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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 000-16789

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
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(Exact name of registrant as specified in its charter)

GEORGIA 58-1713008
- ---------------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

12405 POWERSCOURT DRIVE
ST. LOUIS, MISSOURI 63131
- ---------------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (314) 965-0555
----------------------

Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:

Name of each exchange
Title of each class on which registered
------------------- -------------------

UNITS OF LIMITED PARTNERSHIP INTEREST NONE

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

Yes |X| No |_|

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

State the aggregate market value of the voting equity securities
held by non-affiliates of the registrant: All of the registrant's 59,830 units
of limited partnership interests, its only class of equity securities, are held
by non-affiliates. There is no public trading market for the units, and
transfers of units are subject to certain restrictions; accordingly, the
registrant is unable to state the market value of the units held by
non-affiliates.

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The Exhibit Index is located at Page E-1.

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

2001 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

PART I PAGE
-----

Item 1. Business ........................................................ 3
Item 2. Properties ...................................................... 17
Item 3. Legal Proceedings ............................................... 17
Item 4. Submission of Matters to a Vote of Security Holders ............. 17

PART II

Item 5. Market for the Registrant's Equity Securities and Related
Security Holder Matters ......................................... 18
Item 6. Selected Financial Data ......................................... 19
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations ....................................... 21
Item 7A. Quantitative and Qualitative Disclosures about Market
Risk ............................................................ 27
Item 8. Financial Statements and Supplementary Data ..................... 27
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure ........................................ 27

PART III

Item 10. Directors and Executive Officers of the
Registrant ...................................................... 28
Item 11. Executive Compensation .......................................... 31
Item 12. Security Ownership of Certain Beneficial Owners and
Management ...................................................... 32
Item 13. Certain Relationships and Related Transactions .................. 32

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K ..................................................... 34
Signatures ................................................................ 35

This Annual Report on Form 10-K is for the year ended December 31, 2001. This
Annual Report modifies and supersedes documents filed prior to this Annual
Report. In addition, information that we file with the Securities and Exchange
Commission in the future will automatically update and supersede information
contained in this Annual Report. In this Annual Report, "we," "us," and "our"
refers to Enstar Income/Growth Program Five-B, L.P.

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PART I

ITEM 1. BUSINESS

INTRODUCTION

Enstar Income/Growth Program Five-B, L.P., a Georgia limited
partnership (the "Partnership"), is engaged in the ownership and operation of
cable television systems serving approximately 14,000 basic customers at
December 31, 2001 in and around the cities of Greensburg, Russell Springs,
Liberty, Monticello, and Cumberland, Kentucky, Jellico and Campbell County,
Tennessee and Wheatland, Missouri.

All of our cable television business operations are conducted
through the Partnership's participation as a co-general partner with a 50%
interest in Enstar Cable of Cumberland Valley (the "Joint Venture"), the other
general partner of which is also a limited partnership sponsored by the General
Partners of the Partnership. The Joint Venture was formed in order to enable
each of its partners to participate in the acquisition and ownership of a more
diverse pool of systems by combining certain of its financial resources. Because
all of the Partnership's operations are conducted through its participation in
the Joint Venture, much of the discussion in this report relates to the Joint
Venture and its activities. References to the Partnership include the Joint
Venture, where appropriate.

The General Partners of the Partnership are Enstar Communications
Corporation, a Georgia corporation (the "Corporate General Partner") and Robert
T. Graff, Jr. (the "Individual General Partner"). Since its incorporation in
Georgia in 1982, the Corporate General Partner has been engaged in the
cable/telecommunications business, both as a General Partner of 14 Limited
Partnerships formed to own and operate cable television systems and through a
wholly-owned operating subsidiary. As of December 31, 2001, the Corporate
General Partner managed cable television systems serving approximately 68,500
basic customers. On November 12, 1999, the Corporate General Partner became an
indirect controlled subsidiary of Charter Communications, Inc. ("Charter"), the
nation's fourth largest cable operator, serving approximately seven million
customers. The Corporate General Partner is responsible for day-to-day
management of the Partnership and its operations. Charter and its affiliates
provide management and other services to the Partnership, for which they receive
a management fee and reimbursement of expenses. The principal executive offices
of the Partnership and the Corporate General Partner are located at 12405
Powerscourt Drive, St. Louis, MO 63131-0555 and their telephone number is (314)
965-0555.

PROPOSED SALE OF ASSETS

In 1999, the Corporate General Partner sought purchasers for all of
the cable television systems of the Partnership, as well as 13 other affiliated
limited partnership cable operators of which the Corporate General Partner is
also the general partner. This effort was undertaken primarily because, based on
the Corporate General Partner's experience in the cable television industry, it
was concluded that generally applicable market conditions and competitive
factors were making (and would increasingly make) it extremely difficult for
smaller operators of rural cable systems (such as the Partnership and the other
affiliated partnerships) to effectively compete and be financially successful.
This determination was based on the anticipated cost of electronics and
additional equipment to enable the Joint Venture's systems to operate on a
two-way basis with improved technical capacity, insufficiency of the Joint
Venture's cash reserves and cash flows from operations to finance such
expenditures, limited customer growth potential due to the Joint Venture's
systems' rural location, and a general inability of a small cable system
operator such as the Joint Venture to benefit from economies of scale and the
ability to combine and integrate systems that large cable operators have.
Although certain limited upgrades have been made, the Corporate General Partner
projected that if the Joint Venture made the additional comprehensive upgrades
deemed necessary, the Joint Venture would not recoup the costs or regain its
ability to operate profitably within the remaining term of its franchises, and
as a result, making these upgrades would not be economically prudent.

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As a result of marketing efforts using an independent broker
experienced in the sale of cable systems, the Joint Venture, together with
certain affiliated partnerships for which the Corporate General Partner also
served as a General Partner, entered into a purchase and sale agreement, dated
as of August 8, 2000, as amended September 29, 2000 (the "Gans Agreement"), with
Multimedia Acquisition Corp., an affiliate of Gans Multimedia Partnership
("Gans"). The Gans Agreement provided for Gans to acquire the Joint Venture's
Monticello, Kentucky and Pomme de Terre, Missouri systems, as well as certain
assets of the other Gans Selling Partnerships. Following a series of discussions
and meetings, the Joint Venture together with certain affiliated partnerships,
and Gans determined that they were not able to agree on certain further
amendments to the Gans Agreement required to satisfy conditions precedent to
close the transactions. In light of these conditions and existing economic and
financial market conditions, and their impact of Gans' inability to arrange
financing in order to close the acquisitions, on April 18, 2001, the parties
agreed to terminate the Gans Agreement.

Following termination of the Gans Agreement, the broker once again
attempted to market the Joint Venture's systems. At the time of this filing,
there is no definitive agreement to sell any of the systems and the broker
continues to market the systems on behalf of the Joint Venture.

DESCRIPTION OF THE JOINT VENTURE'S SYSTEMS

The table below sets forth certain operating statistics for the
Joint Venture's cable systems as of December 31, 2001:

AVERAGE
MONTHLY
PREMIUM REVENUE
HOMES BASIC BASIC SERVICE PREMIUM PER BASIC
SYSTEM NAME PASSED(1) CUSTOMERS PENETRATION(2) UNITS(3) PENETRATION(4) CUSTOMER(5)
- --------------------------- ------------ -------------- ------------------- ------------- ----------------- ----------------

Monticello, KY 21,410 13,158 61.5% 3,276 24.9% $39.53

Pomme De Terre, MO 3,245 878 27.1% 114 13.0% $32.79
------------ -------------- -------------

Total 24,655 14,036 56.9% 3,390 24.2% $39.11
============ ============== =============

(1) Homes passed refers to estimates by the Joint Venture of the
approximate number of dwelling units in a particular community that can be
connected to our cable systems without any further extension of principal
transmission lines. Estimates are based upon a variety of sources, including
billing records, house counts, city directories and other local sources.

(2) Basic penetration represents basic customers as a percentage of homes
passed by cable transmission lines.

(3) Premium service units include only single channel services offered for
a monthly fee per channel and do not include tiers of channels offered as a
package for a single monthly fee.

(4) Premium penetration represents premium service units as a percentage
of homes subscribing to cable service. A customer may purchase more than one
premium service, each of which is counted as a separate premium service unit.
This ratio may be greater than 100% if the average customer subscribes for more
than one premium service.

(5) Average monthly revenue per basic customer has been computed based on
revenue for the year ended December 31, 2001, divided by twelve months, divided
by the actual number of basic customers at the end of the year.

SERVICES, MARKETING AND PRICES

The Joint Venture's cable television systems offer customers various
levels of cable services consisting of:

- - broadcast television signals of local network, independent and educational
stations;

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- - a limited number of television signals originating from distant cities,
such as WGN;

- - various satellite delivered, non-broadcast channels, such as CNN, MTV, The
USA Network, ESPN, TNT, and The Disney Channel; and

- - programming originated locally by the cable television system, such as
public, educational and government access programs.

For an extra monthly charge, the Joint Venture cable television
systems also offer premium television services to their customers. These
services, such as HBO and Showtime, are satellite channels that consist
principally of feature films, live sporting events, concerts and other special
entertainment features, usually presented without commercial interruption. See
"Regulation and Legislation."

A customer generally pays an initial installation charge and fixed
monthly fees for basic, expanded basic, other tiers of satellite services and
premium programming services. Such monthly service fees constitute the primary
source of revenues for the Joint Venture's cable television systems. In addition
to customer revenues, the Joint Venture's cable television systems receive
revenues from the sale of available advertising spots on advertiser-supported
programming and also offer to its customers home shopping services, which pay
the Partnership a share of revenues from sales of products to the Joint
Venture's customers, in addition to paying us a separate fee in return for
carrying their shopping service.

The Joint Venture's marketing strategy is to provide added value to
increasing levels of subscription services through packaging. In addition to the
basic service package, customers in substantially all of our cable television
systems may purchase additional unregulated packages of satellite-delivered
services and premium services. The Joint Venture's service options vary from
system to system, depending upon a cable system's channel capacity and viewer
interests. In some cable television systems, the Joint Venture offers discounts
to customers who purchase premium services on a limited trial basis in order to
encourage a higher level of service subscription. The Joint Venture also has a
coordinated strategy for retaining customers that includes televised retention
advertising to reinforce the initial decision to subscribe and encourage
customers to purchase higher service levels.

Rates for services also vary from market to market and according to
the type of services selected. Under the Cable Television Consumer Protection
and Competition Act of 1992 (the "1992 Cable Act"), most cable television
systems are subject to rate regulation of the basic service tier, the charges
for installation of cable service, and the rental rates for customer premises
equipment such as converter boxes and remote control devices. These rate
regulation provisions affect all of the Joint Venture's cable television systems
not deemed to be subject to effective competition under the Federal
Communications Commission's ("FCC") definition. Currently, none of the Joint
Venture's cable television systems are subject to effective competition. See
"Regulation and Legislation."

At December 31, 2001, the Joint Venture's monthly prices for basic
cable service for residential customers, including certain discounted prices,
ranged from $15.50 to $22.28 and its premium price was $11.95, excluding special
promotions offered periodically in conjunction with the Joint Venture's
marketing programs. A one-time installation fee, which the Joint Venture may
wholly or partially waive during a promotional period, is usually charged to new
customers. The Joint Venture charges commercial customers, such as hotels,
motels and hospitals, a negotiated, non-recurring fee for installation of
service and monthly fees based upon a standard discounting procedure. The Joint
Venture offers most multi-unit dwellings a negotiated bulk price in exchange for
single-point billing and basic service to all units. These prices are also
subject to regulation.

PROGRAMMING

We purchase basic and premium programming for the Joint Venture's
systems from Charter based on Charter's actual cost. Charter's programming costs
are generally based on a fixed fee per customer or a percentage of the gross
receipts for the particular service. Charter's programming contracts are
generally for a fixed period of time and are subject to negotiated renewal.
Accordingly, no assurances can be given that

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Charter's, and correspondingly our, programming costs will not continue to
increase substantially in the near future, or that other materially adverse
terms will not be added to Charter's programming contracts. Management believes,
however, that Charter's relations with its programming suppliers generally are
good.

Our cable programming costs have increased in recent years due to
additional programming being provided to basic customers. In addition we are
facing higher costs to carry local broadcast channels who elect retransmission
carriage agreements. Programming costs have increased in the past, and are
expected to continue to increase due to increased costs to produce or purchase
cable programming (generally with particularly significant increases occurring
with respect to sports programming), inflationary increases and other factors.

CABLE SYSTEM AND TECHNOLOGY

A cable television system receives television, radio and data
signals at the system's headend site by means of over-the-air antennas,
microwave relay systems and satellite earth stations. These signals are then
modulated, amplified and distributed, primarily through coaxial and fiber optic
distribution systems, to customers who pay a fee for this service.

The Joint Venture has ten headends that operate at 300-330 megahertz
and are limited to 36-40 channels. These headends have no available channel
capacity to accommodate the addition of new channels or to provide pay-per-view
offerings to customers. Significant capital would be required for a
comprehensive plant and head-end upgrade, particularly in light of the high cost
of electronics to enable two-way service, to offer high speed cable modem
Internet and other interactive services, as well as to increase channel capacity
and allow a greater variety of video services. The estimated cost of a
comprehensive upgrade would be approximately $20.6 million (for an upgrade to
550 megahertz capacity) and $24.8 million (for an upgrade to 870 megahertz
capacity). Given the high cost of this comprehensive upgrade plan, the limited
funds available, and the belief that such a plan is not economically prudent,
the Corporate General Partner does not presently anticipate that it will proceed
with a comprehensive upgrade plan. Provided there are available funds, the
Corporate General Partner will, however, continue to evaluate alternative,
cost-effective solutions to increase channel capacity, pay-per-view services,
and digital services which would enhance the value of the Joint Venture's
systems and be economically prudent.

CUSTOMER SERVICE AND COMMUNITY RELATIONS

We place a strong emphasis on customer service and community
relations and believe that success in these areas is critical to our business.
We have developed and implemented a wide range of internal training programs for
employees, including our regional managers, that focus on our operations and
employee interaction with customers. The effectiveness of our training programs
relating to employees' interaction with customers is monitored on an ongoing
basis. We are also committed to fostering strong community relations in the
towns and cities we serve. We support many local charities and community causes
in various ways, including in-kind donations that include production services
and free air-time on major cable networks. We also participate in the "Cable in
the Classroom" program, whereby cable television companies throughout the United
States provide schools with free cable television service. In addition, we
install and provide free basic cable service to public schools, government
buildings and non-profit hospitals in many of the communities in which we
operate.

FRANCHISES

As of December 31, 2001, the Joint Venture operated cable systems in
nineteen franchise areas, pursuant to permits and similar authorizations issued
by local and state governmental authorities. Each franchise is awarded by a
governmental authority and may not be transferable unless the granting
governmental authority consents. Most franchises are subject to termination
proceedings in the event of a material breach. In addition, most franchises can
require us to pay the granting authority a franchise fee of up to 5% of gross
revenues as

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defined by the franchise agreements, which is the maximum amount that may be
charged under the applicable law.

Prior to the scheduled expiration of most franchises, we initiate
renewal proceedings with the granting authorities. The Cable Communications
Policy Act of 1984 (the "1984 Cable Act") provides for, among other things, an
orderly franchise renewal process in which franchise renewal will not be
unreasonably withheld or, if renewal is denied the franchising authority may
acquire ownership of the system or effect a transfer of the system to another
person, the operator generally is entitled to the fair market value for the
system covered by such franchise, but no value may be attributed to the
franchise itself. In addition, the 1984 Cable Act, as amended by the 1992 Cable
Act, establishes comprehensive renewal procedures which require that an
incumbent franchisee's renewal application be assessed on its own merit and not
as part of a comparative process with competing applications. See "Regulation
and Legislation." In connection with the franchise renewal process, many
governmental authorities require the cable operator to make certain commitments,
such as technological upgrades to the system. Although historically the Joint
Venture has been able to renew its franchises without incurring significant
costs, the Joint Venture cannot assure you that any particular franchise will be
renewed or that it can be renewed on commercially favorable terms. the Joint
Venture's failure to obtain renewals of its franchises, especially those in
areas where it has the most customers, would have a material adverse effect on
its business, results of operations and financial condition.

Under the 1996 Telecommunications Act ("1996 Telecom Act"), state
and local authorities are prohibited from limiting, restricting or conditioning
the provision of telecommunications services. They may, however, impose
"competitively neutral" requirements and manage the public rights-of-way.
Granting authorities may not require a cable operator to provide
telecommunications services or facilities, other than institutional networks, as
a condition of an initial franchise grant, a franchise renewal, or a franchise
transfer. The 1996 Telecom Act also limits franchise fees to an operator's
cable-related revenues and clarifies that they do not apply to revenues that a
cable operator derives from providing new telecommunications services.

The following table groups the franchises of the Joint Venture's
cable television systems by date of expiration and presents the number of
franchises for each group of franchises and the approximate number and
percentage of homes subscribing to cable service for each group as of December
31, 2001:

NUMBER OF PERCENTAGE OF
YEAR OF NUMBER OF BASIC BASIC
FRANCHISE EXPIRATION FRANCHISES CUSTOMERS CUSTOMERS
- --------------------------- --------------- ------------------- -------------------

Prior to 2003 12 10,150 72.3%
2003 - 2007 6 2,204 15.7%
2008 and after 1 1,682 12.0%
--------------- ------------------- -------------------

Total 19 14,036 100.0%
=============== =================== ===================

As of December 31, 2001, franchise agreements have expired in twelve
of the Joint Venture's franchise areas where it serves approximately 10,150
basic customers. The Joint Venture continues to serve these customers while it
is in negotiations to review the franchise agreements and continues to pay
franchise fees to the local franchise authorities. The Joint Venture operates
cable television systems which serve multiple communities and, in some
circumstances, portions of such systems extend into jurisdictions, such as
unincorporated communities, for which the Joint Venture believes no franchise is
necessary. In the aggregate, approximately 1,500 customers, comprising
approximately 11% of the Joint Venture's customers, are served by unfranchised
portions of such systems. The Joint Venture has never had a franchise revoked
for any of its systems and believes that it has satisfactory relationships with
substantially all of its franchising authorities.

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COMPETITION

We face competition in the areas of price, products and services,
and service reliability. We compete with other providers of television signals
and other sources of home entertainment. We operate in a very competitive
business environment which can adversely affect our business and operations.

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

Our key competitors include:

DBS. Direct broadcast satellite, known as DBS, is a significant
competitor to cable systems. The DBS industry has grown rapidly over the last
several years, far exceeding the growth rate of the cable television industry,
and now serves more than 17 million subscribers nationwide. DBS service allows
the subscriber to receive video and high-speed Internet access services directly
via satellite using a relatively small dish antenna. Moreover, video compression
technology allows DBS providers to offer more than 100 digital channels, thereby
surpassing the typical analog cable system.

