, CC VIII issued approximately 49 million additional Class B units to CC V in consideration for prior capital contributions to CC VIII by CC V, with respect to transactions that were unrelated to the dispute in connection with CII’s membership units in CC VIII. As a result, Mr. Allen’s pro rata share of the profits and losses of CC VIII attributable to the Remaining Interests is approximately 5.6%.

The Note is exchangeable, at CII’s option, at any time, for Charter Holdco Class A Common units at a rate equal to the then accreted value, divided by $2.00 (the "Exchange Rate"). Customary anti-dilution protections have been provided that could cause future changes to the Exchange Rate. Additionally, the Charter Holdco Class A Common units received will be exchangeable by the holder into Charter common stock in accordance with existing agreements between CII, Charter and certain other parties signatory thereto. Beginning February 28, 2009, if the closing price of Charter common stock is at or above the Exchange Rate for a certain period of time as specified in the Exchange Agreement, Charter Holdco may require the exchange of the Note for Charter Holdco Class A Common units at the Exchange Rate.

CCHC has the right to redeem the Note under certain circumstances, for cash in an amount equal to the then accreted value, such amount, if redeemed prior to February 28, 2009, would also include a make whole up to the accreted value through February 28, 2009. CCHC must redeem the Note at its maturity for cash in an amount equal to the initial stated value plus the accreted return through maturity.

~~Charter’s Board of Directors has determined that the transferred CC VIII interests remain at CCHC.~~

~~Helicon.~~ In 1999, the Company purchased the Helicon cable systems. As part of that purchase, Mr. Allen entered into a put agreement with a certain seller of the Helicon cable systems that received a portion of the purchase price in the form of a preferred membership interest in Charter Helicon, LLC with a redemption price of $25 million plus accrued interest. Under the Helicon put agreement, such holder had the right to sell any or all of the interest to Mr. Allen prior to its mandatory redemption in cash on July 30, 2009. On August 31, 2005, 40% of the preferred membership interest was put to Mr. Allen. The remaining 60% of the preferred interest in Charter Helicon, LLC remained subject to the put to Mr. Allen. Such preferred interest was recorded in other long-term liabilities. On October 6, 2005, Charter Helicon, LLC redeemed all of the preferred membership interest for the redemption price of $25 million plus accrued interest.

~~22.~~21. Commitments and Contingencies

Commitments

The following table summarizes the Company’s payment obligations as of December 31, ~~2005~~2008 for its contractual obligations.

Total

2006

2007

2008

2009

2010

Thereafter

Contractual Obligations

Operating and Capital Lease Obligations (1) $ 94 $ 20 $ 15 $ 12 $ 10 $ 13 $ 24
Programming Minimum Commitments (2) 1,253 342 372 306 233 -- --
Other (3) 301 146 49 21 21 21 43

Total $ 1,648 $ 508 $ 436 $ 339 $ 264 $ 34 $ 67

	Total		2009		2010		2011		2012		2013		Thereafter

Contractual Obligations
Capital and Operating Lease Obligations (1)	$	96	$	22	$	20	$	15	$	12	$	9	$	18
Programming Minimum Commitments (2)		687		315		101		105		110		56		--
Other (3)		475		368		66		22		19		--		--

Total	$	1,258	$	705	$	187	$	142	$	141	$	65	$	18

(1) The Company leases certain facilities and equipment under noncancelable operating leases. Leases and rental costs charged to expense for the years ended December 31, 2005, 2004 and 2003, were $23 million, $23 million and $30 million, respectively.

(1) The Company leases certain facilities and equipment under noncancelable operating leases. Leases and rental costs charged to expense for the years ended December 31, 2008, 2007, and 2006, were $24 million, $23 million, and $23 million, respectively.

~~F-37~~

(2) The Company pays programming fees under multi-year contracts ranging from three to ten years, typically based on a flat fee per customer, which may be fixed for the term, or may in some cases escalate over the term. Programming costs included in the accompanying statement of operations were $1.6 billion, $1.6 billion, and $1.5 billion, for the years ended December 31, 2008, 2007, and 2006, respectively. Certain of the Company’s programming agreements are based on a flat fee per month or have guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under the Company’s programming contracts.

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

(3) “Other” represents other guaranteed minimum commitments, which consist primarily of commitments to the Company’s billing services vendors.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

(2) The Company pays programming fees under multi-year contracts ranging from three to ten years typically based on a flat fee per customer, which may be fixed for the term or may in some cases, escalate over the term. Programming costs included in the accompanying statement of operations were $1.4 billion, $1.3 billion and $1.2 billion for the years ended December 31, 2005, 2004 and 2003, respectively. Certain of the Company’s programming agreements are based on a flat fee per month or have guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under the Company’s programming contracts.

~~(3) "Other" represents other guaranteed minimum commitments, which consist primarily of commitments to the Company’s billing services vendors.~~

The following items are not included in the contractual obligation table due to various factors discussed below. However, the Company incurs these costs as part of its operations:

The Company also rents utility poles used in its operations. Generally, pole rentals are cancelable on short notice, but the Company anticipates that such rentals will recur. Rent expense incurred for pole rental attachments for the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003,~~2006, was ~~$46~~$47 million, ~~$43~~$47 million, and ~~$40~~$44 million, respectively.

