UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

 Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

X Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from June 1, 1999 to December 31, 1999

                         Commission File Number: 0-16899

                          ARAHOVA COMMUNICATIONS, INC.
              (Successor by Merger to Century Communications Corp.)
             (Exact name of registrant as specified in its charter)

          Delaware                                        25-1844576
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                      Identification No.)

                              One North Main Street
                           Coudersport, PA             16915-1141
               (Address of principal executive offices) (Zip code)

                                  814-274-9830
               (Registrant's telephone number including area code)

        Securities registered pursuant to Section 12(b) of the Act: None.
        Securities registered pursuant to Section 12(g) of the Act: 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  ____

Documents Incorporated by Reference:    None

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 the Form 10-K or any amendment to the
Form 10-K. X .

Adelphia Communications Corporation is the holder of all shares of outstanding
common stock, par value $.01, of Arahova Communicaitons, Inc., consisting of
1,000 shares as of July 28, 2000.

Arahova meets the conditions set forth in General Instruction I (i) (a) and (b)
and is therefore filing in the reduced disclosure format.


<PAGE>


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                                                     ARAHOVA COMMUNICATIONS, INC.

                                TABLE OF CONTENTS

PART I

<S>                                                                                                                <C>
   ITEM 1.      BUSINESS                                                                                              3

   ITEM 2.      PROPERTIES                                                                                           18

   ITEM 3.      LEGAL PROCEEDINGS                                                                                    18

   ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                  19


PART II

   ITEM 5.      MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                STOCKHOLDER MATTERS                                                                                  20

   ITEM 6.      SELECTED FINANCIAL DATA                                                                              20

   ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                RESULTS OF OPERATIONS                                                                                22

   ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                            29

   ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                          30

   ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                FINANCIAL DISCLOSURE                                                                                 54


PART III

   ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                   54

   ITEM 11.     EXECUTIVE COMPENSATION                                                                               55

   ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                       55

   ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                       55


PART IV

   ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                                      55

</TABLE>


<PAGE>



PART I

(Dollars in thousands, except subscriber rates and per share amounts)

ITEM 1.  BUSINESS

Introduction

      On October 1, 1999, Adelphia Communications Corporation ("Adelphia") and
Century Communications Corp. ("Century") consummated a merger (the "Merger")
whereby Century was merged with and into Adelphia Acquisition Subsidiary, Inc.
("Merger Sub"), a wholly owned subsidiary of Adelphia, pursuant to an Agreement
and Plan of Merger (the "Merger Agreement"), dated as of March 5, 1999, as
amended as of July 12, 1999 and July 29, 1999, by and among Adelphia, Century
and Merger Sub. As a result of the Merger, Century has become a wholly owned
subsidiary of Adelphia, which files reports with the Securities and Exchange
Commission. Merger Sub is sometimes referred to herein as the "Successor
Corporation." The name of the Successor Corporation was changed to Arahova
Communications, Inc. ("Arahova") on October 1, 1999. As used herein, the
"Company" refers to the predecessor corporation, as well as Arahova, as the
successor to the predecessor corporation.

      As of December 31, 1999, the Company operates cable television systems
("systems") with broadband networks that passed in front of approximately
2,915,000 homes and served approximately 1,628,000 basic subscribers, with
significant concentrations of basic subscribers in Southern California,
Colorado, and Puerto Rico. In addition to traditional analog cable television,
the Company offers or intends to offer a wide range of telecommunication
services including digital cable television, high-speed data and Internet
access, paging and telephony. Adelphia is a leader in the telecommunications
industry with cable television and local telephone operations. As of December
31, 1999, Adelphia owned and managed cable television systems, including the
Company's systems, with broadband networks that passed in front of approximately
7,903,000 homes and served approximately 5,125,000 basic subscribers.

      Selected financial and other data and consolidated financial statements
presented for periods prior to October 1, 1999 are referred to herein as "Old
Arahova". Selected financial and other data and consolidated financial
statements presented for periods subsequent to October 1, 1999 are referred to
herein as "New Arahova". As a result of the application of purchase accounting
resulting from Adelphia's October 1, 1999 acquisition of Arahova, the assets and
liabilities of New Arahova have been recorded at their estimated fair values on
October 1, 1999. The final allocation of Adelphia's purchase price to acquire
Arahova is pending the completion of third party valuations.

      On May 25, 2000, the Board of Directors of the Company changed Arahova's
fiscal year from May 31 to December 31. The decision was made to conform to
general industry practice and for administrative purposes. The change became
effective for the seven months ended December 31, 1999.

      The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Transition Report on Form 10-K, including Management's Discussion and Analysis
of Financial Condition and Results of Operations, is forward-looking, such as
information relating to the effects of future regulation, future capital
commitments and the effects of competition. Such forward-looking information
involves important risks and uncertainties that could significantly affect
expected results in the future from those expressed in any forward-looking
statements made by, or on behalf of, the Company. These "forward-looking
statements" can be identified by the use of forward-looking terminology such as
"believes", "expects", "may", "will," "should," "intends" or "anticipates" or
the negative thereof or other variations thereon or comparable terminology or by
discussions of strategy that involve risks and uncertainties. These risks and
uncertainties include, but are not limited to, uncertainties relating to
economic conditions, acquisitions and divestitures, government and regulatory
policies, the availability and cost of capital, the pricing and availability of
equipment, materials, inventories and programming, product acceptance,
technological developments and changes in the competitive environment in which
the Company operates. Persons reading this Transition Report on Form 10-K are
cautioned that forward-looking statements herein are only predictions, that no
assurance can be given that the future results will be achieved, and that actual
events or results may differ materially as a result of the risks and
uncertainties facing the Company. For further information regarding those risks
and uncertainties and their potential impact on the Company, see the prospectus
and most recent prospectus supplement filed under Registration Statement
No.333-78027 of Adelphia Communications Corporation, under the heading
"Risk Factors."

    Products and Services

      Video Services

      Systems receive a variety of television, radio and data signals
transmitted to receiving sites ("headends") by way of off-air antennas,
microwave relay systems and satellite earth stations. Signals are then
modulated, amplified and distributed primarily through fiber optic and coaxial
cable to subscribers, who pay fees for the service. Cable television systems are
generally constructed and operated pursuant to non-exclusive franchises awarded
by state or local government authorities for specified periods of time.

      Systems typically offer subscribers a package of basic video services
consisting of local and distant television broadcast signals,
satellite-delivered non-broadcast channels (which offer programming such as
news, sports, family entertainment, music, weather, shopping, etc.) and public,
governmental and educational access channels.

      In addition, premium service channels, which provide movies, live and
taped concerts, sports events and other programming, are offered for an extra
monthly charge. Systems also offer pay-per-view programming, which allows the
subscriber to order special events or movies and to pay on a per event basis.
Local, regional and national advertising time is sold in the majority of the
Systems with commercial advertisements inserted on certain satellite-delivered
non-broadcast channels.

      Digital video services are available to the Company's subscribers who
lease or purchase a digital converter. Digital TV is a computerized method of
defining, transmitting and storing information that makes up a television
signal. Since digital signals can be "compressed," the Company can transmit up
to 12 channels in the space currently used to transmit just one analog channel.
The Company's digital TV subscribers may also receive "multichannel" premium
services, such as HBO 1, 2, 3 and 4 from east and west coast satellite feeds,
enhanced pay-per-view options with 18 movie channels, up to 40 channels of
CD-quality music from Music Choice, and an interactive on-screen program guide
to help them navigate the new digital choices.

      The Company also sells advertising to various entities for local and
national advertising on certain channels carried by the Company, as well as
mailings and other media.

      High-Speed Data Services and Internet Access

      Arahova has begun deployment of Power Link, Adelphia's high-speed data
service provided through cable modems. Power Link, which includes residential,
institutional, and business service offerings, constitutes an alternative to the
traditional slower speed data offerings available through Internet Service
Providers ("ISPs"). Power Link offers customers speeds comparable to those
available through a T1 line, at costs that compare to a typical ISP plus a
second telephone line. The Company also has an agreement with At Home Network
("@Home"), a provider of high-speed Internet services via a cable
infrastructure, to deliver high-speed Internet services in certain markets
covering 1,315,000 homes passed. The agreement with @Home has a term of six
years ending May 31, 2004.

      The Company's deep fiber design allows the use of the expanded bandwidth
potential of digital compression technology for cable data and video services.
High-speed cable data services are now available at speeds far in excess of that
which is currently available via a 28.8 kilobit or 56 kilobit per second
telephone modem. In addition, using a high-speed cable modem and special
ethernet card allows the user to bypass telephone lines, does not require the
user to log on, and allows for multiple sessions or connections to multiple
services simultaneously.

      The Company also offers high-speed Internet access through the use of one
way cable modems, which provide the high-speeds of broadband on the data
downstream and utilize a telephone line return path. One way cable modems enable
the Company to offer the high-speed data service to the bulk of its customers
while completing the system buildout of two-way broadband plant.

      The Company also offers traditional dial up Internet access for those
customers who initially prefer this method of Internet access to the higher
speeds of our broadband network. This establishes the Company as a full service
Internet provider and creates a customer base, which can be upgraded to the
high-speed service in the future.

      Other Services

      In 2000, the Company expects to begin offering wireless messaging services
to its subscribers through an affiliate, Page Time, Inc., a wholly-owned
subsidiary of Adelphia which provides one-way messaging services to Adelphia and
its subsidiaries via resale arrangements with existing paging network operators.

      In the fourth quarter of the calendar year 1999, the Company began selling
long distance telephone service on a resale basis. Services offered include
state-to-state and in-state long distance, as well as toll-free service,
international calling, calling card services and debit card services. The
Company's sales effort is focused on the consumer market for long distance and
emphasizes the simplicity and savings of one low competitive usage fee available
24 hours a day, 7 days a week, with no monthly fee.

    Operating Strategy

      The Company's cable television operations strategy is to construct and
operate a broadband network capable of offering a broad range of
telecommunications services and providing superior customer service while
maximizing operating efficiencies. The Company intends to build on its expertise
as a cable television service provider, as well as to become a provider of
bundled communications services. It intends to combine its cable television
service with high-speed data and Internet access, paging and telephony services.

      The Company considers technological innovation to be an important
component of its service offerings and customer satisfaction. The Company
intends to continue the upgrade of its network infrastructure to add channel
capacity, increase digital transmission capabilities and further improve system
reliability. These improvements will enable the Company to continue its
introduction of additional services, such as digital video, high-speed data and
Internet service and impulse-ordered pay-per-view programming, which expand
customer choices and are expected to increase Company revenues.

Recent Development of the Systems

      The Company has focused on acquiring and developing systems in markets
which have favorable historical growth trends. The Company believes that the
strong household growth trends in its systems' market areas are a key factor in
positioning itself for future growth in basic subscribers.

      In December 1999, Adelphia entered into definitive agreements under which
Cablevision Systems Corporation will sell its cable systems in the greater
Cleveland metropolitan area to a subsidiary of Arahova for approximately
$1,530,000 in cash and Adelphia securities. As of December 31, 1999, these
systems served approximately 307,000 basic subscribers. The transaction is
subject to customary closing conditions and regulatory approval and is expected
to close by the fourth quarter of 2000.

      On April 14, 2000, a subsidiary of Arahova, along with certain other
subsidiaries and affiliates of Adelphia, closed on a $2,250,000 bank credit
facility. In connection with the closing of the facility, Adelphia contributed
cable systems serving approximately 460,000 basic subscribers to a subsidiary of
Arahova. For more information on the bank credit facility, refer to Item 7
"Management's Discussion of Financial Condition and Results of Operations -
Financing Transactions".

      On July 5, 2000 Adelphia closed its acquisition under which Prestige
Communications of NC, Inc. sold its cable systems in Virginia, North Carolina
and Maryland to a subsidiary of Arahova for approximately $700,000. These
systems serve approximately 120,000 basic subscribers.

      On May 26, 1999, Adelphia announced that it had agreed to swap certain of
its cable systems and certain systems and of its wholly owned subsidiaries with
Comcast Corporation ("Comcast") in a geographic rationalization of the
companies' respective markets. As part of this transaction, Arahova will add
approximately 168,000 subscribers in the Los Angeles, CA area and the West
Palm/Fort Pierce, FL area. In exchange, Comcast will receive Arahova systems
serving approximately 178,000 subscribers in New Jersey, New Mexico and Indiana.
All systems involved in the transactions will be valued by agreement between the
parties or, following a failure to reach agreement, by independent valuations,
with any difference in relative value to be funded with cash or additional cable
systems. The system swaps are subject to customary closing conditions and
regulatory approvals and are expected to close during the fourth quarter of
2000.

      The Company will continue to evaluate new opportunities that allow for the
expansion of its business through the acquisition of additional cable television
systems in geographic proximity to its existing regional market areas or in
locations that can serve as the basis for new market areas, either directly or
indirectly through joint ventures, where appropriate.

Financial Information

      The financial data regarding the Company's revenues, results of operations
and identifiable assets as of and for each of the four years in the period ended
May 31, 1999, the seven months ended December 31, 1998, the four months ended
September 30, 1999, and the three months ended December 31, 1999 are set forth
in, and incorporated herein by reference to, Item 6 of this Transition Report on
Form 10-K.

    Technologies and Capital Improvements

      The Company has made a substantial commitment to the technological
development of the systems and is aggressively investing in the upgrade of the
technical capabilities of its cable plant in a cost efficient manner. The
Company continues to deploy fiber optic cable and to upgrade the technical
capabilities of its broadband networks. This should result in increases in
network capacity, digital capability, two-way communication and network
reliability.

      The upgraded systems, on average, will include only two active pieces of
equipment between the headend and the home. Limiting the number of active pieces
of equipment combined with the small number of homes per fiber node reduces the
potential for mechanical failure and the number of customers affected by such a
failure, all of which provides increased reliability to the customers.

    Subscriber Services and Rates

      The Company's revenues are derived principally from monthly subscription
fees for various services. Rates to subscribers vary in accordance with the type
of service selected.

      Although service offerings vary across franchise areas because of
differences in plant capabilities, each of the areas typically offers services
at monthly prices ranging as follows:

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                Service                                       Rate Range

<S>                                                        <C>
                Basic and Cable Value Television            $ 10.00 - 35.00

                Premium Cable Television                    $  9.00 - 14.00

                Digital Cable Television                    $ 10.00

                High-Speed Internet Access                  $ 35.00 - 55.00

                Dial-up Internet Access                     $ 16.00

                Long Distance                               $ .07 - .08 per minute
</TABLE>

      An installation fee, which the Company may wholly or partially waive
during a promotional period, is usually charged to new subscribers. Subscribers
are free to terminate services at any time without charge, but often are charged
a fee for reconnection or change of service.

      The Cable Communications Policy Act of 1984 (the "1984 Cable Act"), as
amended by the Cable Television Consumer Protection and Competition Act of 1992
(the "1992 Cable Act"), deregulated basic service rates for systems in
communities meeting the Federal Communication Commissions ("FCC") definition of
effective competition. Pursuant to the FCC's definition of effective competition
adopted following enactment of the 1984 Cable Act, substantially all of the
Company's franchises were rate deregulated. However, in June 1991, the FCC
amended its effective competition standard, which increased the number of cable
systems, which could be subject to local rate regulation. The 1992 Cable Act
contains a definition of effective competition under which nearly all cable
systems in the United States are subject to regulation of basic service rates.
Additionally, the legislation (i) eliminated the 5% annual basic rate increase
allowed by the 1984 Cable Act without local approval; (ii) allows the FCC to
adjudicate the reasonableness of rates for non-basic service tiers, other than
premium services, for cable systems not subject to effective competition in
response to complaints filed by franchising authorities and/or cable
subscribers; (iii) prohibits cable systems from requiring subscribers to
purchase service tiers above basic service in order to purchase premium services
if the system is technically capable of doing so; (iv) allows the FCC to impose
restrictions on the retiering and rearrangement of cable services under certain
circumstances; and (v) permits the FCC and franchising authorities more latitude
in controlling rates and rejecting rate increase requests. The
Telecommunications Act of 1996 (the "1996 Act") ended FCC regulation on nonbasic
tier rates on March 31, 1999.

      For a discussion of recent FCC rate regulation and related developments,
see "Legislation and Regulation" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Regulatory and Competitive
Matters."

    Franchises

      The 1984 Cable Act provides that cable operators may not offer cable
service to a particular community without a franchise unless such operator was
lawfully providing service to the community on July 1, 1984 and the franchising
authority does not require a franchise. The systems operate pursuant to
franchises or other authorizations issued by governmental authorities,
substantially, all of which are nonexclusive. Such franchises or authorizations
awarded by a governmental authority generally are not transferable without the
consent of the authority. As of December 31, 1999, the Company held 494
franchises. Most of these franchises can be terminated prior to their stated
expiration by the relevant governmental authority, after due process, for breach
of material provisions of the franchise. Under the terms of most of the
Company's franchises, a franchise fee (generally ranging up to 5% of the gross
revenues of the cable system) is payable to the governmental authority.

      The franchises issued by the governmental authorities are subject to
periodic renewal. In renewal hearings, the authorities generally consider, among
other things, whether the franchise holder has provided adequate service and
complied with the franchise terms. In connection with a renewal, the authority
may impose different and more stringent terms, the impact of which cannot be
predicted. To date, all of the Company's material franchises have been renewed
or extended, at or effective upon their stated expiration, generally on modified
terms. Such modified terms have not been materially adverse to the Company.

      The Company believes that all of its material franchises are in good
standing. From time to time, the Company notifies the franchising authorities of
the Company's intent to seek renewal of the franchise in accordance with the
procedures set forth in the 1984 Cable Act. The 1984 Cable Act process requires
that the governmental authority consider the franchise holder's renewal proposal
on its own merits in light of the franchise holder's past performance and the
community's needs and interests, without regard to the presence of competing
applications. See "Legislation and Regulation." The 1992 Cable Act alters the
administrative process by which operators utilize their 1984 Cable Act franchise
renewal rights. Such changes could make it easier in some instances for a
franchising authority to deny renewal of a franchise.

    Competition

      Although the Company and the cable television industry have historically
faced modest competition, the competitive landscape is changing and competition
has increased. The Company believes that the increase in competition within its
communities will continue to occur over the next several years.

      At the present time, cable television systems compete with other
communications and entertainment media, including off-air television broadcast
signals which a viewer is able to receive directly using the viewer's own
television set and antenna. The extent to which a cable system competes with
over-the-air broadcasting depends upon the quality and quantity of the broadcast
signals available by direct antenna reception compared to the quality and
quantity of such signals and alternative services offered by a cable system. In
many areas, television signals, which constitute a substantial part of basic
service, can be received by viewers who use their own antennas. Local television
reception for residents of apartment buildings or other multi-unit dwelling
complexes may be aided by use of private master antenna services. Cable systems
also face competition from alternative methods of distributing and receiving
television signals to and from other sources of entertainment such as live
sporting events, movie theaters and home video products, including multimedia
computers, videotape recorders, digital video disc players and compact disc
players. In recent years, the FCC has adopted policies providing for
authorization of new technologies and a more favorable operating environment for
certain existing technologies that provide, or may provide, substantial
additional competition for cable television systems. The extent to which cable
television service is competitive depends in significant part upon the cable
television system's ability to provide an even greater variety of programming
and other services than that available off-air or through competitive
alternative delivery sources. In addition, certain provisions of the 1992 Cable
Act and the 1996 Act are expected to increase competition significantly in the
cable industry. See "Legislation and Regulation."

      The 1992 Cable Act prohibits the award of exclusive franchises, prohibits
franchising authorities from unreasonably refusing to award additional
franchises and permits them to operate cable systems themselves without
franchises.

      Individuals presently have the option to purchase earth stations, which
allow the direct reception of satellite-delivered program services formerly
available only to cable television subscribers. Most satellite-distributed
program signals are being electronically scrambled to permit reception only with
authorized decoding equipment, generally at a cost to the viewer. From time to
time, legislation has been introduced in Congress which, if enacted into law,
would prohibit the scrambling of certain satellite-distributed programs or would
make satellite services available to private earth stations on terms comparable
to those offered to cable systems. Broadcast television signals are being made
available to owners of earth stations under the Satellite Home View Copyright
Act of 1988, which became effective January 1, 1989 for a six-year period. This
Act establishes a statutory compulsory license for certain transmissions made by
satellite owners to home satellite dishes for which carriers are required to pay
a royalty fee to the Copyright Office. This Act was formally extended through
December 31, 1999 and deliberations relative to further extension of this Act
are ongoing. The 1992 Cable Act enhances the right of cable competitors to
purchase nonbroadcast satellite-delivered programming. See "Legislation and
Regulation--Federal Regulation."

      Video programming is now being delivered to individuals by high-powered
direct broadcast satellites ("DBS") utilizing video compression technology. This
technology has the capability of providing more than 100 channels of programming
over a single high-powered DBS satellite with significantly higher capacity
available if multiple satellites are placed in the same orbital position. Video
compression technology is being used by cable operators to similarly increase
their channel capacity. DBS service can be received virtually anywhere in the
United States through the installation of a small rooftop or side-mounted
antenna, and it is more accessible than cable television service where a cable
plant has not been constructed or where it is not cost effective to construct
cable television facilities. DBS is being heavily marketed on a nationwide basis
by competing service providers. Congress passed the Satellite Home Viewer Act in
late 1999. The law allows DBS providers to begin offering local broadcast
channels. DBS companies have since added a limited number of local channels in
some regions, a trend that will continue, thus lessening the distinction between
cable television and DBS service.

      Cable communications systems also compete with wireless program
distribution services such as multichannel, multipoint distribution service
("MMDS"), commonly called wireless cable systems, which use low-power microwave
frequencies to transmit video programming over-the-air to subscribers. There are
MMDS operators who are authorized to provide or are providing broadcast and
satellite programming to subscribers in areas served by the Company's Systems.
MMDS systems are less capital intensive, are not required to obtain local
franchises or to pay franchise fees and are subject to fewer regulatory
requirements than cable television systems. MMDS systems' ability to compete
with cable television systems has previously been limited by channel capacity,
the inability to obtain programming and regulatory delays. Recently, however,
MMDS systems have developed digital compression technology, which provides for
more channel capacity and better signal delivery. Although relatively few MMDS
systems in the United States are currently in operation or under construction,
virtually all markets have been licensed or tentatively licensed. A series of
actions taken by the FCC, including reallocating certain frequencies to wireless
services, are intended to facilitate the development of wireless cable
television spectrum that will be used by wireless operators to provide
additional channels of programming over longer distances. Several Regional Bell
Operating Companies acquired interests in major MMDS companies. The Company is
unable to predict whether wireless video services will have a material impact on
its operations.

      Additional competition may come from private cable television systems
servicing condominiums, apartment complexes and certain other multiple unit
residential developments. The operators of these private systems, known as
satellite master antenna television ("SMATV") systems, often enter into
exclusive agreements with apartment building owners or homeowners' associations
which preclude franchised cable television operators from serving residents of
such private complexes. However, the 1984 Cable Act gives franchised cable
operators the right to use existing compatible easements within their franchise
areas upon nondiscriminatory terms and conditions. Accordingly, where there are
preexisting compatible easements, cable operators may not be unfairly denied
access or discriminated against with respect to the terms and conditions of
access to those easements. There have been conflicting judicial decisions
interpreting the scope of the access right granted by the 1984 Cable Act,
particularly with respect to easements located entirely on private property.
Further, while a franchised cable television system typically is obligated to
extend service to all areas of a community regardless of population density or
economic risk, an SMATV system may confine its operation to small areas that are
easy to serve and more likely to be profitable. Under the 1996 Act, SMATV
systems can interconnect non-commonly owned buildings without having to comply
with local, state and federal regulatory requirements that are imposed upon
cable systems providing similar services, as long as they do not use public
rights-of-way. The U.S. Copyright Office has concluded that SMATV systems are
"cable systems" for purposes of qualifying for the compulsory copyright license
established for cable systems by federal law.

