<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

              {X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

                                       OR

              { } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM __________ TO__________

                        COMMISSION FILE NUMBER: 333-63643


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

             DELAWARE
   (STATE OR OTHER JURISDICTION                         74-2750981
 OF INCORPORATION OR ORGANIZATION)         (I.R.S. EMPLOYER IDENTIFICATION NO.)


                           6151 PALUXY ROAD BUILDING A
                               TYLER, TEXAS 75703
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)


       Registrant's telephone number, including area code: (903) 581-2121


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.

                                 {X} Yes { } No

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                                 { } Yes {X} No

  As of October 31, 2002, there were 1,000 shares of Common Stock outstanding.

<PAGE>

                               CLASSIC CABLE, INC.

                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 2002
                                TABLE OF CONTENTS


<Table>
<Caption>
                                                                                                       Page
                                                                                                       ----
<S>                                                                                                     <C>
PART I - FINANCIAL INFORMATION

Item 1     Financial Statements
           Consolidated Balance Sheets (Unaudited).......................................................4
           Consolidated Statements of Operations (Unaudited).............................................5
           Consolidated Statements of Cash Flows (Unaudited).............................................6
           Notes to Consolidated Financial Statements (Unaudited)........................................7
Item 2     Management's Discussion and Analysis of Financial Condition and Results of Operations........12
Item 3     Quantitative and Qualitative Disclosures About Market Risk...................................20
Item 4     Controls and Procedures......................................................................20

PART II - OTHER INFORMATION

Item 1     Legal Proceedings............................................................................21
Item 2     Changes in Securities and Use of Proceeds....................................................22
Item 3     Defaults Upon Senior Securities..............................................................22
Item 4     Submission of Matters to a Vote of Security Holders..........................................22
Item 5     Other Information............................................................................22
Item 6     Exhibits and Reports on Form 8-K.............................................................23

SIGNATURES .............................................................................................24
</Table>

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

    This Quarterly Report on Form 10-Q is for the quarter ended September 30,
2002. This Quarterly Report modifies and supersedes documents filed prior to
this Quarterly Report. The SEC allows us to "incorporate by reference"
information that we file with them, which means that we can disclose important
information to you by referring you directly to those documents. Information
incorporated by reference is considered to be part of this Quarterly Report. In
addition, information that we file with the SEC in the future will automatically
update and supersede information contained in this Quarterly Report. In this
Quarterly Report, "Classic," "we," "us" and "our" refer to Classic Cable, Inc.
and its subsidiaries.

    You should carefully review the information contained in this Quarterly
Report, but should particularly consider any risk factors that we set forth in
other reports or documents that we file from time to time with the SEC. The
statements, other than statements of historical fact, included in this Quarterly
Report on Form 10-Q are forward-looking statements. These statements include,
but are not limited to:

     o    statements regarding our bankruptcy proceedings;

     o    statements regarding future financing transactions;

     o    statements regarding our plans to obtain waivers and amendments to our
          current financing arrangements;

     o    statements regarding our planned capital expenditures and system
          upgrades and

     o    statements regarding the offering of video and Internet access on our
          systems.

    Forward-looking statements generally can also be identified by the use of
forward-looking terminology such as "may," "will," "expect," "intend,"
"estimate," "anticipate," "plan," "seek" or "believe." We believe that the
expectations reflected in such forward-looking statements are accurate. However,
we cannot assure you that such expectations will occur. Our actual future
performance could differ materially from such statements. Factors that could
cause such or contribute to such differences include, but are not limited to:

     o    the uncertainties and/or potential delays associated with our
          bankruptcy proceedings and any plan of reorganization that has or may
          be filed;

     o    the uncertainties and/or potential delays associated with integrating
          past and future acquisitions;

     o    our ability to acquire or dispose of cable systems on terms favorable
          to us;




                                       2
<PAGE>
     o    the passage of legislation or court decisions adversely affecting the
          cable industry;

     o    our ability to repay or refinance our outstanding indebtedness;

     o    the timing, actual cost and allocation of our capital expenditures and
          system upgrades;

     o    our potential need for additional capital;

     o    competition in the cable industry and

     o    the advent of new technology.

    You should not unduly rely on these forward-looking statements, which speak
only as of the date of this Quarterly Report on Form 10-Q. Except as required by
law, we are not obligated to publicly release any revisions to these
forward-looking statements to reflect events or circumstances occurring after
the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of
unanticipated events.



                                       3
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                               Classic Cable, Inc.

                           Consolidated Balance Sheets
                        (in thousands, except share data)
                                   (unaudited)


<Table>
<Caption>
                                                                   SEPTEMBER 30,    DECEMBER 31,
                                                                        2002             2001
                                                                   -------------    -------------
<S>                                                                <C>              <C>
Assets
Current:
  Cash and cash equivalents ....................................   $       5,156    $       7,641
  Accounts receivable, net .....................................           8,319            8,047
  Prepaid expenses .............................................           2,786            1,971
                                                                   -------------    -------------
   Total current assets ........................................          16,261           17,659
 Deferred financing costs, net .................................           2,035            3,182
 Advances to parent ............................................             354              498
 Investment in cable television systems:
  Inventory ....................................................           6,347            7,323
  Property, plant and equipment ................................         399,558          385,992
  Less accumulated depreciation ................................        (180,151)        (144,692)
                                                                   -------------    -------------
   Property, plant and equipment, net ..........................         219,407          241,300
  Intangible assets:
   Customer relationships ......................................          41,030           85,378
   Franchise marketing rights ..................................          11,300           77,354
   Noncompete agreements .......................................              --           24,900
   Goodwill ....................................................              --           30,490
                                                                   -------------    -------------
                                                                          52,330          218,122
   Less accumulated amortization ...............................          (2,110)         (23,927)
                                                                   -------------    -------------
   Intangible assets, net ......................................          50,220          194,195
                                                                   -------------    -------------
      Total investment in cable television systems .............         275,974          442,818
                                                                   -------------    -------------
         Total assets ..........................................   $     294,624    $     464,157
                                                                   =============    =============

Liabilities and Stockholder's Equity (Deficit)
Liabilities:
Current:
  Accounts payable .............................................   $       2,283    $         960
  Subscriber deposits and unearned income ......................           7,933            6,563
  Other accrued expenses .......................................          14,993           13,103
  Accrued interest .............................................           3,545              520
  Long-term debt ...............................................         203,866          201,871
                                                                   -------------    -------------
   Total current liabilities ...................................         232,620          223,017
Liabilities subject to compromise ..............................         437,052          441,400
                                                                   -------------    -------------
       Total liabilities .......................................         669,672          664,417

Stockholder's equity (deficit):
  Common stock: $.01 par value; 2002 and 2001 -- 1,000 shares
   authorized, issued and outstanding ..........................              --               --
  Additional paid-in capital ...................................         281,143          281,143
  Accumulated deficit ..........................................        (656,191)        (481,403)
                                                                   -------------    -------------
         Total stockholder's equity (deficit) ..................        (375,048)        (200,260)
                                                                   -------------    -------------
         Total liabilities and stockholder's equity (deficit) ..   $     294,624    $     464,157
                                                                   =============    =============
</Table>

                 See notes to consolidated financial statements.


                                       4
<PAGE>

                               Classic Cable, Inc.

                      Consolidated Statements of Operations
                                 (in thousands)
                                   (unaudited)


<Table>
<Caption>
                                             THREE MONTHS ENDED           NINE MONTHS ENDED
                                                SEPTEMBER 30                SEPTEMBER 30
                                          ------------------------    ------------------------
                                             2002          2001          2002          2001
                                          ----------    ----------    ----------    ----------
<S>                                       <C>           <C>           <C>           <C>
Revenues ..............................   $   44,857    $   44,338    $  127,562    $  136,484
Operating expenses:
  Programming .........................       14,944        15,667        44,208        46,858
  Plant and operating .................        6,134         7,245        19,943        18,735
  General and administrative ..........        7,619        10,018        21,915        21,408
  Marketing and advertising ...........        1,366           920         3,005         2,877
  Corporate overhead ..................          592         4,024         1,796         9,724
  Depreciation and amortization .......       14,916        25,888        56,736        75,938
  Chapter 11 related reorganization
    items .............................        3,121            --         8,862            --
  Asset impairment ....................           --       199,613       101,060       199,613
                                          ----------    ----------    ----------    ----------
          Total operating expenses.....       48,692       263,375       257,525       375,153
                                          ----------    ----------    ----------    ----------
Loss from operations ..................       (3,835)     (219,037)     (129,963)     (238,669)
Interest expense ......................       (5,335)      (16,065)      (15,802)      (47,335)
Other income (expense) ................        1,311           (35)        1,146           229
                                          ----------    ----------    ----------    ----------
Loss before cumulative effect
 of accounting change .................       (7,859)     (235,137)     (144,619)     (285,775)
Cumulative effect of accounting
 change ...............................           --            --       (30,169)           --
                                          ----------    ----------    ----------    ----------
Net loss ..............................   $   (7,859)   $ (235,137)   $ (174,788)   $ (285,775)
                                          ==========    ==========    ==========    ==========
</Table>

                 See notes to consolidated financial statements.