The Company pays franchise fees under multi-year franchise agreements based on a percentage of revenues ~~earned~~generated from video service per year. The Company also pays other franchise related costs, such as public education grants, under multi-year agreements. Franchise fees and other franchise-related costs included in the accompanying statement of operations were ~~$170~~$179 million, ~~$164~~$172 million, and ~~$162~~$175 million for the years ended December 31, ~~2005, 2003~~2008, 2007, and ~~2002,~~2006, respectively.

The Company also has ~~$165~~$158 million in letters of credit, primarily to its various worker’s compensation, property and casualty, and general liability carriers, as collateral for reimbursement of claims. These letters of credit reduce the amount the Company may borrow under its credit facilities.

~~Litigation~~

~~Securities Class Actions and Derivative Suits~~

In 2002 and 2003, Charter had a series of lawsuits filed against Charter and certain of its former and present officers and directors (collectively the "Actions"). In general, the lawsuits alleged that Charter utilized misleading accounting practices and failed to disclose these accounting practices and/or issued false and misleading financial statements and press releases concerning Charter’s operations and prospects.

Charter and the individual defendants entered into a Memorandum of Understanding on August 5, 2004 setting forth agreements in principle regarding settlement of the Actions. Charter and various other defendants in those actions subsequently entered into Stipulations of Settlement dated as of January 24, 2005, setting forth a settlement of the Actions in a manner consistent with the terms of the Memorandum of Understanding. On June 30, 2005, the Court issued its final approval of the settlements. At the end of September 2005, after the period for appeals of the settlements expired, Stipulations of Dismissal were filed with the Eighth Circuit Court of Appeals resulting in the dismissal of the two appeals with prejudice. Procedurally therefore, the settlements are final.

As amended, the Stipulations of Settlement provided that, in exchange for a release of all claims by plaintiffs against Charter and its former and present officers and directors named in the Actions, Charter would pay to the plaintiffs a combination of cash and equity collectively valued at $144 million, which was to include the fees and expenses of plaintiffs’ counsel. Of this amount, $64 million was to be paid in cash (by Charter’s insurance carriers) and the $80 million balance was to be paid in shares of Charter Class A common stock having an aggregate value of $40 million and ten-year warrants to purchase shares of Charter Class A common stock having an aggregate warrant value of $40 million, with such values in each case being determined pursuant to formulas set forth in the Stipulations of Settlement. However, Charter had the right, in its sole discretion, to substitute cash for some or all of the aforementioned securities on a dollar for dollar basis. Pursuant to that right, Charter elected to fund the

~~F-38~~F-31

~~Table of Contents~~

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, ~~2005, 2004~~2008, 2007 AND ~~2003~~2006

(dollars in millions, except where indicated)

~~$80 million obligation with 13.4 million shares~~

Litigation

The Company and its parent companies are defendants or co-defendants in several unrelated lawsuits claiming infringement of ~~Charter Class A common stock (having an aggregate value~~various patents relating to various aspects of ~~approximately $15 million~~its businesses. Other industry participants are also defendants in certain of these cases, and, in many cases, the Company expects that any potential liability would be the responsibility of its equipment vendors pursuant to applicable contractual indemnification provisions. In the ~~formula set forth~~event that a court ultimately determines that the Company infringes on any intellectual property rights, it may be subject to substantial damages and/or an injunction that could require the Company or its vendors to modify certain products and services the Company offers to its subscribers. While the Company believes the lawsuits are without merit and intends to defend the actions vigorously, the lawsuits could be material to the Company’s consolidated results of operations of any one period, and no assurance can be given that any adverse outcome would not be material to the Company’s consolidated financial condition, results of operations or liquidity.

In the ordinary course of business, the Company and its parent companies may face employment law claims, including claims under the Fair Labor Standards Act and wage and hour laws of the states in which we operate. On August 15, 2007, a complaint was filed, on behalf of both nationwide and state of Wisconsin classes of certain categories of current and former Charter technicians, against Charter in the ~~Stipulations~~United States District Court for the Western District of ~~Settlement) with~~Wisconsin (Sjoblom v. Charter Communications, LLC and Charter Communications, Inc.), alleging that Charter violated the ~~remaining balance (less an agreed upon $2 million discount in respect of that portion allocable~~Fair Labor Standards Act and Wisconsin wage and hour laws by failing to ~~plaintiffs’ attorneys’ fees)~~pay technicians for certain hours claimed to be paid in cash. In addition, Charter had agreed to issue additional shares of its Class A common stock to its insurance carrier having an aggregate value of $5 million; however, by agreement with its carrier, Charter paid $4.5 million in cash in lieu of issuing such shares. As a result in 2004,have been worked. While the Company ~~recorded an $85 million special charge on its consolidated statement of operations. Charter delivered the settlement consideration~~believes it has substantial factual and legal defenses to the claims ~~administrator~~at issue, in order to avoid the cost and distraction of continuing to litigate the case, the Company reached a settlement with the plaintiffs, which received final approval from the court on ~~July 8, 2005,~~January 26, 2009. The Company has accrued settlement costs associated with the Sjoblom case. The Company has been subjected, in the normal course of business, to the assertion of other similar claims and ~~it was held in escrow pending resolution~~could be subjected to additional such claims. The Company can not predict the ultimate outcome of ~~the appeals. Those appeals are now resolved.~~any such claims.