      The FCC has authorized an interactive television service which permits
non-video transmission of information between an individual's home and
entertainment and information service providers. This service provides an
alternative means for DBS systems and other video programming distributors,
including television stations, to initiate the interactive television services.
This service may also be used by the cable television industry.

      The FCC also has initiated a new rulemaking proceeding looking toward the
allocation of frequencies in the 28 Ghz range for a new multi-channel wireless
video service which could make 98 video channels available in a single market.
It cannot be predicted at this time whether competitors will emerge utilizing
such frequencies or whether such competition would have a material impact on the
operations of cable television systems.

      The FCC has recently auctioned a sizable amount of spectrum in the 31 Ghz
band for use by a new wireless service, LMDS, which among other uses, can
deliver over 100 channels of digital programming directly to consumers' homes.
The FCC auctioned this spectrum to the public during 1998 with cable operators
and local telephone companies restricted in their participation in this auction.
The extent to which the winning licenses in this service will use this spectrum
in particular regions of the country to deliver multichannel video programming
to subscribers and therefore provide competition for franchised cable systems,
is at this time, uncertain. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

      The 1996 Act eliminates the restriction against ownership and operation of
cable systems by local telephone companies within their local exchange service
areas. Telephone companies are now free to enter the retail video distribution
business through any means, such as DBS, MMDS, SMATV or as traditional
franchised cable system operators. Alternatively, the 1996 Act authorizes local
telephone companies to operate "open video systems" without obtaining a local
cable franchise, although telephone companies operating such systems can be
required to make payments to local governmental bodies in lieu of cable
franchise fees. Up to two-thirds of the channel capacity of an "open video
system" must be available to programmers unaffiliated with the local telephone
company. The open video system concept replaces the FCC's video dialtone rules.
The 1996 Act also includes numerous provisions designed to make it easier for
cable operators and others to compete directly with local exchange telephone
carriers. With certain limited exceptions, neither a local exchange carrier nor
a cable operator can acquire more than 10% of the other entity operating within
its own service area.

      Advances in communications technology, as well as changes in the
marketplace and the regulatory and legislative environment, are constantly
occurring. Thus, it is not possible to predict the effect that ongoing or future
developments might have on the cable industry. The ability of cable systems to
compete with present, emerging and future distribution media will depend, to a
great extent, on obtaining and delivering attractive programming. The
availability and exclusive use of a sufficient amount of quality programming
may, in turn, be affected by developments in regulation or copyright law. See
"Legislation and Regulation."

      The cable television industry competes with radio, television, the
Internet, and print media for advertising revenues. As the cable television
industry continues to develop programming designed specifically for distribution
by cable, advertising revenues may increase. Premium programming provided by
cable systems is subject to the same competitive factors which exist for other
programming discussed above. The continued profitability of premium services may
depend largely upon the continued availability of attractive programming at
competitive prices.

Employees

      On July 1, 2000, there were approximately 3,800 full-time employees of the
Company, of which 581 employees were covered by collective bargaining agreements
at 16 locations. The Company considers its relations with its employees to be
good.

Legislation and Regulation

      The Company's existing and anticipated businesses are regulated by the
FCC, some state governments and most local governments. In addition, various
legislative and regulatory proposals under consideration from time to time by
Congress and various federal agencies may materially affect the Company's
existing and anticipated businesses. The following is a summary of federal laws
and regulations affecting the growth and operation of the Company's existing and
anticipated businesses and a description of certain state and local laws.

Cable Television/Federal Laws and Regulations

    Cable Communications Policy Act of 1984

      The 1984 Cable Act became effective on December 29, 1984. This federal
statute, which amended the Communications Act of 1934 (the "Communications
Act"), created uniform national standards and guidelines for the regulation of
cable television systems. Violations by a cable television system operator of
provisions of the Communications Act, as well as of FCC regulations, can subject
the operator to substantial monetary penalties and other sanctions. Among other
things, the 1984 Cable Act affirmed the right of franchising authorities (state
or local, depending on the practice in individual states) to award one or more
franchises within their jurisdictions. It also prohibited non-grandfathered
cable television systems from operating without a franchise in such
jurisdictions. In connection with new franchises, the 1984 Cable Act provides
that in granting or renewing franchises, franchising authorities may establish
requirements for cable-related facilities and equipment, but may not establish
or enforce requirements for video programming or information services other than
in broad categories.

    Cable Television Consumer Protection and Competition Act of 1992

      On October 5, 1992, Congress enacted the 1992 Cable Act. This legislation
effected significant changes to the legislative and regulatory environment in
which the cable industry operates. It amended the 1984 Cable Act in many
respects. The 1992 Cable Act became effective on December 4, 1992, although
certain provisions, most notably those dealing with rate regulation and
retransmission consent, became effective at later dates. The legislation also
required the FCC to initiate a number of rulemaking proceedings to implement
various provisions of the statute. The 1992 Cable Act allows for a greater
degree of regulation on the cable industry with respect to, among other things:
(i) cable system rates for both basic and certain nonbasic services, (ii)
programming access and exclusivity arrangements, (iii) access to cable channels
by unaffiliated programming services, (iv) leased access terms and conditions,
(v) horizontal and vertical ownership of cable systems, (vi) customer service
requirements, (vii) franchise renewals, (viii) television broadcast signal
carriage and retransmission consent, (ix) technical standards, (x) subscriber
privacy, (xi) consumer protection issues, (xii) cable equipment compatibility,
(xiii) obscene or indecent programming and (xiv) requiring subscribers to
subscribe to tiers of service other than basic service as a condition of
purchasing premium services. Additionally, the legislation encourages
competition with existing cable systems by allowing municipalities to own and
operate their own cable systems without having to obtain a franchise, preventing
franchising authorities from granting exclusive franchises or unreasonably
refusing to award additional franchises covering an existing cable system's
service area and prohibiting the common ownership of cable systems and
co-located MMDS or SMATV systems. The 1992 Cable Act also precludes video
programmers affiliated with cable television companies from favoring cable
operators over competitors and requires such programmers to sell their
programming to other multichannel video distributors. This provision may limit
the ability of cable programming suppliers to offer exclusive programming
arrangements to cable television companies. A number of provisions in the 1992
Cable Act relating to, among other things, rate regulation, have had a negative
impact on the cable industry and the Company's business.

    Telecommunications Act of 1996

      The 1996 Act significantly revised the federal regulatory structure. As it
pertains to cable television, the 1996 Act, among other things,: (i) eliminated
the regulation of certain nonbasic programming services in 1999, (ii) expanded
the definition of effective competition, the existence of which displaces rate
regulation, (iii) eliminated 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.
The FCC has been conducting a number of rulemaking proceedings in order to
implement many of the provisions of the 1996 Act.

FCC Regulation

      The FCC, the principal federal regulatory agency with jurisdiction over
cable television, has promulgated regulations covering such areas as the
registration of cable systems, cross-ownership between cable systems and other
communications businesses, carriage of television broadcast programming,
consumer education and lockbox enforcement, origination cablecasting and
sponsorship identification, children's programming, the regulation of basic
cable service rates in areas where cable systems are not subject to effective
competition, signal leakage and frequency use, technical performance,
maintenance of various records, equal employment opportunity, and antenna
structure notification, marking and lighting. The FCC has the authority to
enforce these regulations through the imposition of substantial fines, the
issuance of cease and desist orders and/or the imposition of other
administrative sanctions, such as the revocation of FCC licenses needed to
operate certain transmission facilities often used in connection with cable
operations. Furthermore, the 1992 Cable Act required the FCC to adopt
regulations covering, among other things, cable rates, signal carriage, consumer
protection and customer service, leased access, indecent programming, programmer
access to cable television systems, programming agreements, technical standards,
consumer electronics equipment compatibility, ownership of home wiring, program
exclusivity, equal employment opportunity, and various aspects of direct
broadcast satellite system ownership and operation. The 1996 Act requires
certain changes to various provisions of these regulations. A brief summary of
the most material federal regulations as adopted to date follows.

    Rate Regulation

      The 1984 Cable Act codified existing FCC preemption of rate regulation for
premium channels and optional nonbasic program tiers. The 1984 Cable Act also
deregulated basic cable rates for cable television systems determined by the FCC
to be subject to effective competition. The 1992 Cable Act substantially changed
the statutory and FCC rate regulation standards. The 1992 Cable Act replaced the
FCC's old standard for determining effective competition, under which most cable
systems were not subject to local rate regulation, with a statutory provision
that has resulted in nearly all cable television systems becoming subject to
local rate regulation of basic service. Additionally, the 1992 Cable Act
eliminated the 5% annual rate increase for basic service previously allowed by
the 1984 Cable Act without local approval; required the FCC to adopt a formula,
for franchising authorities to enforce, to assure that basic cable rates are
reasonable; allows the FCC to review rates for nonbasic service tiers (other
than per-channel or per-program services) in response to complaints filed by
franchising authorities; prohibits cable television systems from requiring
customers to purchase service tiers above basic service in order to purchase
premium services if the system is technically capable of doing so; required the
FCC to adopt regulations to establish, on the basis of actual costs, the price
for installation of cable service, remote controls, converter boxes and
additional outlets; and allows the FCC to impose restrictions on the retiering
and rearrangement of cable services under certain limited circumstances. The
1996 Act expands the definition of effective competition to cover situations
where a local telephone company or its affiliate, or any multichannel video
provider using telephone company facilities, offers comparable video service by
any means except DBS. Satisfaction of this test deregulates both basic and
nonbasic tiers. The 1996 Act ended FCC regulation of nonbasic tier rates on
March 31, 1999.

      The FCC's regulations set standards for the regulation of basic and
nonbasic cable service rates (other than per-channel or per-program services).
The FCC's original rules became effective on September 1, 1993. The rules have
been amended several times. The rate regulations adopt a benchmark price cap
system for measuring the reasonableness of existing basic and nonbasic service
rates, and a formula for future rate increases based on inflation and increases
in certain costs. Alternatively, cable operators have the opportunity to make
cost-of-service showings, which in some cases, may justify rates above the
applicable benchmarks. The rules also require that charges for cable-related
equipment (e.g., converter boxes and remote control devices) and installation
services be unbundled from the provision of cable service and based upon actual
costs plus a reasonable profit. Local franchising authorities and/or the FCC are
empowered to order a reduction of existing rates, which exceed the benchmark
level for either basic and/or nonbasic cable services and associated equipment,
and refunds could be required. The retroactive refund period for basic cable
service rates was limited to one year. A significant number of franchising
authorities have become certified by the FCC to regulate the rates charged by
the Company for basic cable service and for associated equipment. The Company's
ability to implement rate increases consistent with its past practices will
likely be limited by the regulations that the FCC has adopted.

    Carriage of Broadcast Television Signals

      The 1992 Cable Act contains new mandatory carriage requirements. These new
rules allow commercial television broadcast stations, which are "local" to a
cable system (i.e., the system is located in the station's area of dominant
influence), to elect every three years, whether to require the cable system to
carry the station, subject to certain exceptions, or whether the cable system
will have to negotiate for "retransmission consent" to carry the station. Local,
noncommercial television stations are also given mandatory carriage rights,
subject to certain exceptions, within the larger of (i) a 50 mile radius from
the station's city of license or (ii) the station's Grade B contour (a measure
of signal strength). Unlike commercial stations, noncommercial stations are not
given the option to negotiate retransmission consent for the carriage of their
signal. In addition, cable systems will have to obtain retransmission consent
for the carriage of all "distant" commercial broadcast stations, except for
certain "superstations," (i.e., commercial satellite-delivered independent
stations such as WTBS). The 1992 Cable Act also eliminated, effective December
4, 1992, the FCC's regulations requiring the provision of input selector
switches. The statutory must-carry provisions for noncommercial stations became
effective on December 4, 1992. Must-carry rules for both commercial and
noncommercial stations and retransmission consent rules for commercial stations
were adopted by the FCC on March 11, 1993. The must-carry requirement for
commercial stations went into effect on June 2, 1993, and any stations for which
retransmission consent had not been obtained (other than must-carry stations,
non-commercial stations and superstations) had to be dropped as of October 6,
1993. The most recent election between must-carry and retransmission consent for
local commercial television broadcast stations was on October 1, 1996. A number
of stations previously carried by the Company's cable television systems elected
retransmission consent. The Company was able to reach agreements with
broadcasters who elected retransmission consent and has therefore not been
required to pay cash compensation to broadcasters for retransmission consent or
been required by broadcasters to remove broadcast stations from the cable
television channel line-ups. The Company has, however, agreed to carry some
services (e.g., ESPN2 and a new service by FOX) in specified markets pursuant to
retransmission consent arrangements which it believes are comparable to those
entered into by most other large cable operators.

    Channel Set-Asides

      The 1984 Cable Act permits local franchising authorities to require cable
operators to set aside certain channels for public, educational and governmental
access programming. The Company believes that none of the Systems' franchises
contain unusually onerous access requirements. The 1984 Cable Act further
requires cable systems with 36 or more activated channels to designate a portion
of their channel capacity for commercial leased access by unaffiliated third
parties. While the 1984 Cable Act presently allows cable operators substantial
latitude in setting leased access rates, the 1992 Cable Act requires leased
access rates to be set according to a formula determined by the FCC. The FCC has
revised the existing rate formula in a way which will significantly lower the
rates cable operators have been able to charge. It is possible that such leased
access will result in competition to services offered by the Company on the
other channels of its cable systems.

    Competing Franchises

      Questions concerning the ability of municipalities to award a single cable
television franchise and to impose certain franchise restrictions upon cable
television companies have been considered in several recent federal appellate
and district court decisions. These decisions have been somewhat inconsistent
and, until the U.S. Supreme Court rules definitively on the scope of cable
television's First Amendment protections, the legality of the franchising
process and of various specific franchise requirements is likely to be in a
state of flux. It is not possible at the present time to predict the
constitutionally permissible bounds of cable franchising and particular
franchise requirements. However, the 1992 Cable Act, among other things,
prohibits franchising authorities from unreasonably refusing to grant franchises
to competing cable systems and permits franchising authorities to operate their
own cable systems without franchises.

    Cross-Ownership

      The 1996 Act repealed the 1984 Cable Act's prohibition on LECs providing
video programming directly to customers within their local exchange telephone
service areas, except in rural areas or by specific waiver of FCC rules. The
1996 Act also authorized LECs to operate "open video systems" without obtaining
a local cable franchise, although LECs operating such systems can be required to
make payments to local governmental bodies in lieu of cable franchise fees.
Where demand exceeds channel capacity, up to two-thirds of the channels on an
"open video system" must be available to programmers unaffiliated with the LEC.

      The 1996 Act eliminated the FCC rule prohibiting common ownership between
a cable system and a national broadcast television network. The 1996 Act also
eliminated the statutory ban covering certain common ownership interests,
operation or control between a television station and cable system within the
station's Grade B signal coverage area. However, the parallel FCC rules against
cable/television station cross-ownership remains in place, subject to review by
the FCC within two years. Finally, the 1992 Cable Act prohibits common
ownership, control or interest in cable television systems and MMDS facilities
or SMATV systems having overlapping service areas, except in limited
circumstances. The 1996 Act exempts cable systems facing "effective competition"
from the MMDS and SMATV cross-ownership restrictions.

      Pursuant to the 1992 Cable Act, the FCC has imposed limits on the number
of cable subscribers which a single cable operator can serve. While the
constitutionality of the underlying statute has been upheld, a federal appeal is
pending as to the specific cable ownership limits adopted by the FCC. Under
those FCC limits, no cable operator can have an attributable interest in cable
systems which have more than 30 percent of all cable and other multi-channel
video subscribers nationwide. Attributable interests for these purposes include
voting interests of five percent or more, officerships, directorships and
general partnership interests.

      The FCC has also adopted rules which limit the number of channels on a
cable system, which can be occupied by programming in which the cable system's
owner has an attributable interest. The limit is 40% of all activated channels.

    Franchise Transfers

      The 1992 Cable Act requires franchising authorities to act on any
franchise transfer request submitted after December 4, 1992 within 120 days
after receipt of all information required by FCC regulations and by the
franchising authority. Approval is deemed to be granted if the franchising
authority fails to act within such period.

    Technical Requirements

      Historically, the FCC has imposed technical standards applicable to the
cable channels on which broadcast stations are carried, and has prohibited
franchising authorities from adopting standards which were in conflict with or
more restrictive than those established by the FCC. The FCC has recently revised
such standards and made them applicable to all classes of channels which carry
downstream NTSC video programming. Local franchising authorities are permitted
to enforce the FCC's new technical standards. The FCC also has adopted
additional standards applicable to cable television systems using frequencies in
the 108-137 MHz and 225-400 MHz bands in order to prevent harmful interference
with aeronautical navigation and safety radio services, and has also established
limits on cable system signal leakage. Periodic testing by cable operators for
compliance with these technical standards and signal leakage limits is required.
The Company believes that the Systems are in compliance with these standards in
all material respects. The 1992 Cable Act requires the FCC to update
periodically its technical standards to take into account changes in technology.
The FCC has adopted regulations to implement the requirements of the 1992 Cable
Act designed to improve the compatibility of cable systems and consumer
electronics equipment.

    Pole Attachments

      The FCC currently regulates the rates and conditions imposed by certain
public utilities for use of their poles, unless under the Federal Pole
Attachments Act, state public service commissions are able to demonstrate that
they regulate rates, terms and conditions of the cable television pole
attachments. A number of states (including Massachusetts, Michigan, New Jersey,
New York, Ohio and Vermont) and the District of Columbia have certified to the
FCC that they regulate the rates, terms and conditions for pole attachments. In
the absence of state regulation, the FCC administers such pole attachment rates
through use of a formula which it has devised and from time to time revises. The
1996 Act directs the FCC to adopt a new rate formula for any attaching party,
including cable systems, which offers telecommunications services. This new
formula will result in significantly higher attachment rates for cable systems
which choose to offer such services.

    Other Matters

      FCC regulation also includes matters regarding a cable system's carriage
of local sports programming; restrictions on origination and cablecasting by
cable system operators; application of the rules governing political broadcasts;
customer service; home wiring; and limitations on advertising contained in
nonbroadcast children's programming.

    Copyright

      Cable television systems are subject to federal copyright licensing
covering carriage of broadcast signals. In exchange for making semi-annual
payments to a federal copyright royalty pool and meeting certain other
obligations, cable operators obtain a statutory license to retransmit broadcast
signals. The amount of this royalty payment varies, depending on the amount of
system revenues from certain sources, the number of distant signals carried, and
the location of the cable system with respect to over-the-air television
stations.

      Various bills have been introduced into Congress over the past several
years that would eliminate or modify the cable television compulsory license. At
the request of Congress, the Copyright Office has commenced an inquiry into
possible revisions of the compulsory license. Without the compulsory license,
cable operators might need to negotiate rights from the copyright owners for
each program carried on each broadcast station in the channel lineup. Such
negotiated agreements could increase the cost to cable operators of carrying
broadcast signals. The 1992 Cable Act's retransmission consent provisions
expressly provide that retransmission consent agreements between television
broadcast stations and cable operators do not obviate the need for cable
operators to obtain a copyright license for the programming carried on each
broadcaster's signal.

      Copyrighted music performed in programming supplied to cable television
systems by pay cable networks (such as HBO) and basic cable networks (such as
USA Network) has generally been licensed by the networks through private
agreements with the American Society of Composers and Publishers ("ASCAP") and
BMI, Inc. ("BMI"), the two major performing rights organizations in the United
States. As a result of extensive litigation, ASCAP and BMI are both now required
to offer "through to the viewer" licenses to the cable networks which would
cover the retransmission of the cable networks' programming by cable systems to
their subscribers.

      Copyrighted music performed by cable systems themselves on local
origination channels, Public Education Grant ("PEG") channels and in locally
inserted advertising and cross promotional announcements must also be licensed.
A blanket license was obtained for periods through December 31, 1996 from BMI. A
settlement with ASCAP has been made for all periods through December 31, 1999.
Cable industry negotiations with both BMI and ASCAP are ongoing for periods
subsequent to these settlements.

Cable Television/State and Local Regulation

      Because a cable television system uses local streets and rights-of-way,
cable television systems are subject to state and local regulation, typically
imposed through the franchising process. State and/or local officials are
usually involved in franchise selection, system design and construction, safety,
service rates, consumer relations, billing practices and community related
programming and services.

      Cable television systems generally are operated pursuant to nonexclusive
franchises, permits or licenses granted by a municipality or other state or
local government entity. Franchises generally are granted for fixed terms and in
many cases are terminable if the franchise operator fails to comply with
material provisions. The 1984 Cable Act established renewal procedures and
criteria designed to protect incumbent franchises against arbitrary denials of
renewal. While these formal procedures are not mandatory unless timely invoked
by either the cable operator or the franchising authority, they can provide
substantial protection to incumbent franchisees. Even after the formal renewal
procedures are invoked, franchising authorities and cable operators remain free
to negotiate a renewal outside the formal process. Nevertheless, renewal is by
no means assured, as the franchisee must meet certain statutory standards. Even
if a franchise is renewed, a franchising authority may impose new and more
onerous requirements such as upgrading facilities and equipment, although the
municipality must take into account the cost of meeting such requirements. The
1992 Cable Act makes several changes to the process under which a cable operator
seeks to enforce its renewal rights which could make it easier in some cases for
a franchising authority to deny renewal.

      Franchises usually call for the payment of fees, often based on a
percentage of the system's gross subscriber revenues, to the granting authority.
Although franchising authorities may impose franchise fees under the 1984 Cable
Act, such payments cannot exceed 5% of a cable system's annual gross revenues.
In those communities in which franchise fees are required, the Company currently
pays franchise fees ranging up to 5% of gross revenues. Franchising authorities
are also empowered in awarding new franchises or renewing existing franchises to
require cable operators to provide cable-related facilities and equipment and to
enforce compliance with voluntary commitments. In the case of franchises in
effect prior to the effective date of the 1984 Cable Act, franchising
authorities may enforce requirements contained in the franchise relating to
facilities, equipment and services, whether or not cable-related. The 1984 Cable
Act, under certain limited circumstances, permits a cable operator to obtain
modifications of franchise obligations.

      Upon receipt of a franchise, the cable system owner usually is subject to
a broad range of obligations to the issuing authority directly affecting the
business of the system. The terms and conditions of franchises vary materially
from jurisdiction to jurisdiction, and even from city to city within the same
state, historically ranging from reasonable to highly restrictive or burdensome.
The 1984 Cable Act places certain limitations on a franchising authority's
ability to control the operation of a cable system operator and the courts have,
from time to time, reviewed the constitutionality of several general franchise
requirements, including franchise fees and access channel requirements, often
with inconsistent results. On the other hand, the 1992 Cable Act prohibits
exclusive franchises, and allows franchising authorities to exercise greater
control over the operation of franchised cable systems, especially in the area
of customer service and rate regulation. The 1992 Cable Act also allows
franchising authorities to operate their own multichannel video distribution
system without having to obtain a franchise and permits states or local
franchising authorities to adopt certain restrictions on the ownership of cable
systems. Moreover, franchising authorities are immunized from monetary damage
awards arising from regulation of cable systems or decisions made on franchise
grants, renewals, transfers and amendments.

      The specific terms and conditions of a franchise and the laws and
regulations under which it was granted directly affect the profitability of the
cable television system. Cable franchises generally contain provisions governing
charges for basic cable television services, fees to be paid to the franchising
authority, length of the franchise term, renewal, sale or transfer of the
franchise, territory of the franchise, design and technical performance of the
system, use and occupancy of public streets and number and types of cable
services provided. The 1996 Act prohibits a franchising authority from either
requiring or limiting a cable operator's provision of telecommunications
services.

      Various proposals have been introduced at the state and local levels with
regard to the regulation of cable television systems, and a number of states
have adopted legislation subjecting cable television systems to the jurisdiction
of centralized state governmental agencies, even to the exclusion of local
community regulation. Some of these states regulate jointly and impose
regulation of a character similar to that of a public utility. Attempts in other
states to regulate cable television systems are continuing and can be expected
to increase. Such proposals and legislation may be preempted by federal statute
and/or FCC regulation. To date, the only states in which the Company operates
that has enacted such state level regulation are Connecticut, Massachusetts, New
York, and New Jersey. The Company cannot predict whether other states in which
it currently operates, or in which it may acquire systems, will engage in such
regulation in the future.