                                       5
<PAGE>
                              Classic Cable, Inc.

                     Consolidated Statements of Cash Flows
                                 (in thousands)
                                  (unaudited)

<Table>
<Caption>
                                                                        NINE MONTHS ENDED SEPTEMBER 30
                                                                        ------------------------------
                                                                             2002            2001
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
OPERATING ACTIVITIES
Net loss .............................................................   $   (174,788)   $   (285,775)
Adjustments to reconcile net loss to net cash provided by (used in)
  operating activities:
    Cumulative effect of accounting change ...........................         30,169              --
    Provision for doubtful accounts ..................................          2,858           7,749
    Depreciation .....................................................         38,968          35,329
    Amortization of intangibles ......................................         17,766          40,356
   Impairment charge .................................................        101,060         199,613
    Amortization of deferred financing costs .........................          1,422           1,805
   (Gain) loss on sale/disposal of property, plant and equipment .....         (1,306)            130
    Changes in working capital:
     Change in accounts receivable ...................................         (3,130)         (6,226)
     Change in prepaid expenses ......................................           (815)         (1,633)
     Change in advances to parent ....................................            144             144
     Change in other accruals and payables ...........................          5,116           9,528
     Change in accrued interest ......................................          3,025          16,735
     Change in liabilities subject to compromise .....................         (4,348)             --
                                                                         ------------    ------------
Net cash provided by (used in) operating activities ..................         16,141          17,755
INVESTING ACTIVITIES
Inventory purchases, net of returns ..................................         (1,036)         (6,978)
Purchases of property, plant and equipment ...........................        (20,461)        (49,576)
Proceeds from sales of property, plant and equipment .................          1,151             526
Payments for intangibles .............................................             --            (143)
                                                                         ------------    ------------
Net cash provided by (used in) investing activities ..................        (20,346)        (56,171)
FINANCING ACTIVITIES
Proceeds from long-term debt .........................................          2,000          19,500
Repayments of long-term debt .........................................             (5)            (10)
Financing costs ......................................................           (275)             --
                                                                         ------------    ------------
Net cash provided by (used in) financing activities ..................          1,720          19,490
                                                                         ------------    ------------
Increase (decrease) in cash and cash equivalents .....................         (2,485)        (18,926)
Cash and cash equivalents at beginning of period .....................          7,641          19,056
                                                                         ------------    ------------
Cash and cash equivalents at end of period ...........................   $      5,156    $        130
                                                                         ============    ============
</Table>


                 See notes to consolidated financial statements.


                                       6
<PAGE>
                               Classic Cable, Inc.
                   Notes to Consolidated Financial Statements
                            As of September 30, 2002


1. BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements of Classic
Cable, Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In management's
opinion, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and nine month periods ended September 30, 2002 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2002.

    The Company is a holding company with no assets or operations other than its
investments in its subsidiaries. The Company is a wholly owned subsidiary of
Classic Communications, Inc. ("CCI").

    For further information, refer to the consolidated financial statements and
footnotes thereto for the year ended December 31, 2001 included in the Company's
Form 10-K.

    Certain reclassifications have been made in the 2001 financial statements to
conform to the 2002 presentation.

2. BANKRUPTCY PROCEEDINGS

    On November 13, 2001, CCI, the Company and all of its wholly owned
subsidiaries filed voluntary petitions for reorganization under chapter 11 of
title 11 of the United States Code ("Bankruptcy Code") in the United States
Bankruptcy Court for the District of Delaware (the "Court"). CCI, the Company
and each of its debtor subsidiaries continue to manage their businesses as a
debtor-in-possession. The chapter 11 cases are being jointly administered under
Case No. 01-11257. As debtors-in-possession, management is generally authorized
to operate the businesses, but may not engage in certain transactions, including
those outside the ordinary course of business, unless approved by the Court.
After the chapter 11 filings, CCI obtained several Court orders authorizing,
among other things, the payment of certain pre-petition liabilities (such as
employee wages and benefits and programming fees) and certain actions designed
to preserve the going concern value of the business and enhance the
reorganization prospects.

    CONSEQUENCE OF FILING. Under bankruptcy law, absent a court order, actions
by creditors to collect certain pre-petition indebtedness owed by the Company at
the filing date are stayed and certain other pre-petition contractual
obligations may not be enforced against the Company. In addition, the Company
has the right, subject to Court approval and other conditions, to assume or
reject certain pre-petition executory contracts and unexpired leases. Parties
affected by these rejections may file claims with the Court. Parties affected by
these rejections are likely to discontinue providing services associated with
the rejected agreements. The Company may not be able to replace such services in
a timely manner thus causing interruption of service to certain components of
its business. The amounts of claims filed by creditors could be significantly
different from the amounts recorded by the Company. Due to material
uncertainties, it is not possible to predict the length of time the Company will
operate under chapter 11 protection, the outcome of the proceedings in general,
whether the Company will continue to operate under its current organizational
structure, the effect of the proceedings on the Company's businesses or the
recovery by creditors and equity holders of the Company.

    On November 28, 2001, the United States Trustee appointed an official
committee of unsecured creditors (the "Committee") to serve in the chapter 11
cases.

    The Company anticipates that substantially all liabilities of the Company as
of the date of the filing will be resolved under a chapter 11 plan of
reorganization to be proposed and voted on in the chapter 11 cases in accordance
with the provisions of the Bankruptcy Code. The Company's exclusive right to
propose a plan of reorganization expired on May 13, 2002. Following the
termination of the Company's exclusivity, both the Committee and the Company's
secured lenders (the "Lenders") filed individual proposed plans of
reorganization. On October 30, 2002, the Committee and the Lenders jointly filed
a proposed plan of reorganization and related disclosure statement with the
Court. The Court conducted a hearing on



                                       7
<PAGE>

November 8, 2002, to consider the proposed disclosure statement. The Court
entered an order approving the disclosure statement on November 12, 2002, and
the Committee and the Lenders are expected to begin distributing the disclosure
statement on or about November 15, 2002 to solicit approvals from the Company's
creditors. The Court has set a hearing for December 10, 2002 to consider
confirmation of the joint plan of reorganization. In the event the Committee and
the Lenders are not able to complete all of the documentation for the proposed
supplement to the joint plan of reorganization by November 20, 2002, the Court
will adjourn the confirmation hearing until December 17, 2002. Due to the fact
many of the circumstances surrounding the proposed joint plan of reorganization
are not within the Company's control, the Company can provide no assurance as to
if or when the joint plan of reorganization will be confirmed by the Court and
consummated.

    The Court may confirm a plan of reorganization only upon making certain
findings required by the Bankruptcy Code, and a plan may be confirmed over the
dissent of non-accepting stakeholders if certain requirements of the Bankruptcy
Code are met. The payment rights and other entitlements of pre-petition
creditors and CCI's shareholders will, in many cases, be substantially altered
by any plan or plans of reorganization confirmed in the chapter 11 cases,
including the proposed joint plan of reorganization. There is no assurance that
there will be sufficient assets to satisfy the Company's pre-petition
liabilities in whole or in part, and the pre-petition creditors of some debtors
may be treated differently than those of other debtors. Pre-petition creditors
may receive under a plan or plans less than 100% of the face value of their
claims. In addition, the interests of CCI's equity security holders will likely
be cancelled in whole or in part, as the plan of reorganization currently
jointly proposed by the Committee and the Lenders does not provide for any
recovery for CCI's equity security holders. As noted above, it is not possible
at this time to predict the final outcome of the chapter 11 cases. CCI's
shareholders and creditors will receive copies of the disclosure statement in
connection with the solicitation by the Committee and the Lenders and should
refer to that document for a complete description of the proposed treatment of
their claims.

    FINANCIAL STATEMENT PRESENTATION. The accompanying Consolidated Financial
Statements have been prepared in accordance with AICPA Statement of Position
90-7 ("SOP 90-7"), Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code, and on a going concern basis, which contemplates continuity of
operations, realization of assets and liquidation of liabilities in the ordinary
course of business. However, as a result of the filing of the chapter 11 cases,
such realization of assets and liquidation of liabilities are subject to
uncertainty. While operating as debtors-in-possession under the protection of
chapter 11 of the Bankruptcy Code, and subject to Court approval or otherwise as
permitted in the ordinary course of business, the Company may sell or otherwise
dispose of assets or liquidate or settle liabilities for amounts other than
those reflected in the Consolidated Financial Statements. Further, a plan of
reorganization could materially change the amounts and classifications reported
in the consolidated historical financial statements.

    Substantially all of the Company's pre-petition debt is in default as a
result of the bankruptcy filing. As described below, the accompanying
Consolidated Financial Statements present the senior subordinated notes under
the caption Liabilities Subject to Compromise. As required by SOP 90-7, the
Company, beginning in the fourth quarter of 2001, recorded the Company's
pre-petition debt instruments at the allowed amount, as defined by SOP 90-7.