~~In October 2001~~The Company and 2002, two class action lawsuits were filed against Charter alleging that Charter Holdco improperly charged them a wire maintenance fee without request or permission. They also claimed that Charter Holdco improperly required them to rent analog and/or digital set-top terminals even though their television sets were "cable ready." In April 2004, the parties participated in a mediation which resulted in settlement of the lawsuits. As a result of the settlement, we recorded a special charge of $9 million in our consolidated statement of operations in 2004. In December 2004 the court entered a written order formally approving that settlement.

~~Furthermore, the Company is also~~its parent companies are party to ~~other~~ lawsuits and claims that ~~arose~~arise in the ordinary course of conducting its business. ~~In the opinion of management, after taking into account recorded liabilities, the~~The ultimate outcome of these other legal matters pending against the Company or its subsidiaries cannot be predicted, and although such lawsuits and claims are not expected individually to have a material adverse effect on the Company’s consolidated financial condition, results of operations or ~~its~~liquidity, such lawsuits could have, in the aggregate, a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

Regulation in the Cable Industry

The operation of a cable system is extensively regulated by the Federal Communications Commission ~~("FCC"~~(“FCC”), some state governments and most local governments. The FCC has the authority to enforce its regulations through the imposition of substantial fines, the issuance of cease and desist orders and/or the imposition of other administrative sanctions, such as the revocation of FCC licenses needed to operate certain transmission facilities used in connection with cable operations. The 1996 Telecom Act altered the regulatory structure governing the nation’s communications providers. It removed barriers to competition in both the cable television market and the ~~local~~ telephone market. Among other things, it reduced the scope of cable rate regulation and encouraged additional competition in the video programming industry by allowing ~~local~~ telephone companies to provide video programming in their own telephone service areas.

Future legislative and regulatory changes could adversely affect the Company’s operations, including, without limitation, additional regulatory requirements the Company may be required to comply with as it offers new services such as telephone.

~~23.~~

22. Employee Benefit Plan

The Company’s employees may participate in the Charter Communications, Inc. 401(k) Plan. Employees that qualify for participation can contribute up to 50% of their salary, on a pre-tax basis, subject to a maximum contribution limit as determined by the Internal Revenue Service. ~~The~~For each payroll period, the Company ~~matches~~will contribute to the 401(k) Plan (a) the total amount of the salary reduction the employee elects to defer between 1%

F-32

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

and 50% and (b) a matching contribution equal to 50% of the ~~first~~amount of the salary reduction the participant elects to defer (up to 5% of ~~participant~~the participant’s payroll compensation), excluding any catch-up contributions. The Company made contributions to the 401(k) plan totaling $6$8 million, $7 million, and $7$8 million for the years ended December 31, ~~2005, 2004~~2008, 2007, and ~~2003,~~2006, respectively.

~~24.~~23. Recently Issued Accounting Standards

In ~~November 2004,~~December 2007, the FASB issued SFAS No. ~~153,~~ 141R, Business Combinations: Applying the Acquisition Method~~Exchanges of Non-monetary Assets — An Amendment of APB~~, which provides guidance on the accounting and reporting for business combinations. SFAS No. 29~~. This statement eliminates the exception to fair value~~141R is effective for ~~exchanges of similar productive assets and replaces it with a general exception for exchange transactions that~~fiscal years beginning after December 15, 2008. The Company will adopt SFAS No. 141R effective January 1, 2009. We do not expect that the adoption of SFAS No. 141R will have ~~commercial substance — that is, transactions that are not expected to result in significant changes in~~a material impact on the ~~cash flows of the reporting entity. The Company adopted this pronouncement effective April 1, 2005. The exchange transaction discussed in Note 3 was accounted for under this standard.~~Company’s financial statements.

~~F-39~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

In December ~~2004,~~2007, the FASB issued ~~the revised~~ SFAS No. ~~123,~~ 160, Consolidations~~Share — Based Payment~~, which ~~addresses~~provides guidance on the accounting and reporting for ~~share-based payment transactions~~minority interests in ~~which a company receives employee services in exchange for (a) equity instruments of that company or (b) liabilities that~~consolidated financial statements. SFAS No. 160 requires losses to be allocated to non-controlling (minority) interests even when such amounts are ~~based on the fair value of the company’s equity instruments or that may be settled by the issuance of~~deficits. As such, ~~equity instruments. This statement~~future losses will be allocated between Charter and the Charter Holdco non-controlling interest. SFAS No. 160 is effective for ~~the~~fiscal years beginning after December 15, 2008. The Company ~~beginning~~will adopt SFAS No. 160 effective January 1, ~~2006. Because the Company adopted the fair value recognition provisions of SFAS No. 123 on January 1, 2003, the~~2009. The Company does not expect ~~this revised standard to~~that the adoption of SFAS No. 160 will have a material impact on its financial statements.

