##### Table of Contents



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

FORM 10-Q

|           |  |                                                                                                                                                     
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                                                                     
|[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           
|           |  |                                                                                                                                                     
|[ ]        |  | 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 1-6590

COX COMMUNICATIONS LOGO

Cox Communications, Inc.(Exact name of registrant as specified in its charter)

|                                                                                |  |                                               
|------------------------------------------------------------------------------- |  | ----------------------------------------------
|Delaware(State or other jurisdiction of incorporation or organization)          |  | 58-2112281(I.R.S. Employer Identification No.)
|                                                                                |  |                                               
|1400 Lake Hearn Drive, Atlanta, Georgia(Address of principal executive offices) |  | 30319(Zip Code)                               

Registrants telephone number, including area code: (404) 843-5000



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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.    
Yes  x      No  o



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There were 592,526,822 shares of Class A Common Stock and 27,597,792
shares of Class C Common Stock outstanding as of October 31, 2002.





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TABLE OF CONTENTS



|                                                                                                        |                                                                                                |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|Part I  Financial Information                                                                         
|                                                                                                        | Item 1. Condensed Consolidated Financial Statements                                           
|                                                                                                        | Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                                                                        | Item 3.  Quantitative and Qualitative Disclosures About Market Risk                           
|                                                                                                        | Item 4.  Disclosure Controls and Procedures                                                   
|Part II  Other Information                                                                            
|                                                                                                        | Item 1.  Legal Proceedings                                                                    
|                                                                                                        | Item 6.  Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                                                                             
|CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934
|CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934
|EX-10.1 JOINDER AGREEMENT AND ACKNOWLEDGEMENT                                                          
|EX-99.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER                                                       
|EX-99.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER                                                       



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##### Table of Contents



Cox Communications, Inc.
Form 10-Q
For the Quarter Ended September 30, 2002

Table of Contents

|                                                                                                           |  |  |  |     
|---------------------------------------------------------------------------------------------------------- |  |  |  | ----
|                                                                                                           |  |  |  | Page
|                                                                                                           |  |  |  |     
|Part I  Financial Information                                                                             |  |  |  |     
|Item 1. Condensed Consolidated Financial Statements                                                        |  |  |  | 2   
|Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations              |  |  |  | 20  
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                         |  |  |  | 26  
|Item 4. Disclosure Controls and Procedures                                                                 |  |  |  | 27  
|Part II  Other Information                                                                                |  |  |  |     
|Item 1. Legal Proceedings                                                                                  |  |  |  | 27  
|Item 6. Exhibits and Reports on Form 8-K                                                                   |  |  |  | 28  
|Signatures                                                                                                 |  |  |  | 30  
|Certification of Chief Executive Officer Pursuant to Rule 13a-14 of the Securities and ExchangeAct of 1934 |  |  |  | 31  
|Certification of Chief Financial Officer Pursuant to Rule 13a-14 of the Securities and ExchangeAct of 1934 |  |  |  | 32  