    As reflected in the Consolidated Financial Statements, Liabilities Subject
to Compromise refer to the Company's unsecured liabilities incurred prior to the
commencement of the chapter 11 cases. The amounts of the various liabilities
that are subject to compromise are set forth below. These amounts represent the
Company's estimate of known or potential pre-petition claims to be resolved in
connection with the chapter 11 cases. Such claims remain subject to future
adjustments. Adjustments may result from (1) negotiations; (2) actions of the
Court; (3) further developments with respect to disputed claims; (4) rejection
of executory contracts and unexpired leases; (5) the determination as to the
value of any collateral securing claims; (6) proofs of claim or (7) other
events. Payment terms for these amounts will be established in connection with
the chapter 11 cases.

    Pursuant to the Bankruptcy Code, schedules have been filed by the Company
with the Court setting forth the assets and liabilities of the Company as of the
date of the filing. Differences between amounts recorded by the Company and
claims filed by creditors will be investigated and resolved as part of the
proceedings in the chapter 11 cases. The bar date for filing proofs of claim
against the Company was March 29, 2002 (May 13, 2002 for governmental entities).
The Company is still in the process of reviewing such claims and, therefore, the
ultimate number and allowed amount of such claims are not presently known.



                                       8
<PAGE>
    From the petition date through September 30, 2002, contractual interest
expense not accrued or recorded on the senior subordinated notes totaled $33.4
million, of which $4.9 million relates to 2001 and $28.5 million relates to the
nine months ended September 30, 2002.

    As a consequence of the filing and the impact of certain provisions of the
Company's debtor-in-possession financing, as well as a cash management order
entered by the Court, CCI, the Company and its subsidiaries are subject to
certain restrictions, including their ability to pay dividends and to transfer
cash and other assets to each other and to their affiliates. The Company is also
subject to certain other restrictions set forth in its debtor-in-possession
financing.

    The Company believes, based on information presently available to it, that
cash available from operations and the debtor-in-possession financing will
provide sufficient liquidity to allow it to continue as a going concern for the
foreseeable future. However, the ability of the Company to continue as a going
concern (including its ability to meet post-petition obligations) and the
appropriateness of using the going concern basis for its financial statements
are dependent upon, among other things, (i) the Company's ability to comply with
the terms of the debtor-in-possession financing and the cash management order
entered by the Court in connection with the chapter 11 cases, (ii) the Company's
ability to negotiate an extension of the due date of the debtor-in-possession
financing until confirmation of a plan or, conversely, finance the outstanding
borrowings if the debtor-in-possession financing were to become due and payable,
(iii) the ability of the Company to maintain adequate cash on hand, (iv) the
ability of the Company to generate cash from operations, (v) confirmation of a
plan or plans of reorganization under the Bankruptcy Code and (vi) the Company's
ability to maintain profitability following consummation of a plan of
reorganization.

    The liabilities subject to compromise in the Consolidated Balance Sheets
consist of the following items (in thousands):

<Table>
<Caption>
                                                                  SEPTEMBER 30,   DECEMBER 31,
                                                                      2002             2001
                                                                  -------------   -------------
<S>                                                               <C>             <C>
                    Accounts payable ..........................   $      23,476   $      22,633
                    Subscriber deposits and unearned income ...             149             164
                    Other accrued expenses ....................           6,652          11,828
                    Accrued interest ..........................          28,775          28,775
                    Long-term debt ............................         378,000         378,000
                                                                  -------------   -------------
                                                                  $     437,052   $     441,400
                                                                  =============   =============
</Table>

    The amounts classified as chapter 11 related reorganization items in the
Consolidated Statements of Operations consist of the following for the three and
nine months ended September 30, 2002 (in thousands):

<Table>
<Caption>
                                                             THREE MONTHS     NINE MONTHS
                                                             ------------     ----------
<S>                                                          <C>              <C>
               Professional fees                             $      3,002     $    8,729
               U. S. Trustee fees                                     119            133
                                                             ------------     ----------
                                                             $      3,121     $    8,862
                                                             ============     ==========
</Table>

3.  NEW ACCOUNTING PRONOUNCEMENTS

    In May 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 145 ("FAS 145"),
Rescission of FASB Statements No. 4, 44, and 62, Amendment of FASB Statement No.
13, and Technical Corrections. FAS 145 eliminates the requirement under SFAS No.
4, Reporting Gains and Losses from Extinguishment of Debt, to report gains and
losses from extinguishments of debt as extraordinary items in the income
statement. Accordingly, gains or losses from extinguishments of debt for fiscal
years beginning after May 15, 2002 will not be reported as extraordinary items
unless the extinguishment qualifies as an extraordinary item under the
provisions of APB Opinion No. 30 ("Opinion 30"), Reporting the Results of
Operations Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions. Upon
adoption of this pronouncement, any gain or loss on extinguishment of debt
previously classified as an extraordinary item in prior periods presented that
does not meet the criteria of Opinion 30 for such classification should be
reclassified to conform with the provisions of FAS 145. Accordingly, when this
pronouncement becomes effective, the Company expects to reclassify a loss from
early extinguishment of debt of $5.5 million, net of tax, recorded during 2000
to results from continuing operations.





                                       9
<PAGE>
4. INCOME TAXES

    The effective tax rates for the three and nine months ended September 30,
2002 and 2001 differ from the statutory rates primarily due to the impact of
permanent differences and increases in the valuation allowance on deferred tax
assets. The Company believes it is more likely than not that such deferred tax
assets will not be utilized in the near term.

5. CAPITALIZED INTERNAL COSTS

    Costs capitalized as part of new customer installations include materials,
subcontractor costs, internal direct labor costs, including service technicians
and customer care representatives and internal overhead costs incurred to
connect the customer to the plant from the time of installation scheduling
through the time service is activated and functioning. The overhead rates
established are based on a combination of internal company-wide overhead
analysis and internal time and motion studies of specific activities. These
studies are updated to adjust for changes in facts and circumstances.
Capitalized internal payroll costs for the three months ended September 30, 2002
and 2001 were $2.1 million and $1.8 million, respectively. For the nine months
ended September 30, 2002 and 2001, capitalized internal payroll costs were $5.2
million and $6.7 million, respectively. Related capitalized overhead for the
three months ended September 30, 2002 and 2001 was $1.1 million and $2.4
million, respectively. For the nine months ended September 30, 2002 and 2001,
related capitalized overhead was $4.2 million and $8.0 million, respectively.

6. LONG-LIVED ASSETS

    The Company commissioned a third party valuation that indicated certain of
its long-lived assets had a then current market value below their carrying
amount. The Company evaluated the ongoing value of its intangibles with definite
lives as well as property, plant and equipment. Based on this valuation, the
Company determined that long-lived assets with a carrying amount of $154.8
million were no longer recoverable and were in fact impaired and wrote them down
to their estimated fair value of $53.7 million. Fair value was based on expected
future cash flows and various interest rate assumptions. The impairment charge
of $101.1 million was taken in the second quarter of 2002 resulting in a
reduction to net property, plant and equipment of $5.0 million; net customer
relationships of $36.2 million; net franchise marketing rights of $57.5 million
and net noncompete agreements of $2.4 million. Because of deteriorating market
conditions and the Company's bankruptcy proceedings, it is reasonably possible
that the estimate of discounted cash flows may change materially in the near
term resulting in the need to adjust the Company's determination of fair value.
In addition, the Committee and the Lenders promulgated a different valuation of
the Company's assets in connection with their joint plan of reorganization. The
differences between the independent third party valuation received by the
Company and the valuation contained in the joint plan of reorganization can be
attributed to the fact that such valuation was done for a different purpose, at
a different point in time, and may or may not have been done in compliance with
appropriate Statements of Financial Accounting Standards.

7. GOODWILL

     In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets ("FAS 142"). Under FAS 142, goodwill and intangible assets with
indefinite lives are no longer amortized but are reviewed at least annually for
impairment. Upon adoption, the Company recorded a one-time, noncash charge of
$30.2 million to reduce the carrying value of its goodwill to zero. The charge
is non-operational in nature and is reflected as a cumulative effect of an
accounting change effective January 1, 2002. In calculating the impairment
charge, the fair value was estimated using a discounted cash flow methodology.