DBS companies historically were prohibited from retransmitting
popular local broadcast programming. However, a change to the copyright laws in
1999 eliminated this legal impediment. As a result, DBS companies now may
retransmit such programming, once they have secured retransmission consent from
the popular broadcast stations they wish to carry, and they faced mandatory
carriage obligations of less popular broadcast stations as of January 2002. In
response to the legislation, DirecTV, Inc. and EchoStar Communications
Corporation have begun carrying the major network stations in the nation's top
television markets. DBS, however, is limited in the local programming it can
provide because of the current capacity limitations of satellite technology, and
the DBS companies currently offer local broadcast programming only in the larger
U.S. markets. The DBS industry initiated a judicial challenge to the 2002
requirement mandating carriage of less popular broadcast stations. This lawsuit
alleges that the requirement (similar to the one applicable to cable systems) is
unconstitutional. The federal district court and circuit court both rejected the
DBS industry's constitutional challenge, but the industry is now seeking review
by the U.S. Supreme Court.

In October 2001, EchoStar and DirecTV, the two largest DBS providers
in the country, announced EchoStar's planned merger with DirecTV, subject to,
among other things, regulatory approval. If approved by regulators and
consummated, the proposed merger would provide expanded transmission capacity
for a single company serving more than 17 million customers. It is unclear what
impact the consolidation of these two companies will have on the competition we
face from the DBS industry. EchoStar and DirecTV have announced, however, that
the merger would afford the surviving entity sufficient capacity to expand the
carriage of local broadcast programming to every U.S. television market.

DSL. The deployment of digital subscriber line technology, known as
DSL, allows Internet access to subscribers at data transmission speeds greater
than available over conventional telephone lines. DSL service therefore is
competitive with high-speed Internet access over cable systems. Several
telephone companies and other companies offer DSL service. There are bills now
before Congress that would reduce regulation of Internet services offered by
incumbent telephone companies, and the FCC recently initiated a rulemaking
proceeding that could materially reduce existing regulation of DSL service,
essentially freeing such service from traditional telecommunications regulation.
The FCC's decisions and policies in this area are

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subject to change. We cannot predict the likelihood of success of the Internet
access services offered by our competitors, or the impact on our business and
operations of these competitive ventures.

DSL and other forms of high-speed Internet access provide
competition to our own provision of Internet access. For example, EchoStar and
DirecTV have both begun the provision of high-speed Internet access to
residential consumers. High-speed Internet access also facilitates the streaming
of video into homes and businesses. As the quality and availability of video
streaming over the Internet improve, video streaming may compete with the
traditional delivery of video programming services over cable systems. It is
possible that programming suppliers will consider bypassing cable operators and
market their services directly to the consumer through video streaming over the
Internet.

BROADCAST TELEVISION. Cable television has long competed with
broadcast television, which consists of television signals that the viewer is
able to receive without charge using an "off-air" antenna. The extent of such
competition is dependent upon the quality and quantity of broadcast signals
available through "off-air" reception compared to the services provided by the
local cable system. The recent licensing of digital spectrum by the FCC will
provide incumbent television licenses with the ability to deliver high
definition television pictures and multiple digital-quality program streams, as
well as advanced digital services such as subscription video and data
transmission.

TRADITIONAL OVERBUILDS. Cable television systems are operated under
non-exclusive franchises granted by local authorities. More than one cable
system may legally be built in the same area. It is possible that a franchising
authority might grant a second franchise to another cable operator and that such
a franchise might contain terms and conditions more favorable than those
afforded us. In addition, entities willing to establish an open video system,
under which they offer unaffiliated programmers non-discriminatory access to a
portion of the system's cable system, may be able to avoid local franchising
requirements. Well-financed businesses from outside the cable industry, such as
public utilities that already possess fiber optic and other transmission lines
in the areas they serve, may over time become competitors. There are a number of
cities that have constructed their own cable systems, in a manner similar to
city-provided utility services. There also has been interest in traditional
overbuilds by private companies. Constructing a competing cable system is a
capital intensive process which involves a high degree of risk. We believe that
in order to be successful, a competitor's overbuild would need to be able to
serve the homes and businesses in the overbuilt area on a more cost-effective
basis than us. Any such overbuild operation would require either significant
access to capital or access to facilities already in place that are capable of
delivering cable television programming. As of December 31, 2001, the
Partnership and Joint Venture are unaware of any overbuild situations in its
cable systems.

TELEPHONE COMPANIES AND UTILITIES. The competitive environment has
been significantly affected by technological developments and regulatory changes
enacted under the 1996 Telecommunications Act ("1996 Telecom Act"), which was
designed to enhance competition in the cable television and local telephone
markets. Federal cross-ownership restrictions historically limited entry by
local telephone companies into the cable business. The 1996 Telecom Act modified
this cross-ownership restriction, making it possible for local exchange
carriers, who have considerable resources, to provide a wide variety of video
services competitive with services offered by cable systems.

Several telephone companies have obtained or are seeking cable
franchises from local governmental authorities and are constructing cable
systems. Some local exchange carriers may choose to make broadband services
available under the open video regulatory framework of the FCC or through
wireless technology. We cannot predict the likelihood of success of the
broadband services offered by our competitors or the impact on us of such
competitive ventures. Although enthusiasm on the part of local exchange carriers
appears to have waned in recent months, the entry of telephone companies as
direct competitors in the video marketplace may become more widespread and could
adversely affect the profitability and valuation of established cable systems.

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The telecommunications industry is highly competitive and includes
competitors with greater financial and personnel resources, who have brand name
recognition and long-standing relationships with regulatory authorities and
customers. Moreover, mergers, joint ventures and alliances among franchise,
wireless or private cable operators, local exchange carriers and others may
result in providers capable of offering cable television, Internet, and
telecommunications services in direct competition with us.

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

PRIVATE CABLE. Additional competition is posed by satellite master
antenna television systems known as "SMATV systems" serving multiple dwelling
units, referred to in the cable industry as "MDUs", such as condominiums,
apartment complexes, and private residential communities. These private cable
systems may enter into exclusive agreements with such MDUs, which may preclude
operators of franchise systems from serving residents of such private complexes.
Private cable systems can offer both improved reception of local television
stations and many of the same satellite-delivered program services which are
offered by cable systems. SMATV systems currently benefit from operating
advantages not available to franchised cable systems, including fewer regulatory
burdens and no requirement to service low density or economically depressed
communities. Exemption from regulation may provide a competitive advantage to
certain of our current and potential competitors. The FCC ruled in 1998 that
private cable operators can lease video distribution capacity from local
telephone companies and distribute cable programming services over public
rights-of-way without obtaining a cable franchise. In 1999, both the Fifth and
Seventh Circuit Courts of Appeals upheld this FCC policy.

WIRELESS DISTRIBUTION. Cable television systems also compete with
wireless program distribution services such as multi-channel multipoint
distribution systems or "wireless cable," known as MMDS. MMDS uses low-power
microwave frequencies to transmit television programming over-the-air to paying
customers. Wireless distribution services generally provide many of the
programming services provided by cable systems, and digital compression
technology is likely to increase significantly the channel capacity of their
systems. Both analog and digital MMDS services require unobstructed "line of
sight" transmission paths.

REGULATION AND LEGISLATION

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

The operation of a cable system is extensively regulated by the 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.

The 1996 Telecom Act required the FCC to undertake a host of
implementing rulemakings. Moreover, Congress and the FCC have frequently
revisited the subject of cable regulation. Future legislative and regulatory
changes could adversely affect the Joint Venture's operations.

CABLE RATE REGULATION. The 1992 Cable Act imposed an extensive rate
regulation regime on the cable television industry, which limited the ability of
cable companies to increase subscriber fees. Under that regime, all cable
systems were subjected to rate regulation, unless they faced "effective
competition" in their local franchise area. Federal law defines "effective
competition" on a community-specific basis as

- 10 -

requiring satisfaction of certain conditions. These conditions are not typically
satisfied in the current marketplace; hence, most cable systems potentially are
subject to rate regulation. However, with the rapid growth of DBS, it is likely
that additional cable systems will soon qualify for "effective competition" and
thereby avoid further rate regulation.

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

As of December 31, 2001, approximately 16% of our local franchising
authorities were certified to regulate basic tier rates. Because the 1992 Cable
Act permits communities to certify and regulate prices at any time, it is
possible that additional localities served by the systems may choose to certify
and regulate basic prices in the future.

For regulated cable systems, the basic service tier rate increases
are governed by a complicated price cap scheme devised by the FCC that allows
for the recovery of inflation and certain increased costs, as well as providing
some incentive for system upgrades. Operators also have the opportunity to
bypass this "benchmark" regulatory scheme in favor of traditional
"cost-of-service" regulation in cases where the latter methodology appears
favorable. Cost of service regulation is a traditional form of rate regulation,
under which a utility is allowed to recover its costs of providing the regulated
service, plus a reasonable profit.

With regard to cable programming service tiers, which are the
expanded basic programming packages that offer services other than basic
programming and which typically contain satellite-delivered programming, the FCC
historically administered rate regulation of these tiers. Under the 1996 Telecom
Act, however, the FCC's authority to regulate cable programming service tier
rates expired on March 31, 1999. The FCC still adjudicates cable programming
service tier complaints filed prior to that date, but strictly limits its
review, and possible refund orders, to the time period prior to March 31, 1999.
As of December 31, 2001, we had no cable programming service tier rate
complaints pending at the FCC. The elimination of cable programming service tier
regulation affords us substantially greater pricing flexibility.

Premium cable services offered on a per-channel or per-program basis
remain unregulated under both the 1992 Cable Act and the 1996 Telecom Act.
However, federal law requires that the basic service tier be offered to all
cable subscribers and limits the ability of operators to require purchase of any
cable programming service tier if a customer seeks to purchase premium services
offered on a per-channel or per-program basis, subject to a technology exception
which expires in October 2002. The 1996 Telecom Act also relaxes existing
"uniform rate" requirements by specifying that uniform rate requirements do not
apply where the operator faces "effective competition," and by exempting bulk
discounts to multiple dwelling units, although complaints about predatory
pricing still may be made to the FCC.

CABLE ENTRY INTO TELECOMMUNICATIONS AND POLE ATTACHMENT RATES. The
1996 Telecom Act creates a more favorable environment for us to provide
telecommunications services beyond traditional video delivery. It provides that
no state or local laws or regulations may prohibit or have the effect of
prohibiting any entity from providing any interstate or intrastate
telecommunications service. A cable operator is authorized under the 1996
Telecom Act to provide telecommunications services without obtaining a separate
local franchise. States are authorized, however, to impose "competitively
neutral" requirements regarding universal service, public safety and welfare,
service quality, and consumer protection. State and local governments also
retain their authority to manage the public rights-of-way and may require
reasonable,

- 11 -

competitively neutral compensation for management of the public rights-of-way
when cable operators provide telecommunications service. The favorable pole
attachment rates afforded cable operators under federal law can be gradually
increased by utility companies owning the poles if the operator provides
telecommunications service, as well as cable service, over its plant. The FCC
clarified that a cable operator's favorable pole rates are not endangered by the
provision of Internet access, and that approach ultimately was upheld by the
United States Supreme Court.

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

INTERNET SERVICE. Over the past several years, proposals have been
advanced at the FCC and Congress that would require cable operators to provide
non-discriminatory access to unaffiliated Internet service providers and online
service providers. Several local franchising authorities actually adopted
mandatory "open access" requirements, but various federal courts have rejected
each of these actions, relying on different legal theories.

In March 2002, the FCC ruled that cable modem service (that is, the
provision of high speed internet access over cable system infrastructure) is an
interstate information service, rather than a cable or telecommunications
service. This classification should leave cable modem service exempt from the
burdens associated with traditional cable and telecommunications regulation.
Indeed, the FCC tentatively concluded that revenue earned from the provision of
cable service is not subject to local cable franchise fee assessments. With
regard to the open access question, the FCC specifically held that, regardless
of classification, regulatory forbearance should now apply.

The full consequences of classifying cable modem service as an
interstate information service are not yet fully known. The FCC is already
considering whether providers of cable modem service should contribute to the
federal government's universal service fund. This contribution could more than
offset the savings associated with excluding cable modem service from local
franchise fee assessments. The FCC also initiated a rulemaking proceeding to
determine whether its jurisdiction over information services still might warrant
imposition of open access requirements in the future. Finally, the information
services classification itself is likely to be subject to judicial review. If
regulators ultimately were allowed to impose Internet access requirements on
cable operators, it could burden the capacity of cable systems and complicate
the Joint Venture's own plans for providing Internet service.

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

Under the 1996 Telecom Act, local exchange carriers or any other
cable competitor providing video programming to subscribers through broadband
wire should be regulated as a traditional cable operator, subject to local
franchising and federal regulatory requirements, unless the local exchange
carrier or other cable competitor elects to deploy its broadband plant as an
open video system. To qualify for favorable open video system status, the
competitor must reserve two-thirds of the system's activated channels for
unaffiliated

- 12 -

entities. Even then, the FCC revised its open video system policy
to leave franchising discretion to state and local authorities. It is unclear
what effect this ruling will have on the entities pursuing open video system
operation.

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

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

ADDITIONAL OWNERSHIP RESTRICTIONS. The 1996 Telecom Act eliminates
statutory restrictions on broadcast/cable cross-ownership, including broadcast
network/cable restrictions, but leaves in place existing FCC regulations
prohibiting local cross-ownership between co-located television stations and
cable systems. The District of Columbia Circuit Court of Appeals recently struck
down this remaining cross-ownership prohibition, concluding that the FCC had
failed to explain why its continuation was "necessary" in the public interest.
In the same decision, the Court struck down another FCC regulation precluding
any entity from operating broadcast television stations serving more than 35% of
the nation. If these rulings withstand further administrative and judicial
review, they may trigger additional consolidation among domestic media
companies.

Pursuant to the 1992 Cable Act, the FCC adopted rules precluding a
cable system from devoting more than 40% of its activated channel capacity to
the carriage of affiliated national video program services. Also pursuant to the
1992 Cable Act, the FCC adopted rules that preclude any cable operator from
serving more than 30% of all U.S. domestic multichannel video subscribers,
including cable and direct broadcast satellite subscribers. The D.C. Circuit
Court of Appeals struck down these vertical and horizontal ownership limits as
unconstitutional, concluding that the FCC had not adequately justified the
specific rules (i.e., the 40% and 30% figures) adopted. As a result, an existing
divestiture requirement on AT&T was suspended. The FCC is now considering
replacement regulations. These ownership restrictions may be affected by the
proposed merger of EchoStar and DirecTV and the proposed merger of AT&T
Broadband and Comcast Cable. These recently announced transactions involve the
nation's two largest DBS providers and the nation's largest and third largest
cable operators. The proposed combinations might prompt additional consolidation
in the cable industry and are likely to heighten regulatory concerns regarding
industry consolidation. Although any resulting restrictions could be limited to
the particular entities involved, it is also possible that the restrictions
would apply to other cable operators, including us.

MUST CARRY/RETRANSMISSION CONSENT. The 1992 Cable Act contains
broadcast signal carriage requirements. Broadcast signal carriage is the
transmission of broadcast television signals over a cable system to cable
customers. These requirements, among other things, allow local commercial
television broadcast stations to elect once every three years between "must
carry" status or "retransmission consent" status. Less popular stations
typically elect must carry, which is the broadcast signal carriage requirement
that allows local commercial television broadcast stations to require a cable
system to carry the station. More popular stations, such as those affiliated
with a national network, typically elect retransmission consent which is the
broadcast signal carriage requirement that allows local commercial television
broadcast stations to negotiate for

- 13 -

payments for granting permission to the cable operator to carry the stations.
Must carry requests can dilute the appeal of a cable system's programming
offerings because a cable system with limited channel capacity may be required
to forego carriage of popular channels in favor of less popular broadcast
stations electing must carry. Retransmission consent demands may require
substantial payments or other concessions. Either option has a potentially
adverse effect on our business. The burden associated with must carry may
increase substantially if broadcasters proceed with planned conversion to
digital transmission and the FCC determines that cable systems simultaneously
must carry all analog and digital broadcasts in their entirety. This burden
would reduce capacity available for more popular video programming and new
Internet and telecommunication offerings. The FCC tentatively decided against
imposition of dual digital and analog must carry in a January 2001 ruling. At
the same time, however, it initiated further fact-gathering which ultimately
could lead to a reconsideration of the tentative conclusion. The FCC is also
considering whether it should maintain its initial ruling that, whenever a
digital broadcast signal does become eligible for must carry, a cable operator's
obligation is limited to carriage of the primary video signal. If the Commission
reverses itself, and cable operators are required to carry ancillary digital
feeds, the burden associated with digital must carry could be significantly
increased.

ACCESS CHANNELS. Local franchising authorities can include franchise
provisions requiring cable operators to set aside certain channels for public,
educational and governmental access programming. Federal law also requires cable
systems to designate a portion of their channel capacity, up to 15% in some
cases, for commercial leased access by unaffiliated third parties. The FCC has
adopted rules regulating the terms, conditions and maximum rates a cable
operator may charge for commercial leased access use. We believe that requests
for commercial leased access carriages have been relatively limited. The FCC
rejected a request that unaffiliated Internet service providers be found
eligible for commercial leased access.

ACCESS TO PROGRAMMING. To spur the development of independent cable
programmers and competition to incumbent cable operators, the 1992 Cable Act
imposed restrictions on the dealings between cable operators and cable
programmers. Of special significance from a competitive business position, the
1992 Cable Act precludes video programmers affiliated with cable companies from
favoring their cable operators over new competitors and requires such
programmers to sell their satellite-delivered programming to other multichannel
video distributors. This provision limits the ability of vertically integrated
cable programmers to offer exclusive programming arrangements to cable
companies. This prohibition is scheduled to expire in October 2002, unless the
FCC determines in a pending proceeding that an extension is necessary to protect
competition and diversity. There also has been interest expressed in further
restricting the marketing practices of cable programmers, including subjecting
programmers who are not affiliated with cable operators to all of the existing
program access requirements, and subjecting terrestrially-delivered programming
(especially regional sports networks) to the program access requirements.
Terrestrially-delivered programming is programming delivered other than by
satellite and is currently exempt from the ban on exclusivity. These changes
should not have a dramatic impact on us, but would limit potential competitive
advantages we now enjoy. DBS providers have no similar restrictions on exclusive
programming contracts. Pursuant to the Satellite Home Viewer Improvement Act,
the FCC has adopted regulations governing retransmission consent negotiations
between broadcasters and all multichannel video programming distributors,
including cable and DBS.

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

- 14 -

satellite receiver antennae in multiple dwelling unit areas under the exclusive
occupancy of a renter. These developments may make it even more difficult for us
to provide service in multiple dwelling unit complexes.