In ~~March 2005,~~February 2008, the FASB issued ~~FIN No. 47,~~ FASB Staff Position (FSP) 157-2, ~~Accounting for Conditional Asset Retirement Obligations.~~ ~~This interpretation clarifies that the term "conditional asset retirement obligation" as used in~~Effective Date of FASB Statement No. ~~143,~~ 157~~Accounting~~, which deferred the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 for ~~Asset Retirement Obligations~~nonfinancial assets and nonfinancial liabilities. The Company will apply SFAS No. 157 to nonfinancial assets and nonfinancial liabilities beginning January 1, 2009. The Company is in the process of assessing the impact of SFAS No. 157 on its financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, ~~refers~~which requires companies to ~~a legal obligation to perform an asset retirement activity in which the timing and/~~disclose their objectives and strategies for using derivative instruments, whether or ~~method of settlement are conditional on a future event that may or may~~ not ~~be within the control of the entity. This pronouncement~~designated as hedging instruments under SFAS No. 133. SFAS No. 161 is effective for interim periods and fiscal years ~~ending~~beginning after ~~December~~November 15, ~~2005.~~2008. The Company will adopt SFAS No. 161 effective January 1, 2009. The Company does not expect that the adoption of ~~this interpretation did not~~SFAS No. 161 will have a material impact on ~~the Company’s~~its financial statements.

~~Charter~~In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets, which amends the factors to be considered in renewal or extension assumptions used to determine the useful life of a recognized intangible asset. FSP FAS 142-3 is effective for interim periods and fiscal years beginning after December 15, 2008. The Company will adopt FSP FAS 142-3 effective January 1, 2009. The Company does not expect that the adoption of FSP FAS 142-3 will have a material impact on its financial statements.

In May 2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), which specifies that issuers of convertible debt instruments that may be settled in cash upon conversion should separately account for the liability and equity components in a manner reflecting their nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. FSP APB 14-1 is effective for interim periods and fiscal years beginning after December 15, 2008. The Company will adopt FSP APB 14-1 effective January 1, 2009. The Company does not expect that the adoption of FSP APB 14-1 will have a material impact on its financial statements.

The Company does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on ~~the Company’s~~its accompanying financial statements.

~~25.~~

F-33

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

24. Parent Company Only Financial Statements

As the result of limitations on, and prohibitions of, distributions, substantially all of the net assets of the consolidated subsidiaries are restricted from distribution to CCO Holdings, the parent company. The following condensed parent-only financial statements of CCO Holdings account for the investment in its subsidiaries under the equity method of accounting. The financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto.

CCO Holdings, LLC (Parent Company Only)

Condensed Balance Sheet

December 31,

2005

2004
ASSETS

Cash and cash equivalents $ 1 $ 541
Receivables from related party 2 16
Loans receivables from related party 105 361
Investment in subsidiaries 6,269 6,673
Other assets 27 22

Total assets $ 6,404 $ 7,613

LIABILITIES AND MEMBER’S EQUITY

Current liabilities $ 13 $ 10
Long-term debt 1,344 1,050
Payable to related party 3 --
Member’s equity 5,044 6,553

Total liabilities and member’s equity $ 6,404 $ 7,613

~~F-40~~

	December 31,
	2008			2007
ASSETS
Cash and cash equivalents	$	2		$	2
Receivable – related party		15			18
Investment in subsidiaries		18			2,760
Loans receivable - subsidiaries		297			275
Other assets		9			11

Total assets	$	341		$	3,066

LIABILITIES AND MEMBER’S EQUITY(DEFICIT)
Current liabilities	$	8		$	9
Long-term debt		1,146			1,145
Member’s equity (deficit)		(813	)		1,912

Total liabilities and member’s equity (deficit)	$	341		$	3,066

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

Condensed Statement of Operations

Year Ended December 31,

2005

2004

2003

Interest expense, net $ (92) $ (31) $ (5)
Loss on extinguishment of debt (1) -- --
Equity in income (losses) of subsidiaries (165) (3,309) 40
Other, net -- -- (5)

Net income (loss) $ (258) $ (3,340) $ 30

~~Condensed Statements of Cash Flows~~

Year Ended December 31,

2005

2004

2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (258) $ (3,340) $ 30
Noncash interest expense 4 7 --
Equity in (income) losses of subsidiaries 165 3,309 (40)
Changes in operating assets and liabilities 2 (17) 5

Net cash flows from operating activities (87) (41) (5)

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in subsidiaries (500) -- (135)
Distributions from subsidiaries 792 784 545

Net cash flows from investing activities 292 784 410

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 294 550 500
Capital contributions -- -- 10
Distributions to parent companies (925) (738) (545)
Loans to related party (105) -- (361)
Payments for debt issuance costs (9) (14) (9)

Net cash flows from financing activities (745) (202) (405)

NET CHANGE IN CASH AND CASH EQUIVALENTS (540) 541 --
CASH AND CASH EQUIVALENTS, beginning of year 541 -- --

CASH AND CASH EQUIVALENTS, end of year $ 1 $ 541 $ --

~~26.~~

~~Subsequent Events~~

In February 2006, the Company signed two separate definitive agreements to sell certain cable television systems serving a total of approximately 316,000 analog video customers in West Virginia, Virginia, Illinois and Kentucky for a total of approximately $896 million. The closings of these transactions are expected to occur in the third quarter of 2006. Under the terms of the Bridge Loan, bridge availability will be reduced by the proceeds of asset sales. The Company expects to use the net proceeds from the asset sales to repay (but not reduce permanently) amounts outstanding under the Company’s revolving credit facility and that the asset sale proceeds, along with other