     With adoption of the statement, the Company ceased amortization of goodwill
as of January 1, 2002. The following table presents the quarterly results of the
Company on a comparable basis (in thousands of dollars):

<Table>
<Caption>
                                 THREE MONTHS ENDED        NINE MONTHS ENDED
                                    SEPTEMBER 30              SEPTEMBER 30
                               ----------------------    ----------------------
                                  2002         2001         2002         2001
                               ---------    ---------    ---------    ---------
<S>                            <C>          <C>          <C>          <C>
Net loss:
  Reported net loss ........   $  (7,859)   $(235,137)   $(174,788)   $(285,775)
  Goodwill amortization ....          --        1,600           --        4,800
                               ---------    ---------    ---------    ---------
  Adjusted net loss ........   $  (7,859)   $(233,537)   $(174,788)   $(280,975)
                               =========    =========    =========    =========
</Table>



                                       10
<PAGE>
8. LONG-TERM DEBT

     Balances of amounts outstanding under the Company's various debt agreements
as of September 30, 2002 are as follows (in thousands):

<Table>
<S>                                         <C>
Debtor-in-possession financing ...........  $    4,000
1999 credit facility:
  Revolver ...............................      35,382
  Term loan B ............................      86,562
  Term loan C ............................      77,905
Other ....................................          17
                                            ----------
                                            $  203,866
                                            ==========
</Table>

    Long-term debt subject to compromise at September 30, 2002 is as follows (in
thousands):

<Table>
<S>                                                    <C>
              10.5% senior subordinated notes ......   $  225,000
              9.375% senior subordinated notes .....      150,000
              9.875% senior subordinated notes .....        3,000
                                                       ----------
                                                       $  378,000
                                                       ==========
</Table>

    At September 30, 2002 and December 31, 2001, the senior subordinated notes
have been reclassified as long-term debt subject to compromise in the above
table and on the Consolidated Balance Sheets due to the chapter 11 bankruptcy
filing. These instruments did not become subject to compromise until the
bankruptcy filing.

    The debtor-in-possession financing ("DIP Financing") is collateralized by,
among other things, a senior lien on substantially all of the Company's assets,
including assets that had previously been subject to a lien. CCI, the Company
and its subsidiaries have guaranteed the obligations under the DIP Financing and
the Company's outstanding stock, as well as that of its subsidiaries have been
pledged in connection with the DIP Financing. The 1999 credit facility is
collateralized by substantially all the assets of the Company. CCI has no
operations of its own. Consequently, it will rely on dividends and cash flow of
the Company to meet its debt service obligations. The terms of these debt
agreements restrict certain activities of the Company, including the incurrence
of additional indebtedness and the payment of certain dividends. Accordingly,
substantially all the assets and operations of the Company are restricted as to
transfer to CCI and may not be available for dividends and/or debt service of
CCI.

    In April, May and September 2002, the DIP Financing was amended. The
amendments, in total, waived the Company's existing defaults, reset certain
financial covenants, revised and added certain provisions related to the
Company's reorganization efforts and extended the due date to December 11, 2002.
The amendments reduced the total availability of the DIP Financing from $30
million to $25 million. At September 30, 2002, there were $3.7 million of
outstanding letters of credit leaving $17.3 million available for borrowing,
subject to certain conditions.

    The Company is a holding company with no assets or operations other than its
investments in its subsidiaries. The subsidiary guarantors are wholly-owned
subsidiaries of the Company and have fully and unconditionally guaranteed the
notes (the 10.5% senior subordinated notes, the 9.375% senior subordinated
notes, and the 9.875% senior subordinated notes) on a joint and several basis.
The subsidiary guarantors comprise all of the direct and indirect subsidiaries
of the Company, other than inconsequential subsidiaries. The Company has not
presented separate financial statements and other disclosures concerning each
subsidiary guarantor because management has determined that such information is
not material to investors.

9. COMMITMENTS AND CONTINGENCIES

    The Company is currently in discussions with a service provider regarding
the payment provisions of certain contracts. While it is reasonably possible
that the Company may have underpaid previous amounts due under the contracts,
the Company is unable to reasonably estimate such amounts based on information
currently available. The Company can not guarantee that this matter will be
resolved without an interruption in service from this provider, which would
affect an insignificant number of the Company's customers. The Company is
presently unable to determine the outcome of this uncertainty and what impact,
if any, it will have on its results of operations or cash flows.



                                       11
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

    Reference is made to the "Risk Factors" included in our Form 10-K for the
year ended December 31, 2001, for a discussion of important factors that could
cause actual results to differ from expectations and any of our forward-looking
statements contained herein. In some cases, you can identify those so-called
"forward-looking statements" by words such as "may," "will," "should,"
"expects," "anticipates," "considering," "believe," "estimates," "predicts,"
"potential," or "continue" or the negative of those words and other comparable
words. In addition, the following discussion should be read in conjunction with
our audited consolidated financial statements as of and for the years ended
December 31, 2001 and 2000, included in our Form 10-K's.

    We do not believe the discussion and analysis of our historical financial
condition and results of operations set forth below are indicative nor should
they be relied upon as an indicator of our future performance.

    Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
that we make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an on-going basis, we evaluate our estimates, including
those related to bad debts, inventories, long-lived assets, income taxes,
restructuring and contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

BANKRUPTCY PROCEEDINGS

    On November 13, 2001, we, Classic Communications, Inc. ("CCI") and all of
our wholly owned subsidiaries listed below filed voluntary petitions for
reorganization under chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the District of
Delaware (the "Court"). The following subsidiaries filed chapter 11 petitions:

<Table>
<S>                                      <C>                               <C>
   CallCom 24, Inc.                      Classic Cable, Inc.               Classic Cable Holding, Inc.
   Classic Telephone, Inc.               Classic Cable of Oklahoma, Inc.   Correctional Cable TV, Inc.
   Friendship Cable of Arkansas, Inc.    Friendship Cable of Texas, Inc.   Television Enterprises, Inc.
   Universal Cable Communications, Inc.  Universal Cable Holdings, Inc.    Universal Cable of Beaver,
                                                                           Oklahoma, Inc.
   Universal Cable Midwest, Inc.         W.K. Communications, Inc.         WT Acquisition Corporation
</Table>

    We, CCI and each of our debtor subsidiaries continue to manage our
businesses as a debtor-in-possession. The chapter 11 cases are being jointly
administered under Case No. 01-11257. The chapter 11 cases are discussed in
greater detail in the Notes to the Consolidated Financial Statements. As
debtors-in-possession, management is generally authorized to operate the
businesses, but may not engage in certain transactions, including those outside
the ordinary course of business, unless approved by the Court. After the chapter
11 filings, CCI obtained several Court orders authorizing, among other things,
the payment of certain pre-petition liabilities (such as employee wages and
benefits and programming fees) and certain actions designed to preserve the
going concern value of the business and enhance the reorganization prospects.

    CONSEQUENCE OF FILING. Under bankruptcy law, absent a court order, actions
by creditors to collect certain pre-petition indebtedness owed by us at the
filing date are stayed and certain other pre-petition contractual obligations
may not be enforced against us. In addition, we have the right, subject to Court
approval and other conditions, to assume or reject certain pre-petition
executory contracts and unexpired leases. Parties affected by these rejections
may file claims with the Court. Parties affected by these rejections are likely
to discontinue providing services associated with the rejected agreements. We
may not be able to replace such services in a timely manner thus causing
interruption of service to certain components of our business. The amounts of
claims filed by creditors could be significantly different from the amounts we
have recorded. Due to material uncertainties, it is not possible to predict the
length of time we will operate under chapter 11 protection, the outcome of the
proceedings in general, whether we will continue to operate under our current
organizational structure, the effect of the proceedings on our businesses or the
recovery by our creditors and equity holders.



                                       12
<PAGE>

    On November 28, 2001, the United States Trustee appointed an official
committee of unsecured creditors (the "Committee") to serve in the chapter 11
cases.

    We anticipate substantially all of our liabilities as of the date of the
filing will be resolved under a chapter 11 plan of reorganization to be proposed
and voted on in the chapter 11 cases in accordance with the provisions of the
Bankruptcy Code. Our exclusive right to propose a plan of reorganization expired
on May 13, 2002. Following the termination of our exclusivity rights, both the
Committee and our secured lenders (the "Lenders") filed individual proposed
plans of reorganization. On October 30, 2002, the Committee and the Lenders
jointly filed a proposed plan of reorganization and related disclosure statement
with the Court. The Court conducted a hearing on November 8, 2002, to consider
the proposed disclosure statement. The Court entered an order approving the
disclosure statement on November 12, 2002, and the Committee and the Lenders are
expected to begin distributing the disclosure statement on or about November 15,
2002 to solicit approvals from affected parties. The Court has set a hearing for
December 10, 2002 to consider confirmation of the joint plan of reorganization.
In the event the Committee and the Lenders are not able to complete all of the
documentation for the proposed supplement to the joint plan of reorganization by
November 20, 2002, the Court will adjourn the confirmation hearing until
December 17, 2002. Due to the fact many of the circumstances surrounding the
proposed joint plan of reorganization are not within our control, we can provide
no assurance as to if or when the joint plan of reorganization will be confirmed
by the Court and consummated.