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

Telephony and Telecommunications/Federal Laws and Regulations

      The 1996 Act also alters federal, state and local laws and regulations
regarding telecommunications providers and services, including the Company, and
creates a favorable environment in which the Company may provide telephone and
other telecommunications services and facilities. The following is a summary of
the key provisions of the 1996 Act that could materially affect the
telecommunications business of the Company.

      The 1996 Act was intended to promote the provision of competitive
telephone services and facilities by cable television companies and others. The
1996 Act declares that no state or local laws or regulations may prohibit or
have the effect of prohibiting the ability of any entity to provide any
interstate or intrastate telecommunications service. States are authorized to
impose "competitively neutral" requirements regarding universal service, public
safety and welfare, service quality, and consumer protection. The 1996 Act
further provides that cable operators and affiliates providing
telecommunications services are not required to obtain a separate franchise from
local franchising authorities ("LFAs") for such services. An LFA may not order a
cable operator or affiliate to discontinue providing telecommunications services
or discontinue operating its cable system on the basis that it has failed to
obtain a separate franchise or renewal for the provision of telecommunications
services. The 1996 Act prohibits LFAs from requiring cable operators to provide
telecommunications service or facilities as a condition of the grant of a
franchise, franchise renewal, or franchise transfer, except that LFAs may seek
"institutional networks" as part of such franchise negotiations.

      The 1996 Act provides that, when cable operators provide
telecommunications services, LFAs may require reasonable, competitively neutral
compensation for management of the public rights-of-way. The LFA must publicly
disclose such compensation requirements.

      The Company believes that it qualifies as a connecting carrier under
federal law and therefore does not need FCC certification to provide intrastate
service. In the event that it is determined that the Company must seek FCC
certification, the Company believes that such certification will be granted by
the FCC in a timely manner. The Company may be required to file certain tariffs
and reports with the FCC.

Interconnection and Other Telecommunications Carrier Obligations

      To facilitate the entry of new telecommunications providers (including
cable operators), the 1996 Act imposes interconnection obligations on all
telecommunications carriers. All carriers must interconnect their networks with
other carriers and must not deploy network features and functions that interfere
with interoperability. LECs also have a set of separate identified obligations
beyond those that apply to new entrants: (i) good faith negotiation with those
seeking interconnection, (ii) unbundling, equal access and non-discrimination
requirements, (iii) resale of services, including "resale at wholesale rates,"
(iv) notice of changes in the network that would affect interconnection and
interoperability and (v) physical collocation unless shown that practical
technical reasons, or space limitations, make physical collocation impractical.

      Under the 1996 Act, individual interconnection rates must be just and
reasonable, based on cost, and may include a reasonable profit. Traffic
termination charges shall be "mutual and reciprocal." The 1996 Act permits
carriers to agree on a "bill and keep" system, but does not require such a
system.

      The 1996 Act contemplates that interconnection agreements will be
negotiated by the parties and submitted to a state public service commission
("SPSC") for approval. A SPSC may become involved, at the request of either
party, if negotiations fail. If the state regulator refuses to act, the FCC may
determine the matter. If the SPSC acts, an aggrieved party's remedy is to file a
case in federal district court. The 1996 Act provides for a rural exemption to
interconnection requests, but also provides that the exception does not apply
where a cable operator makes an interconnection request of a rural LEC within
the operator's franchise area.

      The 1996 Act requires that all telecommunications providers (including
cable operators that provide telecommunications services) contribute equitably
to a Universal Service Fund ("USF"), and the FCC may exempt an interstate
carrier or class of carriers if its contribution would be minimal under the USF
formula. The 1996 Act allows states to determine which intrastate
telecommunications providers contribute to the USF. The 1996 Act prohibits
geographic end user rate de-averaging to protect rural subscribers' rates.

FCC Interconnection Order

      In August 1996, the FCC released its First Report and Order, Second Report
and Order and memorandum Opinion and Order promulgating rules and regulations to
implement Congress' statutory directive concerning the interconnection
obligations of all telecommunications carriers, including obligations of CLECs
and LECs, and incumbent LEC pricing of interconnection and unbundled elements
(the "Local Competition Orders"). The Local Competition Orders adopted a
national framework for interconnection, but left to the individual states the
task of implementing the FCC's rules. The Local Competition Orders also
established rules implementing the 1996 Act requirements that LECs negotiate
interconnection agreements, and provide guidelines for review of such agreements
by State PUCs.

      In July 1997, the United States Court of Appeals for the Eighth Circuit
vacated in part the FCC's local competition rules. That court concluded that the
FCC did not have the authority to establish rules to govern the pricing of
interconnection, network elements, and resale services provided by incumbent
local exchange carriers. In addition, it found certain other FCC rules to be
unlawful. On January 25, 1999, the Supreme Court issued an opinion in which it
reversed portions of the court of appeals decision. The Supreme Court held that
the FCC has authority under the Communications Act to establish rules, including
pricing rules, to implement the local competition provisions of the 1996 Act,
even with respect to intrastate services. The Supreme Court did not address the
merits of the FCC's 1996 pricing rules. In addition, the Supreme Court affirmed
several of the other rules which had been promulgated by the FCC, but which had
been found unlawful by the court of appeals. These included a rule allowing
requesting carriers to select provisions from among different interconnection
agreements approved by state commissions (the so-called "pick-and-choose" rule)
and a rule allowing requesting carriers to obtain from incumbent local exchange
carriers assembled combinations of unbundled network elements (sometimes called
unbundled network element platforms). The Supreme Court vacated a FCC rule
identifying specific network elements which incumbent local exchange carriers
must make available to requesting carriers on the basis that the FCC had failed
to consider; (i) whether such network elements were necessary, and (ii) whether
the failure to make network elements available would impair the ability of
requesting carriers to provide the services they seek to offer. The FCC has
indicated that it will conduct further proceedings to comply with the Supreme
Court's opinion regarding the availability of network elements. Whether
incumbent local exchange carriers will be required to make available combined
platforms of network elements will depend on how the FCC implements the
"necessary" and "impair" standards governing network element availability in
light of the Supreme Court's opinion.

Internet Services/Federal Laws and Regulations

      Transmitting indecent material via the Internet was made criminal by the
1996 Act. However, on-line access providers are exempted from criminal liability
for simply providing interconnection service; they are also granted an
affirmative defense from criminal or other action where in "good faith" they
restrict access to indecent materials. These provisions have been challenged in
federal court. The 1996 Act further exempts on-line access providers from civil
liability for actions taken in good faith to restrict access to obscene,
excessively violent or otherwise objectionable material.

    Forced Internet Access

      Cable operators have begun to offer high-speed Internet access to
subscribers. These services are in direct competition with a number of other
companies, many of which have substantial resources, such as existing ISPs and
local and long distance telephone companies.

      Recently, a number of ISP's have asked local franchising authorities and
the FCC to grant them rights of access to cable systems' broadband
infrastructure so that they can deliver their services directly to cable
systems' customers. Several local franchising authorities and state legislatures
have been examining the issue and a few local authorities have required cable
operators to provide such access. A U.S. District Court recently ruled that the
City of Portland, OR was authorized to require such access. On appeal, the U.S.
Court of Appeals for the Ninth Circuit reversed the district court and ruled
that a local franchising authority has no authority to impose an open access
requirement. Additionally, a federal district court in Richmond, Virginia held
that a local franchising authority can not impose an open access requirement.
This decision is on appeal. Some cable companies have initiated their own
litigation challenging municipal forced access requirements. Congress and the
FCC have thus far declined to take action on the issue of ISP's access to
broadband cable facilities. If cable operators are subject to this forced
access, it could prohibit the Company from entering into agreements or limiting
existing agreements with ISPs which could adversely impact our anticipated
revenues from high-speed Internet access services. Franchise renewals and
transfers could become more difficult depending upon the outcome of this issue.

ITEM 2.   PROPERTIES

      The Company's principal physical assets consist of cable television
operating plant and equipment, including signal receiving, encoding and decoding
devices, headends and distribution systems and subscriber house drop equipment
for each of its cable television systems. The signal receiving apparatus
typically includes a tower, antenna, ancillary electronic equipment and earth
stations for reception of satellite signals. Headends, consisting of associated
electronic equipment necessary for the reception, amplification and modulation
of signals, are located near the receiving devices. The Company's distribution
system consists primarily of coaxial and fiber optic cables and related
electronic equipment. Subscriber devices consist of decoding converters. The
physical components of cable television systems require maintenance and periodic
upgrading to keep pace with technological advances.

      The Company's cables and related equipment are generally attached to
utility poles under pole rental agreements with local public utilities, although
in some areas the distribution cable is buried in underground ducts or trenches.
See "Legislation and Regulation-Federal Regulation."

      The Company owns or leases parcels of real property for signal reception
sites (antenna towers and headends), microwave facilities and business offices
in each of its market areas, and owns most of its service vehicles.

      A significant portion of the assets of Arahova's subsidiaries are subject
to encumbrances as collateral in connection with the Company's credit
arrangements, either directly with a security interest or indirectly through a
pledge of the stock in the respective subsidiaries. See Note 2 to the Arahova
Consolidated Financial Statements. The Company believes that its properties,
both owned and leased, are in good operating condition and are suitable and
adequate for the Company's business operations.

ITEM 3.  LEGAL PROCEEDINGS

         On or about March 10, 1999, Robert Lowinger, on behalf of himself and
all others similarly situated (the "Plaintiff") commenced an action by filing a
Class Action Complaint (the "Complaint") in the Superior Court of Connecticut,
Judicial District of Stamford/Norwalk against Century, all of its directors, and
Adelphia. The Plaintiff, claiming that he owns shares of Class A Common Stock of
Century, alleged that in connection with the proposed merger of Century with
Adelphia, holders of Class B Common Stock of Century (which has superior voting
rights to the Class A Common Stock of Century) will receive consideration for
their shares that exceeds by $4.00 per share the consideration to be paid to
Century's Class A shareholders resulting in the Century's Class B shareholders
receiving approximately $170,000 more than if they held the equivalent number of
the Century's Class A shares. The Plaintiff claimed that the individual
defendants breached their fiduciary duties of loyalty, good faith, and due care
to Century's Class A shareholders by approving the higher payment to Century's
Class B shareholders and that Century and Adelphia aided and abetted these
alleged breaches of fiduciary duty. The Plaintiff seeks certification of a class
of Century's Class A shareholders and seeks recovery on behalf of himself and
the class of unspecified damages, profits, and special benefits alleged to have
been wrongfully obtained by the defendants, as well as all costs, expenses and
attorney's fees. On October 21, 1999, Adelphia and Century filed motions to
strike the Complaint, and several of the individual defendants moved to dismiss
all counts in the Complaint against them for lack of personal jurisdiction over
each of them. On January 3, 2000, the court dismissed all counts in the
Complaint as to two of the individual defendants. On January 13, 2000, the court
granted defendants' motions to strike and dismissed Plaintiff's complaint in its
entirety for failure to state a claim upon which relief can be granted. The
court entered judgment on February 16, 2000. To the Company's knowledge the
Plaintiff has not filed an appeal in this action within the time provided by
local court rules for the filing of an appeal.

         Arahova has been sued in a class-action case, Galley vs. American
Telephone & Telegraph Corp. et al., where the plaintiffs allege, that by
requiring customers to purchase the @Home service, rather than offering the
option of access alone, Arahova and the other defendant MSO's are illegally
"tying" internet content to internet access, thereby violating both the federal
antitrust laws and California unfair trade practice statutes. The plaintiffs
also allege that the defendants have entered into an illegal conspiracy to
require all MSO's providing, or desiring to provide, the @Home service to enter
into contracts precluding them from offering any competing internet service. The
plaintiffs have recently filed an amended complaint alleging that the violations
are national in scope (rather than merely local). The Company is vigorously
defending this case. Due to the preliminary nature of the litigation, the
outcome cannot be predicted.

         Adelphia and certain subsidiaries, including Arahova, are defendants in
several putative subscriber class action suits in state courts in Vermont,
Pennsylvania and Mississippi initiated during 1999. The suits all challenge the
propriety of late fees charged by the subsidiaries to customers who fail to pay
for services in a timely manner. The suits seek injunctive relief and various
formulations of damages under various claimed causes of action under various
bodies of state law. These actions are in various stages of defense and, in one
case, Adelphia was required to refund the late fees (none of which related to
Arahova) Adelphia has appealed this decision. All of these actions are being
defended vigorously. The outcome of these matters cannot be predicted at this
time.

      On or about March 24, 2000, ML Media Partners, L.P. ("ML Media") commenced
an action by filing a Verified Complaint (the "Complaint") in the Supreme Court
of the State of New York, New York County, against Arahova, Century
Communications Corp., a Texas subsidiary of Arahova ("Century"), and Adelphia.
In the nine count Complaint, ML Media alleges that it entered into a joint
venture agreement (the "Agreement") with Century which, as subsequently
modified, governed the ownership, operation and disposition of cable television
systems in Puerto Rico (the "Joint Venture"). The Complaint alleges that
Adelphia and its affiliates took over Century's interest in the Joint Venture on
or around October 1, 1999, and have, according to the Complaint, breached their
fiduciary obligations to the Joint Venture and violated certain provisions of
the Agreement. The Complaint further alleges that ML Media gave Century notice
that ML Media was exercising its rights under the Agreement to require that
Century elect to (A) purchase ML Media's interest in the Joint Venture at an
appraised fair value, or (B) seek to sell the cable systems to one or more third
parties. Century, according to the Complaint, elected to pursue the sale of the
cable systems and indicated that it was evaluating whether it or an affiliate
thereof would make an offer for the cable systems. The Complaint alleges that
Century or its affiliates' potential participation in the sale process is
improper. The Complaint asks for, among other things, the dissolution of the
Joint Venture and the appointment of a receiver to effect a prompt sale of the
Joint Venture. The parties completed discovery in the action and each filed
motions for partial summary judgment. On July 10, 2000, Justice Gammerman
granted ML Media's motion for partial summary judgment on the fourth cause of
action and declared that neither Century nor any of its affiliates may bid on or
attempt to purchase the assets and business of the Joint Venture. Justice
Gammerman also dismissed the fourth count of the counterclaim and required
Century to proceed diligently with ML Media in locating one or more third
parties to complete the sale and prohibited any defendant from interfering with
the sale. On July 26, 2000, the Justice also ordered that the sale may be a sale
of either the assets of the Joint Venture or the partnership interests in the
Joint Venture. The Justice did not address other issues concerning the motion
for summary judgment and did not schedule a full hearing on the merits. On
August 7, 2000, Arahova and the other defendants filed a notice of appeal with
respect to the above described orders and judgment of the Court. The management
of Adelphia and Arahova intend to vigorously defend this action. Management
believes that this matter will not have a material adverse effect on the
Company.

      There is no other material pending legal proceeding, other than routine
litigation incidental to the business, to which the Company is a part of or
which any of its property is subject.

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

      Not applicable.





<PAGE>



PART II

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

         Not Applicable.

ITEM 6.  SELECTED FINANCIAL DATA
 (Dollars in thousands, except per share amounts)

      As described in Part I, the acquisition of the Company by Adelphia
occurred on October 1, 1999. Accordingly, the following tables present selected
consolidated financial data derived from the Company's financial statements as
of and for the three months ended December 31, 1999 (referred to herein as "New
Arahova"). Also included are selected consolidated financial data derived from
the Company's consolidated financial statements as of and for the years ended
May 31, 1996, 1997, 1998, and 1999, for the seven months ended December 31, 1998
and the four months ended September 30, 1999 (all referred to herein as "Old
Arahova"). All of the selected consolidated financial data has been derived from
the Company's audited financial statements, except for the unaudited seven
months ended December 31, 1998.

      The selected consolidated financial data for the seven months ended
December 31, 1998 have been derived from unaudited condensed consolidated
financial statements of the Company not included herein; however, in the opinion
of management, such data reflect all adjustments (consisting only of normal and
recurring adjustments) necessary to fairly present the data for such period.
This data should be read in conjunction with the consolidated financial
statements and related notes thereto and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included elsewhere in this
Transition Report on Form 10-K.


<PAGE>






<TABLE>
<CAPTION>

                                                                      Old Arahova                               New Arahova
                                   --------------------------------------------------------------------------- -------------
                                                                                  Seven Months   Four Months    Three Months
                                                                                      Ended          Ended         Ended
                                                Year Ended May 31,                 December 31,  September 30,  December 31,
                                       1996       1997       1998        1999          1998          1999           1999
                                   ---------- ----------- ---------- ------------ ------------- -------------- --------------
Statement of Operations Data:                                                     (unaudited)

<S>                                <C>        <C>         <C>        <C>          <C>           <C>            <C>
Revenues                           $  456,683 $  570,357  $ 608,341  $  651,142   $  375,680    $    231,230   $   194,335
Direct operating and programming
  expense                             182,288    223,380    226,862     254,977      143,894          92,455        60,937
Selling, general and
  administrative expense               77,591    103,467    131,169     124,652       75,184          47,610        33,373
Depreciation and amortization

  expense                             124,436    159,547    154,029     158,153       98,117          59,665        58,170
Stock compensation                          -          -          -           -            -          26,232             -
Merger and integration costs                -          -          -       7,922            -         174,153         4,167
                                   ----------  ---------  ---------  ----------   ----------     -----------    ----------
Operating income (loss)                72,368     83,963     96,281     105,438       58,485        (168,885)       37,688
Interest expense - net               (139,030)  (153,850)  (164,421)   (171,125)    (103,324)        (53,929)      (43,055)
Minority interests in income of
  subsidiaries                         (2,701)    (7,170)   (11,899)    (11,597)      (6,745)         (4,911)      (10,169)
Other                                    (550)      (171)     1,533       5,725        5,227             337             -
                                   ----------  ---------  ---------  ----------   ----------     -----------    ----------
Loss before income taxes,
  discontinued operations and
  extraordinary item                  (69,913)   (77,228)   (78,506)    (71,559)     (46,357)       (227,388)      (15,536)
Income tax benefit (expense)           22,730     23,363        624      13,453       (7,096)         (5,837)        3,365
                                   ----------  ---------  ---------  ----------   ----------     -----------    ----------
Loss before discontinued

  operations and extraordinary item   (47,183)   (53,865)   (77,882)    (58,106)     (53,453)       (233,225)      (12,171)
Loss from discontinued operations     (54,934)   (80,428)   (43,089)          -            -               -             -
Gain on sale of discontinued
  operations (less income taxes
  of $25739)                                -          -          -     314,290            -               -             -
Extraordinary loss on early
  retirement of debt, net of income
  tax benefit of $5,379                     -     (7,582)         -           -            -               -             -

                                   ----------  ---------  ---------  ----------   ----------     -----------    ----------
Net (loss) income                    (102,117)  (141,875)  (120,971)    256,184      (53,453)       (233,225)      (12,171)
Dividend requirements applicable
  to preferred stock                   (4,256)    (4,850)    (5,225)          -            -               -             -
                                   ----------  ---------  ---------  ----------   ----------     -----------    ----------
Net (loss) income applicable to
  common stockholders              $ (106,373) $(146,725) $(126,196) $  256,184   $  (53,453)    $  (233,225)   $  (12,171)
                                   ==========  =========  =========  ==========   ==========     ===========    ==========



Net (loss) income per common share:

     (basic and diluted)
  Loss from continuing operations
     before extraordinary item     $    (1.44) $   (0.78) $   (1.11)  $   (0.77)  $    (0.72)    $     (3.07)
  Loss from discontinued

     operations                             -      (1.08)     (0.58)          -            -               -
  Gain on sale of discontinued
     operations                             -          -          -        4.18            -               -
  Extraordinary loss on early
     retirement of debt                     -      (0.10)         -           -            -               -
                                   ----------  ---------  ---------  ----------   ----------     -----------
Net (loss) income per comon share  $    (1.44) $   (1.96) $   (1.69)  $    3.41   $    (0.72)    $     (3.07)
                                   ==========  =========  =========  ==========   ==========     ===========

</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                 ============================================================= ==============
                                                         Old Arahova                            New Arahova
                                                           May 31,                              December 31,
                                 ----------------------------------------------------------------------------
                                        1996           1997          1998            1999          1999
                                  -------------- -------------- ------------- ---------------- ------------
        Balance Sheet Data:
<S>                               <C>            <C>            <C>           <C>              <C>
             Total assets         $   2,234,909  $   2,154,231  $   1,515,182 $    1,803,599   $ 7,821,257
             Total debt               2,096,695      2,201,992      2,029,102      2,042,690     2,414,435
             Cash and cash
              equivalents               164,592        151,947        285,498        626,155       128,028
             Investments                 53,069         45,118         52,451         74,899       122,400
</TABLE>


<PAGE>



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS
           (Dollars in thousands)

    Introduction

      On October 1, 1999, Adelphia Communications Corporation ("Adelphia") and
Century Communications Corp. ("Century") consummated a merger (the "Merger")
whereby Century was merged with and into Adelphia Acquisition Subsidiary, Inc.
("Merger Sub"), a wholly owned subsidiary of Adelphia, pursuant to an Agreement
and Plan of Merger (the "Merger Agreement"), dated as of March 5, 1999, as
amended as of July 12, 1999 and July 29, 1999, by and among Adelphia, Century
and Merger Sub. As a result of the Merger, Century has become a wholly owned
subsidiary of Adelphia. Merger Sub is sometimes referred to herein as the
"Successor Corporation." The name of the Successor Corporation was changed to
Arahova Communications, Inc. ("Arahova") on October 1, 1999. As used herein, the
"Company" refers to the predecessor corporation as well as Arahova, as the
successor to the predecessor corporation. Adelphia is a leader in the
telecommunications industry with cable television and local telephone
operations.

      As of December 31, 1999, the Company operates cable television systems
("systems") with broadband networks that passed in front of approximately
2,915,000 homes and served approximately 1,628,000 basic subscribers, with
significant concentrations of basic subscribers in Southern California,
Colorado, and Puerto Rico. In addition to traditional analog cable television,
the Company offers or intends to offer a wide range of telecommunication
services including digital cable television, high-speed data and Internet
access, paging and telephony. As of December 31, 1999, Adelphia owned and
managed cable television systems with broadband networks that passed in front of
approximately 7,903,000 homes and served approximately 5,125,000 basic
subscribers.

      Selected financial and other data and consolidated financial statements
presented for periods prior to October 1, 1999 are referred to herein as "Old
Arahova". Selected financial and other data and consolidated financial
statements presented for periods subsequent to October 1, 1999 are referred to
herein as "New Arahova". As a result of the application of purchase accounting
resulting from Adelphia's October 1, 1999 acquisition of Arahova, the assets and
liabilities of New Arahova have been recorded at their estimated fair values on
October 1, 1999. The final allocation of Adelphia's purchase price to acquire
Arahova is pending the completion of third party valuations.

      Please refer to the discussion of the Private Securities Litigation Reform
Act of 1995, which is incorporated herein by reference to Item 1,
"Business-Introduction".

    Results of Operations

General

      On May 25, 2000, the Board of Directors of Arahova changed its fiscal year
from May 31 to December 31. The decision was made to conform to general industry
practice and for administrative purposes. The change became effective for the
seven months ended December 31, 1999.

      For purposes of the following table and discussion, the operating results
for the four months ended September 30, 1999 of Old Arahova have been combined
with the operating results for the three months ended December 31, 1999 of New
Arahova in order to provide a more meaningful basis for comparing the seven
months ended December 31, 1998 and 1999. The combined results of Old Arahova and
New Arahova will be referred to as "Adjusted Arahova" in the table below and
discussion that follows. The following table sets forth the historical
percentage relationship of revenues to operating income. Depreciation,
amortization and certain other line items included in the operating results of
Adjusted Arahova are not necessarily comparable between periods as the three
month New Arahova period ended December 31, 1999 includes the effects of the
preliminary purchase accounting adjustments related to Adelphia's acquisition of
Arahova. The combining of Old Arahova and New Arahova accounting periods is not
in accordance with generally accepted accounting principles. See Note 1 to the
accompanying consolidated financial statements.