~~F-41~~

~~Table of Contents~~

~~CCO HOLDINGS, LLC AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~DECEMBER 31, 2005, 2004 AND 2003~~

~~(dollars in millions, except where indicated)~~

~~existing sources of funds, will provide additional liquidity supplementing the Company’s cash availability in 2006 and beyond.~~

	Year Ended December 31,
	2008			2007			2006

Interest expense	$	(74	)	$	(84	)	$	(108	)
Other expense		--			(19	)		(3	)
Equity in losses of subsidiaries		(1,399	)		(247	)		(82	)

Net loss	$	(1,473	)	$	(350	)	$	(193	)

~~F-42~~

F-34

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

Condensed Statements of Cash Flows

	Year Ended December 31,
	2008			2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,473	)	$	(350	)	$	(193	)
Noncash interest expense		3			2			5
Equity in losses of subsidiaries		1,399			247			82
Loss on extinguishment of debt		--			8			3
Changes in operating assets and liabilities		(20	)		(25	)		(19	)

Net cash flows from operating activities		(91	)		(118	)		(122	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from subsidiaries		1,163			1,767			1,274
Loan to subsidiary		--			--			(148	)

Net cash flows from investing activities		1,163			1,767			1,126

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt issuance		--			350			--
Repayments of long-term debt		--			(550	)		--
Contributions from parent companies		--			--			148
Distributions to parent companies		(1,072	)		(1,447	)		(1,151	)
Payments for debt issuance costs		--			(2	)		--

Net cash flows from financing activities		(1,072	)		(1,649	)		(1,003	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		--			--			1
CASH AND CASH EQUIVALENTS, beginning of year		2			2			1

CASH AND CASH EQUIVALENTS, end of year	$	2		$	2		$	2

25. Subsequent Events (unaudited)

Proposed Restructuring

The Proposed Restructuring is expected to be funded with cash from operations, an exchange of debt of CCH II for other debt at CCH II, the issuance of $267 million of additional debt and estimated proceeds of $1.6 billion of an equity rights offering for which Charter has received a back-stop commitment from certain Noteholders. In addition to the Restructuring Agreements, the Noteholders have entered into commitment letters with Charter pursuant to which they have agreed to exchange and/or purchase, as applicable, certain securities of Charter.

The Restructuring Agreements further contemplate that upon consummation of the Plan (i) the notes and bank debt of Charter’s subsidiaries, Charter Operating and CCO Holdings will remain outstanding, (ii) holders of notes issued by CCH II will receive new CCH II notes and/or cash, (iii) holders of notes issued by CCH I will receive shares of Charter’s new Class A Common Stock, (iv) holders of notes issued by CIH will receive warrants to purchase shares of common stock in Charter, (v) holders of notes of Charter Holdings will receive warrants to purchase shares of Charter’s new Class A Common Stock, (vi) holders of convertible notes issued by Charter will receive cash and preferred stock issued by Charter, (vii) holders of common stock will not receive any amounts on account of their common stock, which will be cancelled, and (viii) trade creditors will be paid in full. In addition, as part of the Proposed Restructuring, it is expected that consideration will be paid by holders of CCH I notes to other entities participating in the financial restructuring.

F-35

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

Pursuant to a separate restructuring agreement among Charter, Mr. Allen, and an entity controlled by Mr. Allen (the “Allen Agreement”), in settlement of their rights, claims and remedies against Charter and its subsidiaries, and in addition to any amounts received by virtue of their holding any claims of the type set forth above, upon consummation of the Plan, Mr. Allen or his affiliates will be issued a number of shares of the new Class B Common Stock of Charter such that the aggregate voting power of such shares of new Class B Common Stock shall be equal to 35% of the total voting power of all new capital stock of Charter. Each share of new Class B Common Stock will be convertible, at the option of the holder, into one share of new Class A Common Stock, and will be subject to significant restrictions on transfer. Certain holders of new Class A Common Stock and new Class B Common Stock will receive certain customary registration rights with respect to their shares. Upon consummation of the Plan, Mr. Allen or his affiliates will also receive (i) warrants to purchase shares of new Class A common stock of Charter in an aggregate amount equal to 4% of the equity value of reorganized Charter, after giving effect to the rights offering, but prior to the issuance of warrants and equity-based awards provided for by the Plan, (ii) $85 million principal amount of new CCH II notes, (iii) $25 million in cash for amounts owing to CII under a management agreement, (iv) up to $20 million in cash for reimbursement of fees and expenses in connection with the Proposed Restructuring, and (v) an additional $150 million in cash. The warrants described above shall have an exercise price per share based on a total equity value equal to the sum of the equity value of reorganized Charter, plus the gross proceeds of the rights offering, and shall expire seven years after the date of issuance. In addition, on the effective date of the Plan, CII will retain a 1% equity interest in reorganized Charter Holdco and a right to exchange such interest into new Class A common stock of Charter.