    The Court may confirm a plan of reorganization only upon making certain
findings required by the Bankruptcy Code, and a plan may be confirmed over the
dissent of non-accepting stakeholders if certain requirements of the Bankruptcy
Code are met. The payment rights and other entitlements of pre-petition
creditors and CCI's shareholders may be substantially altered by any plan or
plans of reorganization confirmed in the chapter 11 cases. There is no assurance
that there will be sufficient assets to satisfy our pre-petition liabilities in
whole or in part, and the pre-petition creditors of some debtors may be treated
differently than those of other debtors. Pre-petition creditors may receive
under a plan or plans less than 100% of the face value of their claims. In
addition, the interests of CCI's equity security holders will likely be
cancelled in whole or in part, as the plan of reorganization currently jointly
proposed by the Committee and the Lenders does not provide for any recovery for
CCI's equity security holders. As noted above, it is not possible at this time
to predict the final outcome of the chapter 11 cases. CCI's shareholders and
creditors will receive copies of the disclosure statement in connection with the
solicitation by the Committee and the Lenders and should refer to that document
for a complete description of the proposed treatment of their claims.

    FINANCIAL STATEMENT PRESENTATION. The accompanying Consolidated Financial
Statements have been prepared in accordance with AICPA Statement of Position
90-7 ("SOP 90-7"), Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code, and on a going concern basis, which contemplates continuity of
operations, realization of assets and liquidation of liabilities in the ordinary
course of business. However, as a result of the filing of the chapter 11 cases,
such realization of assets and liquidation of liabilities are subject to
uncertainty. While operating as debtors-in-possession under the protection of
chapter 11 of the Bankruptcy Code, and subject to Court approval or otherwise as
permitted in the ordinary course of business, we may sell or otherwise dispose
of assets or liquidate or settle liabilities for amounts other than those
reflected in the Consolidated Financial Statements. Further, a plan of
reorganization could materially change the amounts and classifications reported
in the consolidated historical financial statements.

    Pursuant to the Bankruptcy Code, we have filed schedules with the Court
setting forth our assets and liabilities as of the date of the filing.
Differences between amounts recorded by us and claims filed by creditors will be
investigated and resolved as part of the proceedings in the chapter 11 cases.
The bar date for filing proofs of claim against us was March 29, 2002 (May 13,
2002 for governmental entities). We are still in the process of reviewing such
claims and, therefore, the ultimate number and allowed amount of such claims are
not presently known.

    As a consequence of the filing and the impact of certain provisions of our
debtor-in-possession financing as well as a cash management order entered by the
Court, we, CCI and our subsidiaries are subject to certain restrictions,
including the ability to pay dividends and to transfer cash and other assets to
each other and to our affiliates. We are also subject to certain other
restrictions set forth in our debtor-in-possession financing.



                                       13
<PAGE>

    We believe, based on information presently available to us, that cash
available from operations and the debtor-in-possession financing will provide
sufficient liquidity to allow us to continue as a going concern for the
foreseeable future. However, our ability to continue as a going concern
(including our ability to meet post-petition obligations) and the
appropriateness of using the going concern basis for our financial statements
are dependent upon, among other things, (i) our ability to comply with the terms
of the debtor-in-possession financing and the cash management order entered by
the Court in connection with the chapter 11 cases, (ii) our ability to negotiate
an extension of the due date of the debtor-in-possession financing until
confirmation of a plan or, conversely, finance the outstanding borrowings if the
debtor-in-possession financing were to become due and payable, (iii) our ability
to maintain adequate cash on hand, (iv) our ability to generate cash from
operations, (v) confirmation of a plan or plans of reorganization under the
Bankruptcy Code and (vi) our ability to maintain profitability following
consummation of a plan of reorganization.

GENERAL

    REVENUES. Revenues are primarily attributable to monthly subscription fees
charged to subscribers for our basic, premium and digital cable television
product offerings. Basic revenues consist of monthly subscription fees for all
services, other than digital services and premium programming, as well as
monthly charges for customer equipment rental. Premium revenues consist of
monthly subscription fees for programming provided on a per channel basis.
Digital revenues consist of the incremental revenues over and above our full
basic revenues for digital based programming. In addition, other revenues are
derived from:

          o    data services;

          o    installation and reconnection fees charged to basic subscribers
               to commence or reinstate service;

          o    pay-per-view charges;

          o    late payment fees;

          o    advertising revenues and

          o    commissions related to the sale of merchandise by home shopping
               services.

    At September 30, 2002, our collective systems served approximately 327,000
basic subscribers who subscribe to an additional 157,000 premium services and
32,000 digital services. We also serve 7,000 data customers. We have a basic
penetration rate of approximately 45%, a premium penetration rate of
approximately 48% and a digital penetration rate of approximately 10%. The table
below sets forth the percentage of our total revenues attributable to the
various sources for the nine months ended September 30, 2002:

<Table>
<S>                                                  <C>
                           Basic                             80%
                           Premium                            8%
                           Digital                            2%
                           Data                               1%
                           Other                              9%
                                                     ----------
                           Total revenues                   100%
                                                     ==========
</Table>

    OPERATING EXPENSES. Our operating expenses consist primarily of (a)
programming fees, (b) plant and operating costs, (c) general and administrative
expenses, (d) marketing costs, (e) corporate overhead and (f) amortization and
depreciation of intangible assets and property, plant and equipment. Programming
fees have historically increased at rates in excess of inflation due to system
acquisitions and internal growth, as well as increases in the number, quality
and cost of programming services offered by us. Plant and operating costs
include expenses related to wages and employee benefits of technical personnel,
electricity, systems supplies, vehicles and other operating costs. General and
administrative expenses include wages and employee benefits for customer
service, accounting and administrative personnel, franchise fees and expenses
related to billing, payment processing and office administration. Corporate
overhead consists primarily of expenses incurred by our executive management,
which are not directly attributable to any one system.

    NET LOSSES. The high level of depreciation and amortization associated with
our acquisitions and capital expenditures related to continued construction and
upgrading of the current systems, together with interest costs related to our
financing activities, have contributed to our net losses. Our net losses have
been further increased by costs associated with our chapter 11 bankruptcy filing
and charges taken for the impairment of certain long-lived assets.



                                       14
<PAGE>
CRITICAL ACCOUNTING POLICIES

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. We evaluate our estimates and
assumptions on an ongoing basis based on a combination of historical information
and various other assumptions that are believed to be reasonable under the
particular circumstances. Actual results may differ from these estimates based
on different assumptions or conditions. We believe that certain of the
accounting policies that most impact our consolidated financial statements and
that require our management to make difficult, subjective or complex judgments
are described below. This should be read in conjunction with the Management's
Discussion and Analysis of Financial Condition and Results of Operations and
footnote 4, "Summary of Significant Accounting Policies", in our consolidated
financial statements included in our December 31, 2001 Form 10-K.

    INVESTMENT IN CABLE PROPERTIES. Our investment in cable properties
represents a significant portion of our total assets. Investment in cable
properties totaled $276.0 million and $442.8 million, representing approximately
94% and 96% of total assets, at September 30, 2002 and December 31, 2001,
respectively. Investment in cable properties includes property, plant and
equipment and various intangible assets. We have continued to invest in cable
properties over the past several years as we have completed numerous
acquisitions of other cable systems and increased capital expenditures to
upgrade, rebuild and expand our cable systems. See "Liquidity and Capital
Resources " for details of our capital expenditures.

    PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment, net, totaled
$219.4 million and $241.3 million, representing approximately 75% and 52% of
total assets, at September 30, 2002 and December 31, 2001, respectively.
Property, plant and equipment are recorded at cost, including all direct and
certain indirect costs associated with the construction of cable transmission
and distribution facilities, plant enhancements and the cost of new customer
installations. Costs capitalized as part of new customer installations include
materials, subcontractor costs, internal direct labor costs, including service
technicians and customer care representatives and internal overhead costs
incurred to connect the customer to the plant from the time of installation
scheduling through the time service is activated and functioning. The overhead
rates established are based on a combination of internal company-wide overhead
analysis and internal time and motion studies of specific activities. These
studies are updated to adjust for changes in facts and circumstances.
Capitalized internal payroll costs for the three months ended September 30, 2002
and 2001 were $2.1 million and $1.8 million, respectively. For the nine months
ended September 30, 2002 and 2001, amounts were $5.2 million and $6.7 million,
respectively. Related capitalized overhead for the three months ended September
30, 2002 and 2001 were $1.1 million and $2.4 million, respectively. For the nine
months ended September 30, 2002 and 2001, amounts were $4.2 million and $8.0
million, respectively. The costs of disconnecting and reconnecting a customer
are charged to expense in the period incurred. Expenditures for repairs and
maintenance are charged to operating expense as incurred, while equipment
replacements and betterments, including the replacement of drops, are
capitalized.

    Depreciation expense related to property, plant and equipment totaled $39.0
million and $35.3 million, representing approximately 15% and 9% of operating
expenses, for the nine months ended September 30, 2002 and 2001, respectively.
Depreciation is recorded using the straight-line method over management's
estimate of the useful lives of the related assets primarily as follows:

<Table>
<S>                                      <C>
Buildings                                30 years
Cable television distribution systems    3-12 years
Office furniture and equipment           3-7 years
Vehicles                                 5 years
</Table>

    VALUATION OF LONG-LIVED ASSETS. We evaluate the recoverability of long-lived
assets for impairment when events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Such events or changes in
circumstances could include such factors as changes in technological advances or
fluctuations in the fair value of such assets. If a review indicates that the
carrying value of such asset is not recoverable based on projected undiscounted
net cash flows related to the asset over its remaining life, the carrying value
of such asset is reduced to its estimated fair value. While we believe that our
estimates of future cash flows are reasonable, different assumptions regarding
such cash flows could materially affect our evaluations.