<PAGE>


<TABLE>
<CAPTION>

                                                 Old Arahova                               Adjusted Arahova
                                          ---------------------------               -------------------------------
                                              Year Ended May 31,                    Seven Months Ended December 31,
                                              1998           1999                        1998            1999
                                         ------------  -------------               ---------------  --------------

<S>                                      <C>             <C>                         <C>             <C>
Revenues                                    100.0%          100.0%                      100.0%          100.0%

Operating Expenses:
     Direct operating and programming        37.3%           39.2%                       38.3%           36.0%
     Selling, general and

      administrative                         21.6%           19.1%                       20.0%           19.0%
     Depreciation and amortization           25.3%           24.3%                       26.1%           27.7%
     Merger and integration costs              -              1.2%                         -             41.9%
     Stock compensation                        -               -                           -              6.2%
                                          ------------    -----------               ---------------  --------------
Operating income (loss)                      15.8%           16.2%                       15.6%          (30.8)%
                                          ============  =============               ===============  ==============
</TABLE>

      Comparison of the Seven Months Ended December 31, 1998 and 1999

      Adjusted Arahova Revenues. Revenues increased approximately 13.3% for the
seven months ended December 31, 1999 compared with the same period of the prior
year. The increase is attributable to the contribution of subscribers by AT&T
into the Century-TCI joint venture, effective December 7, 1999, which is a
consolidated subsidiary of Arahova. Additionally, subscriber rate increases were
implemented in substantially all of the systems during the seven months ended
December 31, 1999. Advertising revenues and revenues derived from other
strategic service offerings such as paging, high speed data services and long
distance services also had a positive impact on revenues for the seven months
ended December 31, 1999.

      Adjusted Arahova Direct Operating and Programming Expenses. Direct
operating and programming expenses, which are mainly basic and premium
programming costs and technical expenses, increased 6.6% for the seven months
ended December 31, 1999, compared with the same period of the prior year. The
increase was due primarily to incremental costs associated with increased
subscribers partially offset by lower programming rates and other technical
expenses.

      Adjusted Arahova Selling, General and Administrative Expenses. These
expenses, which are mainly comprised of costs related to system offices,
customer service representatives, and sales and administrative employees,
increased 7.7% for the seven months ended December 31, 1999, compared with the
same period of the prior year. The increase was primarily due to incremental
costs associated with acquisitions and subscriber growth.

      Adjusted Arahova Depreciation and Amortization. Depreciation and
amortization increased 20.1% for the seven month period ended December 31, 1999,
compared with the same period of the prior year. The increase is primarily due
to increased depreciation and amortization related to purchase accounting
resulting from the merger with Adelphia.

       Adjusted Arahova Merger and Integration Costs. These expenses, which are
comprised of compensation, legal and consulting costs, were incurred in
conjunction with the merger with Adelphia, which was completed on October 1,
1999.

      Adjusted Arahova Stock Compensation. In September 1999, certain employees
of Old Arahova exercised options in a manner that caused Old Arahova to
recognize compensation expense for all options outstanding under the option
plans, which resulted in stock compensation expense of $26,232.

      Adjusted Arahova Interest Expense - net. Interest expense - net decreased
approximately 6.1% for the seven months ended December 31, 1999, compared with
the same period of the prior year. This decrease is due to the increase in
interest income from affiliate borrowings, partially offset by an increase in
the average debt outstanding and the amortization of debt discount recorded as a
result of the merger with Adelphia.


<PAGE>



      Comparison of the Years Ended May 31, 1998 and 1999

      Old Arahova Revenues. Revenues increased approximately 7.0% for the year
ended May 31, 1999 compared with the prior year. The increase is primarily
attributable to subscriber rate increases and acquisitions.

      Old Arahova Direct Operating and Programming Expenses. Direct operating
and programming expenses, which are mainly basic and premium programming costs
and technical expenses, increased 12.4% for the year ended May 31, 1999 compared
with the prior year. The increase was due primarily to increased programming
costs, incremental costs associated with increased subscribers and new services.

      Old Arahova Selling, General and Administrative Expenses. These expenses,
which are mainly comprised of costs related to system offices, customer service
representatives and sales and administrative employees, decreased 5.0% for the
year ended May 31, 1999 compared with prior year due to marketing subsidies
received from third parties.

      Old Arahova Depreciation and Amortization. Depreciation and amortization
increased 2.7% for the year ended May 31, 1999 compared with the prior year. The
increase was due primarily to increased capital expenditures made during the
past several years.

      Old Arahova Interest Expense - net. Interest expense - net increased 4.1%
for the year ended May 31, 1999, compared with the prior year, principally as a
result of increased average borrowings and higher interest rates. For the year
ended May 31, 1999, the average debt outstanding was approximately $2,034,000 or
$163,000 above the average outstanding debt balance of $1,871,000 during the
ended May 31, 1998. This increase was partially offset by an increase in
interest income due to increased cash balances resulting from the sale of
discontinued operations.

Liquidity and Capital Resources

      Cable television and other telecommunications businesses are capital
intensive and typically require continual financing for the construction,
modernization, maintenance, expansion and acquisition of cable and other
telecommunications systems. During the years ended May 31, 1998 and 1999 and the
seven months ended December 31, 1999, the Company committed substantial capital
resources for these purposes. These expenditures were funded through long-term
borrowings and internally generated funds. The Company's ability to generate
cash to meet its future needs will depend generally on its results of operations
and the continued availability of external financing.

      For information regarding significant events and financings subsequent to
December 31, 1999, see Note 10 to Arahova's consolidated financial statements.

Capital Expenditures

      Capital expenditures for the years ended May 31, 1998 and 1999 (Old
Arahova), and the seven months ended December 31, 1998 and 1999 (Adjusted
Arahova) were approximately $113,000, $122,000, $60,000 and $106,000
respectively. The increases were primarily due to acquisitions and cable plant
rebuilds and upgrades to expand services. The Company expects that capital
expenditures for the year ending December 31, 2000 will be in a range of
approximately $290,000 to $320,000.

Financing Activities

      The Company's ability to generate cash adequate to meet its future needs
will depend generally on its results of operations and the continued
availability of financing from Adelphia and other external sources. During the
years ended May 31, 1998 and 1999, and the seven months ended December 31, 1999,
the Company generally funded its acquisitions, working capital requirements, and
capital expenditures through issuance of public debt securities and internally
generated funds. The Company generally has funded the principal and interest
obligations on its long-term borrowings by refinancing the principal with the
issuance of debt securities in the public market and through private
institutions and the sale of certain business segments. Interest primarily has
been paid out of internally generated cash flow. The debt instruments to which
the Company and its subsidiaries are a party impose certain restrictions on
levels of additional indebtedness.

      Certain of Arahova's wholly or majority-owned subsidiaries have their own
senior credit agreements with banks. Typically, borrowings under these
agreements are collateralized by the stock of the borrowing subsidiary and its
subsidiaries and are guaranteed by such subsidiary's subsidiaries. At December
31, 1999, an aggregate of $581,496 in borrowings was outstanding under these
agreements. These agreements contain certain provisions which, among other
things, provide for limitations on borrowings of and investments by the
borrowing subsidiaries, transactions between the borrowing subsidiaries and
Arahova and its other subsidiaries and affiliates, and the payment of dividends
and fees by the borrowing subsidiaries. These agreements also require the
maintenance of certain financial ratios by the borrowing subsidiaries. See Note
2 to Arahova's consolidated financial statements. Management believes the
Company is in compliance with the financial covenants and related financial
ratio requirements contained in its various credit agreements.

      At December 31, 1999, Arahova's subsidiaries had an aggregate of
approximately $551,000 in unused credit lines with banks, part of which is
subject to achieving certain levels of operating performance. In addition, the
Company had an aggregate $128,028 in cash and cash equivalents at December 31,
1999 which combined with the Company's unused credit lines with banks aggregated
to $679,028. Based upon the results of operations of subsidiaries for the
quarter ended December 31, 1999, approximately $501,000 of available assets
could have been transferred to Arahova at December 31, 1999, under the most
restrictive covenants of the subsidiaries' credit agreements. The subsidiaries
also have the ability to sell, dividend or distribute certain assets to other
Arahova subsidiaries or Adelphia, which would have the net effect of increasing
availability. The Company's scheduled maturities of debt are currently $170,000
for the year ending December 31, 2000, which the Company expects to repay with
proceeds from existing liquidity. In April 2000, certain subsidiaries and
affiliates of Adelphia, including a subsidiary of Arahova, entered into a new
$2,250,000 bank credit facility consisting of both a reducing revolving credit
portion and a term loan portion.

      At December 31, 1999, the Company's total outstanding debt aggregated
$2,414,435, which included $1,832,939 of parent debt and $581,496 of subsidiary
debt. Bank debt interest rates are based upon one or more of the following rates
at the option of Arahova: bank defined alternate base rate plus 0% to 1.0%; or
London Interbank Offering Rate ("LIBOR") plus .75% to 2.0%. The Company's
weighted average interest rate on notes payable to banks and institutions was
approximately 8.06% at December 31, 1999. Approximately 78.6% of the Company's
total indebtedness was at fixed interest rates as of December 31, 1999 after
giving effect to the applicable interest rate swap agreement, as described
below.

      Arahova enters into receive-fixed agreements to effectively convert a
portion of its fixed-rate debt to variable-rate debt, which is indexed to LIBOR.
Arahova is exposed to market risk in the event of nonperformance by the banks.
The Company does not expect any such nonperformance. At December 31, 1999,
Arahova would have had to pay approximately $638 to settle its interest rate
swap agreement representing the excess of carrying value over fair value of this
agreement.

Financing Transactions

      On December 7, 1999, a majority-owned joint venture of Arahova closed on a
$1,000,000 credit facility. The credit facility consists of a $500,000, 8 year
reducing revolving credit loan and a $500,000, 8 year term loan. Proceeds from
the initial borrowings were used to pay existing indebtedness.

      On April 14, 2000, a subsidiary of Arahova, and certain other subsidiaries
and affiliates of Adelphia closed on a $2,250,000 bank credit facility (the
"Facility"). The Facility consists of a $1,500,000, 8 3/4 year reducing
revolving credit loan and a $750,000, 9 year term loan. Interest is charged at
variable rates and commitment fees range from .25% to .375% per annum on the
average unborrowed portion.

      The Facility is secured by a first priority pledge of the capital stock of
the restricted borrowers and their restricted subsidiaries, subordination of
management fees and guarantees by the restricted borrowers and their and its
restricted subsidiaries. Under the terms of the credit facility, Arahova has
optional principal reductions on the $750,000 term loan and mandatory principal
reductions on all amounts outstanding under the Facility beginning in July 2003.
The Facility also requires Arahova to maintain compliance with various financial
covenants including, but not limited to, covenants relating to total
indebtedness, debt ratios and interest coverage. Arahova's ability to access
funds under the Facility is dependent upon the level of borrowings of restricted
and unrestricted borrowers as defined in the Facility.

      As of June 30, 2000, cash and available liquidity under Arahova's credit
facilities was approximately $ 1,900,000. For other financing and acquisition
transactions occurring subsequent to December 31, 1999 refer to "Business -
Recent Developments of the Systems".

Acquisitions

      On December 7, 1999, Arahova acquired cable systems that served
approximately 19,000 basic subscribers at the date of acquisition in Moreno
Valley and Riverside County, California and were purchased for an aggregate
price of approximately $32,000. The acquisition was accounted for under the
purchase method of accounting. Accordingly, the financial results of the
acquired systems are included in the consolidated results of Arahova effective
from the date acquired.

      On December 7, 1999, subsidiaries of Arahova consummated a transaction
with AT&T to form a joint venture limited partnership in the Los Angeles, CA
area. Pursuant to this agreement, Adelphia, Arahova and AT&T contributed cable
systems that served approximately 800,000 basic subscribers. On December 15,
1999, Adelphia's interest in the joint venture was contributed to Arahova. At
December 31, 1999, Arahova holds an interest of 75% and AT&T holds an interest
of 25% in the partnership. The cable systems contributed by Arahova and Adelphia
have been recorded at historical cost. The acquisition of the cable systems
contributed by AT&T has been accounted for under the purchase method of
accounting. The financial results of the cable systems contributed by AT&T are
included in the consolidated results of operations of Arahova effective from the
date acquired. As part of this transaction, Arahova and AT&T exchanged cable
systems owned by Arahova in certain communities in northern California for
certain cable systems owned by AT&T in southern California, allowing each of
them to unify operations in existing service areas. AT&T exchanged its East San
Fernando Valley cable system serving approximately 103,500 basic subscribers for
Arahova's northern California cable systems (San Pablo, Benicia, Fairfield and
Rohnert Park, California), which serve approximately 96,500 basic subscribers.
No gain or loss resulted from this system swap due to the Company's application
of purchase accounting in connection with the Adelphia merger.

Resources

      The Company plans to continue to explore and consider new commitments,
arrangements or transactions to refinance existing debt, increase the Company's
liquidity or decrease the Company's leverage. These could include, among other
things, the future issuance by the Company, or its subsidiaries, of public or
private equity or debt and the negotiation of new or amended credit facilities.
These could also include entering into acquisitions, joint ventures or other
investment or financing activities, although no assurance can be given that any
such transactions will be consummated. The Company's ability to borrow under
current credit facilities and to enter into refinancings and new financings is
limited by covenants contained in its indentures and its subsidiaries' credit
agreements, including covenants under which the ability to incur indebtedness is
in part a function of applicable ratios of total debt to cash flow.

      The Company believes that cash and cash equivalents, internally generated
funds, borrowings under existing credit facilities, and future financing sources
will be sufficient to meet its short-term and long-term liquidity and capital
requirements. Although in the past the Company has been able to refinance its
indebtedness or obtain new financing, there can be no assurance that the Company
will be able to do so in the future or that the terms of such financings would
be favorable.

      Management believes that the telecommunications industry, including the
cable television and telephone industries, continues to be in a period of
consolidation characterized by mergers, joint ventures, acquisitions, sales of
all or part of cable companies or their assets, and other partnering and
investment transactions of various structures and sizes involving cable or other
telecommunications companies. The Company continues to evaluate new
opportunities that allow for the expansion of its business through the
acquisition of additional cable television systems in geographic proximity to
its existing regional markets or in locations that can serve as a basis for new
market areas. The Company, like other telecommunications companies, has
participated from time to time and is participating in preliminary discussions
with third parties regarding a variety of potential transactions, and the
Company has considered and expects to continue to consider and explore potential
transactions of various types with other cable and telecommunications companies.
However, no assurances can be given as to whether any such transaction may be
consummated or, if so, when.

Recent Accounting Pronouncements

      Statement of Financial  Accounting  Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities," establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. In June 2000, SFAS No. 138 was issued which amends
the accounting and reporting standards of SFAS No. 133 for certain derivative
instruments and certain hedging activities. Management of the Company has not
completed its evaluation of the impact of SFAS Nos. 133 and 138 on the
Company's consolidated financial statements. The Company will be required to
adopt SFAS No. 133 effective January 1, 2001.

      At its January 2000 meeting, the Emerging Issues Task Force ("EITF")
reached consensus with respect to issues related to EITF 98-3, "Determining
Whether a Transaction is an Exchange of Similar Productive Assets or a Business
Combination." As a result of this consensus, Arahova will be required to account
for cable system swaps as a purchase and a disposition of a business at fair
value. Management of the Company will monitor the impact of EITF 98-3 as it
relates to future transactions of the Company.

Inflation

      In the two fiscal years ended May 31, 1998 and 1999, and the seven months
ended December 31, 1999, inflation did not have a significant effect on the
Company. Periods of high inflation could have an adverse effect to the extent
that increased borrowing costs for floating-rate debt may not be offset by
increases in subscriber rates. At December 31, 1999, after giving effect to
interest rate hedging agreements, approximately $517,000 of the Company's total
debt was subject to floating interest rates.

Regulatory and Competitive Matters

      The cable television operations of the Company may be adversely affected
by changes and developments in governmental regulation, competitive forces and
technology. The cable television industry and the Company are subject to
extensive regulation at the federal, state and local levels. The 1992 Cable Act
significantly expanded the scope of regulation of certain subscriber rates and a
number of other matters in the cable industry, such as mandatory carriage of
local broadcast stations and retransmission consent, and increased the
administrative costs of complying with such regulations. The FCC has adopted
rate regulations that establish, on a system-by-system basis, maximum allowable
rates for (i) basic and cable programming services (other than programming
offered on a per-channel or per-program basis), based upon a benchmark
methodology, and (ii) associated equipment and installation services based upon
cost plus a reasonable profit. Under the FCC rules, franchising authorities are
authorized to regulate rates for basic services and associated equipment and
installation services, and the FCC will regulate rates for regulated cable
programming services in response to complaints filed with the agency. The 1996
Act ended FCC regulation of cable programming service tier rates on March 31,
1999.

      Rates for basic services are set pursuant to a benchmark formula.
Alternatively, a cable operator may elect to use a cost-of-service methodology
to show that rates for basic services are reasonable. Refunds with interest will
be required to be paid by cable operators who are required to reduce regulated
rates. The FCC has reserved the right to reduce or increase the benchmarks it
has established. The rate regulations also limit increases in regulated rates to
an inflation indexed amount plus increases in certain costs such as taxes,
franchise fees, costs associated with specific franchise requirements and
increased programming costs. Cost-based adjustments to these capped rates can
also be made in the event a cable operator adds or deletes channels or completes
a significant system rebuild or upgrade. Because of the limitation on rate
increases for regulated services, future revenue growth from cable services will
rely to a much greater extent than has been true in the past on increased
revenues from unregulated services and new subscribers than from increases in
previously unregulated rates.

      The FCC has adopted regulations implementing all of the requirements of
the 1992 Cable Act. The FCC is also likely to continue to modify, clarify or
refine the rate regulations. Arahova cannot predict the effect of the 1996 Act
or future rulemaking proceedings or changes to the rate regulations.

      Cable television companies operate under franchises granted by local
authorities which are subject to renewal and renegotiation from time to time.
Because such franchises are generally non-exclusive, there is a potential for
competition with the systems from other operators of cable television systems,
including public systems operated by municipal franchising authorities
themselves, and from other distribution systems capable of delivering television
programming to homes. The 1992 Cable Act and the 1996 Act contain provisions
which encourage competition from such other sources. The Company cannot predict
the extent to which competition will materialize from other cable television
operators, local telephone companies, other distribution systems for delivering
television programming to the home, or other potential competitors, or, if such
competition materializes, the extent of its effect on the Company.

      The 1996 Act repealed the prohibition on local competitive telephone
exchange carriers ("CLECs") from providing video programming directly to
customers within their local exchange areas other than in rural areas or by
specific waiver of FCC rules. The 1996 Act also authorized CLECs to operate
"open video systems" ("OVS") without obtaining a local cable franchise, although
CLECs operating such a systems can be required to make payments to local
governmental bodies in lieu of cable franchise fees. Where demand exceeds
capacity, up to two-thirds of the channels on an OVS must be available to
programmers unaffiliated with the CLEC. The statue states that the OVS scheme
supplants the FCC's "video dialtone" rules. The FCC has promulgated rules to
implement the OVS concept, and New Jersey Bell Telephone Company has been
granted permission to convert its video dialtone authorization in Dover
Township, New Jersey to an OVS authorization.

      The Company believes that the provision of video programming by telephone
companies in competition with the Company's existing operations could have an
adverse effect on the Company's financial condition and results of operations.
At this time, the impact of any such effect is not known or estimable.

      The Company also competes with DBS service providers. DBS has been
available to consumers since 1994. A single DBS satellite can provide more than
100 channels of programming. DBS service can be received virtually anywhere in
the United States through the installation of a small outdoor antenna. DBS
service is being heavily marketed on a nationwide basis by several service
providers. At this time, any impact of DBS competition on the Company's future
results is not known or estimable.


<PAGE>



ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
(Dollars in thousands)

      The Company uses fixed and variable rate debt to fund its working capital
requirements, capital expenditures and acquisitions. These debt arrangements
expose the Company to market risk related to changes in interest rates. The
Company has entered into a receive-fixed interest rate swap agreement to
effectively convert a portion of its fixed-rate debt to variable-rate debt to
reduce the risk of incurring higher interest costs in periods of falling
interest rates. The Company does not enter into any interest rate protection
agreements for trading purposes. The Company is exposed to market risk in the
event of non-performance by the counterparties. No such non-performance is
expected. The table below summarizes the fair values and contract terms of the
Company's financial instruments subject to interest rate risk as of December 31,
1999.

<TABLE>
<CAPTION>

                                               Expected Maturity

                            --------------------------------------------------------                           Fair
                              2000       2001        2002       2003        2004     Thereafter     Total      Value
                           ---------- ----------- ---------- ----------- ---------- ----------- ----------- ----------------
Debt:
<S>                        <C>        <C>         <C>        <C>         <C>        <C>         <C>         <C>
Fixed Rate                 $ 170,000  $  20,000   $ 220,000  $ 444,000   $       -  $ 1,530,000 $ 2,384,000 $ 1,938,335
   Average Interest Rate       9.04%      9.02%       8.96%      8.96%       8.96%        8.88%           -           -

Variable Rate                      -      3,500      15,000     46,833      81,667      370,000     517,000     517,000
   Average Interest Rate       8.13%      8.65%       8.76%      8.83%       8.87%        8.95%

Interst Rate Swap:

Fixed to Variable Swap             -          -      35,000          -           -            -      35,000        (638)
Average Pay Rate                   -          -       5.86%          -           -            -           -           -
Average Receive Rate               -          -       7.08%          -           -            -           -           -

</TABLE>

      Interest rates on variable debt are estimated by us using the average
implied forward London Interbank Offer Rate ("LIBOR") rates for the year of
maturity based on the yield curve in effect at December 31, 1999, plus the
borrowing margin in effect at December 31, 1999. The average pay rate on the
fixed to variable swap is estimated by using the average implied forward LIBOR
rates for the year of maturity based on the yield curve in effect at December
31, 1999.

      Old Arahova's primary exposure to market risks at May 31, 1999 related to
the decline in market values of the Company's available-for-sale investments.
Additionally, the Company has minimal exposure to market risks in regard to
interest rate fluctuations on its variable rate debt and in relation to its
interest rate hedge agreement related to certain of the Company's fixed rate
debt. The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. They are used to manage
well-defined interest rate risks.

      At May 31, 1999, approximately 96% of the Company's debt was fixed rate.
Holding all other factors constant, a 10% increase in interest rates would have
an immaterial effect on net income (loss). The sensitivity analysis is limited
in that it is based on balances outstanding at May 31, 1999 and does not provide
for changes in borrowing that may occur. The carrying value of the Company's
available-for-sale investments at May 31, 1999 represented approximately 4% of
the Company's total assets. A 10% decline in the market value of all
available-for-sale investments owned at May 31, 1999 would have had an
insignificant impact on the Company's assets and no impact on net income (loss)
as the unrealized gain is deferred until the investments are sold.

      At December 31, 1999, approximately 79% of the Company's debt was fixed
rate. Holding all other factors constant, a 10% increase in interest rates would
increase net loss by approximately $4,000 annually. The sensitivity analysis is
limited in that it is based on balances outstanding at December 31, 1999 and
does not provide for changes in borrowing that may occur.

      Readers are cautioned that forward-looking statements contained herein
concerning market risks should be read in conjunction with the Company's
disclosures in Business - Introduction, regarding the "Safe Harbor" provisions
of the Private Securities Litigation Reform Act of 1995.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The consolidated financial statements and related notes thereto and
independent auditors' report follow.