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##### Table of Contents






Part I  Financial Information




Item 1.  Condensed Consolidated Financial Statements

Cox Communications, Inc.
Condensed Consolidated Balance Sheets

|                                                                                           |                                                                                                                                                                                              |                                            |            |                        |            |             |            |           |            | 
|------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------- | ---------------------- | ---------- | ----------- | ---------- | --------- | ---------- | 
|                                                                                           |                                                                                                                                                                                              |                                            |            | September 30           |            | December 31
|                                                                                           |                                                                                                                                                                                              |                                            |            | 2002                   |            | 2001       
|                                                                                           |                                                                                                                                                                                              |                                            |            |                        |            |            
|                                                                                           |                                                                                                                                                                                              |                                            |            | (unaudited)           
|                                                                                           |                                                                                                                                                                                              |                                            |            | (Thousands of Dollars)
|Assets                                                                                     |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|Cash                                                                                       |                                                                                                                                                                                              | $                                          | 606,960    |                        |            | $           | 86,860     |          
|Accounts and notes receivable, less allowance for doubtful
accounts of $35,294 and $33,514 |                                                                                                                                                                                              |                                            | 348,393    |                        |            |             | 421,111    |          
|Net plant and equipment                                                                    |                                                                                                                                                                                              |                                            | 7,656,831  |                        |            |             | 7,127,908  |          
|Investments                                                                                |                                                                                                                                                                                              |                                            | 205,152    |                        |            |             | 3,515,233  |          
|Intangible assets                                                                          |                                                                                                                                                                                              |                                            | 13,513,445 |                        |            |             | 13,510,894 |          
|Amounts due from Cox Enterprises, Inc. (CEI)                                               |                                                                                                                                                                                              |                                            | 20,152     |                        |            |             | 13,245     |          
|Other assets                                                                               |                                                                                                                                                                                              |                                            | 429,568    |                        |            |             | 386,185    |          
|                                                                                           |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|                                                                                           |                                                                                                                                                                                              | Total assets                               |            | $                      | 22,780,501 |             |            | $         | 25,061,436 | 
|                                                                                           |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|Liabilities and shareholders equity                                                       |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|Accounts payable and accrued expenses                                                      |                                                                                                                                                                                              | $                                          | 631,978    |                        |            | $           | 674,426    |          
|Deferred income taxes                                                                      |                                                                                                                                                                                              |                                            | 4,249,890  |                        |            |             | 4,538,288  |          
|Other liabilities                                                                          |                                                                                                                                                                                              |                                            | 380,658    |                        |            |             | 470,397    |          
|Debt                                                                                       |                                                                                                                                                                                              |                                            | 7,967,327  |                        |            |             | 8,417,675  |          
|                                                                                           |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|                                                                                           |                                                                                                                                                                                              | Total liabilities                          |            |                        | 13,229,853 |             |            |           | 14,100,786 | 
|                                                                                           |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|Commitments and contingencies (Note 11)                                                    |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|Minority interest in equity of consolidated subsidiaries                                   |                                                                                                                                                                                              |                                            | 132,286    |                        |            |             | 129,121    |          
|Cox-obligated capital and preferred securities of subsidiary trusts                        |                                                                                                                                                                                              |                                            |           |                        |            |             | 1,155,738  |          
|Shareholders equity                                                                       |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|                                                                                           | Series A convertible preferred stock  liquidation preference of $22.1375
per share, $1 par value; 10,000,000 shares of preferred stock
authorized; shares issued and outstanding: 4,836,372 |                                            |            | 4,836                  |            |             |            | 4,836     |           
|                                                                                           | Class A common stock, $1 par value; 671,000,000 shares
authorized; shares issued: 598,030,841 and 578,493,107; shares
outstanding: 592,521,704 and 572,994,707                               |                                            |            | 598,031                |            |             |            | 578,493   |           
|                                                                                           | Class C common stock, $1 par value; 62,000,000 shares
authorized; shares issued and outstanding: 27,597,792                                                                                  |                                            |            | 27,598                 |            |             |            | 27,598    |           
|                                                                                           | Additional paid-in capital                                                                                                                                                                   |                                            |            | 4,546,763              |            |             |            | 3,891,157 |           
|                                                                                           | Retained earnings                                                                                                                                                                            |                                            |            | 4,458,779              |            |             |            | 4,912,461 |           
|                                                                                           | Accumulated other comprehensive income (loss)                                                                                                                                                |                                            |            | (5,308                 | )          |             |            | 473,135   |           
|                                                                                           | Class A common stock in treasury, at cost: 5,509,137 and 5,498,400
shares                                                                                                                    |                                            |            | (212,337               | )          |             |            | (211,889  | )         
|                                                                                           |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|                                                                                           |                                                                                                                                                                                              | Total shareholders equity                 |            |                        | 9,418,362  |             |            |           | 9,675,791  | 
|                                                                                           |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          
|                                                                                           |                                                                                                                                                                                              | Total liabilities and shareholders equity |            | $                      | 22,780,501 |             |            | $         | 25,061,436 | 
|                                                                                           |                                                                                                                                                                                              |                                            |            |                        |            |             |            |          

See notes to condensed consolidated financial statements.