                                       15
<PAGE>
    We commissioned a third-party valuation that indicated certain of our
long-lived assets had a then current market value below their carrying amount.
We evaluated the ongoing value of our intangibles with definite lives as well as
property, plant and equipment. Based on this valuation, we determined that
long-lived assets with a carrying amount of $154.8 million were no longer
recoverable and were in fact impaired and wrote them down to their estimated
fair value of $53.7 million. Fair value was based on expected future cash flows
and various interest rate assumptions. The impairment charge of $101.1 million
was taken in the second quarter of 2002 resulting in a reduction to net
property, plant and equipment of $5.0 million; net customer relationships of
$36.2 million; net franchise marketing rights of $57.5 million and net
noncompete agreements of $2.4 million. Because of deteriorating market
conditions and our bankruptcy proceedings, it is reasonably possible that the
estimate of discounted cash flows may change materially in the near term
resulting in the need to adjust our determination of fair value. In addition,
the Committee and the Lenders promulgated a different valuation of our assets in
connection with their joint plan of reorganization. The differences between the
independent third party valuation we received and the valuation contained in the
joint plan of reorganization can be attributed to the fact that such valuation
was done for a different purpose, at a different point in time, and may or may
not have been done in compliance with appropriate Statements of Financial
Accounting Standards.

    The following discussion pertains to our results of operations and financial
condition for the three and nine months ended September 30, 2002 and 2001.

THREE MONTHS ENDED SEPTEMBER 30, 2002 VS. SEPTEMBER 30, 2001

    Revenues increased $0.5 million from quarter to quarter due primarily to a
$1.7 million credit recognized in 2002 associated with unused coupons, partially
offset by a revenue decline from customer losses. Basic subscriber declines of
approximately 25,000 from period to period, mitigated by a rate increase in June
2002, resulted in a basic revenue decline of $0.9 million. Basic revenue per
subscriber increased from $32.62 to $35.19. Premium revenue decreased $0.6
million as a result of premium subscriber declines of approximately 46,000 from
period to period. Revenue from data customers increased $0.6 million. Total
revenue per subscriber increased from $40.55 to $45.43.

    Operating expenses decreased $214.7 million, or 82%, in the three months
ended September 30, 2002. Programming expenses decreased $0.7 million primarily
due to a decrease in subscribers, but were offset by increased rates charged by
programming vendors. In 2002, plant and operating and general and administrative
costs decreased $3.5 million, or 20%. Bad debt expense decreased $3.7 million
compared to the previous year's quarter while insurance related costs increased
$0.3 million. Capitalization of internal costs decreased $1.0 million as our
workforce transitioned from upgrade construction and new product launches to
increased maintenance which requires less support from administrative
departments. Corporate overhead decreased $3.4 million from quarter to quarter,
primarily due to 2001 professional fees paid for due diligence efforts and
commitments related to our negotiations in potential financing and restructuring
transactions in the amount of $3.0 million. Depreciation and amortization
expense in 2002 was $14.9 million, a decrease of $11.0 million over the same
period in 2001. The decrease is primarily due to a reduction in the carrying
values of fixed assets and intangible balances due to impairment charges taken
in the third quarter of 2001 of $199.6 million and in the second quarter of 2002
of $101.1 million. The gross balance of fixed assets and intangibles decreased
from $948.4 million at June 30, 2001 to $451.9 million at September 30, 2002. In
addition, we ceased amortization of goodwill in 2002. Amortization of goodwill
in 2001 was $1.6 million.

    During the three months ended September 30, 2002, we incurred $3.1 million
of chapter 11 related professional fees.

    Interest expense decreased $10.7 million, or 67%, in 2002. The decrease is
primarily due to the fact that since the filing date we are not accruing or
recording interest expense on our $378.0 million senior subordinated notes.
Interest on the notes in 2001 was $9.5 million. The remainder of the change is
due to lower effective interest rates in 2002.

    Other income increased $1.3 million in 2002. This increase is primarily due
to the final purchase price adjustment associated with the sale of the
Breckenridge, Colorado system in 2001. We recorded an additional gain on the
sale of $1.3 million in 2002 and received a final cash payment of $1.2 million.

    No income tax benefit was recognized in 2002 or 2001. The effective tax
rates for 2002 and 2001 differ from the statutory rates primarily due to
increases in the valuation allowance on deferred tax assets.



                                       16
<PAGE>
    Upon adoption of Statement of Financial Accounting Standards ("SFAS") No.
142, Goodwill and Other Intangible Assets ("FAS 142"), we recorded a one-time,
noncash charge of $30.2 million to reduce the carrying value of goodwill to
zero. The charge is non-operational in nature and is reflected as a cumulative
effect of an accounting change effective January 1, 2002. In calculating the
impairment charge, the fair value was estimated using a discounted cash flow
methodology.

    As a result of the above described fluctuations in our results of
operations, the net loss of $7.9 million in 2002 decreased by $227.2 million, as
compared to the net loss of $235.1 million in 2001.

NINE MONTHS ENDED SEPTEMBER 30, 2002 VS. SEPTEMBER 30, 2001

    Revenues decreased $8.9 million from period to period. Revenue declines from
customer losses were offset by a $1.7 million credit recognized in 2002
associated with unused coupons. Basic subscriber declines of approximately
25,000 from period to period, mitigated by rate increases in February 2001 and
June 2002, resulted in a basic revenue decline of $8.8 million. Basic revenue
per subscriber increased from $33.10 to $34.15. Premium revenue decreased $1.9
million as a result of premium subscriber declines of approximately 46,000 from
period to period. Revenue from data customers increased $1.1 million. Total
revenue per subscriber increased from $40.73 to $42.08.

    Operating expenses decreased $117.6 million, or 32%, in the nine months
ended September 30, 2002. Programming expenses decreased $2.7 million primarily
due to a decrease in subscribers, but were offset by increased rates charged by
programming vendors. In 2002, plant and operating and general and administrative
costs increased $1.7 million, or 4%. Bad debt expense decreased $4.9 million
compared to the previous year while insurance related costs increased $1.7
million. Capitalization of internal costs decreased $5.4 million as our
workforce transitioned from upgrade construction and new product launches to
increased maintenance which requires less support from administrative
departments. Corporate overhead decreased $7.9 million from period to period,
primarily due to the 2001 forgiveness of an officer's debt of $0.8 million and
2001 professional fees paid for due diligence efforts and commitments related to
our negotiations in potential financing and restructuring transactions in the
amount of $6.2 million. Depreciation and amortization expense in 2002 was $56.7
million, a decrease of $19.2 million over the same period in 2001. The decrease
is primarily due to a reduction in the carrying values of fixed assets and
intangible balances due to impairment charges taken in the third quarter of 2001
of $199.6 million and in the second quarter of 2002 of $101.1 million. The gross
balance of fixed assets and intangibles decreased from $917.5 million at
December 31, 2000 to $451.9 million at September 30, 2002. In addition, we
ceased amortization of goodwill in 2002. Amortization of goodwill in 2001 was
$4.8 million.

    During the nine months ended September 30, 2002, we incurred $8.9 million of
chapter 11 related professional fees.

    Interest expense decreased $31.5 million, or 67%, in 2002. The decrease is
primarily due to the fact that since the filing date we are not accruing or
recording interest expense on our $378.0 million senior subordinated notes.
Interest on the notes in 2001 was $28.5 million. The remainder of the change is
due to lower effective interest rates in 2002.

    Other income increased $0.9 million in 2002. This increase is primarily due
to the final purchase price adjustment associated with the sale of the
Breckenridge, Colorado system in 2001. We recorded an additional gain on the
sale of $1.3 million in 2002 and received a final cash payment of $1.2 million.

    No income tax benefit was recognized in 2002 or 2001. The effective tax
rates for 2002 and 2001 differ from the statutory rates primarily due to
increases in the valuation allowance on deferred tax assets.

    Upon adoption of FAS 142, we recorded a one-time, noncash charge of $30.2
million to reduce the carrying value of goodwill to zero. The charge is
non-operational in nature and is reflected as a cumulative effect of an
accounting change effective January 1, 2002. In calculating the impairment
charge, the fair value was estimated using a discounted cash flow methodology.

    As a result of the above described fluctuations in our results of
operations, the net loss of $174.8 million in 2002 decreased by $111.0 million,
as compared to the net loss of $285.8 million in 2001.



                                       17
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

    The cable television industry is a capital intensive business that generally
requires financing for the upgrade, expansion and maintenance of the technical
infrastructure. Historically, we have funded our working capital requirements,
capital expenditures and acquisitions through a combination of internally
generated funds, long- and short-term borrowings and equity contributions. Our
ability to generate cash to meet our future needs will depend generally on our
results of operations and the continued availability of external financing.