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

- subscriber privacy,
- programming practices, including, among other things,

(1) blackouts of programming offered by a distant broadcast
signal carried on a cable system which duplicates the
programming for which a local broadcast station has
secured exclusive distribution rights,
(2) local sports blackouts,
(3) indecent programming,
(4) lottery programming,
(5) political programming,
(6) sponsorship identification,
(7) children's programming advertisements, and
(8) closed captioning,

- registration of cable systems and facilities licensing,
- maintenance of various records and public inspection files,
- aeronautical frequency usage,
- lockbox availability,
- antenna structure notification,
- tower marking and lighting,
- consumer protection and customer service standards,
- technical standards,
- equal employment opportunity,
- consumer electronics equipment compatibility,
- and emergency alert systems.

The FCC ruled that cable customers must be allowed to purchase
set-top terminals from third parties and established a multi-year phase-in
during which security functions (which would remain in the operator's exclusive
control) would be unbundled from basic converter functions, which could then be
provided by third party vendors. The first phase implementation date was July 1,
2000.

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

COPYRIGHT. Cable television systems are subject to federal copyright
licensing covering carriage of television and radio broadcast signals. In
exchange for filing certain reports and contributing a percentage of their
revenues to a federal copyright royalty pool that varies depending on the size
of the system, the number of distant broadcast television signals carried, and
the location of the cable system, cable operators can obtain blanket permission
to retransmit copyrighted material included in broadcast signals. The possible
modification or elimination of this compulsory copyright license is the subject
of continuing legislative review and could adversely affect our ability to
obtain desired broadcast programming. We cannot

- 15 -

predict the outcome of this legislative activity. Copyright clearances for
nonbroadcast programming services are arranged through private negotiations.

Cable operators distribute locally originated programming and
advertising that use music controlled by the two principal major music
performing rights organizations, the American Society of Composers, Authors and
Publishers and Broadcast Music, Inc. The cable industry has had a long series of
negotiations and adjudications with both organizations. Although we cannot
predict the ultimate outcome of these industry proceedings or the amount of any
license fees we may be required to pay for past and future use of
association-controlled music, we do not believe such license fees will be
significant to our business and operations.

STATE AND LOCAL REGULATION. Cable systems generally are operated
pursuant to nonexclusive franchises granted by a municipality or other state or
local government entity in order to cross public rights-of-way. Federal law now
prohibits local franchising authorities from granting exclusive franchises or
from unreasonably refusing to award additional franchises. Cable franchises
generally are granted for fixed terms and in many cases include monetary
penalties for non-compliance and may be terminable if the franchisee fails to
comply with material provisions.

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

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

Under the 1996 Telecom Act, states and local franchising authorities
are prohibited from limiting, restricting, or conditioning the provision of
competitive telecommunications services, except for certain "competitively
neutral" requirements and as necessary to manage the public rights-of-way. This
law should facilitate entry into competitive telecommunications services,
although certain jurisdictions still may attempt to impose rigorous entry
requirements. In addition, local franchising authorities may not require a cable
operator to provide any telecommunications service or facilities, other than
institutional networks under certain circumstances, as a condition of an initial
franchise grant, a franchise renewal, or a franchise transfer. The 1996 Telecom
Act also provides that franchising fees are limited to an operator's
cable-related revenues and do not apply to revenues that a cable operator
derives from providing new telecommunications services. In a March 2002
decision, the FCC tentatively held that a cable operator's provision of Internet
access service should not subject the operator to additional franchising
requirements nor should the revenue derived from such service be subject to
local franchise fee assessments.

Additional regulatory policies may be added in the future. The
Federal Communications Commission recently initiated an inquiry to determine
whether the cable industry's future provision of interactive

- 16 -

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

EMPLOYEES

The Joint Venture has 13 employees. The various personnel required
to operate the Joint Venture's business are employed by Joint Venture, the
Corporate General Partner, its subsidiary corporation and Charter. The
employment costs incurred by the Corporate General Partner, its subsidiary
corporation and Charter are allocated and charged to the Joint Venture for
reimbursement pursuant to the Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") and the management agreement between
the Joint Venture and Enstar Cable Corporation (the "Management Agreement"). The
amounts of these reimbursable costs are set forth in Item 11. "Executive
Compensation."

ITEM 2. PROPERTIES

The Joint Venture owns or leases parcels of real property for signal
reception sites (antenna towers and headends), microwave facilities and business
offices, and own or lease our service vehicles. The Joint Venture believes that
its properties, both owned and leased, are in good condition and are suitable
and adequate for our business operations. The Joint Venture owns substantially
all of the assets related to our cable television operations, including our
program production equipment, headend (towers, antennas, electronic equipment
and satellite earth stations), cable plant (distribution equipment, amplifiers,
customer drops and hardware), converters, test equipment and tools and
maintenance equipment.

ITEM 3. LEGAL PROCEEDINGS

The Partnership and Joint Venture are involved from time to time in
routine legal matters and other claims incidental to their business. The
Partnership and Joint Venture believe that the resolution of such matters will
not have a material adverse impact on their financial position or results of
operations.

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

None.

- 17 -

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S EQUITY SECURITIES AND RELATED SECURITY
HOLDER MATTERS

LIQUIDITY

While our equity securities, which consist of units of limited
partnership interests, are publicly held, there is no established public trading
market for the units and we do not expect that a market will develop. The
approximate number of equity security holders of record was 1,254 as of December
31, 2000. In addition to restrictions on the transferability of units described
in our Partnership Agreement, the transferability of units may be affected by
restrictions on resales imposed by federal or state law.

DISTRIBUTIONS

The amended Partnership Agreement generally provides that all cash
distributions (as defined) be allocated 1% to the General Partners and 99% to
the Limited Partners until the Limited Partners have received aggregate cash
distributions equal to their original capital contributions ("Capital Payback").
The Partnership Agreement also provides that all partnership profits, gains,
operational losses, and credits (all as defined) be allocated 1% to the General
Partners and 99% to the Limited Partners until the Limited Partners have been
allocated net profits equal to the amount of cash flow required for Capital
Payback. After the Limited Partners have received cash flow equal to their
initial investments, the General Partners will only receive a 1% allocation of
cash flow from sale or liquidation of a system until the Limited Partners have
received an annual simple interest return of at least 10% of their initial
investments less any distributions from previous system sales or refinancing of
systems. Thereafter, the respective allocations will be made 20% to the General
Partners and 80% to the Limited Partners. Any losses from system sales or
exchanges shall be allocated first to all partners having positive capital
account balances (based on their respective capital accounts) until all such
accounts are reduced to zero and thereafter to the Corporate General Partner.
All allocations to individual Limited Partners will be based on their respective
limited partnership ownership interests.

Upon the disposition of substantially all of the Partnership's
assets, gains shall be allocated first to the Limited Partners having negative
capital account balances until their capital accounts are increased to zero,
next equally among the General Partners until their capital accounts are
increased to zero, and thereafter as outlined in the preceding paragraph. Upon
dissolution of the Partnership, any negative capital account balances remaining
after all allocations and distributions are made must be funded by the
respective partners.

The policy of the Corporate General Partner, although not recognized
by the terms of the Partnership Agreement, is to cause the Partnership to make
cash distributions on a quarterly basis throughout the operational life of the
Partnership, assuming the availability of sufficient cash flow from the Joint
Venture operations. The amount of such distributions, if any, will vary from
quarter to quarter depending upon the Joint Venture's results of operations and
the Corporate General Partner's determination of whether otherwise available
funds are needed for the Joint Venture's ongoing working capital and liquidity
requirements.

We began making periodic cash distributions to the Limited Partners
from operations in February 1988 and continued through March 1990. The
distributions were funded primarily from distributions received by the
Partnership from the Joint Venture. No distributions were made during 2001,
2000, or 1999.

Our ability to pay distributions in the future and the actual amount
of any such distributions paid depends on a number of factors, including: the
amount of cash flow from operations, projected capital expenditures, provision
for contingent liabilities, availability of financing, regulatory or legislative
developments governing the cable television industry, sale of cable system
assets and growth in customers. Some of these factors are beyond our control,
and consequently, we cannot make assurances regarding the

- 18 -

level or timing of future distributions, if any. However, because management
believes it is critical to conserve cash and borrowing capacity to fund
anticipated capital expenditures, the Partnership does not anticipate a
resumption of distributions to unitholders at this time. See Item 7.,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

ITEM 6. SELECTED FINANCIAL DATA

The table below presents selected financial data of the Partnership
and of the Joint Venture for the five years ended December 31, 2001. This data
should be read in conjunction with the Partnership's and Joint Venture's
financial statements included in Item 8. "Financial Statements and Supplementary
Data" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included in Item 7.

I. THE PARTNERSHIP

YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------
OPERATIONS STATEMENT DATA 2001 2000 1999 1998 1997
------------ ------------ ------------ ------------ ------------

Operating expenses $ (61,000) $ (102,400) $ (41,600) $ (23,300) $ (29,900)
Interest expense -- -- (200) (2,500) (2,900)
Equity in net income (loss) of joint
venture 62,200 285,600 199,200 272,000 (41,100)
------------ ------------ ------------ ------------ ------------

Net income (loss) $ 1,200 $ 183,200 $ 157,400 $ 246,200 $ (73,900)
============ ============ ============ ============ ============

PER UNIT OF LIMITED PARTNERSHIP
INTEREST:

Net income (loss) $ 0.02 $ 3.03 $ 2.60 $ 4.07 $ (1.22)
============ ============ ============ ============ ============

OTHER OPERATING DATA

Net cash from operating activities $ (3,500) $ (14,700) $ (44,900) $ (31,700) $ (31,100)
Net cash from investing activities -- -- 64,000 28,500 30,000

AS OF DECEMBER 31,
--------------------------------------------------------------------------------
BALANCE SHEET DATA 2001 2000 1999 1998 1997
------------ ------------ ------------ ------------ ------------

Total assets $ 4,950,500 $ 4,891,800 $ 4,620,900 $ 4,446,600 $ 4,226,300
General Partners' deficit (76,000) (76,000) (77,800) (79,400) (81,900)
Limited Partners' capital $ 4,875,500 $ 4,874,300 $ 4,692,900 $ 4,537,100 $ 4,293,400

- 19 -

II. ENSTAR CABLE OF CUMBERLAND VALLEY

Revenues $ 6,587,400 $ 6,539,500 $ 6,780,200 $ 7,075,400 $ 7,217,900
Operating expenses (4,583,700) (4,116,600) (4,413,500) (4,018,600) (4,127,100)
Depreciation and amortization (1,897,200) (1,841,400) (1,824,500) (2,085,200) (2,672,700)
------------ ------------ ------------ ------------ ------------

Operating income 106,500 581,500 542,200 971,600 418,100

Interest income 90,200 43,900 37,600 45,300 78,300
Interest expense (3,400) (45,200) (181,400) (257,300) (578,600)
Casualty loss -- -- -- (215,600) --
Other expense (68,900) (9,000) -- -- --
------------ ------------ ------------ ------------ ------------

Net income (loss) $ 124,400 $ 571,200 $ 398,400 $ 544,000 $ (82,200)
============ ============ ============ ============ ============

Distributions paid to venturers $ -- $ -- $ 128,000 $ 57,000 $ 60,000
============ ============ ============ ============ ============

OTHER OPERATING DATA

Net cash from operating activities $ 2,924,500 $ 1,820,100 $ 2,162,800 $ 2,890,500 $ 2,939,300
Net cash from investing activities (856,600) (567,800) (570,100) (1,794,300) (622,200)
Net cash from financing activities -- -- (1,128,000) (1,661,800) (3,661,000)
EBITDA(1) (Unaudited) 1,934,800 2,413,900 2,366,700 3,056,800 3,090,800
EBITDA as a percentage of revenues
(Unaudited) 29.4% 36.9% 34.9% 43.2% 42.8%
Total debt to EBITDA (Unaudited) -- -- -- 0.3x 0.8x

Capital expenditures $ 818,400 $ 547,600 $ 558,600 $ 1,768,700 $ 610,800

Total assets $ 11,317,400 $ 10,655,600 $ 10,521,800 $ 11,229,800 $ 12,392,100
Total debt -- -- -- 1,000,000 2,600,000
Venturers' capital $ 9,898,800 $ 9,774,400 $ 9,203,200 $ 8,932,800 $ 8,445,800

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

- 20 -

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

INTRODUCTION

The 1992 Cable Act required the FCC to, among other things,
implement extensive regulation of the prices charged by cable television systems
for basic and premium service tiers, installation, and equipment leased by
customers. Compliance with those price regulations has had a negative impact on
our revenues and cash flow. The 1996 Telecommunications Act substantially
changed the competitive and regulatory environment for cable television and
telecommunications service providers. Among other changes, the 1996
Telecommunications Act ended the regulation of cable programming service tier
rates on March 31, 1999. There can be no assurance as to what, if any, further
action may be taken by the FCC, Congress or any other regulatory authority or
court, or their effect on our business. Accordingly, our historical financial
results as described below are not necessarily indicative of future performance.

This annual report includes certain forward-looking statements
regarding, among other things, our future results of operations, regulatory
requirements, competition, capital needs and general business conditions
applicable to the Partnership. Such forward-looking statements involve risks and
uncertainties including, without limitation, the uncertainty of legislative and
regulatory changes and the rapid developments in the competitive environment
facing cable television operators such as the Partnership, as discussed more
fully elsewhere in this Report.

RESULTS OF OPERATIONS

THE PARTNERSHIP

All of our cable television business operations, which began in
January 1988, are conducted through our participation as a partner in the Joint
Venture. The Joint Venture distributed an aggregate of $64,000 to us during
1999, representing our pro rata (i.e., 50%) share of the cash flow distributed
from the Joint Venture's operations. The Joint Venture did not pay distributions
in 2001 or 2000. We did not pay distributions to our partners during 2001, 2000,
or 1999.

We used $11,200 less cash in operating activities during the year
ended December 31, 2001 than in 2000. Our expenses used $41,400 less cash in
2001. These changes were partially offset by a decline in our equity in net
income of the Joint Venture. Changes in accounts payable provided $30,200 less
cash in 2001 due to differences in the timing of payments.

We used $30,200 less cash in operating activities during the year
ended December 31, 2000 than in 1999. Our expenses used $60,600 more cash in
2000. Changes in accounts payable used $90,800 more cash in 2000 due to
differences in the timing of payments. Cash from investing activities decreased
by $64,000 due to decreased distributions from the Joint Venture.

THE JOINT VENTURE

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

The Joint Venture's revenues increased $47,900 from $6,539,500 to
$6,587,400, or less than one percent, for the year ended December 31, 2001 as
compared to 2000. The increase was primarily due to an increase in customer fees
offset by a decrease in the number of customers. As of December 31, 2001 and
2000, the Joint Venture had approximately 14,000 and 15,500 basic customers and
3,400 and 4,400 premium service units, respectively.

The Joint Venture reimburses the Corporate General Partner and its
affiliates for service costs and general and administrative expenses based on
actual costs incurred on behalf of the Joint Venture. These reimbursed costs are
included in general partner management fees and reimbursed expenses on the Joint

- 21 -

Venture's statements of operations. The total of service costs, general and
administrative expenses and general partner management fees and reimbursed
expenses increased $467,100, or 11.3%, from $4,116,600 to $4,583,700 for the
year ended December 31, 2001 as compared to 2000.

Service costs increased $385,400 from $1,962,400 to $2,347,800, or
19.6%, for the year ended December 31, 2001 as compared to 2000. Service costs
represent costs directly attributable to providing cable services to customers.
The increase is primarily due to increases in programming fees as a result of
higher prices coupled with an increase in employees at the Joint Venture level.

General and administrative expenses increased $305,400 from $741,800
to $1,047,200, or 41.2%, for the year ended December 31, 2001 as compared to
2000. The increase is primarily due to an increase in employees resulting in the
Joint Venture recording less reimbursable costs.

General partner management fees and reimbursed expenses decreased
$223,700 from $1,412,400 to $1,188,700, or 15.8%, for the year ended December
31, 2001 as compared to 2000. The decrease is primarily due to an increase in
employees at the Joint Venture level resulting in the Joint Venture recording
less reimbursable costs.

Depreciation and amortization expense increased $55,800 from
$1,841,400 to $1,897,200, or 3.0%, for the year ended December 31, 2001 as
compared to 2000, due to increased capital expenditures during 2001.

Due to the factors described above, the Joint Venture's operating
income decreased $475,000 from $581,500 to $106,500, or 81.7%, for the year
ended December 31, 2001 as compared to 2000.

Interest income increased $46,300 from $43,900 to $90,200, or
105.5%, for the year ended December 31, 2001 as compared to 2000, due to higher
average cash balances available for investment in 2001.

Interest expense decreased $41,800 from $45,200 to $3,400, or 92.5%,
for the year ended December 31, 2001 as compared to 2000, primarily due to the
expiration of the loan facility on August 31, 2001.

Other expense of $68,900 and $9,000 for the year ended December 31,
2001 and 2000, respectively, consisted of legal and proxy costs associated with
the proposed sale of the Joint Venture's assets.

Due to the factors described above, the Joint Venture's net income
decreased $446,800 from $571,200 to $124,400, or 78.2%, for the year ended
December 31, 2001 as compared to 2000.

Based on its experience in the cable television industry, the Joint
Venture believes that earnings before interest, income taxes, depreciation and
amortization, or EBITDA, and related measures of cash flow serve as important
financial analysis tools for measuring and comparing cable television companies
in several areas, such as liquidity, operating performance and leverage. EBITDA
is not a measurement determined under GAAP and does not represent cash generated
from operating activities in accordance with GAAP. EBITDA should not be
considered by the reader as an alternative to net income, as an indicator of
financial performance or as an alternative to cash flows as a measure of
liquidity. In addition, the definition of EBITDA may not be identical to
similarly titled measures used by other companies. Due to the factors described
above, EBITDA decreased $479,100 from $2,413,900 to $1,934,800, or 19.8%. EBITDA
as a percentage of revenues decreased 7.5% from 36.9% during 2000 to 29.4% in
2001.

Operating activities provided $1,104,400 more cash during the year
ended December 31, 2001 than in 2000. Changes in receivables, prepaid expenses
and other assets provided $27,800 more cash in 2001 due to differences in the
timing of receivable collections and in the payment of prepaid expenses. Changes
in

- 22 -

accounts payable, accrued liabilities and due to/from liabilities provided
$1,467,600 more cash in 2001 than in 2000 due to differences in the timing of
payments.

We used $288,800 more cash in investing activities during 2001 than
in 2000, due to a $270,800 increase in capital expenditures and a $18,000
increase in spending for intangible assets.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

The Joint Venture's revenues decreased $240,700 from $6,780,200 to
$6,539,500, or 3.6%, for the year ended December 31, 2000 as compared to 1999.
Of the decrease, $252,000 was due to decreases in the number of subscriptions
for basic, premium, tier and equipment rental services and $38,600 was due to
decreases in other revenue producing items. These decreases were partially
offset by an increase of $49,900 due to increases in regulated prices that were
implemented by the Joint Venture in 2000. As of December 31, 2000 and 1999, the
Joint Venture had approximately 15,500 and 15,100 basic customers and 4,400 and
2,300 premium service units, respectively.