2



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##### Table of Contents



Cox Communications, Inc.
Condensed Consolidated Statements of Operations

|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |           | 
|------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------ | - | -------------------------------------------- | ------- | ------------------ | - | ----------- | ------- | ---- | - | ----------- | --------- | - | - | ----------- | --------- | 
|                                                                                                             |                                                                          |   | Three Months                                 |         | Nine Months       
|                                                                                                             |                                                                          |   | Ended September 30                           |         | Ended September 30
|                                                                                                             |                                                                          |   |                                              |         |                   
|                                                                                                             |                                                                          |   | 2002                                         |         | 2001               |   | 2002        |         | 2001
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |     
|                                                                                                             |                                                                          |   | (unaudited)                                 
|                                                                                                             |                                                                          |   | (Thousands of Dollars, excluding share data)
|Revenues                                                                                                     |                                                                          | $ | 1,275,049                                    |         |                    | $ | 1,079,522   |         |      | $ | 3,697,720   |           |   | $ | 3,118,987   |          
|Costs and expenses                                                                                           |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|                                                                                                             | Programming costs                                                        |   |                                              | 266,426 |                    |   |             | 239,875 |      |   |             | 800,502   |   |   |             | 714,086   | 
|                                                                                                             | Selling, general and administrative                                      |   |                                              | 555,180 |                    |   |             | 443,388 |      |   |             | 1,609,835 |   |   |             | 1,268,396 | 
|                                                                                                             | Depreciation and amortization                                            |   |                                              | 343,054 |                    |   |             | 368,629 |      |   |             | 1,006,574 |   |   |             | 1,076,616 | 
|                                                                                                             | Loss on sale of cable systems                                            |   |                                              |        |                    |   |             |        |      |   |             | 3,916     |   |   |             |          | 
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Operating income                                                                                             |                                                                          |   | 110,389                                      |         |                    |   | 27,630      |         |      |   | 276,893     |           |   |   | 59,889      |          
|Interest expense                                                                                             |                                                                          |   | (141,836                                     | )       |                    |   | (136,347    | )       |      |   | (397,820    | )         |   |   | (433,358    | )        
|Gain (loss) on derivative instruments, net                                                                   |                                                                          |   | 102,738                                      |         |                    |   | (90,312     | )       |      |   | 870,361     |           |   |   | (347,890    | )        
|Gain (loss) on investments, net                                                                              |                                                                          |   | (157,910                                     | )       |                    |   | 469,556     |         |      |   | (1,383,260  | )         |   |   | 1,067,568   |          
|Other, net                                                                                                   |                                                                          |   | (104                                         | )       |                    |   | (1,694      | )       |      |   | 906         |           |   |   | (3,622      | )        
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Income (loss) before income taxes, minority
interest and cumulative effect of change
in accounting principle |                                                                          |   | (86,723                                      | )       |                    |   | 268,833     |         |      |   | (632,920    | )         |   |   | 342,587     |          
|Income tax expense (benefit)                                                                                 |                                                                          |   | (26,174                                      | )       |                    |   | 111,849     |         |      |   | (215,382    | )         |   |   | 154,325     |          
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Income (loss) before minority interest and
cumulative effect of change in accounting
principle               |                                                                          |   | (60,549                                      | )       |                    |   | 156,984     |         |      |   | (417,538    | )         |   |   | 188,262     |          
|Minority interest, net of tax                                                                                |                                                                          |   | (12,511                                      | )       |                    |   | (14,021     | )       |      |   | (36,144     | )         |   |   | (45,114     | )        
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Income (loss) before cumulative effect of
change in accounting principle                                     |                                                                          |   | (73,060                                      | )       |                    |   | 142,963     |         |      |   | (453,682    | )         |   |   | 143,148     |          
|Cumulative effect of change in accounting
principle, net of tax                                              |                                                                          |   |                                             |         |                    |   |            |         |      |   |            |           |   |   | 717,090     |          
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Net income (loss)                                                                                            |                                                                          | $ | (73,060                                      | )       |                    | $ | 142,963     |         |      | $ | (453,682    | )         |   | $ | 860,238     |          
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Share data                                                                                                   |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Basic net income (loss) per share                                                                            |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Basic weighted-average shares outstanding                                                                    |                                                                          |   | 610,741,238                                  |         |                    |   | 600,438,748 |         |      |   | 604,298,850 |           |   |   | 600,295,473 |          
|                                                                                                             | Income (loss) before cumulative effect of change
in accounting principle |   | $                                            | (0.12   | )                  |   | $           | 0.24    |      |   | $           | (0.75     | ) |   | $           | 0.24      | 
|                                                                                                             | Cumulative effect of change in accounting principle                      |   |                                              |        |                    |   |             |        |      |   |             |          |   |   |             | 1.19      | 
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Basic net income (loss) per share                                                                            |                                                                          | $ | (0.12                                        | )       |                    | $ | 0.24        |         |      | $ | (0.75       | )         |   | $ | 1.43        |          
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Diluted net income (loss) per share                                                                          |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Diluted weighted-average shares outstanding                                                                  |                                                                          |   | 610,741,238                                  |         |                    |   | 608,531,263 |         |      |   | 604,298,850 |           |   |   | 609,042,181 |          
|                                                                                                             | Income (loss) before cumulative effect of change
in accounting principle |   | $                                            | (0.12   | )                  |   | $           | 0.23    |      |   | $           | (0.75     | ) |   | $           | 0.23      | 
|                                                                                                             | Cumulative effect of change in accounting principle                      |   |                                              |        |                    |   |             |        |      |   |             |          |   |   |             | 1.18      | 
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          
|Diluted net income (loss) per share                                                                          |                                                                          | $ | (0.12                                        | )       |                    | $ | 0.23        |         |      | $ | (0.75       | )         |   | $ | 1.41        |          
|                                                                                                             |                                                                          |   |                                              |         |                    |   |             |         |      |   |             |           |   |   |             |          