    For the nine months ended September 30, 2002 and 2001, cash provided by
operating activities totaled $16.1 million and $17.8 million, respectively. Cash
used for investing activities totaled $20.3 million and $56.2 million for nine
months ended September 30, 2002 and 2001, respectively. Cash provided by
financing activities was $1.7 million and $19.5 million, respectively, for the
nine months ended September 30, 2002 and 2001. Our aggregate outstanding
borrowings as of September 30, 2002 were $581.9 million, of which $203.9 million
was collateralized by our assets.

    Free cash flow for the three months ended September 30, 2002 and 2001,
before noncash charges and restructuring and financing related professional
fees, was $5.6 million and ($6.5) million, respectively. For the nine months
ended September 30, 2002 and 2001, it was $13.9 million and ($19.5) million,
respectively. Free cash flow represents earnings before interest, taxes,
depreciation and amortization, and less capital expenditures. Free cash flow is
not intended to be a performance measure that should be regarded as an
alternative to, or more meaningful than, either operating income or net income
as an indicator of operating performance or to the statement of cash flows as a
measure of liquidity; is not intended to represent funds available for debt
service, dividends, reinvestment or other discretionary uses; and should not be
considered in isolation or as a substitute for measures of performance prepared
in accordance with generally accepted accounting principles. Free cash flow is
included because our management believes that free cash flow is a meaningful
measure of performance as it is commonly used by the cable television industry
and by the investment community to analyze and compare cable television
companies. Our definition of free cash flow may not be identical to similarly
titled measures reported by other companies.

    Prior to November 2001, we were not able to generate sufficient cash flow
from operations to service our debt obligations. We were also unsuccessful in
our efforts to obtain additional financing and/or restructure our debt. As a
result, it became necessary for us to seek protection under chapter 11 of title
11 of the United States Code.

    A final order of the Court approved a secured super-priority
debtor-in-possession revolving credit agreement ("the DIP Financing") for us
with Goldman Sachs as administrative agent, lead arranger and syndication agent.
The DIP Financing is collateralized by, among other things, a senior lien on
substantially all of our assets, including assets that had previously been
subject to a lien. We and our subsidiaries, as well as CCI, have guaranteed the
obligations under the DIP Financing and CCI has pledged our outstanding stock as
well as that of our subsidiaries in connection with the DIP Financing. The DIP
Financing, as amended, expires on December 11, 2002. The DIP Financing can be
terminated if an event of default occurs and we can terminate portions of the
revolving credit commitment in certain circumstances.

    As of September 30, 2002, we have borrowed $4.0 million against the DIP
Financing. In April, May and September 2002, the DIP Financing was amended. The
amendments, in total, waived our existing defaults, reset certain financial
covenants, revised and added certain provisions related to our reorganization
efforts including eliminating the deadline to file a plan of reorganization and
extended the due date. The amendments reduced the total availability of the DIP
Financing from $30 million to $25 million. At September 30, 2002, there were
$3.7 million of outstanding letters of credit leaving $17.3 million available
for borrowing, subject to certain conditions.

    The DIP Financing and the senior credit facility are collateralized by
substantially all of our assets. All of our debt is fully and unconditionally
guaranteed by our wholly owned direct and indirect subsidiaries on a joint and
several basis. The terms of the DIP Financing and the senior credit facility
restrict certain of our activities, including the incurrence of additional
indebtedness, limits on asset sales, investments, affiliate transactions and the
payment of certain dividends.

    We believe, based on information presently available to us, that cash
available from operations and the DIP Financing will provide sufficient
liquidity to allow us to continue as a going concern for the foreseeable



                                       18
<PAGE>

future. However, our ability to continue as a going concern (including our
ability to meet post-petition obligations) and the appropriateness of using the
going concern basis for our financial statements are dependent upon, among other
things, (i) our ability to comply with the terms of the DIP Financing and any
cash management order entered by the Court in connection with the chapter 11
cases, (ii) our ability to negotiate an extension of the due date of the
debtor-in-possession financing until confirmation of a plan or, conversely,
finance the outstanding borrowings if the debtor-in-possession financing were to
become due and payable, (iii) our ability to maintain adequate cash on hand,
(iv) our ability to generate cash from operations, (v) confirmation of a plan or
plans of reorganization under the Bankruptcy Code and (vi) our ability to
achieve profitability following consummation of a plan of reorganization.

    We have substantial ongoing capital expenditure requirements. We make
capital expenditures primarily to upgrade, rebuild and expand our cable systems
for the development of new products and services, and deployment of digital
converters and cable modems. Upgrading our cable systems will enable us to offer
an increasing variety of advanced products and services, including digital
television, cable modem high-speed Internet access, video-on-demand, interactive
services, additional channels and tiers and expanded pay- per-view options to a
larger customer base.

    Capital expenditures and net inventory purchases for the nine months ended
September 30, 2002 and 2001 were approximately $21.5 million and $56.6 million,
respectively. Our ability to invest in our cable systems is dependent on the
availability of capital to fund such investments. We expect to spend
approximately $33.8 million in 2002 on various capital projects.

    Capital expenditures consisted of the following as of September 30, 2002 and
2001 (in thousands):

<Table>
<Caption>
                                         NINE MONTHS ENDED SEPTEMBER 30
                                       ---------------------------------
                                            2002                2001
                                       -------------        ------------
<S>                                    <C>                  <C>
Internal labor and overhead            $       9,349        $     14,703
External costs                                11,112              34,873
                                       -------------        ------------
                                       $      20,461        $     49,576
                                       =============        ============
</Table>

    The following table presents capitalized internal labor and overhead,
categorized by installation activity, construction projects and other activities
for the nine months ended September 30, 2002 and 2001 (in thousands):

<Table>
<Caption>
                                                                                        TOTAL CAPITALIZED
                                            CAPITALIZED                                     LABOR AND
                                          INSTALLATION(1)   CONSTRUCTION(2)    OTHER        OVERHEAD
                                          ---------------   ---------------  ---------  -----------------
<S>                                         <C>             <C>              <C>          <C>
Nine Months Ended September 30, 2002
Direct Labor(a)                             $    1,956      $     3,129      $     131    $     5,216
Overhead(b)                                      2,437            1,677             19          4,133
                                            ----------      -----------      ---------    -----------
                                            $    4,393      $     4,806      $     150    $     9,349
                                            ==========      ===========      =========    ===========
Nine Months Ended September 30, 2001
Direct Labor(a)                             $    2,707      $     3,441      $     510    $     6,658
Overhead(b)                                      4,737            3,308             --          8,045
                                            ----------      -----------      ---------    -----------
                                            $    7,444      $     6,749      $     510    $    14,703
                                            ==========      ===========      =========    ===========
</Table>

(1)  Includes costs for initial customer installation that are capitalized in
     accordance with SFAS No. 51, Financial Reporting by Cable Television
     Companies, paragraph 12: "Initial subscriber installation costs, including
     material, labor, and overhead costs of the drop, shall be capitalized."

     (a)  Costs include wages of in-house installer and installer's supervisor.

     (b)  Indirect costs include benefits/payroll taxes, vehicle costs,
          warehouse expenses and customer service representatives, among others.

(2)  Includes costs capitalized to upgrade/rebuild existing plant, build new
     plant (line extensions), software and infrastructure modifications.



                                       19
<PAGE>
    RECENTLY ISSUED ACCOUNTING STANDARDS. In May 2002, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 145 ("FAS 145"), Rescission of FASB
Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13, and Technical
Corrections. FAS 145 eliminates the requirement under SFAS No. 4, Reporting
Gains and Losses from Extinguishment of Debt, to report gains and losses from
extinguishments of debt as extraordinary items in the income statement.
Accordingly, gains or losses from extinguishments of debt for fiscal years
beginning after May 15, 2002 shall not be reported as extraordinary items unless
the extinguishment qualifies as an extraordinary item under the provisions of
APB Opinion No. 30 ("Opinion 30"), Reporting the Results of Operations Reporting
the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions. Upon adoption of this
pronouncement, any gain or loss on extinguishment of debt previously classified
as an extraordinary item in prior periods presented that does not meet the
criteria of Opinion 30 for such classification should be reclassified to conform
with the provisions of FAS 145. Accordingly, upon adoption of this
pronouncement, we expect to reclassify a loss from early extinguishment of debt
of $5.5 million, net of tax, recorded during 2000 to results from continuing
operations.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The use of interest rate risk management instruments, such as interest rate
exchange agreements ("Swaps"), interest rate cap agreements ("Caps") and
interest rate collar agreements ("Collars"), may be required under the terms of
certain of our outstanding debt agreements. Our policy is to manage interest
costs using a mix of fixed and variable rate debt. Using Swaps, we agree to
exchange, at specified intervals, the difference between fixed and variable
interest amounts calculated by reference to an agreed-upon notional principal
amount. Caps are used to lock in a maximum interest rate should variable rates
rise, but enable us to otherwise pay lower market rates. Collars limit our
exposure to and benefits from interest rate fluctuations on variable rate debt
to within a certain range of rates.