Effective with the acquisition of the Corporate General Partner and
certain affiliates by Charter on November 12, 1999, certain activities
previously performed by the Joint Venture and expensed through service cost and
general and administrative expenses have been either eliminated by Charter, or
have been performed by Charter and then been reimbursed by the Joint Venture
based on Charter's costs incurred. These reimbursed costs are included in
general partner management fees and reimbursed expenses on the Joint Venture's
statements of operations. The total of service costs, general and administrative
expenses and general partner management fees and reimbursed expenses decreased
$296,900, or 6.7%, from $4,413,500 to $4,116,600 for the year ended December 31,
2000 as compared to 1999.

Service costs decreased $856,800 from $2,819,200 to $1,962,400, or
30.4%, for the year ended December 31, 2000 as compared to 1999. Service costs
represent costs directly attributable to providing cable services to customers.
The decrease is primarily due to decreases in programming fees, personnel costs
and certain costs incurred by the Joint Venture prior to the Charter acquisition
that are now incurred by Charter and reimbursed by the Joint Venture, as
described above. Programming fees decreased as a result of lower prices that
Charter has extended to us and a decrease in customers.

General and administrative expenses decreased $273,900 from
$1,015,700 to $741,800, or 27.0%, for the year ended December 31, 2000 as
compared to 1999. As described above, Charter now performs certain management
and operational functions formerly performed by the Joint Venture. This has
resulted in more reimbursable costs and lower service costs and general and
administrative expenses.

General partner management fees and reimbursed expenses increased
$833,800 from $578,600 to $1,412,400, or 144.1%, for the year ended December 31,
2000 as compared to 1999. General partner management fees decreased in direct
relation to decreased revenues as described above. As described above, Charter
now performs certain management and operational functions formerly performed by
the Joint Venture. This has resulted in more reimbursable costs and lower
service costs and general and administrative expenses.

Depreciation and amortization expense increased $16,900 from
$1,824,500 to $1,841,400, or less than 1.0%, for the year ended December 31,
2000 as compared to 1999, due to additional depreciation related to capital
expenditures in the third quarter.

Due to the factors described above, the Joint Venture's operating
income increased $39,300 from $542,200 to $581,500, or 7.2%, for the year ended
December 31, 2000 as compared to 1999.

Interest income increased $6,300 from $37,600 to $43,900, or 16.8%,
for the year ended December 31, 2000 as compared to 1999, due to higher average
cash balances available for investment in 2000.

- 23 -

Interest expense decreased $136,200 from $181,400 to $45,200, or
75.1%, for the year ended December 31, 2000 as compared to 1999, primarily due
to no borrowings outstanding in 2000 and the reclassification of certain bank
charges from interest expense to general and administrative expense.

Other expense of $9,000 for the year ended December 31, 2000,
consisted of legal and proxy costs associated with the proposed sale of the
Joint Venture's assets.

Due to the factors described above, the Joint Venture's net income
increased $172,800 from $398,400 to $571,200, or 43.4%, for the year ended
December 31, 2000 as compared to 1999.

Based on its experience in the cable television industry, the Joint
Venture believes that earnings before interest, income taxes, depreciation and
amortization, or EBITDA, and related measures of cash flow serve as important
financial analysis tools for measuring and comparing cable television companies
in several areas, such as liquidity, operating performance and leverage. EBITDA
is not a measurement determined under GAAP and does not represent cash generated
from operating activities in accordance with GAAP. EBITDA should not be
considered by the reader as an alternative to net income, as an indicator of
financial performance or as an alternative to cash flows as a measure of
liquidity. In addition, the definition of EBITDA may not be identical to
similarly titled measures used by other companies. Due to the factors described
above, EBITDA decreased $47,200 from $2,366,700 to $2,413,900, or 2.0%. EBITDA
as a percentage of revenues increased 2.0% from 34.9% during 1999 to 36.9% in
2000.

Operating activities provided $342,700 less cash during the year
ended December 31, 2000 than in 1999. Changes in receivables, prepaid expenses
and other assets provided $213,600 more cash in 2000 due to differences in the
timing of receivable collections and in the payment of prepaid expenses. Changes
in accounts payable, accrued liabilities and due to/from liabilities used
$705,300 more cash in 2000 than in 1999 due to differences in the timing of
payments.

We used $2,300 less cash in investing activities during 2000 than in
1999 due to a $11,000 decrease in capital expenditures and a $8,700 increase in
spending for intangible assets.

We used $1,128,000 less cash in financing activities during 2000
than in 1999 due to distributions to venturers of $128,000 and a $1,000,000
repayment of borrowings in 1999.

DISTRIBUTIONS BY THE CUMBERLAND VALLEY JOINT VENTURE

The Joint Venture did not pay distributions in 2001 or 2000. The
Joint Venture distributed $128,000 equally between its two partners during 1999.

LIQUIDITY AND CAPITAL RESOURCES

Our primary objective, having invested our net offering proceeds in
the Joint Venture, is to distribute to our partners distributions of cash flow
received from the Joint Venture's operations and proceeds from the sale of the
Joint Venture's cable television systems, if any, after providing for expenses,
debt service and any planned capital requirements relating to the expansion,
improvement and upgrade of such cable television systems.

We believe that cash generated by operations of the Joint Venture
will be adequate to fund capital expenditures, debt service and other liquidity
requirements in 2002 and beyond. See "Results of Operations" for discussion
regarding cash from operating, investing and financing activities.

- 24 -

PROPOSED SALE OF ASSETS

In 1999, the Corporate General Partner sought purchasers for all of
the cable television systems of the Partnership, as well as 13 other, affiliated
limited partnership cable operators of which the Corporate General Partner is
also the general partner. This effort was undertaken primarily because, based on
the Corporate General Partner's experience in the cable television industry, it
was concluded that generally applicable market conditions and competitive
factors were making (and would increasingly make) it extremely difficult for
smaller operators of rural cable systems (such as the Partnership and the other
affiliated partnerships) to effectively compete and be financially successful.
This determination was based on the anticipated cost of electronics and
additional equipment to enable the Joint Venture's systems to operate on a
two-way basis with improved technical capacity, insufficiency of Joint Venture
cash reserves and cash flows from operations to finance such expenditures,
limited customer growth potential due to the Joint Venture's systems' rural
location, and a general inability of a small cable system operator such as the
Joint Venture to benefit from economies of scale and the ability to combine and
integrate systems that large cable operators have. Although certain limited
upgrades have been made, the Corporate General Partner projected that if the
Joint Venture made the additional comprehensive upgrades deemed necessary, the
Joint Venture would not recoup the costs or regain its ability to operate
profitably within the remaining term of its franchises, and as a result, making
these upgrades would not be economically prudent.

Following termination of the Gans Agreement, the broker once again
attempted to market the Joint Venture's systems. At the time of this filing,
there is no definitive agreement to purchase any of the systems and the broker
continues to market the systems on behalf of the Joint Venture.

INVESTING ACTIVITIES

The Joint Venture relies upon the availability of cash generated
from operations and possible borrowings to fund its ongoing expenses, debt
service and capital requirements. The Joint Venture was required to upgrade its
system in Campbell County, Tennessee, under a provision of its franchise
agreement. The upgrade began in 1998 and the franchise agreement required the
project to be completed by January 2000. The Joint Venture did not meet this
requirement, although the project has subsequently been completed at a total
cost of approximately $1,385,000. Under this upgrade initiative, no additional
capital expenditures are currently planned. The franchising authority has not
given any indication that it intends to take action adverse to the Joint Venture
as the result of the Joint Venture's noncompliance with the upgrade timing
requirements of the franchise agreement. However, no assurances can be given
that the franchising authority will not take action that is adverse to the Joint
Venture. The Joint Venture spent approximately $818,400 and $547,600 in the
years ended December 31, 2001 and 2000, respectively, for plant extensions, new
equipment and system upgrades. Minimal capital spending is planned for 2002 to
upgrade additional plant assets and equipment.

- 25 -

FINANCING ACTIVITIES

The Joint Venture was party to a loan agreement with Enstar Finance
Company, LLC, a subsidiary of Enstar Communications Corporation ("ECC") that
matured on August 31, 2001. The loan facility was not extended or replaced and
any amounts outstanding under the facility were paid in full. Cash generated by
operations of the Joint Venture, together with available cash balances will be
used to fund capital expenditures as required by franchise authorities. However,
the Joint Venture's cash reserves will be insufficient to fund a comprehensive
upgrade program. If the Joint Venture's systems are not sold, it will need to
rely on increased cash flow from operations or new sources of financing in order
to meet its future liquidity requirements and complete its planned upgrade
program. There can be no assurance that such cash flow increases can be
attained, or that additional future financing will be available on terms
acceptable to the Joint Venture. If the Joint Venture is not able to attain such
cash flow increases, or obtain new sources of borrowings, it will not be able to
fully complete its cable systems upgrades. As a result, the value of the Joint
Venture's systems would likely be lower than that of systems built to a higher
technical standard.

The Joint Venture believes it is critical to conserve cash to fund
its anticipated capital expenditures. Accordingly, the Partnership does not
anticipate any distributions to partners at this time.

CERTAIN TRENDS AND UNCERTAINTIES

Insurance coverage is maintained for all of the cable television
properties owned or managed by Charter to cover damage to cable distribution
systems, customer connections and against business interruptions resulting from
such damage. This coverage is subject to a significant annual deductible which
applies to all of the cable television properties owned or managed by Charter,
including those of the Joint Venture.

Although we do not believe that the terrorist attacks on September
11, 2001 and the related events have resulted in any material changes to its
business and operations to date, it is difficult to assess the impact that these
events, combined with the general economic slowdown, will have on future
operations. These events could result in reduced spending by customers and
advertisers, which could reduce the Partnership's revenues and operating cash
flow, as well as the collectibility of accounts receivable.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations", No. 142, "Goodwill and Other Intangible Assets" and No. 143,
"Accounting for Asset Retirement Obligations." SFAS No. 141 requires all
business combinations initiated after June 30, 2001 to be accounted for using
the purchase method of accounting and was adopted by the Partnership and Joint
Venture on July 1, 2001. Management believes that adoption of SFAS No. 141 did
not have an impact on the financial statements of the Partnership or Joint
Venture.

Under SFAS No. 142, goodwill and other indefinite lived intangible
assets are no longer subject to amortization over their useful lives, rather,
they are subject to at least annual assessments for impairment. Also, under SFAS
No. 142, an intangible asset should be recognized if the benefit of the
intangible asset is obtained through contractual or other legal rights or if the
intangible asset can be sold, transferred, licensed, rented or exchanged. Such
intangibles continue to be amortized over their useful lives. SFAS 142 was
implemented by the Partnership and Joint Venture on January 1, 2002. Management
believes that adoption of SFAS No. 142 did not have a material impact on the
financial statements of the Partnership or

- 26 -

Joint Venture.

Under SFAS No. 143, the fair value of a liability for an asset
retirement obligation is required to be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset. SFAS No. 143 will be implemented by the Partnership and Joint
Venture on January 1, 2002. Management believes that adoption of SFAS No. 143
will not have a material impact on the financial statements of the Partnership
or Joint Venture.

In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "Accounting for the Impairment of Disposal of Long-Lived Assets." SFAS
No. 144 addresses financial accounting and reporting for the impairment of
long-lived assets and for long-lived assets to be disposed of and supersedes
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." SFAS No. 144 establishes a single
accounting model for long-lived assets to be disposed of by sale and resolves
implementation issues related to SFAS No. 121. SFAS No. 144 was implemented by
the Partnership and Joint Venture on January 1, 2002. The Partnership and Joint
Venture are currently in process of assessing the impact of adoption of SFAS No.
144. See "Proposed Sale of Assets."

INFLATION

Certain of the Joint Venture's expenses, such as those for wages and
benefits, equipment repair and replacement, and billing and marketing generally
increase with inflation. However, we do not believe that our financial results
have been, or will be, adversely affected by inflation in a material way,
provided that the Joint Venture is able to increase its prices periodically, of
which there can be no assurance. See "Regulation and Legislation."

ITEM 7(A). QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not exposed to material significant risks associated with
financial instruments.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The index to the financial statements and related financial
information required to be filed hereunder is located on Page F-1.

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

Previously reported in Current Report on Form 8-K, dated July 18,
2000.

- 27 -

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The General Partners of the Partnership may be considered, for
certain purposes, the functional equivalents of directors and executive
officers. The Corporate General Partner is ECC, and Robert T. Graff, Jr. is the
Individual General Partner. As part of Falcon Cablevision's September 30, 1988,
acquisition of the Corporate General Partner, Falcon Cablevision received an
option to acquire Mr. Graff's interest as Individual General Partner of the
Partnership and other affiliated cable limited partnerships that he previously
co-sponsored with the Corporate General Partner, and Mr. Graff received the
right to cause Falcon Cablevision to acquire such interests. These arrangements
were modified and extended in an amendment dated September 10, 1993, pursuant to
which, among other things, the Corporate General Partner obtained the option to
acquire Mr. Graff's interest in lieu of the purchase right described above which
had been previously granted to Falcon Cablevision. Since its incorporation in
Georgia in 1982, the Corporate General Partner has been engaged in the
cable/telecommunications business, both as a general partner of 14 limited
partnerships formed to own and operate cable television systems and through a
wholly-owned operating subsidiary.

The directors and executive officers of the Corporate General
Partner as of March 15, 2002, all of whom have their principal employment in a
comparable position with Charter, are named below:

NAME POSITION
- ---- --------

Carl E. Vogel President and Chief Executive Officer

David G. Barford Executive Vice President and Chief Operating Officer

Kent D. Kalkwarf Executive Vice President and Chief Financial Officer

Steven A. Schumm Director of the Corporate General Partner, Executive Vice
President and Assistant to the President

Steven E. Silva Executive Vice President - Corporate Development and Chief
Technology Officer

David C. Andersen Senior Vice President - Communications

J. Christian Fenger Senior Vice President of Operations - Western Division

Eric A. Freesmeier Senior Vice President - Administration

Thomas R. Jokerst Senior Vice President - Advanced Technology Development

Ralph G. Kelly Senior Vice President - Treasurer

David L. McCall Senior Vice President of Operations - Eastern Division

Majid R. Mir Senior Vice President - Telephony and Advanced Services

John C. Pietri Senior Vice President - Engineering

Michael E. Riddle Senior Vice President and Chief Information Officer

William J. Senior Vice President of Operations - Midwest Division
Schreffler

Curtis S. Shaw Senior Vice President, General Counsel and Secretary

Paul E. Martin Vice President, Corporate Controller and Principal Financial
Officer for Partnership Matters

Except for above-named executive officers who joined Charter after
November 1999, such officers were appointed to their position with the Corporate
General Partner following Charter's acquisition of control in November 1999,
have been employees of Charter since November 1999, and immediately prior to

- 28 -

November 1999, were employees of Charter Investment, Inc., an affiliate of
Charter and the Corporate General Partner.

CARL E. VOGEL, 44, President and Chief Executive Officer. Mr. Vogel has more
than 20 years of experience in telecommunications and the subscription
television business. Prior to joining Charter in October 2001, he was a Senior
Vice President of Liberty Media Corp., from November 1999 to October 2001, and
Chief Executive Officer of Liberty Satellite and Technology, from April 2000 to
October 2000. Prior to joining Liberty, Mr. Vogel was an Executive Vice
President and Chief Operating Officer of Field Operations for AT&T Broadband and
Internet Services, with responsibility of managing operations of all of AT&T's
cable broadband properties, from June 1999 to November 1999. From June 1998 to
June 1999, Mr. Vogel served as Chief Executive Officer of Primestar, Inc., a
national provider of subscription television services, and from 1997 to 1998, he
served as Chief Executive Officer of Star Choice Communications. From 1994
through 1997, Mr. Vogel served as the President and Chief Operating Officer of
EchoStar Communications. He began his career at Jones Intercable in 1983. Mr.
Vogel serves as a director of OnCommand Corporation, and holds a B.S. degree in
finance and accounting from St. Norbert College.

DAVID G. BARFORD, 43 Executive Vice President and Chief Operating Officer. Mr.
Barford was promoted to his current position in July 2000, having previously
served as Senior Vice President of Operations-Western Division from June 1997 to
July 2000. Prior to joining Charter Investment (an affiliate of Charter) in
1995, Mr. Barford held various senior marketing and operating roles during nine
years at Comcast Cable Communications, Inc. He received a B.A. degree from
California State University, Fullerton, and an M.B.A. from National University.

KENT D. KALKWARF, 42 Executive Vice President and Chief Financial Officer. Mr.
Kalkwarf was promoted to the position of Executive Vice President in July 2000,
having previously served as Senior Vice President. Prior to joining Charter
Investment in 1995, Mr. Kalkwarf was employed for 13 years by Arthur Andersen
LLP, where he attained the position of senior tax manager. He has extensive
experience in cable, real estate, and international tax issues. Mr. Kalkwarf has
a B.S. degree from Illinois Wesleyan University and is a certified public
accountant.

STEVEN A. SCHUMM, 49 Director of the Corporate General Partner, Executive Vice
President and Assistant to the President. Prior to joining Charter Investment in
1998, Mr. Schumm was Managing Partner of the St. Louis office of Ernst & Young
LLP for 14 years. He had joined Ernst & Young in 1974. He served as one of 10
members of the firm's National Tax Committee. Mr. Schumm earned a B.S. degree
from Saint Louis University.

STEVEN E. SILVA, 42 Executive Vice President - Corporate Development and Chief
Technology Officer. Mr. Silva joined Charter Investment in 1995. Prior to his
promotion to Executive Vice President and Chief Technology Officer in October
2001, he was Senior Vice President - Corporate Development and Technology since
September 1999. Mr. Silva previously served in various management positions at
U.S. Computer Services, Inc., a billing service provider specializing in the
cable industry. He is a member of the board of directors of Diva Systems
Corporation.

DAVID C. ANDERSEN, 53 Senior Vice President - Communications. Mr. Andersen was
named to his current position in May 2000. Prior to this, he was Vice President
of Global Communications for CNBC, the worldwide cable and satellite business
news network subsidiary of NBC, from September 1999 through April 2000. He
worked for Cox communications, Inc. from 1982 to 1999, establishing their
communications department and advancing to Vice President of Public Affairs. He
held various management positions in communications with the General Motors
Corporation from 1971 to 1982. Mr. Andersen is a past recipient of the cable
industry's highest honor - the Vanguard Award. He serves on the Board of
KIDSNET, the educational non-profit clearinghouse of children's programming, and
is a former Chairman of the National Captioning Institute's Cable Advisory
Board.