See notes to condensed consolidated financial statements.

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##### Table of Contents



Cox Communications, Inc.
Condensed Consolidated Statement of Shareholders Equity

|                   |                                                                                                          |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   |             |          |        |   |          |      |   |   |           |          |   |  |   |          |  
|------------------ | -------------------------------------------------------------------------------------------------------- | - | ---------------------- |  | ------------ | - | ---------- | ------ | -------- | - | ------------- |  | ------------- | - | --------- | ------- | ----- | - | ------------- | -------- | - | - | ----------- | -------- | ------ | - | -------- | ---- | - | - | --------- | -------- | - |  | - | -------- | -
|                   |                                                                                                          |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   |             |          |        |   | Class A  |      |   |   |           |          |   |  |  
|                   |                                                                                                          |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   | Accumulated |          | Common |   |          |      |   |   |           |          |  
|                   |                                                                                                          |   | Series A               |  | Common Stock |   | Additional |        |          |   |               |  | Other         |   | Stock in  |         |       |   |               |          |   |   |            
|                   |                                                                                                          |   | Preferred              |  |              |   | Paid-in    |        | Retained |   | Comprehensive |  | Treasury,     |   |           |         |       |   | Comprehensive
|                   |                                                                                                          |   | Stock                  |  | Class A      |   | Class C    |        | Capital  |   | Earnings      |  | Income (Loss) |   | at Cost   |         | Total |   | Loss         
|                   |                                                                                                          |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |              
|                   |                                                                                                          |   | (unaudited)           
|                   |                                                                                                          |   | (Thousands of Dollars)
|December 31, 2001  |                                                                                                          | $ | 4,836                  |  |              | $ | 578,493    |        |          | $ | 27,598        |  |               | $ | 3,891,157 |         |       | $ | 4,912,461     |          |   | $ | 473,135     |          |        | $ | (211,889 | )    |   | $ | 9,675,791 |          |   |  |   |         
|                   | Net loss                                                                                                 |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               | (453,682 | ) |   |             |          |        |   |          |      |   |   |           | (453,682 | ) |  | $ | (453,682 | )
|                   |                                                                                                          |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   |             |          |        |   |          |      |   |   |           |          |   |  |   |         
|                   | Issuance of stock related to
stock compensation plans (including tax
benefit on stock options exercised) |   |                        |  |              |   |            | 800    |          |   |               |  |               |   |           | 24,345  |       |   |               |          |   |   |             |          |        |   |          |      |   |   |           | 25,145   |   |  |   |          |  
|                   | Issuance of stock for settlement of
FELINE PRIDES                                                        |   |                        |  |              |   |            | 18,738 |          |   |               |  |               |   |           | 631,261 |       |   |               |          |   |   |             |          |        |   |          |      |   |   |           | 649,999  |   |  |   |          |  
|                   | Shares surrendered in connection
with vesting of restricted stock                                        |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   |             |          |        |   |          | (448 | ) |   |           | (448     | ) |  |   |          |  
|                   | Other comprehensive loss                                                                                 |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   |             | (478,443 | )      |   |          |      |   |   |           | (478,443 | ) |  |   | (478,443 | )
|                   |                                                                                                          |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   |             |          |        |   |          |      |   |   |           |          |   |  |   |         
|                   | Comprehensive loss                                                                                       |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   |             |          |        |   |          |      |   |   |           |          |   |  | $ | (932,125 | )
|                   |                                                                                                          |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   |             |          |        |   |          |      |   |   |           |          |   |  |   |         
|September 30, 2002 |                                                                                                          | $ | 4,836                  |  |              | $ | 598,031    |        |          | $ | 27,598        |  |               | $ | 4,546,763 |         |       | $ | 4,458,779     |          |   | $ | (5,308      | )        |        | $ | (212,337 | )    |   | $ | 9,418,362 |          |   |  |   |         
|                   |                                                                                                          |   |                        |  |              |   |            |        |          |   |               |  |               |   |           |         |       |   |               |          |   |   |             |          |        |   |          |      |   |   |           |          |   |  |   |         