    As of September 30, 2002, no such instruments were outstanding.

    Virtually any potential loss associated with interest rate risk is
attributable to fixed-rate long-term debt instruments. As of September 30, 2002,
all fixed-rate long-term debt is subject to compromise.

    While Swaps, Caps and Collars may represent an integral part of our interest
rate risk management program, their incremental effect on interest expense for
the three and nine months ended September 30, 2002 and 2001 was not significant.

ITEM 4 - CONTROLS AND PROCEDURES

    Within the 90 days prior to the date of this report, under the supervision
and with the participation of management, including our chief executive officer
and our chief financial officer, we have evaluated the effectiveness of the
design and operation of our disclosure controls and procedures pursuant to
Exchange Act Rule 13a-14. Based upon that evaluation, our chief executive
officer and our chief financial officer have concluded that our disclosure
controls and procedures are effective in timely alerting them to material
information relating to us (including our consolidated subsidiaries) required to
be included in our periodic SEC filings. There have been no significant changes
in our internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their evaluation.




                                       20
<PAGE>
    PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

    On November 13, 2001, we, CCI and our subsidiaries filed voluntary petitions
under chapter 11 of title 11 of the United States Code in the United States
Bankruptcy Court for the District of Delaware (the "Court"). We and our
subsidiaries remain in possession of our assets and properties and continue to
operate our businesses and manage our properties as debtors-in-possession
pursuant to the provisions of the Bankruptcy Code.

    The chapter 11 cases are being jointly administered under Case No. 01-11257.
We anticipate that substantially all of our liabilities as of the date of the
filing will be resolved under one or more chapter 11 plans of reorganization to
be proposed and voted on in the chapter 11 cases in accordance with the
provisions of the Bankruptcy Code. As a consequence of the bankruptcy filing,
essentially all pending litigation against us is stayed automatically by section
362 of the Bankruptcy Code and, absent further order of the Court, no party may
take any action to recover on pre-petition claims against us. Please see Note 2.

    On December 13, 2001, the Court entered a final order approving our
post-petition DIP Financing with certain of our pre-petition senior lenders. The
DIP Financing was arranged by Goldman Sachs Credit Partners LP as administrative
agent under Section 364 of the Bankruptcy Code.

    In addition to the post-petition financing motion, we obtained Court
authority to (1) pay certain "critical vendors and service providers" in an
amount up to approximately $8 million, (2) continue use of our existing cash
management system, (3) pay certain pre-petition compensation and benefits to our
employees, (4) address adequate assurance demands made by utilities and (5)
continue certain customer practices designed to maintain and attract customers.

    On March 13, 2002, we filed a motion asking the Court to extend the time in
which we had an exclusive right to file a plan of reorganization to May 13, 2002
and to extend the exclusive period within which we could solicit acceptances of
any such plan of reorganization through July 9, 2002. This motion was approved
by the Court on April 15, 2002. In addition, on April 15, 2002, the Court
entered an order approving the amendment to our DIP Financing.

    We later filed a motion asking the Court to extend the time in which we have
an exclusive right to file a plan of reorganization from May 13, 2002 to July
15, 2002 and the exclusive period within which we could solicit acceptances of
any such plan from July 9, 2002 to September 16, 2002. This motion was not
approved by the Court and, as a result, we no longer have the exclusive right to
file a plan of reorganization.

    On August 14, 2002, the official committee of unsecured creditors (the
"Committee") filed a proposed plan of reorganization and related disclosure
statement with the Court. On September 13, 2002, our secured lenders filed their
own proposed plan of reorganization and related disclosure statement. Following
several amendments to these plans and negotiations between the Committee and our
secured lenders, the Committee and the secured lenders filed a proposed joint
plan of reorganization and related disclosure statement with the Court on
October 30, 2002.

    The Court conducted a hearing on November 8, 2002, to consider the proposed
disclosure statement. The Court entered an order approving the disclosure
statement on November 12, 2002, and the Committee and the secured lenders are
expected to begin distributing the disclosure statement on or about November 15,
2002 to solicit approvals from affected parties. The Court has set a hearing for
December 10, 2002 to consider confirmation of the joint plan of reorganization.
In the event the Committee and the secured lenders are not able to complete all
of the documentation for the proposed supplement to the joint plan of
reorganization by November 20, 2002, the Court will adjourn the confirmation
hearing until December 17, 2002. Due to the fact many of the circumstances
surrounding the proposed joint plan of reorganization are not within our
control, we can provide no assurance as to if or when the joint plan of
reorganization will be confirmed by the Court and consummated.



                                       21
<PAGE>
    On January 14, 2002, we filed a complaint against EchoStar Communications
Corporation (d/b/a Dish Network) with the Court. In the complaint, we asserted
EchoStar violated the automatic stay provisions of the Bankruptcy Code,
tortously interfered with our contractual and business relationships with our
subscribers, published injurious falsehoods and defamed us by slander and
competed unfairly. The complaint alleges EchoStar made false and intentionally
misleading statements regarding our business to our subscribers to induce our
subscribers to do business with EchoStar. On January 16, 2002, the Court issued
a temporary restraining order restraining and enjoining EchoStar from making
knowingly false or intentionally misleading statements to any existing or
potential subscribers of our cable service. We subsequently withdrew our motion
for a preliminary injunction and we are now proceeding with pre-trial discovery.
EchoStar has filed a motion to dismiss based on lack of subject matter
jurisdiction.

    In addition to the chapter 11 cases, we are involved in various claims and
lawsuits incidental to our business. Prosecution of certain of these actions may
be stayed by our chapter 11 filing. The outcome of such suits, however, is not
expected to have a material adverse effect on our financial position or results
of operations.

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

    None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

    As of September 30, 2002, we were in default under the senior credit
agreement and our senior subordinated notes.

    See notes 2 and 8 to the consolidated financial statements in Part 1 of this
Form 10-Q and "Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations" for additional information regarding these
defaults. Such information is incorporated herein by reference.

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

    None

ITEM 5 - OTHER INFORMATION

    None


                                       22
<PAGE>
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         Exhibit Number     Exhibit

         10.1*              Amendment No. Five dated as of September 30, 2002,
                            to the Company's Secured Super Priority Debtor In
                            Possession Revolving Credit Agreement.

         99.1*              Certification pursuant to 18 U.S.C. Section 1350,
                            as adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002 (Chief Executive Officer)

         99.2*              Certification pursuant to 18 U.S.C. Section 1350,
                            as adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002 (Chief Financial Officer)

* Filed herewith.

(b)      Reports on Form 8-K

         (1)      On August 16, 2002, we filed a Form 8-K announcing we issued a
                  press release stating the Official Committee of Unsecured
                  Creditors had filed a proposed plan of reorganization and
                  related disclosure statement on August 14, 2002, with the
                  United States Bankruptcy Court for the District of Delaware.




                                       23
<PAGE>
SIGNATURES

    Pursuant to the requirements 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.


                                          CLASSIC CABLE, INC.


Date: November 14, 2002                   /s/ JIMMIE TAYLOR
                                          --------------------------------------
                                          Jimmie Taylor
                                          Chief Financial Officer



                                       24
<PAGE>
                    CERTIFICATION BY CHIEF EXECUTIVE OFFICER

I, Dale Bennett, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of the Registrant;

(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this quarterly report;

(4) The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

         (a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

         (b) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

         (c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

(5) The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit committee
of the Registrant's board of directors (or persons performing the equivalent
function):

         (a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to record,
process, summarize and report financial data and have identified for the
Registrant's auditors any material weaknesses in internal controls; and

         (b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's internal
controls; and

(6) The Registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                           /s/ Dale Bennett
                                           -------------------------------------
                                           Dale Bennett
                                           Chief Operating Officer and President
                                           November 14, 2002


<PAGE>


                    CERTIFICATION BY CHIEF FINANCIAL OFFICER

I, Jimmie Taylor, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of the Registrant;

(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this quarterly report;

(4) The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

         (a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

         (b) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

         (c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

(5) The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit committee
of the Registrant's board of directors (or persons performing the equivalent
function):

         (a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to record,
process, summarize and report financial data and have identified for the
Registrant's auditors any material weaknesses in internal controls; and

         (b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's internal
controls; and

(6) The Registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                                     /s/ Jimmie Taylor
                                                     ---------------------------
                                                     Jimmie Taylor
                                                     Chief Financial Officer
                                                     November 14, 2002


<PAGE>


                                INDEX TO EXHIBITS

<Table>
<Caption>
Exhibit Number      Exhibit
--------------      -------
<S>                 <C>
         10.1*      Amendment No. Five dated as of September 30, 2002, to the Company's
                    Secured Super Priority Debtor In Possession Revolving Credit Agreement.

         99.1*      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)

         99.2*      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)
</Table>

* Filed herewith.