The Allen Agreement contains similar provisions to those provisions of the Restructuring Agreements. There is no assurance that the treatment of creditors outlined above will not change significantly. For example, because the Proposed Restructuring is contingent on reinstatement of the Company’s credit facilities and notes, failure to reinstate such debt would require Charter to revise the Proposed Restructuring. Moreover, if reinstatement does not occur and current capital market conditions persist, the Company and its parent companies may not be able to secure adequate new financing and the cost of new financing would likely be materially higher. The Proposed Restructuring would result in the reduction of Charter’s debt by approximately $8 billion.

Interest Payments

Two of the Company’s parent companies, CIH and Charter Holdings, did not make scheduled payments of interest due on January 15, 2009 on certain of their outstanding senior notes (the “Overdue Payment Notes”). Each of the respective governing indentures (the “Indentures”) for the Overdue Payment Notes permits a 30-day grace period for such interest payments through (and including) February 15, 2009. On February 13, 2009, Charter paid the full amount of the January interest payment to the paying agent for the members of the ad-hoc committee of holders of the Overdue Payment Notes, which constitutes payment under the Indentures.

One of the Company’s parent companies, CCH II, did not make its scheduled payment of interest on March 16, 2009 on certain of its outstanding senior notes. The governing indenture for such notes permits a 30-day grace period for such interest payments, and Charter and its subsidiaries, including CCH II, filed voluntary Chapter 11 Bankruptcy prior to the expiration of the grace period.

Charter Operating Credit Facility

On February 3, 2009, Charter Operating made a request to the administrative agent under the Charter Operating credit facilities credit agreement (the “Credit Agreement”), to borrow additional revolving loans under the Credit Agreement. Such borrowing request complied with the provisions of the Credit Agreement including section 2.2 (“Procedure for Borrowing”) thereof. Subsequently, Charter received a notice from the administrative agent asserting that one or more Events of Default (as defined in the Credit Agreement) had occurred and was continuing under the Credit Agreement. In response, Charter sent a letter to the administrative agent, among other things, stating that no Event of Default under the Credit Agreement occurred or was continuing and requesting the administrative agent to rescind its notice of default and fund Charter Operating’s borrowing request. The administrative agent subsequently sent a letter stating that it continues to believe that one or more events of default occurred and was continuing. As a result, with the exception of one lender who funded approximately $0.4 million, the lenders under the Credit Agreement have failed to fund Charter Operating’s borrowing request.

F-36

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008, 2007 AND 2006

(dollars in millions, except where indicated)

On March 27, 2009, Charter, Charter Holdings, and all other Charter entities filed a petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Later on March 27, 2009, JPMorgan Chase Bank, N. A., as Administrative Agent under the Credit Agreement, filed an adversary proceeding in bankruptcy court against Charter Operating and CCO Holdings seeking a declaration that there have been events of default under the Credit Agreement. Such a judgment would prevent Charter Operating and CCO Holdings from reinstating the terms and provisions of the Credit Agreement through the bankruptcy proceeding. Although it has not yet answered the complaint, Charter denies the allegations made by JP Morgan and intends to vigorously contest this matter.

F-37

(Mark One)
[X]		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2005~~ 2008
or

[]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Delaware		86-1067239
Delaware		~~20-02579004~~ 20-0259004
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

12405 Powerscourt Drive
St. Louis, Missouri 63131		(314) 965-0555
(Address of principal executive offices including zip code)		(Registrants’ telephone number, including area code)

		Page No.
PART I

Item 1	Business	1
Item 1A	Risk Factors	47
Item 1B	Unresolved Staff Comments	1420
Item 2	Properties	1420
Item 3	Legal Proceedings	1420

PART II

Item 5	Market for Registrant's Common Equity, ~~and~~ Related Stockholder Matters and Issuer Purchases of Equity Securities	1523
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	1524
Item 7A	Quantitative and Qualitative Disclosure About Market Risk	4044
Item 8	Financial Statements and Supplementary Data	4146
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	4146
Item 9A	Controls and Procedures	4146
Item 9B	Other Information	4246

PART III

Item 14	Principal Accounting Fees and Services	4347

PART IV

Item 15	Exhibits and Financial Statement Schedules	4448

Signatures		45S-1

Exhibit Index		47E-1

	·	the completion of our and our parent companies’ restructuring including the outcome and impact on our business of the proceedings under Chapter 11 of the Bankruptcy Code;
	·	our and our parent companies’ ability to satisfy closing conditions under the agreements-in-principle and Pre-Arranged Plan and related documents and to have the Pre-Arranged Plan confirmed by the bankruptcy court;
	·	the availability of and access to, in general, of funds to meet interest payment obligations under our and our parent companies’ debt and to fund our operations and necessary capital expenditures, either through cash on hand, cash flows from operating activities, further borrowings or other sources and, in particular, our and our parent companies’ ability to ~~be able to provide under the applicable~~fund debt ~~instruments such funds~~obligations (by dividend, investment or otherwise) to the applicable obligor of such debt;

(1)		Charter acts as the sole manager of Charter Holdco and its direct and indirect limited liability company subsidiaries.