See notes to condensed consolidated financial statements.

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##### Table of Contents



Cox Communications, Inc.
Condensed Consolidated Statements of Cash Flows

|                                                                                         |                                                                 |                                           |            |                        |           |      |            |            |          |  
|---------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ----------------------------------------- | ---------- | ---------------------- | --------- | ---- | ---------- | ---------- | -------- | -
|                                                                                         |                                                                 |                                           |            | Nine Months           
|                                                                                         |                                                                 |                                           |            | Ended September 30    
|                                                                                         |                                                                 |                                           |            |                       
|                                                                                         |                                                                 |                                           |            | 2002                   |           | 2001
|                                                                                         |                                                                 |                                           |            |                        |           |     
|                                                                                         |                                                                 |                                           |            | (unaudited)           
|                                                                                         |                                                                 |                                           |            | (Thousands of Dollars)
|Cash flows from operating activities                                                     |                                                                 |                                           |            |                        |           |      |            |           
|Net income (loss)                                                                        |                                                                 | $                                         | (453,682   | )                      |           | $    | 860,238    |           
|Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |                                                                 |                                           |            |                        |           |      |            |           
|                                                                                         | Depreciation and amortization                                   |                                           |            | 1,006,574              |           |      |            | 1,076,616  |         
|                                                                                         | Loss on sale of cable systems                                   |                                           |            | 3,916                  |           |      |            |           |         
|                                                                                         | (Gain) loss on derivative instruments, net                      |                                           |            | (870,361               | )         |      |            | 347,890    |         
|                                                                                         | Deferred income taxes                                           |                                           |            | 11,362                 |           |      |            | (421,736   | )       
|                                                                                         | (Gain) loss on investments, net                                 |                                           |            | 1,383,260              |           |      |            | (1,067,568 | )       
|                                                                                         | Minority interest, net of tax                                   |                                           |            | 36,144                 |           |      |            | 45,114     |         
|                                                                                         | Cumulative effect of change in accounting principle, net of tax |                                           |            |                       |           |      |            | (717,090   | )       
|Decrease in accounts and notes receivable                                                |                                                                 |                                           | 57,146     |                        |           |      | 587        |           
|(Increase) decrease in other assets                                                      |                                                                 |                                           | 52,532     |                        |           |      | (72,974    | )         
|Decrease in accounts payable and accrued expenses                                        |                                                                 |                                           | (10,113    | )                      |           |      | (53,379    | )         
|Increase (decrease) in taxes payable                                                     |                                                                 |                                           | (99,901    | )                      |           |      | 855,824    |           
|Other, net                                                                               |                                                                 |                                           | 69,545     |                        |           |      | 53,237     |           
|                                                                                         |                                                                 |                                           |            |                        |           |      |            |           
|                                                                                         |                                                                 | Net cash provided by operating activities |            |                        | 1,186,422 |      |            |            | 906,759  |  
|                                                                                         |                                                                 |                                           |            |                        |           |      |            |           
|Cash flows from investing activities                                                     |                                                                 |                                           |            |                        |           |      |            |           
|Capital expenditures                                                                     |                                                                 |                                           | (1,431,644 | )                      |           |      | (1,600,531 | )         
|Proceeds from the sale of investments                                                    |                                                                 |                                           | 1,344,770  |                        |           |      | 1,135,410  |           