J. CHRISTIAN FENGER, 46 Senior Vice President of Operations - Western Division.
Mr. Fenger was promoted to his current position in January 2002, having served
as Vice President and Senior Vice President of

- 29 -

Operations for our North Central Region since 1998. From 1992 until joining us
in 1998, Mr Fenger served as the Vice President of Operations for Marcus Cable,
and, prior to that, as Regional Manager of Simmons Cable TV since 1986. Mr.
Fenger received his bachelor's degree and his master's degrees in communications
management from Syracuse University's Newhouse School of Public Communications.

ERIC A. FREESMEIER, 49 Senior Vice President - Administration. From 1986 until
joining Charter Investment in 1998, Mr. Freesmeier served in various executive
management positions at Edison Brothers Stores, Inc. Earlier he held management
and executive positions at Montgomery Ward. Mr. Freesmeier holds a bachelor's
degree from the University of Iowa and a master's degree from Northwestern
University's Kellogg Graduate School of Management.

THOMAS R. JOKERST, 52 Senior Vice President - Advanced Technology Development.
Mr. Jokerst joined Charter Investment in 1994. Previously he served as a vice
president of Cable Television Laboratories and as a regional director of
engineering for Continental Cablevision. He is a graduate of Ranken Technical
Institute and of Southern Illinois University.

RALPH G. KELLY, 44 Senior Vice President - Treasurer. Prior to joining Charter
Investment in 1993, Mr. Kelly was controller and then treasurer of Cencom Cable
Associates between 1984 and 1992. He left Charter Investment in 1994, to become
chief financial officer of CableMaxx, Inc., and returned in 1996. Mr. Kelly
received his bachelor's degree in accounting from the University of Missouri -
Columbia and his M.B.A. from Saint Louis University. Mr. Kelly is a certified
public accountant.

DAVID L. MCCALL, 46 Senior Vice President of Operations - Eastern Division.
Prior to joining Charter Investment in 1995, Mr. McCall was associated with
Crown Cable and its predecessor company, Cencom Cable Associates, Inc., from
1983 to 1994. Mr. McCall is a member of the Southern Cable Association's Tower
Club.

MAJID R. MIR, 51 Senior Vice President - Telephony and Advanced Services. Prior
to joining Charter in April 2001, Mr. Mir worked with GENUITY Networks, Inc. as
Vice President, Metro Network Engineering in Irving, Texas from June 2000 to
April 2001. Prior to that, Mr. Mir worked with GTE from 1979 to June 2000 in
various capacities of increasing responsibility, most recently as Assistant Vice
President of Core Network Engineering. Mr. Mir served as director, Business
Development for GTE, from 1996 to 1997. Mr. Mir earned a bachelor's of science
in systems science from the University of West Florida and holds a master's
degree in business administration from the University of South Florida.

JOHN C. PIETRI, 52 Senior Vice President - Engineering. Prior to joining Charter
Investment in 1998, Mr. Pietri was with Marcus Cable for nine years, most
recently serving as Senior Vice President and Chief Technical Officer. Earlier
he was in operations with West Marc Communications and Minnesota Utility
Contracting. Mr. Pietri attended the University of Wisconsin-Oshkosh.

MICHAEL E. RIDDLE, 43 Senior Vice President and Chief Information Officer. Prior
to joining Charter in December 1999, Mr. Riddle was Director, Applied
Technologies of Cox Communications for four years. Prior to that, he held
technical and management positions during 17 years at Southwestern Bell and its
subsidiaries. Mr. Riddle attended Fort Hays State University.

WILLIAM J. SCHREFFLER, 48 Senior Vice President of Operations - Midwest
Division. Mr Shreffler was promoted to his current position in January 2002,
having previously served as Vice President of Operations for the Michigan
region. Prior to joining Charter in 1999, Mr. Shreffler acted as a Managing
Director of Cablevision. Between 1995 and 1999, he held various positions with
Century Communications, mot recently as its Group Vice President. From 1985 to
1995, Mr. Shreffler acted as the Regional Controller for American Cable Systems
and following the acquisition of American by Continental Cablevision, as its
General Manager in its Chicago region. Mr. Shreffler holds degrees from Robert
Morris College and Duquesne University and is obtaining a master's degree in
business from Lewis University in Chicago.

- 30 -

CURTIS S. SHAW, 53 Senior Vice President, General Counsel and Secretary. From
1988 until he joined Charter Investment in 1997, Mr. Shaw served as corporate
counsel to NYNEX. Since 1973, Mr. Shaw has practiced as a corporate lawyer,
specializing in mergers and acquisitions, joint ventures, public offerings,
financings, and federal securities and antitrust law. Mr. Shaw received a B.A.
degree from Trinity College and a J.D. degree from Columbia University School of
Law.

PAUL E. MARTIN, 41 Vice President, Corporate Controller and Principal Financial
Officer for Partnership Matters. Mr. Martin has been Vice President and
Corporate Controller since March 2000, and became Principal Financial Officer
for Partnership Matters in July 2001. Prior to joining Charter in March 2000,
Mr. Martin was Vice President and Controller for Operations and Logistics for
Fort James Corporation, a manufacturer of paper products. From 1995 to February
1999, Mr. Martin was Chief Financial Officer of Rawlings Sporting Goods Company,
Inc. Mr. Martin is a certified public accountant, having been with Arthur
Andersen LLP for nine years. Mr. Martin received a B.S. degree in accounting
from the University of Missouri - St. Louis.

The sole director of the Corporate General Partner is elected to a
one-year term at the annual shareholder meeting to serve until the next annual
shareholder meeting and thereafter until his respective successor is elected and
qualified. Upon his resignation in September 2001, Jerald L. Kent resigned as
the sole director of ECC and was succeeded by Mr. Schumm. Officers are appointed
by and serve at the discretion of the directors of the Corporate General
Partner.

ITEM 11. EXECUTIVE COMPENSATION

MANAGEMENT FEE

Pursuant to the Management Agreement, Enstar Cable Corporation
("Enstar Cable") manages the Joint Venture's systems and provides all
operational support for the Joint Venture activities. For these services, Enstar
Cable receives a management fee of 4% of the Joint Venture's gross revenues,
excluding revenues from the sale of cable television systems or franchises,
which is calculated and paid monthly. In addition, the Joint Venture is required
to distribute 1% of its gross revenues to the Corporate General Partner for its
interest as the Corporate General Partner of the Partnership. In addition, the
Joint Venture's reimburses Enstar Cable for operating expenses incurred by
Enstar Cable in the daily operation of our cable systems. The Management
Agreement also requires the Partnership to indemnify Enstar Cable (including its
officers, employees, agents and shareholders) against loss or expense, absent
negligence or deliberate breach by Enstar Cable of the Management Agreement. The
Management Agreement is terminable by the Partnership upon 60 days written
notice to Enstar Cable. Enstar Cable had, prior to November 12, 1999, engaged
Falcon Communications, L.P. ("Falcon") to provide management services for us and
paid Falcon a portion of the management fees it received in consideration of
such services and reimbursed Falcon for expenses incurred by Falcon on its
behalf. Subsequent to November 12, 1999, Charter, as successor-by-merger to
Falcon, has provided such services and received such payments. Additionally, the
Joint Venture received system operating management services from affiliates of
Enstar Cable in lieu of directly employing personnel to perform those services.
The Joint Venture reimburses the affiliates for its allocable share of their
operating costs. The Corporate General Partner also performs supervisory and
administrative services for the Partnership, for which it is reimbursed.

For the fiscal year ended December 31, 2001, Enstar Cable charged
the Joint Venture management fees of approximately $263,500. In addition, the
Corporate General Partner charged the Joint Venture approximately $65,900
relative to its 1% special interest. Enstar Cable, Charter and its affiliates
also charged the Joint Venture approximately $859,300 for system operating
management services. In addition, programming services were purchased through
Charter. The Joint Venture was charged approximately $1,300,000 for these
programming services for fiscal year 2001.

- 31 -

PARTICIPATION IN DISTRIBUTIONS

The General Partners are entitled to share in distributions from,
and profit and losses in, the Partnership. See Item 5. "Market for the
Registrant's Equity Securities and Related Security Holder Matters."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of December 31, 2001, the only persons known by the Partnership
to own beneficially or that may be deemed to own beneficially more than 5% of
the units were:

Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership of Class
- ------------------------------- ----------------------------------------- --------------------------- -----------

Units of limited Everest Cable Investors LLC 3,573(1) 6.0%
partnership 199 South Los Robles Ave.,
interest Suite 440
Pasadena, CA 91101

(1) As reported to us by our transfer agent, Gemisys Corporation.

The Corporate General Partner is a wholly-owned subsidiary of
Charter Communications Holding Company, LLC. As of February 28, 2002, the common
membership units of Charter Communications Holding Company, LLC are owned 51.2%
by Charter, 16.7% by Vulcan Cable III Inc., and 32.1% by Charter Investment,
Inc. (assuming conversion of all convertible securities). Charter controls 100%
of the voting power of Charter Communications Holding Company LLC. Paul G. Allen
owns approximately 3.7% of the outstanding capital stock of Charter and controls
approximately 92.3% of the voting power of Charter's common stock, and he is the
sole equity owner of Charter Investment, Inc. and Vulcan Cable III Inc.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT SERVICES

On November 12, 1999, Charter acquired ownership of ECC from Falcon
Holding Group, L.P. and assumed the management services operations previously
provided by affiliates Falcon Communications, L.P. ("Falcon") Charter now
manages the operations of the partnerships of which ECC is the Corporate General
Partner, including the Partnership. Commencing November 13, 1999, Charter began
receiving management fees and reimbursed expenses which had previously been paid
by the Corporate General Partner to Falcon.

Pursuant to the Management Agreement between the Joint Venture and
Enstar Cable, a subsidiary of the Corporate General Partner, Enstar Cable
provides financial, management, supervisory and marketing services, as necessary
to the Joint Venture's operations. This Management Agreement provides that the
Joint Venture shall pay management fees equal to 4% of the Joint Venture's gross
receipts from customers and 1% to the Corporate General Partner representing its
special interest in the Joint Venture. In addition, Enstar Cable is to be
reimbursed for amounts paid to third parties, the cost of administrative
services in an amount equal to the lower of actual cost or the amount the Joint
Venture would be required to pay to independent parties for comparable
administrative services, salaries and benefits of employees necessary for
day-to-day operation of the Joint Venture's systems, and an allocable shares of
costs associated with facilities required to manage the Joint Venture's systems.
To provide these management services, Enstar Cable has engaged Charter
Communications Holding Company LLC, an affiliate of the Corporate General
Partner and Charter, to provide management, consulting, programming and billing
services for the Joint Venture.

- 32 -

Since November 12, 1999, when Charter acquired control of the
Corporate General Partner and its subsidiary, Enstar Cable, as well as Falcon
Communications, L.P., the management fees payable have been limited to
reimbursement of an allocable share of Charter's management costs, which is less
than the fee permitted by the existing agreement. For the year ended December
31, 2001, accrued and unpaid management fees to Charter Communications Holding
Company LLC. from the Joint Venture were $349,500. In addition, the Joint
Venture was charged directly for the salaries and benefits of employees for
daily operations, and where shared by other Charter systems, an allocable share
of facilities costs, with programming and billing being charged to the Joint
Venture at Charter's actual cost. For the year ended December 31, 2001, service
costs directly attributable to providing cable services to customers which were
incurred by Charter and reimbursed by the Joint Venture were $859,300. In
addition, programming services were purchased through Charter. The Joint Venture
was charged approximately $1,300,000 for these programming services for fiscal
year 2001.

CONFLICTS OF INTEREST

The Partnership and the Joint Venture rely upon the Corporate
General Partner and certain of its affiliates to provide general management
services, system operating services, supervisory and administrative services and
programming. See Item 11. "Executive Compensation" and Item 7. "Management's
Discussion and Analysis of Financial Condition and Results of Operations." The
executive officers of the Corporate General Partner have their personal
employment with Charter, and, as a result, are involved in the management of
other cable ventures. Charter expects to continue to enter into other cable
ventures. These affiliations subject Charter and the Corporate General Partner
and their management to conflicts of interest. These conflicts of interest
relate to the time and services that management will devote to the Partnership's
affairs.

FIDUCIARY RESPONSIBILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS

A general partner is accountable to a limited partnership as a
fiduciary and consequently must exercise good faith and integrity in handling
partnership affairs. Where the question has arisen, some courts have held that a
limited partner may institute legal action on his own behalf and on behalf of
all other similarly situated limited partners (a class action) to recover
damages for a breach of fiduciary duty by a general partner, or on behalf of the
Partnership (a partnership derivative action) to recover damages from third
parties. Section 14-9-1001 of the Georgia Revised Uniform Limited Partnership
Act also allows a partner to maintain a partnership derivative action if general
partners with authority to do so have refused to bring the action or if an
effort to cause those general partners to bring the action is not likely to
succeed. Some cases decided by federal courts have recognized the right of a
limited partner to bring such actions under the Securities and Exchange
Commission's Rule 10b-5 for recovery of damages resulting from a breach of
fiduciary duty by a general partner involving fraud, deception or manipulation
in connection with the limited partner's purchase or sale of partnership units.

The Partnership Agreement provides that the General Partners will be
indemnified by the Partnership for acts performed within the scope of their
authority under the Partnership Agreement if the General Partners (i) acted in
good faith and in a manner that it reasonably believed to be in, or not opposed
to, the best interests of the Partnership and the partners, and (ii) had no
reasonable grounds to believe that their conduct was negligent. In addition, the
Partnership Agreement provides that the General Partners will not be liable to
the Partnership or its Limited Partners for errors in judgment or other acts or
omissions not amounting to negligence or misconduct. Therefore, Limited Partners
will have a more limited right of action than they would have absent such
provisions. In addition, the Partnership maintains, at its expense and in such
reasonable amounts as the Corporate General Partner shall determine, a liability
insurance policy which insures the Corporate General Partner, Charter and its
affiliates, officers and directors and persons determined by the Corporate
General Partner, against liabilities which they may incur with respect to claims
made against them for wrongful or allegedly wrongful acts, including certain
errors, misstatements, misleading statements, omissions, neglect or breaches of
duty.

- 33 -

PART IV

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

(a) 1. Financial Statements

Reference is made to the Index to Financial Statements on page F-1.

2. Financial Statement Schedules

Reference is made to the Index to Financial Statements on page F-1.

3. Exhibits

Reference is made to the Exhibits Index on Page E-1.

(b) Reports on Form 8-K

On October 9, 2001, the registrant filed a current report on Form
8-K announcing the resignation of Jerald L. Kent, Charter's
former President and Chief Executive Officer and the appointment
of Steven A. Schumm, Executive Vice President and Assistant to
the President of Charter as sole director of Enstar
Communications Corporation, the Partnership's Corporate General
Partner.

- 34 -

SIGNATURES

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

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

By: Enstar Communications
Corporation,
Corporate General Partner

Dated: March 29, 2002 By: /s/ Steven A. Schumm
--------------------
Steven A. Schumm
Director, Executive Vice
President and Assistant to
the President

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

Dated: March 29, 2002 By: /s/ Steven A. Schumm
--------------------
Steven A. Schumm
Director, Executive Vice President
and Assistant to the President
(Principal Executive Officer) *

Dated: March 29, 2002 By: /s/ Paul E. Martin
------------------
Paul E. Martin
Vice President and Corporate
Controller (Principal Financial
Officer and Principal Accounting
Officer) *

* Indicates position held with Enstar Communications Corporation, the Corporate
General Partner of the registrant.

- 35 -

INDEX TO FINANCIAL STATEMENTS

PAGE
----------------------------------------------------------
ENSTAR INCOME/GROWTH ENSTAR CABLE OF
PROGRAM FIVE-B, L.P. CUMBERLAND VALLEY
----------------------------- -------------------------

Report of Independent Public Accountants F-2 F-11

Balance Sheets as of December 31, 2001 and 2000 F-3 F-12

Statements of Operations for the years ended December 31,
2001 and 2000 F-4 F-13

Statements of Partnership/Venturers' Capital (Deficit) for
the years ended December 31, 2001 and 2000 F-5 F-14

Statements of Cash Flows for the years ended December 31,
2001 and 2000 F-6 F-15

Notes to Financial Statements F-7 F-16

Reports of Independent Auditors F-23 F-30

Statement of Operations for the year ended
December 31, 1999 F-24 F-31

Statement of Partnership/Venturers' Capital (Deficit) for
the year ended December 31, 1999 F-25 F-32

Statement of Cash Flows for the year ended
December 31, 1999 F-26 F-33

Notes to Financial Statements F-27 F-34

All financial statement schedules have been omitted because they are either not
required, not applicable or the information has otherwise been supplied.

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Enstar Income/Growth Program Five-B, L.P.:

We have audited the accompanying balance sheets of Enstar Income/Growth Program
Five-B, L.P. (a Georgia limited partnership) as of December 31, 2001 and 2000,
and the related statements of operations, partnership capital (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Enstar Income/Growth Program
Five-B, L.P. as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

St. Louis, Missouri,
March 29, 2002

F-2

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

BALANCE SHEETS

AS OF DECEMBER 31, 2001 AND 2000

2001 2000
----------- -----------

ASSETS

ASSETS:
Cash $ 1,100 $ 4,600
Equity in net assets of joint venture 4,949,400 4,887,200
----------- -----------

Total assets $ 4,950,500 $ 4,891,800
=========== ===========

LIABILITIES AND PARTNERSHIP CAPITAL

LIABILITIES:
Accounts payable and accrued liabilities $ 3,300 $ 2,700
Due to affiliates 147,700 90,800
----------- -----------

Total liabilities 151,000 93,500
----------- -----------

PARTNERSHIP CAPITAL (DEFICIT):
General Partners (76,000) (76,000)
Limited Partners 4,875,500 4,874,300
----------- -----------

Total partnership capital 4,799,500 4,798,300
----------- -----------

Total liabilities and partnership capital $ 4,950,500 $ 4,891,800
=========== ===========

See accompanying notes to financial statements.

F-3

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

2001 2000
--------- ---------

OPERATING EXPENSES:
General and administrative $ (61,000) $ (88,400)
Other -- (14,000)
--------- ---------

Loss before equity in net income of joint venture (61,000) (102,400)

EQUITY IN NET INCOME OF JOINT VENTURE 62,200 285,600
--------- ---------

Net income $ 1,200 $ 183,200
========= =========

NET INCOME ALLOCATED TO GENERAL PARTNERS $ -- $ 1,800
========= =========

NET INCOME ALLOCATED TO LIMITED PARTNERS $ 1,200 $ 181,400
========= =========

NET INCOME PER UNIT OF LIMITED PARTNERSHIP INTEREST $ 0.02 $ 3.03
========= =========

WEIGHTED AVERAGE LIMITED PARTNERSHIP UNITS OUTSTANDING DURING THE YEAR 59,830 59,830
========= =========

See accompanying notes to financial statements.