<TABLE>
<CAPTION>

                          INDEX TO FINANCIAL STATEMENTS

                                                                                                                   Page

<S>                                                                                                                <C>
   Independent Auditors' Report                                                                                      31

   Consolidated Balance Sheets, May 31, 1999 And December 31, 1999                                                   32

   Consolidated Statements of Operations, Years Ended May 31, 1998 and 1999, Four Months Ended
         September 30, 1999 and Three Months Ended December 31, 1999                                                 33

   Consolidated Statements of Common Stockholders' Equity (Deficiency), Years Ended May 31, 1998 and 1999,
         Four Months Ended September 30, 1999 and Three Months Ended December 31, 1999                               34

   Consolidated Statements of Cash Flows, Years Ended May 31, 1998 and 1999, Four Months Ended
         September 30, 1999 and Three Months Ended December 31, 1999                                                 36

   Notes To Consolidated Financial Statements                                                                        37
</TABLE>


<PAGE>




                          INDEPENDENT AUDITORS' REPORT

Arahova Communications, Inc.:


      We have audited the accompanying consolidated balance sheets of Arahova
Communications, Inc. and subsidiaries as of May 31, 1999 and December 31, 1999,
and the related consolidated statements of operations, of common stockholders'
equity (deficiency), and of cash flows for the years ended May 31, 1998 and
1999, the four months ended September 30, 1999 and the three months ended
December 31, 1999. Our audits also included the financial statement schedules
listed in the Index at Item 14. These financial statements and financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits.

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

      In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Arahova Communications, Inc.
and subsidiaries at May 31, 1999 and December 31, 1999, and the results of their
operations and their cash flows for the years ended May 31, 1998 and 1999, the
four months ended September 30, 1999 and the three months ended December 31,
1999 in conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedules, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.

DELOITTE & TOUCHE LLP



Pittsburgh, Pennsylvania

March 29, 2000  (August 7, 2000 as to Note 10)



<PAGE>



<TABLE>
<CAPTION>

                                  ARAHOVA COMMUNICATIONS, INC. AND SUBSIDIARIES
                                           CONSOLIDATED BALANCE SHEETS
                                 (Dollars in thousands, except per share amounts)


                                                                         Old Arahova              New Arahova
                                                                     ---------------------   ----------------------
                                                                           May 31,               December 31,
                                                                             1999                    1999
                                                                     ---------------------   ----------------------
ASSETS:

Cable systems, at cost, net of accumulated depreciation and amortization:

<S>                                                                  <C>                     <C>
   Property, plant and equipment                                     $           585,980     $            948,583
   Intangible assets                                                             459,833                6,511,329
                                                                     ---------------------   ----------------------
     Total                                                                     1,045,813                7,459,912

Cash and cash equivalents                                                        626,155                  128,028
Investments                                                                       74,899                  122,400
Subscriber receivables - net                                                      24,798                   38,675
Prepaid expenses and other assets - net                                           31,934                   72,242
                                                                     ---------------------   ----------------------
     Total                                                           $         1,803,599     $          7,821,257
                                                                     =====================   ======================

LIABILITIES AND COMMON STOCKHOLDERS'
    EQUITY (DEFICIENCY):
Parent debt                                                          $         1,873,640     $          1,832,939
Subsidiary debt                                                                  169,050                  581,496
Accounts payable                                                                  44,096                   88,800
Subscriber advance payments and deposits                                          25,747                   23,982
Accrued interest and other liabilities                                            76,180                  145,009
Deferred income taxes                                                              5,290                1,634,690
                                                                     ---------------------   ----------------------
     Total liabilities                                                         2,194,003                4,306,916

Minority interests                                                                74,915                  597,486

Commitments and contingencies (Note 4)

Common stockholders' equity (deficiency):

   Common stock, par value $.01 per share:
     New Arahova, 1,000 shares authorized,
       Issued and outstanding                                                          -                        -
     Old Arahova Class A, 400,000,000 shares authorized,
       67,232,335 shares issued and 33,423,167 shares outstanding                    672                        -
     Old Arahova Class B, 300,000,000 shares authorized,
       42,322,059 shares issued and outstanding                                      423                        -
    Additional paid-in-capital                                                   191,234                3,372,538
   Related party receivables - net                                                     -                 (442,120)
    Other, including 33,809,168  treasury shares at May 31, 1999                (143,818)                  (1,392)
    Accumulated deficit                                                         (513,830)                 (12,171)
                                                                     ---------------------   ----------------------
       Total common stockholders' equity (deficiency)                           (465,319)               2,916,855
                                                                     ---------------------   ----------------------
       Total                                                         $         1,803,599     $          7,821,257
                                                                     =====================   ======================






                                            See notes to consolidated financial statements.

</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                     ARAHOVA COMMUNICATIONS, INC. AND SUBSIDIARIES
                                         CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Dollars in thousands, except per share amounts)

                                                                         Old Arahova                      New Arahova
                                                         ---------------------------------------------- -----------------

                                                                                          Four Months      Three Months

                                                               Year Ended May 31,            Ended            Ended
                                                                  Year Ended             September 30,     December 31,
                                                               1998           1999            1999             1999
                                                         -------------- -------------- ---------------- -----------------
<S>                                                      <C>            <C>            <C>              <C>
Revenues                                                 $    608,341   $    651,142   $      231,230   $       194,335
                                                         -------------- -------------- ---------------- -----------------
Operating expenses:
   Direct operating and programming                           226,862        254,977           92,455            60,937
   Selling, general and administrative                        131,169        124,652           47,610            33,373
   Depreciation and amortization                              154,029        158,153           59,665            58,170
   Stock compensation                                               -              -           26,232                 -
   Merger and integration costs                                     -          7,922          174,153             4,167
                                                         -------------- -------------- ---------------- -----------------
       Total                                                  512,060        545,704          400,115           156,647
                                                         -------------- -------------- ---------------- -----------------

Operating income (loss)                                        96,281        105,438         (168,885)           37,688

Other (expense) income:
   Interest expense - net                                    (164,421)      (171,125)         (53,929)          (43,055)
   Minority interests in income of subsidiaries               (11,899)       (11,597)          (4,911)          (10,169)
   Other                                                        1,533          5,725              337                 -
                                                         -------------- -------------- ---------------- -----------------
       Total                                                 (174,787)      (176,997)         (58,503)          (53,224)

Loss before income taxes                                      (78,506)       (71,559)        (227,388)          (15,536)
Income tax benefit (expense)                                      624         13,453           (5,837)            3,365
                                                         -------------- -------------- ---------------- -----------------

Net loss from continuing operations                           (77,882)       (58,106)        (233,225)          (12,171)
Loss on discontinued operations (net of income tax
   benefit of $13,597 and minority interest in
losses

   of $21,193)                                                (43,089)             -                -                 -
Gain on sale of discontinued operations (less
    applicable income taxes of $25,739)                             -        314,290                -                 -
                                                         -------------- -------------- ---------------- -----------------

Net (loss) income                                            (120,971)       256,184         (233,225)          (12,171)

Dividend requirements applicable to preferred stock            (5,225)             -                -                 -
                                                         -------------- -------------- ---------------- -----------------
Net (loss) income applicable to common stockholders          (126,196)       256,184         (233,225)          (12,171)
Other comprehensive income (loss) -
   net of income taxes                                          7,333         (3,308)          11,511            (1,392)
                                                         -------------- -------------- ---------------- -----------------

Comprehensive (loss) income                              $   (118,863)   $   252,876   $     (221,714)  $       (13,563)
                                                         ============== ============== ================ =================

Basic and diluted net loss from continuing
    operations per share                                 $      (1.11)  $       (.77)  $        (3.07)

Basic and diluted gain on sale of discontinued
   operations per share                                             -           4.18                -

Basic and diluted loss from discontinued
   operations                                                    (.58)             -                -

                                                         -------------- -------------- ----------------
Basic and diluted net (loss) income per share            $      (1.69)  $       3.41   $        (3.07)
                                                         ============== ============== ================

Basic and diluted weighted average shares of
   common stock outstanding (in thousands)                     74,770         75,088           75,921
                                                         ============== ============== ================


                                   See notes to consolidated financial statements.

</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                            ARAHOVA COMMUNICATIONS, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY (DEFICIENCY)
                                               (Dollars in thousands)

          Old Arahova                                                                                              Total Common
                                                             Additional                            Related Party   Stockholders'
                                          Common Stock        Paid-in    Accumulated                Receivables       Equity
                                      Class A      Class B    Capital      Deficit      Other         - Net        (Deficiency)
                                   ------------- ---------- ----------- ------------ ------------- ------------- ----------------
<S>                                <C>           <C>        <C>         <C>          <C>           <C>           <C>
Balances at June 1, 1997           $     627     $    451   $  179,840  $ (649,043)  $ (130,518)   $       -     $     (598,643)

Shares issued in connection with
  employee incentive plans                 6            -        4,278           -          255            -              4,539

Class A shares purchased by
  the Company                              -            -            -           -      (12,576)           -            (12,576)

Class B shares converted to
  Class A shares                          24          (24)           -           -            -            -                  -

Subsidiary preferred stock

  dividends                                -            -       (5,225)          -            -            -             (5,225)

Net unrealized gain on
  available-for-sale securities            -            -            -           -        7,333            -              7,333

Foreign currency translation
  transferred to discontinued

  operations                               -            -            -           -          291            -                291

Net loss                                   -            -            -    (120,971)           -            -           (120,971)
                                   ---------     --------   ----------  ----------   ----------    ---------      -------------

Balances at May 31, 1998                 657          427      178,893    (770,014)    (135,215)           -           (725,252)
                                   ---------     --------   ----------  ----------   ----------    ---------      -------------

Shares issued in connection with
  employee incentive plans                11            -       12,341           -       (3,790)           -              8,562

Class A shares purchased by the
  Company from employees                   -            -            -           -       (1,505)           -             (1,505)

Class B shares converted to Class
  A shares                                 4           (4)           -           -            -            -                  -

Net unrealized loss on
  available-for-sale securities            -            -            -           -       (3,308)           -             (3,308)

Net income                                 -            -            -     256,184            -            -            256,184
                                   ---------     --------   ----------  ----------   ----------    ---------      -------------
Balances at May 31, 1999                 672          423      191,234    (513,830)    (143,818)           -           (465,319)
                                   ---------     --------   ----------  ----------   ----------    ---------      -------------

Shares issued in connection with
  employee incentive plans                 8            -        5,460           -        6,504            -             11,972

Class A Shares purchased by the
  Company from employees                   -            -            -           -       (7,891)           -             (7,891)

Acceleration of stock options              -            -       37,901           -            -            -             37,901

Net unrealized gain on
  available-for-sale securities            -            -            -           -       11,511            -             11,511

Net loss                                   -            -            -    (233,225)           -            -           (233,225)
                                   ---------     --------   ----------  ----------   ----------    ---------      -------------
Balances at September 30, 1999     $     680     $    423   $  234,595  $ (747,055)  $ (133,694)   $       -     $     (645,051)
                                   =========     ========   ==========  ==========   ==========    ========      ==============


                                            See notes to consolidated financial statements.

</TABLE>


<PAGE>



<TABLE>

          New Arahova

                                                                                                   Related       Total Common
                                                           Additional                               Party        Stockholders'
                                     Common Stock           Paid-in    Accumulated               Receivables        Equity
                                   Class A     Class B      Capital      Deficit      Other         -Net         (Deficiency)
                                 ----------- ---------- ------------- ------------ ----------- --------------- ----------------
Excess of purchase price of
   acquired assests and
   liabilites over predecessor
<S>                              <C>         <C>        <C>           <C>          <C>         <C>             <C>
   owners' net book value        $    (680)  $    (423) $ 3,004,553   $   747,055  $  133,694  $          -    $     3,884,199
                                 ---------   ---------  -----------   -----------  ----------  ------------    ---------------

Balances at October 1, 1999              -           -    3,239,148             -           -             -          3,239,148

Net unrealized loss on
   available-for-sale securities         -           -            -             -      (1,392)            -             (1,392)

Capital contribution from                -           -      133,390             -           -             -            133,390
Adelphia

Advances to affiliates - net             -           -            -             -           -      (442,120)          (442,120)

Net loss                                 -           -            -       (12,171)          -             -            (12,171)
                                 ---------   ---------  -----------   -----------  ----------  ------------    ---------------

Balances at December 31, 1999    $       -   $       -  $ 3,372,538   $   (12,171) $   (1,392) $   (442,120)   $     2,916,855
                                 =========   =========  ===========   ===========  ==========  ============    ===============






























                                            See notes to consolidated financial statements.

</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                             ARAHOVA COMMUNICATIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (Dollars in thousands)

                                                                                       Old Arahova                    New Arahova
                                                                ---------------------------------------------------- --------------
                                                                                                     Four Months     Three Months
                                                                                                        Ended            Ended

                                                                         Year Ended May 31,          September 30,    December 31,
                                                                        1998             1999            1999             1999
                                                                  ----------------- -------------- ----------------- --------------
Cash flows from operating activities:

<S>                                                               <C>               <C>            <C>               <C>
   Net (loss) income                                              $    (120,971)    $   256,184    $   (233,225)     $    (12,171)
   Adjustments to reconcile net (loss) income to net cash
      Provided by (used for) operating activities:

      Depreciation                                                       93,926         101,370          41,731            17,971
      Amortization                                                       60,103          56,783          17,934            40,199
      Minority interests in income of subsidiaries                       11,899          11,597           4,911            10,169
      (Decrease) increase in deferred taxes                              (4,812)            121             202            (8,473)
      Gain on sale of discontinued operations                                          (340,029)              -                 -
      Other                                                                   -          (7,237)              -                 -
      Amortization of restricted stock                                        -               -           6,504                 -
      Write-off of employee receivables                                       -               -           1,437                 -
      Acceleration of stock options                                           -               -          37,901                 -
      Noncash interest expense                                           39,138          57,393          19,647            13,107
         Loss from discontinued operations - net                         43,089               -               -                 -
      Changes in operating assets and liabilities, net of
         effect of acquisitions:
         Subscriber receivables                                           5,189            (866)          2,240            (7,764)
         Prepaid expenses and other assets                                5,437            (268)         (5,403)           12,659
         Accounts payable and accrued liabilities                        26,626         (11,315)          3,641            61,278
                                                                  -------------     -----------    ------------      ------------
           Net cash provided by (used for) operating activities         159,624         123,733       (102,480)           126,975
                                                                  -------------     -----------    ------------      ------------

Cash flows (used for) provided by investing activities:

   Capital expenditures                                                (113,222)       (121,523)        (52,630)          (53,481)
   Acquisition of cable and other assets                                (74,282)         (7,978)        (14,303)         (247,315)
   Proceeds from sale of radio stations                                       -          11,538               -                 -
   Proceeds from sale of discontinued operations                              -         360,115               -                 -
   Amounts invested in and advanced to related parties                        -               -               -          (442,120)
                                                                  -------------     -----------    ------------      ------------
           Net cash (used for) provided by investing activities        (187,504)        242,152         (66,933)         (742,916)
                                                                  -------------     -----------    ------------      ------------

Cash flows provided by (used for) financing activities:

   Proceeds from debt                                                   813,659               -         880,000           471,000
   Repayments of debt                                                  (575,550)        (37,050)         (1,000)         (942,050)
    Costs assciated with debt financings                                (18,307)              -               -           (12,183)
   Issuance of common stock                                               2,951           8,562           5,468                 -
   Purchase of treasury stock                                           (12,576)         (1,505)         (7,891)                -
                                                                  -------------     -----------    ------------      ------------
           Net cash provided by (used for) financing activities         210,177         (29,993)        876,577          (483,233)
                                                                  -------------     -----------    ------------      ------------

Increase (decrease) in cash and cash equivalents - continuing
operations                                                              182,297         335,892         707,164        (1,099,174)

Cash flow of discontinued operations - net                              (48,746)          4,765               -                 -

Cash and cash equivalents, beginning of period                          151,947         285,498         626,155         1,227,202
                                                                  -------------     -----------    ------------      ------------
Cash and cash equivalents, end of period                          $     285,498     $   626,155    $  1,333,319      $    128,028
                                                                  =============     ===========    ============      ============
Supplemental disclosure of cash flow activity -
   cash payments for interest                                     $     129,148     $   135,290    $     48,331      $     40,852
                                                                  =============     ===========    ============      ============



                                            See notes to consolidated financial statements.

</TABLE>


<PAGE>


                  ARAHOVA COMMUNICATIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                (Dollars in thousands, except per share amounts)

1.  The Company and Summary of Significant Accounting Policies:

    The Company and Basis of Presentation

      On October 1, 1999, Adelphia Communications Corporation ("Adelphia") and
Century Communications Corp. ("Century") consummated a merger (the "Merger")
whereby Century was merged with and into Adelphia Acquisition Subsidiary, Inc.
("Merger Sub"), a wholly owned subsidiary of Adelphia, pursuant to an Agreement
and Plan of Merger (the "Merger Agreement"), dated as of March 5, 1999, as
amended as of July 12, 1999 and July 29, 1999, by and among Adelphia, Century
and Merger Sub. As a result of the Merger, Century has become a wholly owned
subsidiary of Adelphia. Merger Sub is sometimes referred to herein as the
"Successor Corporation." The name of the Successor Corporation was changed to
Arahova Communications, Inc. ("Arahova") on October 1, 1999. As used herein, the
"Company" refers to the predecessor corporation as well as Arahova, as the
successor to the predecessor corporation. The Company operates cable television
systems with significant concentrations of subscribers in Southern California,
Colorado, and Puerto Rico.

      Pursuant to the terms of the Merger Agreement, and subject to the
limitations set forth below, each issued and outstanding share of Class A common
stock, par value $.01 per share, of Century ("Century Class A common stock") was
converted, at the option of the holder, into the right to receive either (1)
$44.14 in cash, or (2) 0.77269147 shares of Class A common stock, par value $.01
per share of Adelphia ("Adelphia Class A common stock "). Subject to the
limitations set forth below, each issued and outstanding share of Class B common
stock, par value $.01 per share, of Century ("Century Class B common stock ")
was converted, at the option of the holder, into the right to receive either (1)
$48.14 in cash, or (2) 0.84271335 shares of Adelphia Class A common stock.

      The aggregate number of shares of Century's Class A common stock converted
into the right to receive cash in the Merger was limited to 20.76% of the number
of shares of Century's Class A common stock outstanding immediately prior to the
effective time of the Merger. The aggregate number of shares of the Century's
Class A common stock converted into the right to receive shares of Adelphia
Class A common stock in the Merger was limited to 79.24% of the number of such
shares of Century's Class A common stock outstanding immediately prior to the
effective time of the Merger. The aggregate number of shares of Century's Class
B common stock converted into the right to receive cash in the Merger was
limited to 24.54% of the number of shares of Century's Class B common stock
outstanding immediately prior to the effective time of the Merger. The aggregate
number of shares of Century's Class B common stock converted into the right to
receive shares of Adelphia Class A common stock in the Merger was limited to
75.46% of the number of shares of Century's Class B common stock outstanding
immediately prior to the effective time of the Merger.

      Century Class A common stockholders made stock elections for an amount of
Adelphia Class A common stock exceeding the amount available to such holders. As
a result, holders of Century Class A common stock who elected to receive
Adelphia Class A common stock received 86.42% of their consideration in Adelphia
Class A common stock, or approximately 0.6678 of a share of Adelphia Class A
common stock, and 13.58% of their consideration in cash, or approximately $5.99,
for each share of Century Class A common stock, without interest. Holders of
Century Class A common stock who elected to receive cash received $44.14 per
share, without interest.

      Century Class B common stockholders made stock elections for amounts of
cash and Adelphia Class A common stock equal to the amounts available to such
holders. As a result, holders of Century Class B common stock who elected to
receive Adelphia Class A common stock received 0.84271335 of a share of Adelphia
Class A common stock for each share of Century Class B common stock, and holders
of Century Class B common stock who elected to receive cash received $48.14 per
share, without interest.

      Also pursuant to the terms of the Merger Agreement, each outstanding
option to purchase shares of Century Class A common stock granted under
Century's 1993 Non-Employee Directors' Stock Option Plan, the 1994 Stock Option
Plan, and all other similar plans or arrangements (collectively "Option Plans"),
whether or not previously exercisable or vested, became fully exercisable and
vested. Option holders were given the option to exercise immediately prior to
the Merger or to rollover their options into options to acquire Adelphia Class A
common stock. Furthermore, all restricted shares of Century Class A common stock
issued pursuant to the 1992 Management Equity Incentive Plan became fully vested
and ceased to be restricted.

      On May 25, 2000, the Board of Directors of the Company changed Arahova's
fiscal year from May 31 to December 31. The decision was made to conform to
general industry practice and for administrative purposes. The change became
effective for the seven months ended December 31, 1999.

      The consolidated financial statements include the accounts of Arahova and
its subsidiaries. All significant intercompany accounts and transactions have
been eliminated in consolidation.

      Consolidated financial statements for periods prior to October 1, 1999,
are referred to herein as "Old Arahova", whereas periods subsequent to October
1, 1999 are referred to herein as "New Arahova". Due to the October 1, 1999
application of purchase accounting resulting from the acquisition of Old Arahova
by Adelphia, the predecessor consolidated financial statements of Old Arahova
are not comparable to the successor consolidated financial statements of New
Arahova. In addition, Old Arahova previously presented classified balance sheets
and statements of cash flows under the direct method. These financial statements
have been reclassified to conform to New Arahova's presentation.

      At the effective time of the Merger, Adelphia purchased Citizens Utilities
Company's ("Citizens") 50% interest in the Century/Citizens Cable Television
Joint Venture ("CCJV"), one of Century's 50% owned joint ventures, for a
purchase price of approximately $131,900, comprised of approximately $27,700 in
cash and approximately 1,850,000 shares of Adelphia Class A common stock. As of
October 1, 1999 this joint venture served approximately 92,300 basic subscribers
in California and was jointly owned by Century and Citizens Cable Company, a
subsidiary of Citizens. On December 15, 1999, Adelphia's interest in CCJV of
$133,390 was contributed to Arahova.

      The Merger has been accounted for using the purchase method of accounting.
Accordingly, the preliminary allocation of Adelphia's purchase price to acquire
Old Arahova has been reflected in New Arahova's consolidated financial
statements as of October 1, 1999, as adjusted through December 31, 1999. A final
allocation of the purchase price will be made upon resolution of pre-acquisition
contingencies and completion of final valuations. The approximate $4,950,148
aggregate purchase price was comprised of the following:

<TABLE>

<S>                                                                       <C>
                   Issuance of Adelphia Class A common stock              $     2,705,000
                   Assumption of debt and working capital                       1,711,000
                   Deferred tax asset realized by Adelphia                       (277,852)
                   Cash                                                           812,000
                                                                          -----------------
                                                                          $     4,950,148
                                                                          =================
</TABLE>

      The value assigned to the Adelphia Class A common stock was based on the
average closing price of Adelphia Class A common stock a few days before and
after the Merger was agreed to and announced on March 5, 1999.


<PAGE>



      The following table reflects the opening condensed consolidated balance
sheet of New Arahova, as adjusted through December 31, 1999, which includes the
effects of the preliminary purchase accounting adjustments resulting from the
allocation of Adelphia's purchase prices to acquire Old Arahova and Citizen's
50% interest in CCJV.