|Investments in and returns from affiliated companies, net                                |                                                                 |                                           | 2,065      |                        |           |      | (24,341    | )         
|(Increase) decrease in amounts due from CEI, net                                         |                                                                 |                                           | (6,907     | )                      |           |      | 5,808      |           
|Proceeds (payments) from the sale of cable systems                                       |                                                                 |                                           | 12,574     |                        |           |      | (1,495     | )         
|Other, net                                                                               |                                                                 |                                           | (11,778    | )                      |           |      | 14,789     |           
|                                                                                         |                                                                 |                                           |            |                        |           |      |            |           
|                                                                                         |                                                                 | Net cash used in investing activities     |            |                        | (90,920   | )    |            |            | (470,360 | )
|                                                                                         |                                                                 |                                           |            |                        |           |      |            |           
|Cash flows from financing activities                                                     |                                                                 |                                           |            |                        |           |      |            |           
|Commercial paper repayments, net                                                         |                                                                 |                                           | (727,384   | )                      |           |      | (1,485,807 | )         
|Proceeds from issuance of debt, net of debt issuance costs                               |                                                                 |                                           | 985,890    |                        |           |      | 1,406,979  |           
|Repayment of debt                                                                        |                                                                 |                                           | (284,824   | )                      |           |      | (342,197   | )         
|Redemption of preferred securities of subsidiary trust                                   |                                                                 |                                           | (502,610   | )                      |           |      |           |           
|Proceeds from exercise of stock options                                                  |                                                                 |                                           | 23,764     |                        |           |      | 8,954      |           
|Decrease in book overdrafts                                                              |                                                                 |                                           | (22,474    | )                      |           |      | (8,250     | )         
|Increase in amounts due to CEI, net                                                      |                                                                 |                                           |           |                        |           |      | 32,871     |           
|Distributions paid on capital and preferred securities of
subsidiary trusts              |                                                                 |                                           | (47,764    | )                      |           |      | (58,769    | )         
|Other, net                                                                               |                                                                 |                                           |           |                        |           |      | 23,970     |           
|                                                                                         |                                                                 |                                           |            |                        |           |      |            |           
|                                                                                         |                                                                 | Net cash used in financing activities     |            |                        | (575,402  | )    |            |            | (422,249 | )
|                                                                                         |                                                                 |                                           |            |                        |           |      |            |           
|Net increase in cash                                                                     |                                                                 |                                           | 520,100    |                        |           |      | 14,150     |           
|Cash at beginning of period                                                              |                                                                 |                                           | 86,860     |                        |           |      | 78,442     |           
|                                                                                         |                                                                 |                                           |            |                        |           |      |            |           
|Cash at end of period                                                                    |                                                                 | $                                         | 606,960    |                        |           | $    | 92,592     |           
|                                                                                         |                                                                 |                                           |            |                        |           |      |            |           

See notes to condensed consolidated financial statements.

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##### Table of Contents



Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

Quarter Ended September 30, 2002

1. Basis of Presentation and Other Information

The accompanying unaudited condensed consolidated financial statements of
Cox Communications, Inc. (Cox), a 63.4% majority-owned subsidiary of Cox
Enterprises, Inc. (CEI), have been prepared in accordance with accounting
principles generally accepted in the United States of America (GAAP) 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 footnote disclosures required by GAAP for complete financial
statements. In the opinion of management, the condensed consolidated financial
statements reflect all adjustments considered necessary for a fair statement of
the consolidated results of operations and financial position for the interim
periods presented. All such adjustments are of a normal recurring nature. These
unaudited interim condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes
thereto contained in Coxs Annual Report on Form 10-K for the year ended
December 31, 2001, as amended.