F-4

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

STATEMENTS OF PARTNERSHIP CAPITAL (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

GENERAL LIMITED
PARTNERS PARTNERS TOTAL
---------- ---------- ----------

PARTNERSHIP CAPITAL (DEFICIT), January 1, 2000 $ (77,800) $4,692,900 $4,615,100

Net income 1,800 181,400 183,200
---------- ---------- ----------

PARTNERSHIP CAPITAL (DEFICIT), December 31, 2000 (76,000) 4,874,300 4,798,300

Net income -- 1,200 1,200
---------- ---------- ----------

PARTNERSHIP CAPIAL (DEFICIT), December 31, 2001 $ (76,000) $4,875,500 $4,799,500
========== ========== ==========

See accompanying notes to financial statements.

F-5

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

2001 2000
--------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,200 $ 183,200
Adjustments to reconcile net income to net cash from operating activities:
Equity in net income of joint venture (62,200) (285,600)
Changes in:
Accounts payable, accrued liabilities and due to affiliates 57,500 87,700
--------- ---------

Net cash from operating activities (3,500) (14,700)
--------- ---------

Net decrease in cash (3,500) (14,700)

CASH, beginning of year 4,600 19,300
--------- ---------

CASH, end of year $ 1,100 $ 4,600
========= =========

See accompanying notes to financial statements.

F-6

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

Enstar Income/Growth Program Five-B, L.P. is a Georgia limited
partnership (the "Partnership") whose principal business is derived from its 50%
ownership interest in the operations of Enstar Cable of Cumberland Valley, a
Georgia general partnership (the "Joint Venture"). The financial statements
include the operations of the Partnership and its equity ownership interest in
the Joint Venture. The separate financial statements of the Joint Venture are
included in this report on Form 10-K, and should be read in conjunction with
these financial statements.

The financial statements do not give effect to any assets that the
partners may have outside of their interest in the Partnership, nor to any
obligations of the partners, including income taxes.

Investment in Joint Venture

The Partnership's investment and share of the income or loss in the
Joint Venture is accounted for on the equity method of accounting.

Income Taxes

The Partnership pays no income taxes as an entity. All of the
income, gains, losses, deductions and credits of the Partnership are passed
through to the General Partners and the Limited Partners. Nominal taxes are
assessed by certain state jurisdictions. The basis in the Partnership's assets
and liabilities differs for financial and tax reporting purposes. As of December
31, 2001 and 2000, the book basis of the Partnership's investment in the Joint
Venture exceeds its tax basis by approximately $1,938,200 and $2,364,600,
approximately. The accompanying financial statements, which are prepared in
accordance with accounting principles generally accepted in the United States,
differ from the financial statements prepared for tax purposes due to the
different treatment of various items as specified in the Internal Revenue Code.
The net effect of these accounting differences is that the Partnership's net
income for the year ended December 31, 2001 and 2000, in the financial
statements is approximately $408,600 and $311,700 less than tax income or loss
for the same period, respectively. The difference is principally due to timing
differences in depreciation and amortization expense reported by the Joint
Venture.

Net Income per Unit of Limited Partnership Interest

Net income per unit of limited partnership interest is based on the
average number of units outstanding during the periods presented. For this
purpose, net income has been allocated 99% to the Limited Partners and 1% to the
General Partners. The General Partners do not own units of partnership interest
in the Partnership, but rather hold a participation interest in the income,
losses and distributions of the Partnership.

Use of Estimates

F-7

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

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

(2) PARTNERSHIP MATTERS

The Partnership was formed on September 4, 1986 by a partnership
agreement, as amended (the "Partnership Agreement"), to acquire, construct or
improve, develop, and operate cable television systems in various locations in
the United States. The Partnership Agreement provides for Enstar Communications
Corporation (the "Corporate General Partner") and Robert T. Graff, Jr. to be the
General Partners and for the admission of Limited Partners through the sale of
interests in the Partnership.

On November 12, 1999, Charter Communications Holdings Company, LLC,
an entity controlled by Charter Communications, Inc. ("Charter"), acquired both
the Corporate General Partner, as well as Falcon Communications, L.P.
("Falcon"), the entity that provided management and certain other services to
the Partnership. Charter is the nation's fourth largest cable operator, serving
approximately seven million customers and files periodic reports with the
Securities and Exchange Commission. Charter and its affiliates (principally CC
VII Holdings, LLC, the successor-by-merger to Falcon) provide management and
other services to the Partnership. Charter receives a management fee and
reimbursement of expenses from the Corporate General Partner for managing the
Partnership's cable television operations. The Corporate General Partner,
Charter and affiliated companies are responsible for the management of the
Partnership and its operations.

The amended Partnership Agreement generally provides that all cash
distributions, as defined, be allocated 1% to the General Partners and 99% to
the Limited Partners until the Limited Partners have received aggregate cash
distributions equal to their original capital contributions ("Capital Payback").
The Partnership Agreement also provides that all partnership profits, gains,
operational losses, and credit, all as defined, be allocated 1% to the General
Partners and 99% to the Limited Partners until the Limited Partners have been
allocated net profits equal to the amount of cash flow required for Capital
Payback. After the Limited Partners have received cash flow equal to their
initial investments, the General Partners will only receive a 1% allocation of
cash flow from sale or liquidation of a system until the Limited Partners have
received an annual simple interest return of at least 10% of their initial
investments less any distributions from previous system sales or refinancing of
systems. Thereafter, the respective allocations will be made 20% to the General
Partners and 80% to the Limited Partners. Any losses from system sales or
exchanges shall be allocated first to all partners having positive capital
account balances (based on their respective capital accounts) until all such
accounts are reduced to zero and thereafter to the Corporate General Partner.
All allocations to individual Limited Partners will be based on their respective
limited partnership ownership interests.

F-8

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

The Partnership's operating expenses and distributions to partners
are funded primarily from distributions received from the Joint Venture.

(3) EQUITY IN NET ASSETS OF JOINT VENTURE

The Partnership and an affiliated partnership, Enstar Income/Growth
Program Five-A, L.P. (collectively, the "Venturers"), each own 50% of the Joint
Venture. Each of the Venturers share equally in the profits and losses of the
Joint Venture. The investment in the Joint Venture is accounted for on the
equity method. The Joint Venture had net income of $124,400 and $571,200 for the
years ended December 31, 2001 and 2000, of which $62,200 and $285,600 was
allocated to the Partnership, respectively.

(4) PROPOSED SALE OF ASSETS

In 1999, the Corporate General Partner sought purchasers for all of
the cable television systems of the Partnership, as well as 13 other affiliated
limited partnership cable operators of which the Corporate General Partner is
also the general partner. This effort was undertaken primarily because, based on
the Corporate General Partner's experience in the cable television industry, it
was concluded that generally applicable market conditions and competitive
factors were making (and would increasingly make) it extremely difficult for
smaller operators of rural cable systems (such as the Partnership and the other
affiliated partnerships) to effectively compete and be financially successful.
This determination was based on the anticipated cost of electronics and
additional equipment to enable the Joint Venture's systems to operate on a
two-way basis with improved technical capacity, insufficiency of Joint Venture
cash reserves and cash flows from operations to finance such expenditures,
limited customer growth potential due to the Joint Venture's systems' rural
location, and a general inability of a small cable system operator such as the
Joint Venture to benefit from economies of scale and the ability to combine and
integrate systems that large cable operators have. Although certain limited
upgrades have been made, the Corporate General Partner projected that if the
Joint Venture made the additional comprehensive upgrades deemed necessary, the
Joint Venture would not recoup the costs or regain its ability to operate
profitably within the remaining term of its franchises, and as a result, making
these upgrades would not be economically prudent.

Following termination of the Gans Agreement, the broker once again
attempted to market the Joint Venture's systems. At the time of this filing,
there is no definitive agreement to purchase any of the systems and the broker
continues to market the systems on behalf of the Joint Venture.

F-9

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

Other expense of $0 and $14,000 for the years ended December 31,
2001 and 2000, respectively, represents legal and proxy costs associated with
proposed sale of the Joint Venture's assets.

(5) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES

The Partnership has a management and service agreement (the
"Management Agreement") with Enstar Cable Corporation ("Enstar Cable"), a wholly
owned subsidiary of the Corporate General Partner pursuant to which the
Partnership pays a monthly management fee of 5% of gross revenues of the
Partnership. The Partnership did not own or operate any cable television
operations in 2001 and 2000 other than through its investment in the Joint
Venture. No management fees were paid by the Partnership during 2001 and 2000.

The Management Agreement also provides that the Partnership
reimburse the Enstar Cable for direct expenses incurred on behalf of the
Partnership and for the Partnership's allocable share of operational costs. No
reimbursable expenses were incurred on behalf of the Partnership during 2001 and
2000.

(6) NEW ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations", No. 142, "Goodwill and Other Intangible Assets" and No. 143,
"Accounting for Asset Retirement Obligations." SFAS No. 141 requires all
business combinations initiated after June 30, 2001 to be accounted for using
the purchase method of accounting and was adopted by the Partnership on July 1,
2001. Management believes that adoption of SFAS No. 141 did not have an impact
on the financial statements of the Partnership.

Under SFAS No. 142, goodwill and other indefinite lived intangible
assets are no longer subject to amortization over their useful lives, rather,
they are subject to at least annual assessments for impairment. Also, under SFAS
No. 142, an intangible asset should be recognized if the benefit of the
intangible asset is obtained through contractual or other legal rights or if the
intangible asset can be sold, transferred, licensed, rented or exchanged. Such
intangibles continue to be amortized over their useful lives. SFAS 142 was
implemented by the Partnership on January 1, 2002. Management believes that
adoption of SFAS No. 142 did not have a material impact on the financial
statements of the Partnership.

Under SFAS No. 143, the fair value of a liability for an asset
retirement obligation is required to be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset. SFAS No. 143 was implemented by the Partnership on January 1,
2002. Management believes that adoption of SFAS No. 143 did not have a material
impact on the financial statements of the Partnership.

In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "Accounting for the Impairment of Disposal of Long-Lived Assets." SFAS
No. 144 addresses financial accounting and reporting for the impairment of
long-lived assets and for long-lived assets to be disposed of and supersedes
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." SFAS No. 144 establishes a single
accounting model for long-lived assets to be disposed of by sale and resolves
implementation issues related to SFAS No. 121. SFAS No. 144 was implemented by
the Partnership on January 1, 2002. The Partnership is currently in process of
assessing the impact of adoption of SFAS No. 144.

F-10

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Venturers of
Enstar Cable of Cumberland Valley:

We have audited the accompanying balance sheets of Enstar Cable of Cumberland
Valley (a Georgia general partnership) as of December 31, 2001 and 2000, and the
related statements of operations, venturers' capital and cash flows for the
years then ended. These financial statements are the responsibility of the Joint
Venture's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Enstar Cable of Cumberland
Valley as of December 31, 2001 and 2000, and the results of its operations and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

St. Louis, Missouri,
March 29, 2002

F-11

ENSTAR CABLE OF CUMBERLAND VALLEY

BALANCE SHEETS

AS OF DECEMBER 31, 2001 AND 2000

2001 2000
----------- -----------

ASSETS

ASSETS:
Cash $ 4,300,500 $ 2,232,600
Accounts receivable 148,100 180,700
Due from affiliates -- 246,400
Prepaid expenses and other assets 22,900 109,400
Property, plant and equipment, net of accumulated depreciation of
$16,575,000 and $14,993,300, respectively 6,462,000 7,225,300
Franchise cost, net of accumulated amortization of $7,669,000 and
$7,429,400, respectively 383,300 622,900
Deferred financing costs and other deferred charges, net 600 38,300
----------- -----------

$11,317,400 $10,655,600
=========== ===========

LIABILITIES AND VENTURERS' CAPITAL

LIABILITIES:
Accounts payable and accrued liabilities $ 655,700 $ 881,200
Due to affiliates 762,900 --
----------- -----------

Total liabilities 1,418,600 881,200
----------- -----------

VENTURERS' CAPITAL:
Enstar Income/Growth Program Five-A, L.P. 4,949,400 4,887,200
Enstar Income/Growth Program Five-B, L.P. 4,949,400 4,887,200
----------- -----------

Total venturers' capital 9,898,800 9,774,400
----------- -----------

Total liabilities and venturers' capital $11,317,400 $10,655,600
=========== ===========

See accompanying notes to financial statements.

F-12

ENSTAR CABLE OF CUMBERLAND VALLEY

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

2001 2000
----------- -----------

REVENUES $ 6,587,400 $ 6,539,500
----------- -----------

OPERATING EXPENSES:
Service costs 2,347,800 1,962,400
General and administrative expenses 1,047,200 741,800
General partner management fees and reimbursed expenses 1,188,700 1,412,400
Depreciation and amortization 1,897,200 1,841,400
----------- -----------

6,480,900 5,958,000
----------- -----------

Operating income 106,500 581,500
----------- -----------

OTHER INCOME (EXPENSE):
Interest income 90,200 43,900
Interest expense (3,400) (45,200)
Other expense (68,900) (9,000)
----------- -----------

17,900 (10,300)
----------- -----------

Net income $ 124,400 $ 571,200
=========== ===========

See accompanying notes to financial statements.

F-13

ENSTAR CABLE OF CUMBERLAND VALLEY

STATEMENTS OF VENTURERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

ENSTAR INCOME/ ENSTAR INCOME/
GROWTH PROGRAM GROWTH PROGRAM
FIVE-A, L.P. FIVE-B, L.P. TOTAL
--------------- --------------- ----------

BALANCE, January 1, 2000 $4,601,600 $4,601,600 $9,203,200

Net income 285,600 285,600 571,200
---------- ---------- ----------

BALANCE, December 31, 2000 4,887,200 4,887,200 9,774,400

Net income 62,200 62,200 124,400
---------- ---------- ----------

BALANCE, December 31, 2001 $4,949,400 $4,949,400 $9,898,800
========== ========== ==========

See accompanying notes to financial statements.

F-14

ENSTAR CABLE OF CUMBERLAND VALLEY

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

2001 2000
----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 124,400 $ 571,200
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 1,897,200 1,841,400
Changes in:
Accounts receivable, prepaid expenses and other assets 119,100 91,300
Accounts payable, accrued liabilities and due to/from affiliates 783,800 (683,800)
----------- -----------

Net cash from operating activities 2,924,500 1,820,100
----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (818,400) (547,600)
Change in intangible assets (38,200) (20,200)
----------- -----------

Net cash from investing activities (856,600) (567,800)
----------- -----------

Net increase in cash 2,067,900 1,252,300

CASH, beginning of year 2,232,600 980,300
----------- -----------

CASH, end of year $ 4,300,500 $ 2,232,600
=========== ===========

See accompanying notes to financial statements.

F-15

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

Enstar Cable of Cumberland Valley, a Georgia general partnership
(the "Joint Venture"), owns and operates cable systems in small to medium-sized
communities in Kentucky, Tennessee and Missouri.

The financial statements do not give effect to any assets that
Enstar Income/Growth Program Five-A, L.P. and Enstar Income/Growth Program
Five-B, L.P. (the "Venturers") may have outside of their interest in the Joint
Venture, nor to any obligations of the Venturers, including income taxes.

Property, Plant and Equipment

Property, plant and equipment are reported at cost. Direct costs
associated with installations in homes not previously served by cable are
capitalized as part of the cable system, and reconnects are expensed as
incurred. For financial reporting, depreciation is computed using the
straight-line method over the following estimated useful lives:

Cable distribution systems 5-15 years
Vehicles 3 years
Furniture and equipment 5-7 years
Leasehold improvements Shorter of life of lease or useful life of asset

Franchise Cost

Costs incurred in obtaining and renewing cable franchises are
deferred and amortized over the lives of the franchises. Franchise rights
acquired through the purchase of cable systems represent management's estimate
of fair value and are generally amortized using the straight-line method over a
period of up to 15 years. This period represents management's best estimate of
the useful lives of the franchise and assumes substantially all of those
franchises that expire during the period will be renewed by the Joint Venture.
Amortization expense related to franchises for the years ended December 31, 2001
and 2000 was $239,700 and $299,200, respectively.

As of December 31, 2001, franchise agreements have expired in twelve
of the Joint Venture's franchise areas where it serves approximately 10,000
basic customers. The Joint Venture continues to serve those customers while it
is in negotiations to renew the franchise agreements and continues to pay
franchise fees to the local franchise authorities.

Deferred Financing Costs and Other Deferred Charges

Costs incurred relative to borrowings are deferred and amortized
using the straight-line method over the terms of the related borrowing
agreement. Deferred financing costs were $0 and $23,400, net of accumulated
amortization of $140,500 and $117,100 as of December 31, 2001 and 2000,
respectively. Other deferred charges are amortized using the straight-line
method over two years. Other deferred charges

F-16

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

were $600 and $14,900, net of accumulated amortization of $61,000 and $8,600, as
of December 31, 2001 and 2000, respectively.

Long-Lived Assets

The Joint Venture reviews its long-lived assets for impairment
whenever events or circumstances indicate that the carrying amount of an asset
may not be recoverable. If the sum of the expected cash flows, undiscounted and
without interest, is less than the carrying amount of the asset, the carrying
amount of the asset is reduced to its estimated fair value and an impairment
loss is recognized.

Revenue Recognition

Cable television revenues from basic and premium services are
recognized when the related services are provided. Installation revenues are
recognized to the extent of direct selling costs incurred. The remainder, if
any, is deferred and amortized to income over the estimated average period that
customers are expected to remain connected to the cable system. As of December
31, 2001 and 2000, no installation revenues have been deferred, as direct
selling costs have exceeded installation revenues.

Local governmental authorities impose franchise fees on the Joint
Venture ranging up to a federally mandated maximum of 5% of gross revenues. Such
fees are collected on a monthly basis from the Joint Venture's customers and are
periodically remitted to local franchise authorities. Franchise fees collected
and paid are reported as revenues and expenses.

Income Taxes

The Joint Venture pays no income taxes. All of the income, gains,
losses, deductions and credits of the Joint Venture are passed through to the
Venturers. Nominal taxes are assessed by certain state jurisdictions. The basis
in the Joint Venture's assets and liabilities differs for financial and tax
reporting purposes. As of December 31, 2001 and 2000, the book basis of the
Joint Venture's net assets exceeds its tax basis by approximately $3,876,400 and
$4,729,200, respectively. The accompanying financial statements, which are
prepared in accordance with accounting principles generally accepted in the
United States, differ from the financial statements prepared for tax purposes
due to the different treatment of various items as specified in the Internal
Revenue Code. The net effect of these accounting differences is that the Joint
Venture's net income for the year ended December 31, 2001 and 2000, in the
financial statements is approximately $847,000 and $595,200 less than tax income
or loss for the same period, respectively. The difference is principally due to
timing differences in depreciation and amortization expense.