(2)		At December 31, 2008, these membership units were held by CII and Vulcan Cable III Inc. (“Vulcan Cable”), each of which was 100% owned by Paul G. Allen, Charter’s Chairman and controlling shareholder. They are exchangeable at any time on a one-for-one basis for shares of Charter Class B common stock, which in turn are exchangeable into Charter Class A common stock on a one-for-one basis. In January 2009, Vulcan Cable merged into CII with CII being the surviving entity.

(3)		The percentages shown in this table reflect the 21.8 million shares of Class A common stock outstanding as of December 31, 2008 issued pursuant to the Share Lending Agreement. However, for accounting purposes, Charter’s common equity interest in Charter Holdco is 53%, and Paul G. Allen’s ownership of Charter Holdco through his affiliates is 47%. These percentages exclude the 21.8 million mirror membership units outstanding as of December 31, 2008 issued pursuant to the Share Lending Agreement.

(4)		Represents preferred membership interests in CC VIII, LLC (“CC VIII”), a subsidiary of CC V Holdings, LLC, and an exchangeable accreting note issued by CCHC. See Note 11 to the accompanying consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data.”

	Year Ended December 31,
	2005					2004

Revenues	$	5,254		100	%	$	4,977		100	%

Costs and Expenses:
Operating (excluding depreciation and amortization)		2,293		44	%		2,080		42	%
Selling, general and administrative		1,034		20	%		971		19	%
Depreciation and amortization		1,499		28	%		1,495		30	%
Impairment of franchises		--		--			2,433		49	%
Asset impairment charges		39		1	%		--		--
(Gain) loss on sale of assets, net		6		--			(86	)	(2	)%
Option compensation expense, net		14		--			31		1	%
Hurricane asset retirement loss		19		--			--		--
Special charges, net		7		--			104		2	%
Unfavorable contracts and other settlements		--		--			(5	)	--

		4,911		93	%		7,023		141	%

Income (loss) from operations		343		7	%		(2,046	)	(41	)%

Interest expense, net		(691	)				(560	)
Gain on derivative instruments and hedging activities, net		50					69
Loss on extinguishment of debt		(6	)				(21	)
Other, net		22					3

Loss before minority interest, income taxes and cumulative effect of accounting change		(282	)				(2,555	)
Minority interest		33					20

Loss before income taxes and cumulative effect of accounting change		(249	)				(2,535	)

Income tax benefit (expense)		(9	)				35

Loss before cumulative effect of
accounting change		(258	)				(2,500	)
Cumulative effect of accounting change, net of tax		--					(840	)

Net loss	$	(258	)			$	(3,340	)

	2008 compared to 2007

Marketing costs	$	32
Customer care costs		23
Bad debt and collection costs		17
Stock compensation costs		14
Employee costs		7
Other, net		24
Asset sales, net of acquisitions		(5	)

	$	112

	2008 compared to 2007

Increase in losses on sales of assets	$	16
Increase in special charges, net		70

	$	86

		Payments by Period
					Less than		1-3		3-5		More than
			Total		1 year		years		years		5 years

Contractual Obligations
Long-Term Debt Principal Payments (1)		$	9,028	$	30	$	1,024	$	2,541	$	5,433
Long-Term Debt Interest Payments (2)			3,410		581		1,150		1,068		611
Payments on Interest Rate Instruments (3)			18		8		10		--		--
Capital and Operating Lease Obligations (1)			94		20		27		23		24
Programming Minimum Commitments (4)			1,253		342		678		233		--
Other (5)			301		146		70		42		43

	Total	$	14,104	$	1,127	$	2,959	$	3,907	$	6,111

			For the years ended December 31,
			2005		2004

Customer premise equipment (a)		$	434	$	451
Scalable infrastructure (b)			174		108
Line extensions (c)			134		131
Upgrade/Rebuild (d)			49		49
Support capital (e)			297		154

	Total capital expenditures	$	1,088	$	893

		2006		2007		2008		2009		2010		Thereafter		Total		Fair Value at December 31, 2005
Debt
Fixed Rate		$	--	$	--	$	114	$	--	$	--	$	2,633	$	2,747	$	2,697
	Average Interest Rate		--		--		10.00%		--		--		8.33%		8.40%

Variable Rate		$	30	$	280	$	630	$	779	$	1,762	$	2,800	$	6,281	$	6,256
	Average Interest Rate		7.94%		7.67%		7.67%		7.74%		8.14%		8.07%		7.99%

Interest Rate Instruments
Variable to Fixed Swaps		$	873	$	975	$	--	$	--	$	--	$	--	$	1,848	$	4
	Average Pay Rate		8.23%		8.00%		--		--		--		--		8.11%
	Average Receive Rate		7.83%		7.77%		--		--		--		--		7.80%

				Accumulated
				Other			Total
	Member’s			Comprehensive			Member's
	Equity (Deficit)			Income (Loss)			Equity (Deficit)

BALANCE, December 31, 2005	$	5,042		$	2		$	5,044
Contributions		148			--			148
Distributions to parent company		(1,151	)		--			(1,151	)
Changes in fair value of interest rate agreements		--			(1	)		(1	)
Net loss		(193	)		--			(193	)

BALANCE, December 31, 2006		3,846			1			3,847
Distributions to parent company		(1,447	)		--			(1,447	)
Changes in fair value of interest rate agreements		--			(123	)		(123	)
Other		(14	)		(1	)		(15	)
Net loss		(350	)		--			(350	)