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates. The results of operations for the interim periods presented
are not necessarily indicative of the results to be expected for the year
ending December 31, 2002 or any other interim period.

2. Summary of Significant Accounting Policies

Recently Issued Accounting Pronouncements

On January 1, 2002, Cox adopted Statement of Financial Accounting
Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, which requires
that goodwill and certain intangible assets, including those recorded in past
business combinations, no longer be amortized through the statement of
operations, but instead be tested for impairment at least annually. The
adoption of SFAS No. 142 did not result in an impairment charge. For a further
discussion, see Note. 4, Goodwill and Intangible Assets.

Effective January 1, 2003, Cox will adopt SFAS No. 143, Accounting for
Asset Retirement Obligations, which addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The adoption of SFAS No. 143
is not expected to have a material impact on Coxs financial position or
results of operations.

Also on January 1, 2002, Cox adopted SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which addresses financial
accounting and reporting for the impairment and disposition of long-lived
assets. The adoption of SFAS No. 144 did not have a material impact on Coxs
financial position or results of operations.

6



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##### Table of Contents



Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

Also on January 1, 2002, Cox adopted the guidance prescribed in Emerging
Issues Task Force Issue No. 01-14, Income Statement Characterization of
Reimbursements Received for Out-of-Pocket Expenses Incurred, which specifies
that the collection and payment of certain fees must be presented on a gross
basis, as revenue and expense, rather than on a net basis. Retroactive
application of this standard was required. Accordingly, collection and payment
of fees by Cox, primarily franchise fees, have been reclassified on a gross
basis for all periods presented herein to conform to this new guidance.
Approximately $48.7 million and $145.4 million have been classified to revenues
for the three and nine months ended September 30, 2002, respectively, and
approximately $47.6 million and $137.3 million were reclassified from operating
expenses to revenues for the three and nine months ended September 30, 2001,
respectively.

In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS
No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections, which provides for the rescission
of several previously issued accounting standards, new accounting guidance for
the accounting of certain lease modifications and various technical corrections
that are not substantive in nature to existing pronouncements. Cox will adopt
SFAS No. 145 on January 1, 2003, except for the provisions relating to the
amendment of SFAS No. 13, which was adopted for transactions occurring
subsequent to May 15, 2002. Cox is currently assessing the impact of SFAS No.
145 on its financial position and results of operations.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, which requires companies to
recognize costs associated with exit or disposal activities when they are
incurred, rather than at the date of a commitment to an exit or disposal plan.
SFAS No. 146 will be applied prospectively to exit or disposal activities
initiated after December 31, 2002.

Reclassifications

Certain amounts in the 2001 condensed consolidated financial statements
have been reclassified for comparative purposes.

3. Investments

|                                  |                        |   |                        |         |             |   |           |           | 
|--------------------------------- | ---------------------- | - | ---------------------- | ------- | ----------- | - | --------- | --------- | 
|                                  |                        |   | September 30           |         | December 31
|                                  |                        |   | 2002                   |         | 2001       
|                                  |                        |   |                        |         |            
|                                  |                        |   | (Thousands of Dollars)
|Investments stated at fair value: |                        |   |                        |         |             |   |           |          
|                                  | Available-for-sale     |   | $                      | 135,135 |             |   | $         | 2,903,062 | 
|                                  | Trading securities     |   |                        | 38,220  |             |   |           | 475,995   | 
|                                  | Derivative instruments |   |                        | 3,430   |             |   |           | 90,494    | 
|Other                             |                        |   | 28,367                 |         |             |   | 45,682    |          
|                                  |                        |   |                        |         |             |   |           |          
|Total investments                 |                        | $ | 205,152                |         |             | $ | 3,515,233 |          
|                                  |                        |   |                        |         |             |   |           |          