Use of Estimates

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

F-17

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

(2) JOINT VENTURE MATTERS

The Joint Venture was formed under the terms of a general
partnership agreement (the "Partnership Agreement") effective January 11, 1988,
between Enstar Income/Growth Program Five-A, L.P. and Enstar Income/Growth
Program Five-B, L.P., which are two limited partnerships sponsored by Enstar
Communications Corporation (the "Corporate General Partner"). The Joint Venture
was formed to pool the resources of the two limited partnerships to acquire,
construct, improve, develop and operate cable television systems.

On November 12, 1999, Charter Communications Holdings Company, LLC,
an entity controlled by Charter Communications, Inc. ("Charter"), acquired both
the Corporate General Partner, as well as Falcon Communications, L.P.
("Falcon"), the entity that provided management and certain other services to
the Partnership. Charter is the nation's fourth largest cable operator, serving
approximately seven million customers and files periodic reports with the
Securities and Exchange Commission. Charter and its affiliates (principally CC
VII Holdings, LLC, the successor-by-merger to Falcon) provide management and
other services to the Joint Venture. Charter receives a management fee and
reimbursement of expenses from the Corporate General Partner for managing the
Joint Venture's cable television operations. The Corporate General Partner,
Charter and affiliated companies are responsible for the management of the Joint
Venture and its operations.

Under the terms of the Partnership Agreement, the Venturers share
equally in profits, losses, allocations and assets. Capital contributions, as
required, are also made equally.

(3) PROPOSED SALE OF ASSETS

In 1999, the Corporate General Partner sought purchasers for all of
the cable television systems of the Joint Venture, as well as other affiliated
limited partnership cable operators of which the Corporate General Partner is
also the general partner. This effort was undertaken primarily because, based on
the Corporate General Partner's experience in the cable television industry, it
was concluded that generally applicable market conditions and competitive
factors were making (and would increasingly make) it extremely difficult for
smaller operators of rural cable systems (such as the Joint Venture and the
other affiliated partnerships) to effectively compete and be financially
successful. This determination was based on the anticipated cost of electronics
and additional equipment to enable the Joint Venture's systems to operate on a
two-way basis with improved technical capacity, insufficiency of Joint Venture
cash reserves and cash flows from operations to finance such expenditures,
limited customer growth potential due to the Joint Venture's systems' rural
location, and a general inability of a small cable system operator such as the
Joint Venture to benefit from economies of scale and the ability to combine and
integrate systems that large cable operators have. Although certain limited
upgrades have been made, the Corporate General Partner projected that if the
Joint Venture made the additional comprehensive upgrades deemed necessary, the
Joint Venture would not recoup the costs or regain its ability to operate
profitably within the remaining term of its franchises, and as a result, making
these upgrades would not be economically prudent.

F-18

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

affiliate of Gans Multimedia Partnership ("Gans"). The Gans Agreement provided
for Gans to acquire the Joint Venture's Monticello, Kentucky and Pomme de Terre,
Missouri systems, as well as certain assets of the other Gans Selling
Partnerships. Following a series of discussions and meetings, the Joint Venture
together with certain affiliated partnerships, and Gans determined that they
were not able to agree on certain further amendments to the Gans Agreement
required to satisfy conditions precedent to close the transactions. In light of
these conditions and existing economic and financial market conditions, and
their impact of Gans' inability to arrange financing in order to close the
acquisitions, on April 18, 2001, the parties agreed to terminate the Gans
Agreement.

Following termination of the Gans Agreement, the broker once again
attempted to market the Joint Venture's systems. At the time of this filing,
there is no definitive agreement to purchase any of the systems and the broker
continues to market the systems on behalf of the Joint Venture.

Other expense of $68,900 and $9,000 for the years ended December 31,
2001 and 2000, respectively, represents legal and proxy costs associated with
proposed sale of the Joint Venture's assets.

(4) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following as of the
dates presented:

DECEMBER 31,
----------------------------
2001 2000
------------ ------------

Cable distribution systems $ 22,223,300 $ 21,475,700
Land and improvements 149,700 114,800
Vehicles, furniture and equipment 664,000 628,100
------------ ------------
23,037,000 22,218,600

Less: accumulated depreciation (16,575,000) (14,993,300)
------------ ------------

$ 6,462,000 $ 7,225,300
============ ============

Depreciation expense for the years ended December 31, 2001 and 2000,
was $1,581,700 and $1,505,000, respectively.

(4) CREDIT FACILITY

The Joint Venture was party to a loan agreement with Enstar Finance
Company, LLC, a subsidiary of Enstar Communications Corporation that matured on
August 31, 2001. The loan facility was not extended or replaced and any amounts
outstanding under the facility were paid in full.

F-19

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

(6) COMMITMENTS AND CONTINGENCIES

The Joint Venture relies upon the availability of cash generated
from operations to fund its ongoing liquidity requirements and capital
requirements. The Joint Venture was required to upgrade its system in Campbell
County, Tennessee under a provision of its franchise agreement. The upgrade
began in 1998 and the franchise agreement required the project to be completed
by January 2000. The Joint Venture did not meet this requirement, although the
project has subsequently been completed at a total cost of approximately
$1,385,000. Under this upgrade initiative, no additional capital expenditures
are currently planned. The franchising authority has not given any indication
that it intends to take action adverse to the Joint Venture as the result of the
Joint Venture's noncompliance with the upgrade timing requirements of the
franchise agreement. However, no assurances can be given that the franchise
authority will not take action that is adverse to the Joint Venture.

Litigation

The Joint Venture is involved from time to time in routine legal
matters and other claims incidental to its business. The Joint Venture believes
that the resolution of such matters will not have a material adverse impact on
its financial position or results of operations.

Regulation in the Cable Television Industry

The operation of a cable system is extensively regulated by the
Federal Communications Commission (FCC), some state governments and most local
governments. The FCC has the authority to enforce its regulations through the
imposition of substantial fines, the issuance of cease and desist orders and/or
the 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.

Insurance

Approximately 94% of the Joint Venture's customers are served by its
system in Monticello, Kentucky and neighboring communities. Significant damage
to the system due to seasonal weather conditions

F-20

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

or other events could have a material adverse effect on the Joint Venture's
liquidity and cash flow. The Joint Venture continues to maintain insurance
coverage in amounts its management views as appropriate for all other property,
liability, automobile, workers' compensation and other insurable risks.

(7) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES

The Joint Venture has a management and service agreement (the
"Management Agreement") with Enstar Cable Corporation ("Enstar Cable"), a wholly
owned subsidiary of the Corporate General Partner, pursuant to which the Joint
Venture pays a monthly management fee of 4% of gross revenues of the Joint
Venture. Management fee expense was $263,500 and $261,600 for the years ended
December 31, 2001 and 2000, respectively. In addition, the Joint Venture is also
required to distribute to the Corporate General Partner an amount equal to 1% of
gross revenues, representing its interest as the Corporate General Partner.
Management fee expense to the Corporate General Partner was $65,900 and $65,400
for the years ended December 31, 2001 and 2000, respectively. No management fee
is payable to Enstar Cable or the Corporate General Partner by the Joint Venture
and management fees are non-interest bearing.

The Management Agreement also provides that the Joint Venture
reimburse Enstar Cable for direct expenses incurred on behalf of the Joint
Venture and the Joint Venture's allocable share of Enstar Cable's operational
costs. Additionally, Charter and its affiliates provide other management and
operational services for the Joint Venture. These expenses are charged to the
properties served based primarily on the Joint Venture's allocable share of
operational costs associated with the services provided. The Joint Venture
reimburses the affiliates for the Joint Venture's allocable share of the
affiliates' costs. The total amount charged to the Joint Venture for these costs
approximated $859,300 and $1,085,400 for the years ended December 31, 2001 and
2000, respectively.

Substantially all programming services had been purchased through
Charter. Charter charges the Joint Venture for these costs based on its costs.
The Joint Venture recorded programming fee expense of $1,300,000 and $1,075,000
for the years ended December 31, 2001 and 2000, respectively. Programming fees
are included in service costs in the accompanying statements of operations.

(8) NEW ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations", No. 142, "Goodwill and Other Intangible Assets" and No. 143,
"Accounting for Asset Retirement Obligations." SFAS No. 141 requires all
business combinations initiated after June 30, 2001 to be accounted for using
the purchase method of accounting and was adopted by the Venture on July 1,
2001. Management believes that adoption of SFAS No. 141 did not have an impact
on the financial statements of the Venture.

Under SFAS No. 142, goodwill and other indefinite lived intangible
assets are no longer subject to amortization over their useful lives, rather,
they are subject to at least annual assessments for impairment. Also, under SFAS
No. 142, an intangible asset should be recognized if the benefit of the
intangible asset is obtained through contractual or other legal rights or if the
intangible asset can be sold, transferred, licensed, rented or exchanged. Such
intangibles continue to be amortized over their useful lives. SFAS 142 was
implemented by the Venture on January 1, 2002. Management believes that adoption
of SFAS No. 142 did not have a material impact on the financial statements of
the Venture.

F-21

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2001 AND 2000

Under SFAS No. 143, the fair value of a liability for an asset
retirement obligation is required to be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset. SFAS No. 143 will be implemented by the Venture on January 1,
2002. Management believes that adoption of SFAS No. 143 will not have a material
impact on the financial statements of the Venture.

In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "Accounting for the Impairment of Disposal of Long-Lived Assets." SFAS
No. 144 addresses financial accounting and reporting for the impairment of
long-lived assets and for long-lived assets to be disposed of and supersedes
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." SFAS No. 144 establishes a single
accounting model for long-lived assets to be disposed of by sale and resolves
implementation issues related to SFAS No. 121. SFAS No. 144 was implemented by
the Venture on January 1, 2002. The Venture is currently in process of assessing
the impact of adoption of SFAS No. 144.

F-22

REPORT OF INDEPENDENT AUDITORS

To the Partners of
Enstar Income/Growth Program Five-B, L.P. (a Georgia limited partnership):

We have audited the accompanying statements of operations, partnership capital
(deficit), and cash flows of Enstar Income/Growth Program Five-B, L.P. (a
Georgia limited partnership) for the period ended December 31, 1999. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Enstar
Income/Growth Program Five-B, L.P. for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.

/s/ ERNST & YOUNG LLP

Los Angeles, California,
March 24, 2000

F-23

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1999

OPERATING EXPENSES:
General and administrative expenses $ (41,600)

INTEREST EXPENSE (200)
---------

Loss before equity in net income of joint venture (41,800)

EQUITY IN NET INCOME OF JOINT VENTURE 199,200
---------

Net income $ 157,400
=========

NET INCOME ALLOCATED TO GENERAL PARTNERS $ 1,600
=========

NET INCOME ALLOCATED TO LIMITED PARTNERS $ 155,800
=========

NET INCOME PER UNIT OF LIMITED PARTNERSHIP INTEREST $ 2.60
=========

WEIGHTED AVERAGE LIMITED PARTNERSHIP UNITS OUTSTANDING
DURING THE YEAR 59,830
=========

See accompanying notes to financial statements.

F-24

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

STATEMENT OF PARTNERSHIP CAPITAL (DEFICIT)

FOR THE YEAR ENDED DECEMBER 31, 1999

GENERAL LIMITED
PARTNERS PARTNERS TOTAL
---------- ---------- ----------

PARTNERSHIP CAPITAL (DEFICIT), January 1, 1999 $ (79,400) $4,537,100 $4,457,700

Net income for year 1,600 155,800 157,400
---------- ---------- ----------

PARTNERSHIP CAPITAL (DEFICIT), December 31, 1999 $ (77,800) $4,692,900 $4,615,100
========== ========== ==========

See accompanying notes to financial statements.

F-25

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1999

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 157,400
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Equity in net income of joint venture (199,200)
Decrease from changes in:
Accounts payable and due to affiliates (3,100)
---------

Net cash used in operating activities (44,900)
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from joint venture 64,000
---------

Net increase in cash 19,100

CASH, BEGINNING OF YEAR 200
---------

CASH, END OF YEAR $ 19,300
=========

See accompanying notes to financial statements.

F-26

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1999

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

Form of Presentation

The financial statements do not give effect to any assets that the
partners may have outside of their interest in the Partnership, nor to any
obligations, including income taxes of the partners.

Investment in Joint Venture

The Partnership's investment and share of the income or loss in a
Joint Venture is accounted for on the equity method of accounting.

Income Taxes

The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles, differ from the
financial statements prepared for tax purposes due to the different treatment of
various items as specified in the Internal Revenue Code. The net effect of these
accounting differences is that the Partnership's net income for 1999 in the
financial statements is $157,400 as compared to its tax loss of $383,100 for the
same period. The difference is principally due to timing differences in
depreciation and amortization expense reported by the Joint Venture.

Earnings per Unit of Limited Partnership Interest

Earnings and losses have been allocated 99% to the Limited Partners
and 1% to the General Partners. Earnings and losses per unit of limited
partnership interest are based on the weighted average number of units
outstanding during the year. The General Partners do not own units of
partnership interest in the Partnership, but rather hold a participation
interest in the income, losses and distributions of the Partnership.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

F-27

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1999

NOTE 2 - PARTNERSHIP MATTERS

The Partnership was formed on September 4, 1986, to acquire,
construct or improve, develop, and operate cable television systems in various
locations in the United States. The partnership agreement provides for Enstar
Communications Corporation (the "Corporate General Partner") and Robert T.
Graff, Jr. to be the General Partners and for the admission of Limited Partners
through the sale of interests in the Partnership.

On September 30, 1988, Falcon Cablevision, a California limited
partnership, purchased all of the outstanding capital stock of the Corporate
General Partner. On September 30, 1998, FHGLP acquired ownership of the
Corporate General Partner from Falcon Cablevision. Simultaneously with the
closing of that transaction, FHGLP contributed all of its existing cable
television system operations to Falcon Communications, L.P. ("FCLP"), a
California limited partnership and successor to FHGLP. FHGLP served as the
managing partner of FCLP, and the General Partner of FHGLP was Falcon Holding
Group, Inc., a California corporation ("FHGI"). On November 12, 1999, Charter
Communications Holding Company, LLC, ("Charter"), acquired the ownership of FCLP
and the Corporate General Partner. The Corporate General Partner, Charter and
affiliated companies are responsible for the day-to-day management of the
Partnership and its operations.

The Partnership was formed with an initial capital contribution of
$1,100 comprising $1,000 from the Corporate General Partner and $100 from the
initial Limited Partner. Sale of interests in the Partnership began in July
1987, and the initial closing took place in August 1987. The Partnership
continued to raise capital until $15,000,000 (the maximum) was raised in
December 1987.

The partnership agreement generally provides that all cash
distributions (as defined) be allocated 1% to the General Partners and 99% to
the Limited Partners until the Limited Partners have received aggregate cash
distributions equal to their original capital contributions ("Capital Payback").
The amended partnership agreement also provides that all partnership profits,
gains, operational losses, and credits (all as defined) be allocated 1% to the
General Partners and 99% to the Limited Partners until the Limited Partners have
been allocated net profits equal to the amount of cash flow required for Capital
Payback. After the Limited Partners have received cash flow equal to their
initial investments, the General Partners will only receive a 1% allocation of
cash flow from sale or liquidation of a system until the Limited Partners have
received an annual simple interest return of at least 10% of their initial
investments less any distributions from previous system sales or refinancing of
systems. Thereafter, the respective allocations will be made 20% to the General
Partners and 80% to the Limited Partners. Any losses from system sales or
exchanges shall be allocated first to all partners having positive capital
account balances (based on their respective capital accounts) until all such
accounts are reduced to zero and thereafter to the Corporate General Partner.
All allocations to individual Limited Partners will be based on their respective
limited partnership ownership interests.

F-28

ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1999

The Partnership's operating expenses and distributions to partners
are funded primarily from distributions received from the Joint Venture.

The partnership agreement limits the amount of debt the Partnership
may incur.

NOTE 3 - EQUITY IN NET ASSETS OF JOINT VENTURE

The Partnership and an affiliated partnership, Enstar Income/Growth
Program Five-A, L.P., (collectively, the "Venturers") each own 50% of the Joint
Venture. The Joint Venture was initially funded through capital contributions
made by each Venturer during 1988 totaling $11,821,000 in cash and $750,000 in
capitalized system acquisition and related costs. Each Venturer shares equally
in the profits and losses of the Joint Venture. The Joint Venture earned income
of $398,400 in 1999, of which income of $199,200 was allocated to the
Partnership.

NOTE 4 - POTENTIAL SALE OF PARTNERSHIP ASSETS

In accordance with the partnership agreement, the Corporate General
Partner has implemented a plan for liquidating the Partnership. In connection
with that strategy, the Corporate General Partner has entered into an agreement
with a cable broker to market the Joint Venture's cable systems to third
parties. Should the Joint Venture receive offers from third parties for such
assets, the Corporate General Partner will prepare a proxy for submission to the
Limited Partners for the purpose of approving or disapproving such sale. Should
such a sale be approved, the Corporate General Partner will proceed to liquidate
the Partnership and Joint Venture following the settlement of their final
liabilities. The Corporate General Partner can give no assurance, however, that
it will be able to generate a sale of the Joint Venture's cable assets. The
financial statements do not reflect any adjustments that may result from the
outcome of this uncertainty.

NOTE 5 - TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES

The Partnership has a management and service agreement (the
"Agreement") with a wholly owned subsidiary of the Corporate General Partner
(the "Manager") for a monthly management fee of 5% of gross receipts as defined,
from the operations of the Partnership. The Partnership did not own or operate
any cable television operations in 1999 other than through its investment in the
Joint Venture. No management fees were paid by the Partnership during 1999.

The Agreement also provides that the Partnership will reimburse the
Manager for direct expenses incurred on behalf of the Partnership and for the
Partnership's allocable share of operational costs associated with services
provided by the Manager. No reimbursable expenses were incurred on behalf of the
Partnership during 1999.

NOTE 6 - COMMITMENTS

The Partnership, together with Enstar Income/Growth Program Five-A,
L.P., has guaranteed the debt of the Joint Venture.

F-29

REPORT OF INDEPENDENT AUDITORS

To the Venturers of
Enstar Cable of Cumberland Valley (a Georgia general partnership):

We have audited the accompanying statements of operations, venturers' capital,
and cash flows of Enstar Cable of Cumberland Valley (a Georgia general
partnership) for the year ended December 31, 1999. These financial statements
are the responsibility of the Joint Venture's management. Our responsibility is
to express an opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Enstar Cable
of Cumberland Valley for the year ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States.

/s/ ERNST & YOUNG LLP

Los Angeles, California,
March 24, 2000

F-30

ENSTAR CABLE OF CUMBERLAND VALLEY

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1999

REVENUES $ 6,780,200
-----------

OPERATING EXPENSES:
Service costs 2,819,200
General and administrative expenses 1,015,700
General partner management fees and reimbursed expenses 578,600
Depreciation and amortization 1,824,500
-----------

6,238,000
-----------

Operating income 542,200
-----------

OTHER INCOME (EXPENSE):
Interest expense (181,400)
Interest income 37,600
-----------

(143,800)
-----------

Net income (loss) $ 398,400
===========

See accompanying notes to financial statements.