<TABLE>
<CAPTION>

                                                                                            New Arahova

                                                                                        --------------------
                                                                                          October 1, 1999
                                                                                        --------------------
ASSETS

Cable systems:
<S>                                                                                     <C>
   Property, plant and equipment                                                        $          769,766
   Intangible assets                                                                             5,896,025
                                                                                        --------------------
     Total                                                                                       6,665,791

Cash and cash equivalents                                                                        1,227,202
Investments                                                                                        105,328
Subscriber receivables - net                                                                        26,422
Prepaid expenses and other assets - net                                                             46,772
                                                                                        --------------------
     Total                                                                              $        8,071,515
                                                                                        ====================

LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Parent debt                                                                             $        1,820,700
Subsidiary debt                                                                                  1,052,955
Accounts payable                                                                                    32,022
Subscriber advance payments and deposits                                                            33,248
Accrued interest and other liabilities                                                              88,767
Deferred income taxes                                                                            1,643,163
                                                                                        --------------------
     Total liabilities                                                                           4,670,855

Parent's interest in subsidiary and other minority interests                                       161,512

Common stockholders' equity:

   Common stock, par value $.01 per share:

     New Arahova, 1,000 shares authorized, issued and outstanding                                        -
    Additional paid-in-capital                                                                   3,239,148
                                                                                        --------------------
         Total common stockholders' equity                                                       3,239,148
                                                                                        --------------------
         Total                                                                          $        8,071,515
                                                                                        ====================
</TABLE>

      As a result of the application of purchase accounting, New Arahova has
recorded its assets and liabilities at their preliminary fair values on October
1, 1999. As of December 31, 1999, the allocation of Adelphia's purchase price to
acquire Old Arahova had not been finalized. Accordingly, the Company may make
additional refinements to the preliminary allocation of Adelphia's purchase
prices to acquire Old Arahova and Citizen's 50% interest in CCJV in future
periods. Certain of the more significant effects of purchase accounting are
described below.

      The $769,766 assigned to New Arahova's property, plant and equipment will
be depreciated over useful lives ranging primarily from 5 to 20 years. The
$5,896,025 assigned to New Arahova's intangible assets is primarily comprised of
franchise costs and will be amortized over useful lives of primarily 40 years.

      On December 7, 1999, Arahova acquired cable systems that served
approximately 19,000 basic subscribers at the date of acquisition in Moreno
Valley and Riverside County, California and were purchased for an aggregate
price of approximately $32,000. The acquisition was accounted for under the
purchase method of accounting. Accordingly, the financial results of the
acquired systems are included in the consolidated results of Arahova effective
from the date acquired.

      On December 7, 1999, subsidiaries of Arahova consummated a transaction
with AT&T to form a joint venture limited partnership in the Los Angeles, CA
area. Pursuant to this agreement, Adelphia, Arahova and AT&T contributed cable
systems that served approximately 800,000 basic subscribers. On December 15,
1999, Adelphia's interest in the joint venture was contributed to Arahova. At
December 31, 1999, Arahova holds an interest of 75% and AT&T holds an interest
of 25% in the partnership. The cable systems contributed by Arahova and Adelphia
have been recorded at historical cost. The acquisition of the cable systems
contributed by AT&T has been accounted for under the purchase method of
accounting. The financial results of the cable systems contributed by AT&T are
included in the consolidated results of operations of Arahova effective from the
date acquired. As part of this transaction, Arahova and AT&T exchanged cable
systems owned by Arahova in certain communities in northern California for
certain cable systems owned by AT&T in southern California, allowing each of
them to unify operations in existing service areas. AT&T exchanged its East San
Fernando Valley cable system serving approximately 103,500 basic subscribers for
Arahova's northern California cable systems (San Pablo, Benecia, Fairfield and
Rohnert Park, California), which serve approximately 96,500 basic subscribers.
No gain or loss resulted from this system swap due to the Company's application
of purchase accounting in connection with the Adelphia merger.

      The following unaudited financial information assumes that the
acquisitions that were consummated during the period ended December 31, 1999 had
occurred on June 1, 1998.

<TABLE>
<CAPTION>

                                                                    Four Months      Three Months
                                                    Year Ended         Ended             Ended
                                                      May 31,      September 30,     December 31,
                                                       1999             1999             1999
                                                   --------------  ---------------   --------------
<S>                                                <C>             <C>               <C>
       Revenues                                    $     782,332   $      278,217    $     217,551
       Net loss                                           98,804          250,323           15,418
</TABLE>

      The above financial information excludes the gain on the sale of
discontinued operations of Centennial Cellular and the Australian operations of
$314,290 in the year ended May 31, 1999.

    Subscriber Revenues

     Subscriber revenues are recognized in the month in which the service is
provided.

   Subscriber Receivables

      An allowance for doubtful accounts of $3,311 and $3,573 is recorded as a
reduction of subscriber receivables at May 31, 1999 and December 31, 1999,
respectively.

      Property, Plant and Equipment

      Property, plant and equipment are comprised of the following:

<TABLE>
<CAPTION>

                                                        Old Arahova        New Arahova

                                                      -----------------  -----------------
                                                          May 31,          December 31,
                                                            1999               1999
                                                      -----------------  -----------------
<S>                                                   <C>                <C>
Operating plant and equipment                         $       991,389    $       825,101
Real estate and improvements                                   39,398             67,071
Support equipment                                              59,769             25,657
Construction in progress                                        6,320             48,725
                                                      -----------------  -----------------
                                                            1,096,876            966,554
Accumulated depreciation                                    (510,896)           (17,971)
                                                      -----------------  -----------------
                                                      $       585,980    $       948,583
                                                      =================  =================
</TABLE>

      Depreciation for Old Arahova was computed on a straight-line basis using
estimated useful lives of 8 to 15 years for operating plant and equipment and 3
to 25 years for support equipment and real estate and improvements. New
Arahova's depreciation is computed on a straight-line basis using estimated
useful lives of 5 to 12 years for operating plant and equipment and 3 to 20
years for support equipment and real estate and improvements. Additions to
property, plant and equipment are recorded at cost, which includes amounts for
material, applicable labor and overhead, and interest.

    Intangible Assets

     Intangible assets, at cost, net of accumulated amortization, are comprised
of the following:

<TABLE>
<CAPTION>

                             Old Arahova New Arahova

                                                    -----------------  ----------------
                                                        May 31,         December 31,
                                                          1999              1999
                                                    -----------------  ----------------
<S>                                                 <C>                <C>
Purchased franchises                                $       298,675         5,036,828
Goodwill                                                    161,158    $    1,474,501
                                                    -----------------  ----------------
                                                    $       459,833    $    6,511,329
                                                    =================  ================
</TABLE>

      A portion of the aggregate purchase price of cable television systems
acquired has been allocated to purchased franchises and goodwill. Purchased
franchises and goodwill are amortized on the straight-line method over 40 years
for New Arahova and over periods ranging from 10 to 40 years for Old Arahova.
Accumulated amortization of intangible assets amounted to $395,268 and $38,941
at May 31, 1999 and December 31, 1999, respectively.

   Other Assets

      The unamortized amount of deferred debt financing costs included in
prepaid expenses and other assets was $27,057 and $36,207 at May 31, 1999 and
December 31, 1999, respectively. Such costs are amortized over the term of the
related debt.

    Asset Impairments

      Arahova periodically reviews the carrying value of its long-lived assets
for impairment whenever events or changes in circumstances indicate that the
carrying value of assets may not be recoverable. Measurement of any impairment
would include a comparison of estimated future operating cash flows anticipated
to be generated during the remaining life of the assets with their net carrying
value. An impairment loss would be recognized as the amount by which the
carrying value of the assets exceeds their fair value.

    Cash and Cash Equivalents

      The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.

    Investments

      Arahova owns approximately 114,000 shares of United GlobalCom, Inc.
("UCOMA"), formerly United International Holdings, Inc. ("UIH"), Series B
convertible preferred stock as a result of the transactions described in Note 3.
Each share of this stock is convertible into approximately 21 shares of UIH
Class A common stock, at a conversion price of $10.625 per share. This equity
instrument was recorded at its fair value of $87,433 on October 1, 1999 in
connection with purchase accounting.

      As a result of a contract between Arahova and At Home Corporation
("@Home") to provide @Home high speed internet access on certain systems,
Arahova has a warrant contract to purchase up to 5,260,000 shares of @Home
Series A common stock at $5.25 per share. Deferred revenue is recorded for the
fair value of the warrants when earned with corresponding revenue recognized
over the remaining life of the contract, which expires in May 2004. The
investment in @Home warrants is classified as an available-for-sale security.
During the three months ended December 31,1999, New Arahova recognized revenue
of approximately $1,500 related to these warrants. No revenue was previously
recognized by Old Arahova. New Arahova's investment in @Home warrants of $34,366
at December 31, 1999 includes $2,354 of unrealized loss.

    Debt and Other Financial Instruments

      Net settlement amounts under the interest rate swap agreement are recorded
as adjustments to interest expense during the period incurred. Discounts on debt
are amortized to earnings as an adjustment to interest expense over the
respective remaining lives of the underlying debt obligations. The aggregate
amount by which fair value assigned in purchase accounting to debt exceeded or
was less than carrying value at the acquisition date is being amortized to
interest expense over the respective remaining lives of the underlying debt
obligations.

    Franchise Expense

      The typical term of the Company's franchise agreements upon renewal is 10
years. Franchise fees range from 3% to 5% of subscriber revenue and are expensed
currently.

    Basic and Diluted Net Loss Per Weighted Average Share of Common Stock

      For the years ended May 31, 1998 and 1999 and the four months ended
September 30, 1999, diluted net loss per common share is equal to basic net loss
per common share because Old Arahova's outstanding options and other potential
common shares had an anti-dilutive effect for the periods presented. Subsequent
to the Merger, all shares of New Arahova common stock are held by Adelphia. As
such, disclosure of net loss per weighted average share of common stock is not
required for periods subsequent to the Merger.

    Interest Expense - Net

      Interest expense - net includes interest income of $8,187, $20,678,
$14,679, and $14,175 for the years ended May 31, 1998 and 1999, the four months
ended September 30, 1999 and the three months ended December 31, 1999,
respectively. For the three months ended December 31, 1999, interest income
includes interest income from affiliates on long-term loans and for
reimbursement of interest expense on revolving credit agreements, related to
short term borrowings by such affiliates (Note 9).

    Merger and Integration Costs

      The Company had employment agreements primarily with four executive
officers including Dr. Leonard Tow, former Chairman and Chief Executive Officer
of the Company. The terms of these employment agreements expire on June 30,
2003, except that Dr. Tow's agreement continues for an additional five-year
advisory period. Each of these employment agreements was terminable by the
executive officer upon a "change of control" or a "threatened change of control"
of the Company. One of the events that is considered to be a threatened change
of control under each employment agreement is the acquisition by any person of
securities of the Company such that the person files or is required to make a
filing pursuant to Regulation 13D under the Securities Exchange Act of 1934, as
amended. As a result of entering into the Merger Agreement, such an event
occurred and, therefore, for purposes of these employment agreements, a
"threatened change of control" occurred. During the quarter ended August 31,
1999, each of these executive officers exercised his right to terminate his
employment agreement but continued working for the Company through the closing
of the Merger.

      Pursuant to the employment agreement, upon such termination, each
executive officer is entitled to receive his base salary through the end of the
term of his employment agreement, an annual cash bonus for the remainder of the
term equal to his most recently awarded cash bonus, continuation of medical,
dental, life and disability insurance for the remainder of the term on the same
basis as provided while the agreement was in effect and the use of office space
for one year. In addition, upon termination, all of his Company stock options
vest and become exercisable and the restrictions on all of his shares of
restricted stock of the Company lapse. The total cost to the Company of the
termination of the executive employment agreements was approximately $227,400.
Approximately $167,200 of these costs were recorded by the Company during the
four months ended September 30, 1999. The remaining $60,200 of these costs,
which resulted from the completion of the Merger, were recorded as an adjustment
to Adelphia's purchase price upon completion of the Merger.

      The Company also incurred employee severance related costs related to the
Merger and the continuance of the employment of key personnel through the
completion of the Merger. The total cost to the Company of these employee
severance related costs was approximately $7,000. These additional Merger
related costs were recorded by the Company upon completion of the Merger. The
Company also incurred certain other Merger related costs subsequent to September
30, 1999. Approximately $77,000 of these costs relate primarily to investment
banking, legal and accounting services incurred in relation to the completion of
the Merger and were recorded as an adjustment to Adelphia's purchase price.

      The Company incurred total incremental compensation, legal and consulting
costs of $174,153 and $4,167 during the four months ended September 30, 1999 and
the three months ended December 31, 1999, respectively, in connection with the
Merger.

    Use of Estimates in the Preparation of Financial Statements

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

    Comprehensive Income (Loss)

      Comprehensive income (loss) is required to be presented when a company has
items of other comprehensive income (loss) during the periods presented. Other
comprehensive income (loss) consisted primarily of net unrealized gains on
available-for-sale securities for all periods presented. Items of other
comprehensive income (loss) are excluded from net loss and are included in
arriving at comprehensive income (loss).

    Recent Accounting Pronouncements

      Statement of Financial  Accounting  Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities," establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value.  In June 2000, SFAS No. 138 was issued which amends
the accounting and reporting standards of SFAS No. 133 for certain derivative
instruments and certain hedging activities. Management of the Company has not
completed its evaluation of the impact of SFAS Nos. 133 and 138 on the
Company's consolidated financial statements. The Company will be required to
adopt SFAS No. 133 effective January 1, 2001.

      At its January 2000 meeting, the Emerging Issues Task Force ("EITF")
reached consensus with respect to issues related to EITF 98-3, "Determining
Whether a Transaction is an Exchange of Similar Productive Assets or a Business
Combination." As a result of this consensus, Arahova will be required to account
for cable system swaps as a purchase and a disposition of a business at fair
value. Management of the Company will monitor the impact of EITF 98-3 as it
relates to future transactions of the Company.

    Reclassifications

      Certain May 31, 1998 and 1999 amounts have been reclassified to conform
with the December 31, 1999 presentation.

2.     Debt:

      Parent Debt

      Interest on parent debt, excluding zero coupon and discount bonds, is due
semi-annually. The parent debt is effectively subordinated to all notes to banks
and may not be redeemed prior to maturity. The parent debt agreements contain
restrictions on, among other things, the incurrence of indebtedness, mergers and
sales of assets, certain restricted payments, investments in affiliates and
certain other affiliate transactions. The agreements also require maintenance of
certain financial ratios.

      The following table summarizes the parent debt:

<TABLE>
<CAPTION>

                                                       Old               New
                                                     Arahova           Arahova
                                                   -------------   -----------------
                                                          Outstanding as of

     Interest        Issue           Amount          May 31,         December 31,      Maturity
       Rate           Date           Issued            1999            1999 (a)          Date
  ------------------------------ --------------- ---------------  ------------------ -------------
<S>                  <C>        <C>             <C>              <C>                   <C>
         9.500%       08/14/92   $     150,000   $     150,000    $        148,773      08/15/00
         9.750%       02/15/92         200,000         200,000             201,172      02/15/02
    Zero coupon       04/01/93         444,000         316,618             318,235      03/15/03
         9.500%       03/06/95         250,000         250,000             250,853      03/01/05
         8.875%       01/17/97         250,000         250,000             242,542      01/15/07
         8.750%       09/23/97         225,000         225,000             216,105      10/01/07
         8.375%       11/07/97         100,000         100,000              94,048      11/15/17
         8.375%       12/04/97         100,000         100,000              94,106      12/15/07
       Discount       01/08/98         605,000         282,022             267,105      01/15/08
          notes
                                                 ---------------  ------------------
                                                 $   1,873,640    $      1,832,939
                                                 ===============  ==================

</TABLE>

<TABLE>
<CAPTION>

     Subsidiary Debt

                                                                         Old               New
                                                                       Arahova           Arahova
                                                                   ----------------  -----------------
                                                                      May 31,         December 31,
                                                                        1999            1999 (a)
                                                                   ----------------  -----------------
<S>                                                                <C>               <C>
                   Notes to banks                                  $       89,000    $       517,000
                   9.47% Senior Secured Notes due 2002                     80,000             64,496
                   Other debt                                                  50                  -
                                                                   ----------------  -----------------
                           Total subsidiary debt                   $      169,050    $       581,496
                                                                   ================  =================
<FN>

    (a) Amounts outstanding include discounts or premiums recorded as a result
of purchase accounting, as applicable.

</FN>
</TABLE>

    Notes to Banks and Other Institutions

      At December 31, 1999, certain subsidiaries of the Company had credit
facilities with $551,000 of available borrowings, subject to the subsidiaries
achieving certain levels of operating performance, which expire through December
31, 2007. Arahova pays commitment fees of up to 0.375% of unused principal.

      Notes to banks and institutions mature at various dates through 2007. Bank
debt interest rates are based upon one or more of the following rates at the
option of Arahova: bank defined alternate base rate plus 0% to 1.0%; or London
Interbank Offering Rate ("LIBOR") plus .75% to 2.0%. At December 31, 1999, the
weighted average interest rate on notes payable to banks and institutions was
8.06%.

      Borrowings under most of these credit arrangements are collateralized by a
pledge of the stock of the borrowing subsidiary and its subsidiaries and are
guaranteed by such subsidiary's subsidiaries. These agreements contain certain
provisions which, among other things, provide for limitations on borrowings of
and investments by the borrowing subsidiaries, transactions between the
borrowing subsidiaries and Arahova and its other subsidiaries and affiliates,
and the payment of dividends and fees by the borrowing subsidiaries. These
agreements also require the maintenance of certain financial ratios by the
borrowing subsidiaries. At December 31, 1999, approximately $483,000 of the net
assets of subsidiaries would be permitted to be transferred to the parent
company in the form of dividends and loans without the prior approval of the
lenders based upon the results of operations of such subsidiaries for the
quarter ended December 31, 1999. The subsidiaries are permitted to pay
management fees to the parent company or other subsidiaries. Such fees are
limited to a percentage of the subsidiaries' revenues.

    Maturities of Debt

      The following table sets forth the mandatory reductions in principal under
all debt agreements for each of the next five years based on amounts outstanding
at December 31, 1999:

<TABLE>
<CAPTION>

                           Year ending December 31:
<S>                                    <C>                             <C>
                                       2000                            $       170,000
                                       2001                                     23,500
                                       2002                                    235,000
                                       2003                                    490,833
                                       2004                                     81,667

</TABLE>

       Arahova intends to fund its requirements for maturities of debt through
borrowings under new and existing credit arrangements and internally generated
funds. Changing conditions in the financial markets may have an impact on how
Arahova will refinance its debt in the future.

       The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes.

3.       Sale of Business Segments:

    Centennial Cellular Corp.

       On January 7, 1999, Centennial Cellular Corp. ("Centennial"), a former
subsidiary of the Company, completed the previously announced merger of CCW
Acquisition Corp., a company organized at the direction of Welsh, Carson,
Anderson & Stowe, with and into Centennial (the "Centennial Merger"). As of the
completion of the Centennial Merger, the Services Agreement between the Company
and Centennial was terminated. As a holder of 8,561,819 shares of Class B Common
Stock and 3,978 shares of Second Series Convertible Preferred Stock of
Centennial, the Company received for its interest in Centennial approximately
$360,100 in cash. The Company recorded a pre-tax gain upon the sale of
Centennial of approximately $322,000 during the year ended May 31, 1999.

    Australian Operations

       During the year ended May 31, 1999, the Company sold to UIH Asia/Pacific
Communications Inc. ("UAP"), a unit of UCOMA, the Company's 25% ownership
interest in XYZ Entertainment Pty. Limited ("XYZ") for approximately $24,600.
Approximately 95% of the sales price was paid in the form of UIH Series B
Convertible Preferred Stock ("UIH Convertible Stock") which is convertible at
any time into approximately 21 shares of UIH Class A Common Stock for each share
of UIH Convertible Stock, at a conversion price of $10.625 per share.

       In fiscal 1999, East Coast Pay Television Pty. Limited ("ECT") sold
substantially all of its operating assets to Austar Entertainment Pty Ltd.
("Austar"), a wholly owned subsidiary of UAP, for approximately $6,100 in the
form of UIH Convertible Stock. ECT finalized the shutdown of its operations,
including the liquidation of its current liabilities. On December 16, 1998, the
creditors of ECT (including the Company) entered into an Intercreditor Agreement
pursuant to which substantially all of the remaining assets of ECT were
distributed among them and the Company received 5,652 units of UIH Convertible
Stock, of which 1,156 units were transferred to the ECT minority interest
shareholders. The Company recorded a pre-tax gain of approximately $18,000 as a
result of the sale of its Australian business segment during the year ended May
31, 1999.

       Operating results of Centennial and the Australian Operations for the
year ended May 31, 1998 are shown separately within the accompanying
consolidated statements of operations under the caption "Loss from Discontinued
Operations". The operating results of Centennial and the Australian Operations
for the year ended May 31, 1998 consist of the following:


<PAGE>


<TABLE>
<CAPTION>

Centennial Cellular Corp.:

<S>                                             <C>
Revenue                                         $      301,626
Expenses                                              (314,927)
                                                ----------------
    Operating loss                                     (13,301)
Income from equity investments                          13,069
Interest expense                                       (45,155)
Gain on sale of assets                                       5
Income tax benefit                                      13,597
Minority interest in income of subsidiaries               (162)
                                                ----------------
    Net loss (a)                                $      (31,947)
                                                ================

Australian Operations:

Revenue                                        $        35,257
Expenses                                               (54,672)
                                               -----------------
    Operating loss                                     (19,415)
Interest expense                                       (10,547)
Other loss                                              (2,373)
                                               -----------------
    Net loss (a)                               $       (32,335)
                                               =================
<FN>

      (a) Prior to minority interest share of losses.
</FN>
</TABLE>

4.   Commitments and Contingencies:

      Arahova rents office and studio space, tower sites, vehicles and space on
utility poles under leases with terms, which are generally less than one year or
under agreements that are generally cancelable on short notice. Total rental
expense under all operating leases aggregated $8,572, $8,793, $4,684 and $2,946
for the years ended May 31, 1998 and 1999, the four months ended September 30,
1999 and the three months ended December 31, 1999, respectively.

      In connection with certain obligations under franchise agreements, Arahova
obtains surety bonds guaranteeing performance to municipalities and public
utilities. Payment is required only in the event of nonperformance. Management
believes Arahova has fulfilled all of its obligations such that no payments
under surety bonds have been required.

      The cable television industry and Arahova are subject to extensive
regulation at the federal, state and local levels. Pursuant to the 1992 Cable
Act, which significantly expanded the scope of regulation of certain subscriber
rates and a number of other matters in the cable industry the FCC adopted rate
regulations that establish, on a system-by-system basis, maximum allowable rates
for (i) basic and cable programming services (other than programming offered on
a per-channel or per-program basis), based upon a benchmark methodology, or, in
the alternative, a cost of service showing, and (ii) associated equipment and
installation services based upon cost plus a reasonable profit. Under the FCC
rules, franchising authorities are authorized to regulate rates for basic
services and associated equipment and installation services, and the FCC will
regulate rates for regulated cable programming services in response to
complaints filed with the agency. The original rate regulations became effective
on September 1, 1993. Several amendments to the rate regulations have
subsequently been added.

      The FCC has adopted regulations implementing all of the requirements of
the 1992 Cable Act. The FCC is also likely to continue to modify, clarify or
refine the rate regulations. The Telecommunications Act of 1996 (the "1996 Act")
deregulated the rates for cable programming services on March 31, 1999. Adelphia
cannot predict the effect or outcome of the future rulemaking proceedings,
changes to the rate regulations, or litigation.

      On or about March 10, 1999, Robert Lowinger, on behalf of himself and all
others similarly situated (the "Plaintiff") commenced an action by filing a
Class Action Complaint (the "Complaint") in the Superior Court of Connecticut,
Judicial District of Stamford/Norwalk against Century, all of its directors, and
Adelphia. The Plaintiff, claiming that he owns shares of Class A Common Stock of
Century, alleged that in connection with the proposed merger of Century with
Adelphia, holders of Class B Common Stock of Century (which has superior voting
rights to the Class A Common Stock of Century) will receive consideration for
their shares that exceeds by $4.00 per share the consideration to be paid to
Century's Class A shareholders resulting in the Century's Class B shareholders
receiving approximately $170,000 more than if they held the equivalent number of
the Century's Class A shares. On January 3, 2000, the court dismissed all counts
in the Complaint as to two of the individual defendants. On January 13, 2000,
the court granted defendants' motions to strike and dismissed Plaintiff's
complaint in its entirety for failure to state a claim upon which relief can be
granted. The court entered judgment on February 16, 2000. To the Company's
knowledge, the Plaintiff has not filed an appeal in this action within the time
provided by local court rules for the filing of an appeal.