BALANCE, December 31, 2007		2,035			(123	)		1,912
Distributions to parent company		(1,072	)		--			(1,072	)
Changes in fair value of interest rate agreements		--			(180	)		(180	)
Net loss		(1,473	)		--			(1,473	)

BALANCE, December 31, 2008	$	(510	)	$	(303	)	$	(813	)

				Accumulated
				Other			Total
	Member’s			Comprehensive			Member’s
	Equity			Income (Loss)			Equity

BALANCE, December 31, 2002	$	11,145		$	(105	)	$	11,040
Capital contributions		10			--			10
Distributions to parent company		(545	)		--			(545	)
Changes in fair value of interest
rate agreements		--			48			48
Other, net		2			--			2
Net income		30			--			30

BALANCE, December 31, 2003		10,642			(57	)		10,585
Distributions to parent company		(738	)		--			(738	)
Changes in fair value of interest rate
agreements		--			42			42
Other, net		4			--			4
Net loss		(3,340	)		--			(3,340	)

BALANCE, December 31, 2004		6,568			(15	)		6,553
Distributions to parent company		(1,268	)		--			(1,268	)
Changes in fair value of interest rate
agreements and other		--			17			17
Net loss		(258	)		--			(258	)

BALANCE, December 31, 2005	$	5,042		$	2		$	5,044

Cable distribution systems		7-20 years
Customer equipment and installations		3-5 years
Vehicles and equipment		1-5 years
Buildings and leasehold improvements		5-15 years
Furniture, fixtures and equipment		5 years

						Gain (loss) for
		Carrying Value at				the Years Ended
		December 31,				December 31,

		2005		2004		2005		2004		2003

Equity investments, under the cost method	$	27	$	8	$	--	$	(3)	$	(2)
Equity investments, under the equity method		13		24		22		6		2

	$	40	$	32	$	22	$	3	$	--

	Year Ended December 31, 2006
Revenues	$	109
Income before income taxes	$	238
Income tax expense	$	(22	)
Net income	$	216
Earnings per common share, basic and diluted	$	0.65

	2005		2004

Accounts payable - trade	$	100	$	138
Accrued capital expenditures		73		60
Accrued expenses:
Interest		118		101
Programming costs		272		278
Franchise related fees		67		67
Compensation		60		47
Other		185		210

	$	875	$	901

	2008		2007

Accounts payable – trade	$	86	$	116
Accrued capital expenditures		56		95
Accrued expenses:
Interest		122		120
Programming costs		305		273
Franchise related fees		60		66
Compensation		80		75
Other		200		184

	$	909	$	929

		2005				2004
		Principal		Accreted		Principal		Accreted
		Amount		Value		Amount		Value

Long-Term Debt
CCO Holdings:
	8 3/4% senior notes due 2013	$	800	$	794	$	500	$	500
	Senior floating notes due 2010		550		550		550		550
Charter Operating:
	8% senior second-lien notes due 2012		1,100		1,100		1,100		1,100
	8 3/8% senior second-lien notes due 2014		733		733		400		400
Renaissance Media Group LLC:
	10.000% senior discount notes due 2008		114		115		114		116
CC V Holdings, LLC:
	11.875% senior discount notes due 2008		--		--		113		113

Credit Facilities
Charter Operating			5,731		5,731		5,515		5,515

		$	9,028	$	9,023	$	8,292	$	8,294

Year	Amount

2006	$	30
2007		280
2008		744
2009		779
2010		1,762
Thereafter		5,433

	$	9,028

	2005				2004
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Debt
CCO Holdings debt	$	1,344	$	1,299	$	1,050	$	1,064
Charter Operating debt		1,833		1,821		1,500		1,563
Credit facilities		5,731		5,719		5,515		5,502
Other		115		114		229		236
Interest Rate Agreements
Assets (Liabilities)
Swaps		(4)		(4)		(69)		(69)
Collars		--		--		(1)		(1)

					Options Outstanding				Options Exercisable
						Weighted-				Weighted-
						Average	Weighted-			Average	Weighted-
						Remaining	Average			Remaining	Average
Range of					Number	Contractual	Exercise		Number	Contractual	Exercise
Exercise Prices					Outstanding	Life	Price		Exercisable	Life	Price
					(in thousands)				(in thousands)

$	1.11	—	$	1.60	12,565	9 years	$	1.39	1,297	9 years	$	1.49
$	2.85	—	$	4.56	5,906	7 years		3.40	3,028	7 years		3.33
$	5.06	—	$	5.17	6,970	8 years		5.15	2,187	8 years		5.13
$	9.13	—	$	13.68	1,712	6 years		10.96	1,513	6 years		11.10
$	13.96	—	$	23.09	1,974	4 years		19.24	1,974	4 years		19.24

		Severance/Leases		Litigation		Other		Total Special Charge

Balance at December 31, 2002	$	31

Special Charges		26	$	--	$	(5)	$	21
Payments		(43)
Balance at December 31, 2003		14

Special Charges		12	$	92	$	--	$	104
Payments		(20)
Balance at December 31, 2004		6

Special Charges		6	$	1	$	--	$	7
Payments		(8)
Balance at December 31, 2005	$	4