F-31

ENSTAR CABLE OF CUMBERLAND VALLEY

STATEMENT OF VENTURERS' CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 1999

ENSTAR INCOME/ ENSTAR INCOME/
GROWTH GROWTH
PROGRAM PROGRAM
FIVE-A, L.P. FIVE-B, L.P. TOTAL
----------- ----------- -----------

BALANCE, January 1 ,1999 $ 4,466,400 $ 4,466,400 $ 8,932,800

Distributions to venturers (64,000) (64,000) (128,000)
Net income for year 199,200 199,200 398,400
----------- ----------- -----------

BALANCE, December 31, 1999 $ 4,601,600 $ 4,601,600 $ 9,203,200
=========== =========== ===========

See accompanying notes to financial statements.

F-32

ENSTAR CABLE OF CUMBERLAND VALLEY

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 1999

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 398,400
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,824,500
Amortization of deferred loan costs 40,700
Increase (decrease) from changes in:
Accounts receivable, prepaid expenses and other assets (122,300)
Accounts payable and due to affiliates 21,500
-----------

Net cash provided by operating activities 2,162,800
-----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (558,600)
Increase in intangible assets (11,500)
-----------

Net cash used in investing activities (570,100)
-----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to venturers (128,000)
Repayment of borrowings from affiliate (1,000,000)
-----------

Net cash used in financing activities (1,128,000)
-----------

Net increase in cash 464,700

CASH, BEGINNING OF YEAR 515,600
-----------

CASH, END OF YEAR $ 980,300
===========

See accompanying notes to financial statements.

F-33

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1999

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

Form of Presentation

Enstar Cable of Cumberland Valley, a Georgia general partnership
(the "Joint Venture"), owns and operates cable systems in rural areas of
Kentucky, Tennessee and Missouri.

Property, Plant, Equipment and Depreciation and Amortization

Property, plant and equipment are stated at cost. Direct costs
associated with installations in homes not previously served by cable are
capitalized as part of the distribution system, and reconnects are expensed as
incurred. For financial reporting, depreciation and amortization is computed
using the straight-line method over the following estimated useful lives:

Cable distribution systems 5-15 years
Vehicles 3 years
Furniture and equipment 5-7 years
Leasehold improvements Shorter of life of lease or useful life of asset

In 1998, the Joint Venture revised the estimated useful life of its
existing plant assets in a Tennessee franchise area from 15 years to
approximately 12.5 years. The Partnership implemented the reduction as a result
of a system upgrade that is required to be completed in 2000 as provided for in
the franchise agreement. The impact of this change in the life of the assets was
to increase depreciation expense by approximately $36,500 in 1999.

Franchise Cost

The excess of cost over the fair values of tangible assets and
customer lists of cable television systems acquired represents the cost of
franchises. In addition, franchise cost includes capitalized costs incurred in
obtaining new franchises and the renewal of existing franchises. These costs are
amortized using the straight-line method over the lives of the franchises,
ranging up to 15 years. The Joint Venture periodically evaluates the
amortization periods of these intangible assets to determine whether events or
circumstances warrant revised estimates of useful lives. Costs relating to
unsuccessful franchise applications are charged to expense when it is determined
that the efforts to obtain the franchise will not be successful. The Joint
Venture is in the process of negotiating the renewal of expired franchise
agreements for 10 of the Joint Venture's 19 franchises, which include
approximately 69% of the Joint Venture's basic customers at December 31, 1999.

Deferred Loan Costs and Other Deferred Charges

Costs related to obtaining new loan agreements are capitalized and
amortized to interest expense over the life of the related loan. Other deferred
charges are amortized using the straight-line method over two years.

F-34

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1999

Recoverability of Assets

The Joint Venture assesses, on an ongoing basis, the recoverability
of intangible and capitalized plant assets based on estimates of future
undiscounted cash flows compared to net book value. If the future undiscounted
cash flow estimate were less than net book value, net book value would then be
reduced to estimated fair value, which would generally approximate discounted
cash flows. The Joint Venture also evaluates the amortization periods of assets,
including franchise costs and other intangible assets, to determine whether
events or circumstances warrant revised estimates of useful lives.

Revenue Recognition

Revenues from customer fees, equipment rental and advertising are
recognized in the period that services are delivered. Installation revenue is
recognized in the period the installation services are provided to the extent of
direct selling costs. Any remaining amount is deferred and recognized over the
estimated average period that customers are expected to remain connected to the
cable television system.

Income Taxes

As a partnership, the Joint Venture pays no income taxes. All of the
income, gains, losses, deductions and credits of the Joint Venture are passed
through to the Venturers. Nominal taxes are assessed by certain state
jurisdictions. The basis in the Joint Venture's assets and liabilities differs
for financial and tax reporting purposes. At December 31, 1999, the book basis
of the Joint Venture's net assets exceeds its tax basis by $5,301,500.

The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles, differ from the
financial statements prepared for tax purposes due to the different treatment of
various items as specified in the Internal Revenue Code. The net effect of these
accounting differences is that the Joint Venture's net income for 1999 in the
financial statements is $398,400 as compared to its tax loss of $682,400 for the
same period. The difference is principally due to timing differences in
depreciation and amortization expense.

Advertising Costs

All advertising costs are expensed as incurred.

Use of Estimates

NOTE 2 - JOINT VENTURE MATTERS

The Joint Venture was formed under the terms of a general
partnership agreement (the "partnership agreement") effective January 11, 1988,
between Enstar Income/Growth Program Five-A, L.P. and Enstar Income/Growth
Program Five-B, L.P., which are two limited partnerships sponsored by Enstar

F-35

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1999

Communications Corporation (the "Corporate General Partner"). The Joint Venture
was formed to pool the resources of the two limited partnerships to acquire,
own, operate and dispose of certain cable television systems.

Under the terms of the partnership agreement, the Venturers share
equally in profits, losses, allocations and assets. Capital contributions, as
required, are also made equally.

NOTE 3 - POTENTIAL SALE OF JOINT VENTURE ASSETS

In accordance with the partnership agreement, the Corporate General
Partner has implemented a plan for liquidating the Joint Venture. In connection
with that strategy, the Corporate General Partner has entered into an agreement
with a cable broker to market the Joint Venture's cable systems to third
parties. Should the Joint Venture receive offers from third parties for such
assets, the Corporate General Partner will prepare a proxy for submission to the
Limited Partners for the purpose of approving or disapproving such sale. Should
such a sale be approved, the Corporate General Partner will proceed to liquidate
the Joint Venture following the settlement of its final liabilities. The
Corporate General Partner can give no assurance, however, that it will be able
to generate a sale of the Joint Venture's cable assets. The financial statements
do not reflect any adjustments that may result from the outcome of this
uncertainty.

NOTE 4 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practicable to
estimate that value:

Notes Payable - Affiliate

The carrying amount approximates fair value due to the variable rate
nature of the notes payable.

NOTE 5 - NOTE PAYABLE - AFFILIATE

The Joint Venture is party to a loan agreement with Enstar Finance
Company, LLC ("EFC"), a subsidiary of the Corporate General Partner. The loan
agreement provides for a revolving loan facility of $9,181,000 (the "Facility").
The Joint Venture repaid its outstanding borrowings in 1999, although the Joint
Venture may reborrow under the Facility in the future for the upgrade of its
systems. On November 12, 1999,

F-36

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1999

in connection with the sale of the Corporate General Partner to Charter, the
Facility was reduced to $1,000,000.

The Joint Venture's Facility matures on August 31, 2001, at which
time all amounts then outstanding are due in full. Borrowings bear interest at
the lender's base rate (8.5% at December 31, 1999) plus 0.625%, or at an
offshore rate plus 1.875%. Under certain circumstances, the Joint Venture is
required to make mandatory prepayments, which permanently reduce the maximum
commitment under the Facility. Borrowings under the Facility are collateralized
by substantially all assets of the Joint Venture and are guaranteed by the
Venturers. The Facility contains certain financial tests and other covenants
including, among others, restrictions on incurrence of indebtedness,
investments, sales of assets, acquisitions and other covenants, defaults and
conditions. The Facility does not restrict the payment of distributions to
partners by the Partnership unless an event of default exists thereunder or the
Joint Venture's ratio of debt to cash flow is greater than 4 to 1. The Corporate
General Partner believes the Joint Venture was in compliance with the covenants
at December 31, 1999.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

The Joint Venture leases buildings and tower sites associated with
the systems under operating leases expiring in various years through 2002.

Future minimum rental payments under non-cancelable leases that have
remaining terms in excess of one year as of December 31, 1999, are as follows:

Year Amount
------ --------

2000 $ 18,500
2001 18,400
2002 10,600
--------
$ 47,500
========

Rentals, other than pole rentals, charged to operations approximated
$48,600 in 1999, while pole rental expense approximated $114,900 in 1999.

Other commitments include approximately $935,000 at December 31,
1999, to complete the upgrade of the Joint Venture's Campbell County, Tennessee
system. The Joint Venture's franchise agreement with Campbell County requires
the upgrade to have been completed by January 2000. The Joint Venture did not
meet this requirement, although it has commenced the upgrade. The franchising
authority has not given any indication that it intends to take action adverse to
the Joint Venture as a result of the Joint Venture's non-compliance with the
upgrade requirement in the franchise agreement. There can be no assurance,
however, that the franchising authority will not take action that is adverse to
the Joint Venture. In the event that the franchising authority exercises its
right to terminate the franchise as a result of this non-compliance, an event of
default may be declared under the Joint Venture's Facility with EFC, which would
require the Joint Venture to identify alternative sources of financing.

F-37

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1999

The Joint Venture is subject to regulation by various federal, state
and local government entities. The Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act") provides for, among other things,
federal and local regulation of prices charged for basic cable service, cable
programming service tiers ("CPSTs") and equipment and installation services.
Regulations issued in 1993 and significantly amended in 1994 by the Federal
Communications Commission (the "FCC") have resulted in changes in the prices
charged for the Joint Venture's cable services. The Joint Venture believes that
compliance with the 1992 Cable Act has had a significant negative impact on its
operations and cash flow. It also believes that any potential future liabilities
for refund claims or other related actions would not be material. The
Telecommunications Act of 1996 (the "1996 Telecom Act") was signed into law on
February 8, 1996. As it pertains to cable television, the 1996 Telecom Act,
among other things, (i) ends the regulation of certain CPSTs in 1999; (ii)
expands the definition of effective competition, the existence of which
displaces rate regulation; (iii) eliminates the restriction against the
ownership and operation of cable systems by telephone companies within their
local exchange service areas; and (iv) liberalizes certain of the FCC's
cross-ownership restrictions.

Beginning in August 1997, the Corporate General Partner elected to
self-insure the Joint Venture's cable distribution plant and customer
connections against property damage as well as possible business interruptions
caused by such damage. The decision to self-insure was made due to significant
increases in the cost of insurance coverage and decreases in the amount of
insurance coverage available.

In October 1998, FCLP reinstated third-party insurance coverage for
all of the cable television properties owned or managed by FCLP to cover damage
to cable distribution plant and customer connections and against business
interruptions resulting from such damage. This coverage is subject to a
significant annual deductible which applies to all of the cable television
properties formerly owned or managed by FCLP through November 12, 1999, and
currently managed by Charter.

Approximately 94% of the Joint Venture's customers are served by its
system in Monticello, Kentucky and neighboring communities. Significant damage
to the system due to seasonal weather conditions or other events could have a
material adverse effect on the Joint Venture's liquidity and cash flows. The
Joint Venture's Monticello, Kentucky, cable system sustained damage due to an
ice storm on February 3, 1998. The cost of replacing and upgrading the damaged
assets amounted to approximately $1,361,400 in 1998 and resulted in a casualty
loss of $215,600. The cost of repairs was funded from available cash reserves
and operating cash flow. The Joint Venture continues to purchase insurance
coverage in amounts its management views as appropriate for all other property,
liability, automobile, workers' compensation and other types of insurable risks.

In the state of Missouri, customers have filed a punitive class
action lawsuit on behalf of all persons residing in the state who are or were
customers of the Joint Venture's cable television service, and who have been
charged a fee for delinquent payment of their cable bill. The action challenges
the legality of the processing fee and seeks declaratory judgment, injunctive
relief and unspecified damages. At present, the Joint Venture is not able to
project the outcome of the action. Approximately 6% of the Joint Venture's basic
customers reside in Missouri where the claim was filed.

NOTE 7 - TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES

The Joint Venture has a management and service agreement (the
"Agreement") with a wholly owned subsidiary of the Corporate General Partner
(the "Manager") for a monthly management fee of 4% of

F-38

ENSTAR CABLE OF CUMBERLAND VALLEY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1999

gross receipts, as defined, from the operations of the Joint Venture. Management
fee expense approximated $271,200 in 1999. In addition, the Joint Venture is
required to distribute 1% of its gross revenues to the Corporate General Partner
in respect of its interest as the Corporate General Partner. This fee
approximated $67,800 in 1999.

The Joint Venture also reimburses the Manager for direct expenses
incurred on behalf of the Joint Venture and for the Venture's allocable share of
operational costs associated with services provided by the Manager. All cable
television properties managed by the Corporate General Partner and its
subsidiaries are charged a proportionate share of these expenses. Charter and
its affiliates provide management services for the Venture. Such services were
provided by FCLP and its affiliates prior to November 12, 1999. Corporate office
allocations and district office expenses are charged to the properties served
based primarily on the respective percentage of basic customers or homes passed
(dwelling units within a system) within the designated service areas. The total
amounts charged to the Joint Venture for these services approximated $239,600
during 1999.

The Joint Venture also receives certain system operating management
services from affiliates of the Corporate General Partner in addition to the
Manager, due to the fact that there are no such employees directly employed by
the Joint Venture. The Joint Venture reimburses the affiliates for the Joint
Venture's allocable share of the affiliates' operational costs. The total amount
charged to the Joint Venture for these costs approximated $791,200 in 1999. No
management fee is payable to the affiliates by the Joint Venture and there is no
duplication of reimbursed expenses and costs paid to the Manager.

Substantially all programming services had been purchased through
FCLP, and since November 12, 1999, have been purchased through Charter. FCLP
charged the Joint Venture for these costs based on an estimate of what the
Corporate General Partner could negotiate for such programming services for the
15 partnerships managed by the Corporate General Partner as a group. Charter
charges the Joint Venture for these costs based on its costs. The Joint Venture
recorded programming fee expense of $1,383,600 in 1999. Programming fees are
included in service costs in the statement of operations.

In the normal course of business, the Joint Venture paid interest
and principal to EFC when there were amounts outstanding under the Facility and
pays a commitment fee to EFC on the unborrowed portion of its Facility.

NOTE 8 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for interest amounted to $197,400 in 1999.

F-39

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
- ------ -----------

2.2a Asset Purchase Agreement, dated August 8, 2000, by and among
Multimedia Acquisition Corp., as Buyer, and Enstar Income Program
II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program
IV-3, L.P., Enstar Income/Growth Program Six-A, L.P., Enstar IX,
Ltd., Enstar XI, Ltd., Enstar IV/PBD Systems Venture, Enstar Cable
of Cumberland Valley and Enstar Cable of Macoupin County, as
Sellers. (Incorporated by reference to the exhibits to the Current
Report on Form 10-Q of Enstar Income Program II-1, L.P., File No.
000-14508 for the quarter ended June 30, 2000.)

2.2b Amendment dated September 29, 2000, of the Asset Purchase Agreement
dated August 8, 2000, by and among Multimedia Acquisition Corp., as
Buyer, and Enstar Income Program II-1, L.P., Enstar Income Program
II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/Growth
Program Six-A, L.P., Enstar IX, Ltd., Enstar XI, Ltd., Enstar IV/PBD
Systems Venture, Enstar Cable of Cumberland Valley and Enstar Cable
of Macoupin County, as Sellers. (Incorporated by reference to the
exhibits to the Current Report on Form 10-Q of Enstar Income Program
IV-1, L.P., File No. 000-15705 for the quarter ended September 30,
2000.)

2.3 Asset Purchase Agreement and related documents by and between Enstar
Cable of Cumberland Valley and W.K. Communications, Inc., dated as
of April 23, 1993. (Incorporated by reference to the exhibits to the
Registrant's Quarterly Report on Form 10-Q, File No. 000-16789 for
the quarter ended March 31, 1993.)

3 Second Amended and Restated Agreement of Limited Partnership of
Enstar Income/Growth Program Five-B, L.P., dated as of August 1,
1988. (Incorporated by reference to the exhibits to the Registrant's
Annual Report on Form 10-K, File No. 000-16789 for the fiscal year
ended December 31, 1988.)

10.1 Amended and Restated Partnership Agreement of Enstar Cable of
Cumberland Valley, dated as of April 28, 1988. (Incorporated by
reference to the exhibits to the Registrant's Annual Report on Form
10-K, File No. 000-16789 for the fiscal year ended December 31,
1988.)

10.2 Management Agreement between Enstar Income/Growth Program Five-B,
L.P., and Enstar Cable Corporation. (Incorporated by reference to
the exhibits to the Registrant's Annual Report on Form 10-K, File
No. 000-16789 for the fiscal year ended December 31, 1987.)

10.3 Management Agreement between Enstar Cable of Cumberland Valley and
Enstar Cable Corporation, as amended. (Incorporated by reference to
the exhibits to the Registrant's Annual Report on Form 10-K, File
No. 000-16789 for the fiscal year ended December 31, 1988.)

10.4 Management Services Agreement between Enstar Cable Corporation and
Falcon Communications, L.P. dated as of September 30, 1998
(Incorporated by reference to the exhibits to the Annual Report on
Form 10-K of Enstar Income Program II-1, L.P., File No. 000-14508
for the fiscal year ended December 31, 2001.)

10.5 Service agreement between Enstar Communications Corporation, Enstar
Cable Corporation and Falcon Communications, L.P. dated as of
September 30, 1998 (Incorporated by reference to the exhibits to the
Annual Report on Form 10-K of Enstar Income Program II-1, L.P., File
No. 000-14508 for the fiscal year ended December 31, 2001.)

E-1

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
- ------ -----------

10.6 Consulting Agreement between Enstar Communications Corporation and
Falcon Communications, L.P. dated as of September 30, 1998
(Incorporated by reference to the exhibits to the Annual Report on
Form 10-K of Enstar Income Program II-1, L.P., File No. 000-14508
for the fiscal year ended December 31, 2001.)

21.1 Subsidiaries: Enstar Cable of Cumberland Valley.

**99.1 Letter responsive to Temporary Note 3T to Article 3 of Regulation
S-X.

E-2