      On May 26, 1999, Adelphia announced that it had agreed to swap certain of
its cable systems and certain systems and of its wholly owned subsidiaries with
Comcast Corporation ("Comcast") in a geographic rationalization of the
companies' respective markets. As part of this transaction, Arahova will add
approximately 168,000 subscribers in the Los Angeles, CA area and the West
Palm/Fort Pierce, FL area. In exchange, Comcast will receive Arahova systems
serving approximately 178,000 subscribers in New Jersey, New Mexico and Indiana.
All systems involved in the transactions will be valued by agreement between the
parties or, following a failure to reach agreement, by independent valuations,
with any difference in relative value to be funded with cash or additional cable
systems. The system swaps are subject to customary closing conditions and
regulatory approvals and are expected to close during the fourth quarter of
2000.

      In December 1999, Adelphia entered into definitive agreements under which
Cablevision Systems Corporation will sell its cable systems in the greater
Cleveland metropolitan area to a subsidiary of Arahova for approximately
$1,530,000 in cash and Adelphia securities. As of December 31, 1999, these
systems served approximately 307,000 basic subscribers. The transaction is
subject to customary closing conditions and regulatory approval and is expected
to close by the fourth quarter of 2000.

         Arahova has been sued in a class-action case, Galley vs. American
Telephone & Telegraph Corp. et al., where the plaintiffs allege, that by
requiring customers to purchase the @Home service, rather than offering the
option of access alone, Arahova and the other defendant MSO's are illegally
"tying" internet content to internet access, thereby violating both the federal
antitrust laws and California unfair trade practice statutes. The plaintiffs
also allege that the defendants have entered into an illegal conspiracy to
require all MSO's providing, or desiring to provide, the @Home service to enter
into contracts precluding them from offering any competing internet service. The
plaintiffs have recently filed an amended complaint alleging that the violations
are national in scope (rather than merely local). The Company is vigorously
defending this case. Due to the preliminary nature of the litigation, the
outcome cannot be predicted.

      Adelphia and certain subsidiaries, including Arahova, are defendants in
several putative subscriber class action suits in state courts in Vermont,
Pennsylvania and Mississippi initiated during 1999. The suits all challenge the
propriety of late fees charged by the subsidiaries to customers who fail to pay
for services in a timely manner. The suits seek injunctive relief and various
formulations of damages under various claimed causes of action under various
bodies of state law. These actions are in various stages of defense and, in one
case, Adelphia was required to refund the late fees (none of which related to
Arahova). Adelphia has appealed this decision. All of these actions are being
defended vigorously. The outcome of these matters and the resulting impact on
Arahova cannot be predicted at this time.

      Except as described in Note 10, there are no other material pending legal
proceedings, other than routine litigation incidental to the business, to which
Arahova is a part of or which any of its property is subject.

5.  Common Stockholders' Equity (Deficiency):

    Common Stock

      The voting rights with respect to the two classes of Old Arahova common
stock were as follows: Class A shares entitled the holder to one vote per share,
Class B shares entitled the holder to ten votes per share and were convertible
into shares of Class A Common Stock on a one-for-one basis. Arahova is
restricted from paying cash dividends on its common stock by its credit
agreements.

    Treasury Stock

      During fiscal 1998, the Company purchased 1,959,000 shares of its Class A
Common Stock in the open market. These shares were accounted for as treasury
shares. The carrying amount of treasury stock included in "Other" in the
consolidated statements of common stockholders' equity (deficiency) as of May
31, 1997, 1998, and 1999 was $140,121, $152,697, and $154,202, respectively.

6.  Employee Benefit Plans:

      Old Arahova sponsored stock option plans permitting the issuance of
incentive stock options, restricted stock and non-qualified options. In
connection with the Merger (Note 1), all outstanding options, whether or not
previously excerciscable or vested, became fully excerciseable and vested.
Option holders were given the option to exercise immediately prior to the Merger
or to rollover their options into options to acquire Adelphia Class A common
stock. Old Arahova incurred stock compensation expense of $26,232 related to
these plans during the four months ended September 30, 1999. At May 31, 1999,
there were 849,920 unvested options outstanding under the option plans.

      A summary of the status of the Company's stock options as of May 31, 1998
and 1999, September 30, 1999, and December 31, 1999 and changes during the
periods then ended is presented below:

<TABLE>
<CAPTION>

                                                                                         Weighted
                                                                                         Average
                                                                         Stock           Exercise
                                                                        Options            Price

                                                                      -------------  ----------------
<S>                                                                   <C>            <C>
                 Outstanding at May 31, 1997                            3,457,050    $         6.66
                 Granted                                                   10,000              6.44
                 Exercised                                               (340,836)             6.34
                 Canceled                                                (242,415)             6.66
                                                                      -------------
                 Outstanding at May 31, 1998                            2,883,799              6.70
                 Granted                                                  118,000             18.85
                 Exercised                                               (816,098)             6.39
                 Canceled                                                 (59,003)             9.75
                                                                      -------------
                 Outstanding at May 31, 1999                            2,126,698              7.41
                 Exercised                                               (782,033)             6.66
                 Canceled                                                (909,866)             6.66
                                                                      -------------
                 Outstanding at September 30, 1999                        434,799              9.08
                 Converted to Adelphia options Outstanding               (434,799)                -
                                                                      -------------
                 Outstanding at December 31, 1999                               -
                                                                      =============
</TABLE>

      The number of the Company's options which were exercisable at May 31, 1998
and 1999 and September 30, 1999 were 1,598,650, 1,276,878 and 434,799
respectively. The weighted average exercise prices of such options were $6.62,
$6.83 and $9.08 at May 31, 1998, 1999 and September 30, 1999, respectively.

      The estimated fair value of the Company's options granted during fiscal
1998 was immaterial. The fair value of options granted during fiscal 1999 was
$6.96 per share.

Employee Stock Purchase Plan

      In 1985, the Company adopted the 1985 Employee Stock Purchase Plan, as
amended. Under the Plan, eligible employees (which generally includes all
full-time employees of the Company) could subscribe for shares of Class A Common
Stock at a purchase price of 85% of the average market price (as defined) of the
Class A Common Stock on the first day or last day of the purchase period,
whichever was lower. Payment of the purchase price of the shares was made in
installments through payroll deductions, with no right of prepayment. The
Company reserved 1,125,767 shares of Class A Common Stock for issuance under the
Plan. The Amended Purchase Plan was administered by the Compensation Committee.
As of September 30, 1999, no shares of Class A Common Stock were subscribed for
under the Plan.

Equity Incentive Plan

      The Company's 1992 Equity Incentive Plan (the "Equity Plan") permitted the
issuance of up to 1,613,945 shares of the Company's Class A Common Stock for
high levels of performance and productivity by officers and other management
employees of the Company. The Equity Plan was administered by the Company's
Board of Directors. The Plan authorized the Board of Directors to grant stock
based awards that included, but were not limited to, restricted stock,
performance shares and deferred stock. The Board of Directors determined the
recipients and provisions of the grants under the Equity Plan, including the
grant price, term and number of shares subject to grant. These stock based
awards vested over the options' respective vesting periods. Recipients were not
required to provide consideration to the Company other than rendering service.
Under SFAS 123, compensation cost was recognized over the vesting period of the
shares granted based upon the market value of the restricted stock at the date
of grant. The restricted stock awards were recorded at the market value of the
Company's stock on the date of grant. Initially, the total market value of the
restricted shares was treated as unearned compensation and was charged to
expense over the options' respective vesting periods.

      During the fiscal years ended May 31, 1998 and 1999, the Company granted
170,000 shares and 270,000 shares, respectively, of restricted stock with
weighted average fair values at the date of grant of $6.87 and $19.21 per share,
respectively. Through May 31, 1999, the Company had granted 1,238,027 shares of
restricted stock to 20 officers and employees of the Company. No shares of
restricted stock were granted after May 31, 1999. As of September 30, 1999, no
shares of restricted stock were outstanding. As a result of the termination of
certain executive employment agreements, substantially all restricted shares
became fully vested. These shares ceased to be restricted upon completion of the
Merger.

      The Company also granted 25,000 shares of the Company's Class B Common
Stock during the fiscal year ended May 31, 1998 with a fair value of $5.50 at
the date of grant (based upon the fair value of the Company's Class A Common
Stock on that date) to one executive of the Company. These shares were subject
to substantially the same restrictions as set forth in the Equity Plan.

      The Company applied APB Opinion No. 25 and related interpretations in
accounting for its plans. Accordingly, no compensation cost was recognized with
respect to their stock option, and stock purchase plans during the fiscal years
ended May 31, 1998 and 1999. Had compensation cost for the Company's stock
option and stock purchase plans been determined based on the fair value of the
awards on the grant dates in accordance with the accounting provisions of
Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" ("SFAS 123"), the Company's consolidated net (loss) income and
consolidated net (loss) income per common share for the fiscal years ended May
31, 1998 and 1999 would have been increased to the pro forma amounts indicated
below:

<TABLE>
<CAPTION>

                                                                                Old Arahova

                                                                     -------------------------------
                                                                             Year Ended May 31,
                                                                     -------------------------------
                                                                           1998             1999
                                                                     --------------- ---------------
Consolidated net income (loss) applicable to common shares: As reported:

<S>                                                                   <C>            <C>
    Loss from continuing operations                                   $    (83,107)   $    (58,106)
    Loss from discontinued operations                                      (43,089)              -
    Gain on sale of discontinued operations                                      -         314,290
                                                                     --------------- ---------------
    Net (loss) income                                                 $   (126,196)   $    256,184
                                                                     =============== ===============

Pro forma:
     Loss from continuing operations                                  $    (84,540)   $    (59,764)
     Loss from discontinued operations                                     (43,089)              -
     Gain on sale of discontinued operations                                     -         314,290
                                                                     --------------- ---------------
Net (loss) income                                                     $   (127,629)   $    254,526
                                                                     =============== ===============

Consolidated net income (loss) per common share - basic & diluted As reported:

    Loss from continuing operations                                   $      (1.11)   $       (.77)
    Loss from discontinued operations                                         (.58)              -
    Gain on sale of discontinued operations                                      -            4.18
                                                                     --------------- ---------------
    Net (loss) income                                                 $      (1.69)   $       3.41
                                                                     =============== ===============

Pro forma:
     Loss from continuing operations                                  $      (1.13)   $       (.79)
     Loss from discontinued operations                                        (.58)              -
     Gain on sale of discontinued operations                                     -            4.18
                                                                     --------------- ---------------
     Net (loss) income                                                $      (1.71)   $       3.39
                                                                     =============== ===============
</TABLE>

      The fair values of options granted during the fiscal year ended May 31,
1999 were estimated on the dates of grant using the Black-Scholes
options-pricing model with the following weighted average assumptions used:

<TABLE>

<S>                                                                         <C>
                 Expected dividend yield                                           0%
                 Expected volatility                                           46.12%
                 Risk free interest rate                                        5.75%
                 Expected lives of option grants                              3 years
</TABLE>

      Pro forma compensation cost related to shares purchased under the
Company's Employee Stock Purchase Plan was measured based on the discount from
market value.

      Old Arahova sponsored 401(k) retirement plans covering substantially all
employees of its wholly owned cable subsidiaries. Total expense under the plans
amounted to $1,367 and $1,437 for the years ended May 31, 1998 and 1999,
respectively, and $630 for the four months ended September 30, 1999.

      New Arahova participates in an Adelphia savings plan (401(k)) and an
Adelphia stock incentive plan. The 401(k) savings plan provides that eligible
full-time employees may contribute from 2% to 16% of their pre-tax compensation
subject to certain limitations. New Arahova matches contributions not exceeding
1.5% of each participant's pre-tax compensation. During the three months ended
December 31, 1999, no significant matching contributions were made by New
Arahova. The stock incentive plan rewards full time employees with compensation
bonuses based on Adelphia Class A common stock performance. During the three
months ended December 31, 1999, no significant costs associated with this plan
were allocated to the Company.

7.  Taxes on Income:

      Old Arahova and its corporate subsidiaries filed federal income tax
returns, which included their share of the subsidiary partnerships and joint
venture partnership results of operations. Subsequent to October 1, 1999, New
Arahova is included in Adelphia's consolidated federal income tax returns. For
New Arahova's financial reporting purposes, current and deferred income tax
assets and liabilities are computed on a separate company basis. In making the
computation of federal income taxes, current expense and net operating losses
are adjusted for the effects of filing a consolidated income tax return. At
December 31, 1999, New Arahova and its corporate subsidiaries had net operating
loss carryforwards for federal income tax purposes of approximately $442,000
expiring through 2018. Depreciation and amortization expense differs for tax and
financial statement purposes due to the use of prescribed periods rather than
useful lives for tax purposes and also as a result of differences between tax
basis and book basis of certain acquisitions.


<PAGE>



      The tax effects of significant items comprising Arahova's net deferred tax
liability are as follows:

<TABLE>
<CAPTION>

                                                                             Old            New
                                                                           Arahova        Arahova
                                                                         ------------- --------------
                                                                           May 31,     December 31,
                                                                             1999          1999
                                                                         ------------- --------------
      Deferred tax liabilities:
        Differences between book and tax basis of
<S>                                                                      <C>           <C>
         property, plant and equipment and intangible assets             $    99,805   $  1,837,007
                                                                         ------------- --------------

      Deferred tax assets:
        Tax credits and other assets                                               -         14,616
        Operating loss carryforwards                                         184,099        199,027
                                                                         ------------- --------------
                                                                             184,099        213,643
        Valuation allowance                                                  (89,584)       (11,326)
                                                                         ------------- --------------

            Subtotal                                                          94,515        202,317
                                                                         ------------- --------------

        Net deferred tax liability                                       $     5,290   $  1,634,690
                                                                         ============= ==============
</TABLE>

      For the year ended May 31, 1999, Old Arahova reduced its valuation
allowance applied against its deferred tax assets by approximately $104,042 as a
result of the sale of Centennial and the Australian Operations. The net change
in the valuation allowance from operations for the four months ended September
30, 1999 an increase of $16,144. For the three months ended December 31, 1999,
there was no change in the valuation allowance. There was a decrease in the
valuation allowance of $94,402 due to the Merger on October 1, 1999.

      Income tax benefit (expense) is as follows:

<TABLE>
<CAPTION>

                                                         Old Arahova                     New Arahova
                                       ---------------------------------------------  -----------------
                                           Year          Year          Four Months     Three Months
                                           Ended         Ended            Ended            Ended
                                          May 31,       May 31,       September 30,     December 31,
                                           1998          1999             1999              1999
                                       ------------ --------------- ---------------- ------------------
<S>                                    <C>          <C>            <C>               <C>
                    Current            $    (7,984) $     (12,165) $        (5,635)  $         (6,175)
                    Deferred                22,205           (121)            (202)             9,540
                                       --------------------------------------------- ------------------

                          Total        $    14,221  $     (12,286) $        (5,837)  $          3,365
                                       ============================================= ==================

</TABLE>


<PAGE>



      Income tax benefit (expense) is included in the Company's financial
statements as follows:

<TABLE>
<CAPTION>

                                                       Old Arahova                     New Arahova
                                        -------------------------------------------- ----------------
                                            Year         Year        Four Months       Three Months
                                            Ended        Ended          Ended             Ended
                                            May 31,      May 31,     September 30,     December 31,
                                             1998         1999           1999              1999
                                        ------------ ------------- ----------------- ----------------
<S>                                     <C>          <C>           <C>               <C>
               Continuing operations    $       624  $    13,453   $      (5,837)    $        3,365
               Discontinued operations       13,597      (25,739)              -                  -
                                        ------------ ------------- ----------------  ----------------

                       Total            $    14,221  $   (12,286)  $      (5,837)    $        3,365
                                        ============ ============= ================  ================
</TABLE>

      A reconciliation of the statutory federal income tax rate and Arahova's
effective income tax rate for continuing operations is as follows:

<TABLE>
<CAPTION>

                                                                   Old Arahova                  New Arahova

                                                      ---------------------------------------  ---------------
                                                         Year        Year      Four Months      Three Months
                                                         Ended       Ended        Ended            Ended
                                                        May 31,     May 31,   September 30,     December 31,
                                                         1998        1999          1999             1999
                                                      ------------ -------------- ------------ ---------------
<S>                                                   <C>          <C>            <C>           <C>
          Statutory federal income tax rate                  35%         35%            35%             35%
          Change in federal valuation allowance             (39%)        (8%)           (7%)             -
          State taxes, net of federal benefit                 6%          2%            (2%)             7%
          Non deductible compensation

              and merger and integration costs                 -         (7%)          (26%)             -
          Goodwill                                           (2%)        (2%)           (1%)           (20%)
          Other                                               1%         (1%)           (2%)             -
                                                      ------------ -------------- ------------ ---------------
          Effective income tax benefit (expense) rate         1%         19%            (3%)            22%
                                                      ============ ============== ============ ===============
</TABLE>

8.   Disclosures about Fair Value of Financial Instruments:

      Included in Arahova's financial instrument portfolio are cash, investments
in marketable securities, fixed and variable rate debt, and an interest rate
swap. The fair value of variable rate debt and investments in marketable
securities approximate their fair values at May 31 and December 31, 1999. The
fair value of the fixed rate debt at May 31, 1999 and December 31, 1999 was
$1,971,213 and $1,938,335, respectively. At May 31, 1999 and December 31, 1999,
the fair value of such fixed rate debt exceeded the carrying value by $37,573
and $40,900, respectively. At December 31, 1999, Arahova would have been
required to pay approximately $638 to settle its interest rate swap agreement,
representing the excess of carrying cost over fair value of this agreement. The
fair values of the debt and interest rate swap were based upon quoted market
prices of similar instruments or on rates available to Arahova for instruments
of similar remaining maturities.

 9.   Related Party Transactions:

      Old Arahova purchased workers compensation and general liability insurance
from Sentry Insurance (a holder of approximately 1% of Old Arahova Class B
common stock until June 1998) and its affiliated companies. The Company paid a
total of $4,665 and $4,112, for such insurance for the fiscal years ended May
31, 1998 and 1999, respectively.

      Leavy Rosensweig & Hyman of which David Z. Rosensweig is a member, served
as General Counsel to Old Arahova. Mr. Rosensweig was also a director and
secretary of Old Arahova. Old Arahova paid approximately $1,165 and $1,743 to
Leavy Rosensweig & Hyman for the fiscal years ended May 31, 1998 and 1999,
respectively.

      At the effective time of the Merger, Century sold its shares of Class A
common stock of Citizens to Dr. Leonard Tow, former Chairman and Chief Executive
Officer of Century at fair market value, based on the closing market price of
such shares on the date the Merger Agreement was signed. Based on that closing
price, the aggregate sales price was approximately $39,800.

      New Arahova periodically  receives funds from and advances funds to
Adelphia. Arahova charged $13,278 of interest to Adelphia on such receivables
for the three months ended December 31, 1999.

10.       Subsequent Events:

      On April 14, 2000, a subsidiary of Arahova, along with certain other
subsidiaries and affiliates of Adelphia, closed on a $2,250,000 bank credit
facility. The credit facility consists of a $1,500,000 8 3/4 year reducing
revolving credit loan and a $750,000 9-year term loan. Proceeds from the
facility will be used to complete the Prestige and Cablevision Cleveland
acquisitions described herein. Generally, coborrowers which are comprised of
affiliates and subsidiaries of Arahova cross guarantee indebtedness under this
facility. In connection with the closing of the facility, Adelphia contributed
cable systems, at historical cost, serving approximately 460,000 basic
subscribers to a subsidiary of Arahova. Arahova's ability to access funds under
the credit facility is dependent upon the level of borrowings of restricted and
unrestricted borrowers as defined in the credit facility.

      On July 5, 2000, Adelphia closed its acquisition under which Prestige
Communications of NC, Inc. ("Prestige") sold its cable systems in Virginia,
North Carolina and Maryland to a subsidiary of Arahova for approximately
$700,000. These systems serve approximately 120,000 basic subscribers.

      On or about March 24, 2000, ML Media Partners, L.P. ("ML Media") commenced
an action by filing a Verified Complaint (the "Complaint") in the Supreme Court
of the State of New York, New York County, against Arahova, Century
Communications Corp., a Texas subsidiary of Arahova ("Century"), and Adelphia.
In the nine count Complaint, ML Media alleges that it entered into a joint
venture agreement (the "Agreement") with Century which, as subsequently
modified, governed the ownership, operation and disposition of cable television
systems in Puerto Rico (the "Joint Venture"). The Complaint alleges that
Adelphia and its affiliates took over Century's interest in the Joint Venture on
or around October 1, 1999, and have, according to the Complaint, breached their
fiduciary obligations to the Joint Venture and violated certain provisions of
the Agreement. The Complaint further alleges that ML Media gave Century notice
that ML Media was exercising its rights under the Agreement to require that
Century elect to (A) purchase ML Media's interest in the Joint Venture at an
appraised fair value, or (B) seek to sell the cable systems to one or more third
parties. Century, according to the Complaint, elected to pursue the sale of the
cable systems and indicated that it was evaluating whether it or an affiliate
thereof would make an offer for the cable systems. The Complaint alleges that
Century or its affiliates' potential participation in the sale process is
improper. The Complaint asks for, among other things, the dissolution of the
Joint Venture and the appointment of a receiver to effect a prompt sale of the
Joint Venture. The parties completed discovery in the action and each filed
motions for partial summary judgment. On July 10, 2000, Justice Gammerman
granted ML Media's motion for partial summary judgment on the fourth cause of
action and declared that neither Century nor any of its affiliates may bid on or
attempt to purchase the assets and business of the Joint Venture. Justice
Gammerman also dismissed the fourth count of the counterclaim and required
Century to proceed diligently with ML Media in locating one or more third
parties to complete the sale and prohibited any defendant from interfering with
the sale. On July 26, 2000, the Justice also ordered that the sale may be a sale
of either the assets of the Joint Venture or the partnership interests in the
Joint Venture. The Justice did not address other issues concerning the motion
for summary judgment and did not schedule a full hearing on the merits. On
August 7, 2000, Arahova and the other defendants filed a notice of appeal with
respect to the above described orders and judgment of the Court. The management
of Adelphia and Arahova intend to vigorously defend this action. Management
believes that this matter will not have a material adverse effect on the
Company.


<PAGE>




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

            None.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    Executive Officers of the Registrant

      The directors and executive officers of Arahova are:

<TABLE>
<CAPTION>

Name                         Age       Position
<S>                       <C>         <C>
John J. Rigas                75        Chairman and Director of Arahova Communications, Inc.
Michael J. Rigas             46        Executive Vice President and Director of Arahova Communications, Inc.
Timothy J. Rigas             44        Executive Vice President, Treasurer and Director of Arahova Communications, Inc.
James P. Rigas               42        Executive Vice President and Director of Arahova Communications, Inc.
</TABLE>

      John J. Rigas is the founder, Chairman, President and Chief Executive
Officer of Adelphia and is President of its subsidiaries. He is also Chairman
and director of Adelphia Business Solutions. Mr. Rigas has served as President
or general partner of most of the constituent entities which become wholly owned
subsidiaries of Adelphia upon its formation in 1986, as well as the cable
television operating companies acquired by the Company which were wholly or
partially owned by member of the John J. Rigas family or entities controlled by
them ("the Rigas Family"). Mr. Rigas has owned and operated cable television
system since 1952. Among his business and community service activities, Mr.
Rigas is Chairman of the Board of Directors of Citizens Bancorp., Inc.,
Coudersport, Pennsylvania and a member of the Board of Directors of the Charles
Cole Memorial Hospital. He is a director of the National Cable Television
Association and a past President of the Pennsylvania Cable Television
Association. He is also a member of the Board of Directors of C-SPAN and the
Cable Advertising Bureau, and is a Trustee of St. Bonaventure University. He
graduated from Rensselaer Polytechnic Institute with a B.S. in Management
Engineering in 1950.

      John J. Rigas is the father of Michael J. Rigas,  Timothy J. Rigas and
James P. Rigas, each of whom currently serves as director and executive officer
of the Company.

      Michael J. Rigas is an Executive Vice President, Operations and Secretary
of Adelphia and is Vice President of its subsidiaries. He is also Vice Chairman,
Secretary and a director of Adelphia Business Solutions. Since 1981, Mr. Rigas
has served as Senior Vice President, Vice President, general partner or other
office of the constituent entities which become wholly owned subsidiaries of
Adelphia upon its formation in 1986, as well as the cable television operating
companies acquired by the Company which were wholly or partially owned by
members of the Rigas family. From 1979 to 1981, he worked for Webster,
Chamberlain and Bean, a Washington, D.C. law firm. Mr. Rigas graduated from
Harvard University (magna cum laude) in 1976 and received his J.D. degree from
Harvard Law School in 1979.

      Timothy J. Rigas is Executive Vice President, Chief Financial Officer,
Chief Accounting Officer and Treasurer of Adelphia and its subsidiaries. He is
also Vice Chairman, Chief Financial Officer, Treasurer and a director of
Adelphia Business Solutions. Since 1979, Mr. Rigas services as Senior Vice
President, Vice President, general partner or other officer of the constituent
entities which become wholly owned subsidiaries of Adelphia upon its formation
in 1986, as well as the cable television operation companies acquired by the
Company which were wholly or partially owned by members of the Rigas family. Mr.
Rigas graduated from the University of Pennsylvania, Wharton School, with a B.S.
degree in Economics (cum laude) in 1978.

      James P. Rigas is Executive Vice President,  Strategic  Planning of
Adelphia and is Vice President of its subsidiaries. He also serves as Vice
Chairman, President, Chief Executive Officer, Chief Operating Officer and a
director of Adelphia Business Solutions. Since February 1986, Mr. Rigas has
served as a Senior Vice President, Vice President or other officer of the
constituent entities which become wholly owned subsidiaries of the Company which
were wholly or partially owned by members of the Rigas Family. Among his
business activities, Mr. Rigas is a member of the Board of Directors of Cable
Labs. Mr. Rigas graduated from Harvard University (magna cum laude) in 1980 and
received a J.D. degree and an M.A. degree in Economics from Stanford University
in 1984. From June 1984 to February 1986, he was a consultant with Bain & Co., a
management consulting firm.

ITEM 11.  EXECUTIVE COMPENSATION

      Arahova has no employment contracts in effect with its named executive
officers in Item 10 of this Form 10-K, including any compensatory plans or
arrangements resulting from the resignation, retirement or other termination of
such executive officers. Each of the executive officers named in Item 10 is an
executive officer of Adelphia and are compensated by Adelphia in accordance with
the decisions and policies of the Board of Directors of Adelphia and the
Compensation Committee of the Board of Directors of Adelphia.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      Not applicable.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Not applicable.

PART IV

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

      Financial statements, schedules and exhibits not listed have been omitted
where the required information is included in the consolidated financial
statements or notes thereto, or is not applicable or required. (a)(1) A listing
of the consolidated financial statements, notes and independent auditors' report
required in Item 8 are listed in

       the index in Item 8 of this Transition Report on Form 10-K.

(2) Financial statement schedules:
         The following are included in this Report:
                Schedule I  -- Condensed Financial Information of the Registrant
                Schedule II -- Valuation and Qualifying Accounts

(3) Exhibits

Exhibit

Number                                   Description

2.1      Agreement and Plan of Merger, dated as of March 5, 1999, by and among
         the Company, Adelphia Communications Corporation and Adelphia
         Acquisition Subsidiary, Inc. as amended by the First Amendment to the
         Agreement and Plan of Merger, dated as of July 12, 1999 and the Second
         Amendment to the Agreement and Plan of Merger, dated as of July 29,
         1999. (File No. 0-16899)

3.1      Certificate of Incorporation of the Company (filed as Exhibit 3(i) to
         the Company's Quarterly Report on Form 10-Q for the quarter ended
         August 31, 1999 and incorporated herein by reference. (File No.
         0-16899)

3.2      By-laws of the Company, as amended (filed as Exhibit 3(ii) to the
         Company's Quarterly Report on Form 10-Q for the quarterly period ended
         August 31, 1999, and incorporated herein by reference. (File No.
         0-16899)

4.1      Indenture, dated as of November 15, 1988, by and between the Company
         and the Bank of Montreal Trust Company as Trustee (filed as Exhibit
         4(l) to Amendment No. 7 to the Company's Registration Statement on Form
         S-1 (File No. 33-21394) under the Securities Act of 1933, as amended
         (the "1988 Form S-1"); said 1988 Form S-1 having been filed with the
         Commission on April 22, 1988 and incorporated herein by reference, and
         said Amendment No. 7 to the 1988 Form S-1 having been filed with the
         Commission on November 10, 1988 and incorporated herein by reference).
         (File No. 0-16899)

4.2      Indenture, dated as of October 15, 1991, by and between the Company and
         the Bank of Montreal Trust Company, as Trustee (filed as Exhibit 4.2 to
         Amendment No. 2 to the Company's Registration Statement on Form S-3
         (File No. 33-33787) under the Securities Act of 1933, as amended (the
         "1991 Form S-3"); said 1991 Form S-3 having been filed with the
         Commission on August 31, 1990 and incorporated herein by reference, and
         said Amendment No. 2 to the 1991 Form S-3 having been filed with the
         Commission on March 1, 1991 and incorporated herein by reference).
         (File No. 0-16899)

4.3      First Supplemental Indenture, dated as of October 15, 1991, by and
         between the Company and the Bank of Montreal Trust Company, as Trustee
         (filed as Exhibit 7(2) to the Company's current report on Form 8-K,
         dated October 17, 1991 and incorporated herein by reference). (File No.
         0-16899)

4.4      Indenture, dated as of February 15, 1992, by and between the Company
         and the Bank of America National Trust and Savings Association, as
         Trustee (filed as Exhibit 4.3 to Amendment No. 2 to the Company's
         Registration Statement on Form S-3 (File No. 33-33787) under the
         Securities Act of 1933, as amended (the "1991 Form S-3"); said 1991
         Form S-3 having been filed with the Commission on March 9, 1990 and
         incorporated herein by reference, and said Amendment No. 2 to the 1991
         Form S-3 having been filed with the Commission on March 1, 1991 and
         incorporated herein by reference). (File No. 0-16899)

4.5      First Supplemental Indenture, dated as of February 15, 1992, by and
         between the Company and the Bank of America National Trust and Savings
         Association, as Trustee (filed as Exhibit 4(t) to the Company's Annual
         Report on Form 10-K for the fiscal year ended May 31, 1992 and
         incorporated herein by reference). (File No. 0-16899)

4.6      Second Supplemental Indenture, dated as of August 15, 1992, by and
         between the Company and Bank of America National Trust and Savings
         Association, as Trustee (filed as Exhibit 4(u) to the Company's Annual
         Report on Form 10-K for the fiscal year ended May 31, 1992 and
         incorporated herein by reference). (File No. 0-16899)

4.7      Third Supplemental Indenture, dated as of April 1, 1993, by and between
         the Company and Bank of America National Trust and Savings Association,
         as Trustee (filed as Exhibit 4(v) to the Company's Annual Report on
         Form 10-K for the fiscal year ended May 31, 1993 and incorporated
         herein by reference). (File No. 0-16899)

4.8      Fourth Supplemental Indenture, dated as of March 6, 1995, by and
         between the Company and Bank of America National Trust and Savings
         Association, as Trustee (filed as Exhibit 4(w) to the Company's Annual
         Report on Form 10-K for the fiscal year ended May 31, 1995, and
         incorporated herein by reference). (File No. 0-16899)

4.9      Fifth Supplemental Indenture, dated as of January 23, 1997, by and
         between the Company and First Trust of California, National
         Association, successor trustee to Bank of America National Trust and
         Savings Association, as Trustee (filed as Exhibit 4.10 to the Company's
         Annual Report on Form 10-K for the fiscal year ended May 31, 1997, and
         incorporated herein by reference). (File No. 0-16899)

4.10     Sixth Supplemental Indenture, dated as of September 29, 1997, between
         the Company and First Trust of California, National Association,
         successor trustee to Bank of America National Trust and Savings
         Association, as Trustee (filed as Exhibit 10.2 to the Company's
         Quarterly Report on Form 10-Q for the quarterly period ended August 31,
         1997, and incorporated herein by reference). (File No. 0-16899)

4.11     Seventh Supplemental Indenture dated as of November 13, 1997 between
         the Company and First Trust of California, National Association,
         successor trustee to Bank of America National Trust and Savings
         Association, as Trustee (filed as Exhibit 4.1 to the Company's
         Quarterly Report on Form 10-Q for the quarterly period ended November
         30, 1997, and incorporated herein by reference). (File No. 0-16899)

4.12     Eighth Supplemental Indenture dated as of December 10, 1997 between the
         Company and First Trust of California, National Association, as trustee
         (filed as Exhibit 4.13 to the Company's Form 10-K for the year ended
         May 31, 1999 and incorporated herein by reference). (File No. 0-16899)

4.13     Ninth Supplemental Indenture, dated as of October 1, 1999 between
         Arahova Communications, Inc. ("Arahova") and U.S. Bank Trust National
         Association (the "Trustee"), successor trustee to Bank of America
         National Trust and Savings Association, to the Indenture, dated as of
         February 15, 1992 between Century Communications Corp. and the Trustee
         (Incorporated herein by reference is Exhibit 4.01 to Form 10-Q for
         Arahova for the quarter ended November 30, 1999.) (File No. 0-16899).

4.14     Indenture, dated as of January 15, 1998 between the Company and First
         Trust of California, National Association, as Trustee (filed as Exhibit
         4 to the Company's Registration Statement on Form S-4 (File No.
         333-47161) under the Securities Act of 1933, as amended (the "1998 Form
         S-4"); said 1998 Form S-4 having been filed with the Commission on
         March 2, 1998 and incorporated herein by reference). (File No. 0-16899)

4.15     First Supplemental Indenture, dated as of October 1, 1999 between
         Arahova Communications, Inc. and U.S. Bank Trust National Association
         (the "Trustee"), to the Indenture, dated as of January 15, 1998 between
         Century Communications Corp. and the Trustee (Incorporated herein by
         reference is Exhibit 4.02 to Form 10-Q for Arahova for the quarter
         ended November 30, 1999.) (File No. 0-16899).

*10.1    Employment Agreement, dated as of January 1, 1997, between the Company
         and Scott N. Schneider (filed as Exhibit 10.4 to the Company's Annual
         Report on Form 10-K for the fiscal year ended May 31, 1997, and
         incorporated herein by reference). (File No. 0-16899)

*10.2    Employment Agreement, dated as of January 1, 1997, between the Company
         and Michael G. Harris (filed as Exhibit 10.5 to the Company's Annual
         Report on Form 10-K for the fiscal year ended May 31, 1997, and
         incorporated herein by reference). (File No. 0-16899)

*10.3    Employment Agreement, dated as of January 1, 1997, between the Company
         and Frank Tow (filed as Exhibit 10.6 to the Company's Annual Report on
         Form 10-K for the fiscal year ended May 31, 1997, and incorporated
         herein by reference). (File No. 0-16899)

10.4     Lease, dated July 15, 1987, between Locust Avenue Associates and
         Century-Texas (filed as Exhibit 10(h) to the 1988 Form S-1 and
         incorporated herein by reference). (File No. 0-16899)

10.5     Agreement for lease dated as of January 1, 1997 by and between Locust
         Avenue Associates Limited Partnership and Century Texas (filed as
         Exhibit 10.11 to the Company's Annual Report on Form 10-K for the
         fiscal year ended May 31, 1997, and incorporated herein by reference).
         (File No. 0-16899)

*10.6    Century 1992 Management Equity Incentive Plan (filed as
         Exhibit 10(x)(1) to the Company's Annual Report on Form 10-K for the
         year ended May 31, 1992 and incorporated herein by reference). (File
         No. 0-16899)

*10.7    1993 Non-Employee Directors' Stock Option Plan of the Company (filed as
         Exhibit 10(v)(2) to the Company's Annual Report on Form 10-K for the
         fiscal year ended May 31, 1995, and incorporated herein by reference).
         (File No. 0-16899)

*10.8    1994 Stock Option Plan of the Company (filed as Exhibit 10(v)(3) to the
         Company's Annual Report on Form 10-K for the fiscal year ended May 31,
         1995, and incorporated herein by reference). (File No. 0-16899)

10.9     Interest Rate Swap Agreement, dated as of July 18, 1986, between
         Citibank, N.A. and Century-Texas (filed as Exhibit 10(v) to Amendment
         No. 5 to the 1988 Form S-1 and incorporated herein by reference). (File
         No. 0-16899)

10.10    Amendment No. 1 to Management Agreement and Joint Venture Agreement
         (Century ML Venture), dated September 21, 1987, between Century Texas
         and ML Media Partners, L.P., a Delaware limited partnership (filed as
         Exhibit 10(w) to the Company's Annual Report on Form 10-K for the
         fiscal year ended May 31, 1989 and incorporated herein by reference).
         (File No. 0-16899)

10.11    Management Agreement and Joint Venture Agreement (Century-ML Radio
         Venture), dated as of February 15, 1989, between Century Texas and ML
         Media Partners, L.P., a Delaware limited partnership (filed as Exhibit
         10(x) to the Company's Annual Report on Form 10-K for the fiscal year
         ended May 31, 1989 and incorporated herein by reference). (File No.
         0-16899)

10.12    Plan and Agreement of Merger, dated August 2, 1991, by and among
         Century Cellular Holding Corp., Century Cellular Corp., Citizens
         Utilities Company and Citizens Cellular Corp., together with exhibits,
         including Management Agreement, Conflicts/Non-Compete Agreement, Stock
         Transfer Agreement and Registration Rights Agreement (filed as Exhibit
         10(cc) to the Company's Annual Report on Form 10-K for the fiscal year
         ended May 31, 1991 and incorporated herein by reference). (File No.
         0-16899)

10.13    Credit Agreement dated as of April 15, 1997 among Citizens Century
         Cable Television Venture, Bank of America, National Trust and Savings
         Association, as Syndication Agent, and Societe General, as Agent,
         Corestates Bank, N.A., The First National Bank of Boston, LTCB Trust
         Company, and PNC Bank, National Association, as Co-Agents, and each of
         the bank parties thereto (filed as Exhibit 10.41 to the Company's
         Annual Report on Form 10-K for the fiscal year ended May 31, 1997, and
         incorporated herein by reference). (File No. 0-16899)

10.14    Credit Agreement dated as of April 14, 2000, among Century Cable
         Holdings, LLC, Ft. Myers Cablevision, LLC and Highland Prestige
         Georgia, Inc., Bank of America, N.A. and the Chase Manhattan Bank,
         Co-Administrative Agents and Toronto Domision (Texas), Inc. Syndication
         Agent, filed as Exhibit 10.01 to Adelphia Communication Corporation
         Quarterly Report on Form 10-Q for the quarterly period ended March 31,
         2000. (File No. 0-16014)

*10.15   Employment Agreement, dated as of January 1, 1997, between the Company
         and Bernard P. Gallagher (filed as Exhibit 10.1 to the Company's
         Quarterly Report on Form 10-Q for the quarterly period ended August 31,
         1997, and incorporated herein by reference). (File No. 0-16899)

*10.16   Modification Agreement, dated as of June 1, 1998, between the Company
         and Scott N. Schneider (filed as Exhibit 10.44 to the Company's Annual
         Report on Form 10-K for the fiscal year ended May 31, 1998 and
         incorporated by reference). (File No. 0-16899)

*10.17   Modification Agreement, dated as of June 1, 1998, between the Company
         and Bernard P. Gallagher (filed as Exhibit 10.45 to the Company's
         Annual Report on Form 10-K for the fiscal year ended May 31, 1998 and
         incorporated by reference). (File No. 0-16899)

*10.18   Modification Agreement, dated as of June 1, 1998, between the Company
         and Michael G. Harris (filed as Exhibit 10.46 to the Company's Annual
         Report on Form 10-K for the fiscal year ended May 31, 1998 and
         incorporated by reference). (File No. 0-16899)

*10.19   Modification Agreement, dated as of June 1, 1998, between the Company
         and Frank Tow (filed as Exhibit 10.47 to the Company's Annual Report on
         Form 10-K for the fiscal year ended May 31, 1998 and incorporated by
         reference). (File No. 0-16899)

*10.20   Employment Agreement, dated as of July 1, 1997, between the Company and
         Leonard Tow (filed as Exhibit 10.48 to the Company's Annual Report on
         Form 10-K for the fiscal year ended May 31, 1998 and incorporated by
         reference). (File No. 0-16899)

10.21    Agreement and Plan of Merger, dated as of July 2, 1998, between
         Centennial Cellular Corp. and CCW Acquisition Corp (filed as Exhibit
         10.49 to the Company's Annual Report on Form 10-K for the fiscal year
         ended May 31, 1998 and incorporated by reference). (File No. 0-16899)

10.22    Stockholder Agreement, dated as of July 2, 1998, between CCW
         Acquisition Corp. and Century Communications Corp (filed as Exhibit
         10.50 to the Company's Annual Report on Form 10-K for the fiscal year
         ended May 31, 1998 and incorporated by reference). (File No. 0-16899)

10.23    Agreement of Limited Partnership of Century-TCI California
         Communications, LP., dated as of December 7, 1999 (incorporated herein
         by reference is Exhibit 10.115 to the Form 10-K for Adelphia
         Communications Corporation for the year ended December 31, 1999). (File
         No. 0-16014)

10.24    Credit Agreement dated as of December 3, 1999 among Century-TCI
         California, L.P., Certain Lenders, Societe Generale and Deutsche Bank
         Securities, Inc., as Co-Syndication Agents, Salomon Smith Barney Inc.
         as Lead Arranger and Sole Book Manager, Mellon Bank, N.A. as
         Documentation Agent and Citibank, N.A. as Administrative Agent
         (incorporated herein by reference is Exhibit 10.116 to the Form 10-K
         for Adelphia Communications Corporation for the year ended December 31,
         1999). (File No. 0-16014)

27.1   Financial Data Schedule.

*    Denotes management contracts and compensatory plans and arrangements
     required to be identified by Item 14(a)(3).

         The Registrant will furnish to the Commission upon request copies of
     instruments not filed herewith which authorize the issuance of long-term
     obligations of Registrant or its Subsidiaries not in excess of 10% of the
     Registrant's total assets on a consolidated basis.

(b)      The Registrant filed Form 8-Ks on October 15, 1999, (Items 1, 2 and
         7), December 22, 1999, (Items 2 and 7), February 22, 2000, (Item 7,
         including financial statements), and June 6, 2000 (Item 8).

(c)      The Company hereby files as exhibits to this Transition Report on Form
         10-K the exhibits set forth in Item 14(a)(3) hereof which are not
         incorporated by reference.

(d)      The Company hereby files as financial statement schedules to this
         Transition Report on Form 10-K the financial statement schedules set
         forth in Item 14(a)(2) hereof.


<PAGE>



<TABLE>
<CAPTION>

                                             SCHEDULE I (Page 1 of 3)
                                  ARAHOVA COMMUNICATIONS, INC. AND SUBSIDIARIES
                       Condensed Information as to the Financial Position of the Registrant
                                                December 31, 1999
                                              (Dollars in thousands)

ASSETS:

Investment in and net advances to cable television
<S>                                                                                                <C>
  subsidiaries and related parties                                                                 $    5,205,427
Cash and cash equivalents
                                                                                                              408

Other assets - net

                                                                                                           23,448

                                                                                                     --------------
          Total                                                                                    $    5,229,283
                                                                                                   ================

LIABILITIES AND STOCKHOLDERS' EQUITY:

Parent debt                                                                                        $    1,832,939
Accrued interest and other liabilities                                                                     37,369
                                                                                                   ----------------
          Total liabilities                                                                             1,870,308

Stockholders' equity - see consolidated financial
  statements included herein for details                                                                3,358,975*
                                                                                                     --------------
          Total                                                                                    $    5,229,283
                                                                                                   ================


*Excludes $442,120 of related party receivables - net shown in consolidated
balance sheet.

</TABLE>


<PAGE>



<TABLE>
<CAPTION>

                                             SCHEDULE I (Page 2 of 3)
                                  ARAHOVA COMMUNICATIONS, INC. AND SUBSIDIARIES
                           Condensed Information as to the Operations of the Registrant
                                       Three Months Ended December 31, 1999
                                              (Dollars in thousands)

INCOME:

<S>                                                                                              <C>
Income from parent                                                                               $         13,278
                                                                                                 ------------------

EXPENSES:

Amortization                                                                                                  866
Interest expense                                                                                           31,933
                                                                                                 ------------------
          Total                                                                                            32,799
                                                                                                 ------------------

Loss before equity in net income of subsidiaries                                                          (19,521)

Equity in net income of subsidiaries                                                                        7,350
                                                                                                 ------------------
Net loss                                                                                          $       (12,171)
                                                                                                 ==================

























</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                              SCHEDULE I (Page 3 of 3)
                                   ARAHOVA COMMUNICATIONS, INC. AND SUBSIDIARIES
                            Condensed Information as to the Cash Flows of the Registrant
                                        Three Months Ended December 31, 1999
                                               (Dollars in thousands)

Cash flows from operating activities:

<S>                                                                                                 <C>
  Net loss                                                                                          $       (12,171)
    Adjustments to reconcile net loss to net cash provided by operating
      activities:

        Equity in net income of subsidiaries                                                                 (7,350)
        Amortization                                                                                            866
        Noncash interest expense                                                                             12,238
        Change in operating assets and liabilities:
           Accrued interest and other liabilities                                                            10,967
                                                                                                     ----------------
Net cash provided by operating activities                                                                     4,550
                                                                                                     ----------------
Cash flows from investing activities:

  Investments in and advances to subsidiaries and related parties - net                                      (4,550)
                                                                                                     ----------------

Increase in cash and cash equivalents                                                                             -
                                                                                                     ----------------
Cash and cash equivalents, beginning of period                                                                  408
                                                                                                     ----------------

Cash and cash equivalents, end of period                                                           $            408
                                                                                                     ================
Supplemental disclosure of cash flow activity -
  Cash payments for interest                                                                       $          8,732
                                                                                                     ================


</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                                        SCHEDULE II
                                       ARAHOVA COMMUNICATIONS, INC. AND SUBSIDIARIES
                                             VALUATION AND QUALIFYING ACCOUNTS
                                                   (Dollars in thousands)

                                                 Balance at      Charged to                                        Balance
                                                  Beginning       Costs and     Deductions-                        at End
                                                  of Period       Expenses      Write-Offs     Acquisitions       of Period
                                               --------------  --------------  --------------  --------------  --------------
Three Months Ended December 31, 1999

<S>                                            <C>             <C>             <C>             <C>             <C>
Allowance for doubtful accounts                $      2,260    $      3,194    $     (1,881)   $         -     $      3,573
                                               ==============  ==============  ==============  ==============  ==============

Valuation allowance for deferred tax assets    $    105,728    $          -    $          -    $   (94,402)    $     11,326
                                               ==============  ==============  ==============  ==============  ==============
</TABLE>


<PAGE>




                                                       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.

                                          ARAHOVA COMMUNICATIONS, INC.

August 11, 2000                           By: /s/ Timothy J. Rigas
                                          Timothy J. Rigas, Executive Vice
                                          President, Chief Financial Officer,
                                          Chief Accounting Officer, and
                                          Treasurer



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

August 11, 2000                               /s/ John J. Rigas
                                              John J. Rigas,
                                              Director

August 11, 2000                               /s/ Timothy J. Rigas
                                              Timothy J. Rigas, Executive Vice
                                              President, Chief Financial
                                              Officer, Chief Accounting Officer,
                                              and Treasurer


August 11, 2000                               /s/ Michael J. Rigas
                                              Michael J. Rigas,
                                              Director


August 11, 2000                               /s/ James P. Rigas
                                              James P. Rigas,
                                              Director