Investments Stated at Fair Value

The aggregate cost of Coxs investments stated at fair value at September
30, 2002 and December 31, 2001 was $187.8 million and $2,326.0 million,
respectively. Gross unrealized losses on investments were
$3.8 million at September 30, 2002, and gross unrealized gains and losses
on investments were $843.3 million and $76.6 million, respectively, at December
31, 2001. For the three and nine months ended September 30, 2002, gross
realized gains and losses on investments stated at fair value were $27.1
million and $179.9 million, respectively, and $64.4 million and $1,418.8
million, respectively. For the three and nine months ended September 30, 2001,
gross realized gains and losses on investments stated at fair value
7Table of ContentsCox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)were $502.1
million and $32.0 million, respectively, and $1,200.2 million and $120.4
million, respectively. Derivative instruments classified within investments are
comprised of certain warrants to purchase shares of publicly-traded and
privately-held entities, as further described in Note 6. Derivative
Instruments and Hedging Activities.Sprint PCS.At September 30, 2002, the estimated fair value of Coxs
investment in Sprint Corporations PCS Group (Sprint PCS) was $169.8 million
and comprised of 66.7 million shares of Sprint PCS common stock and warrants
and convertible preferred stock, which are exercisable for or convertible into
approximately 10.3 million shares of Sprint PCS common stock. At December 31,
2001, the estimated fair value of Coxs investment in Sprint PCS was $2,444.3
million and comprised of 91.9 million shares of Sprint PCS common stock and
warrants and convertible preferred stock, which are exercisable for or
convertible into approximately 10.3 million shares of Sprint PCS common stock.In February and March 2002, Cox terminated its series of costless equity
collar arrangements that managed its exposure to market price fluctuations of
15.8 million shares of Sprint PCS common stock for aggregate proceeds of
approximately $151.6 million and recognized an aggregate pre-tax derivative
gain of approximately $168.9 million. In connection with the terminations, Cox
also sold the 15.8 million shares of Sprint PCS common stock covered by the
collar arrangements for aggregate net proceeds of approximately $155.9 million.
In addition, Cox sold 9.4 million shares of Sprint PCS common stock that were
not covered by the collar arrangements for aggregate net proceeds of
approximately $82.8 million. Cox recognized an aggregate pre-tax gain of $32.8
million on the sale of these shares.AT&T/AT&T Wireless. In February and March 2002, Cox terminated its
costless equity collar arrangements which managed its exposure to market price
fluctuations of 22.5 million shares of AT&T Corp. common stock and 17.2 million
shares of AT&T Wireless Services, Inc. common stock for aggregate proceeds of
approximately $112.8 million and recognized an aggregate pre-tax derivative
gain of $99.9 million. In connection with the terminations, Cox also sold the
22.5 million shares of AT&T common stock and 17.2 million shares of AT&T
Wireless common stock covered by these collar arrangements for aggregate net
proceeds of approximately $527.0 million. In addition, Cox sold 12.5 million
shares of AT&T common stock and 6.7 million shares of AT&T Wireless common
stock that were not covered by collar arrangements for aggregate net proceeds
of approximately $263.8 million. Cox recognized an aggregate pre-tax loss of
$170.1 million on the sale of these shares. As a result of these transactions,
Cox no longer holds any shares of AT&T common stock or AT&T Wireless common
stock.Motorola. In June 2002, Cox sold its remaining 1.7 million shares of
Motorola, Inc. common stock for aggregate net proceeds of approximately $24.5
million and recognized aggregate pre-tax loss of $1.5 million. Cox acquired
the shares of Motorola common stock through the exercise of warrants in June
2000 and June 2001.OtherDiscovery.In September 2002, Cox received a $27.1 million partial return
on its investment from Discovery Communications, Inc. Since Coxs cumulative
proportionate share of equity in net losses exceeds the carrying amount of its
investment in Discovery, this resulted in a pre-tax gain of $27.1 million.During the three and nine months ended September 30, 2002, Cox recorded
aggregate pre-tax losses of $127.0 million and $804.4 million, respectively,
on certain of its investments, primarily Sprint PCS, as a result of a decline
in fair value that was considered other than temporary. For the three and nine
months ended September 30, 2001, Cox recorded aggregate pre-tax losses of $1.6
million and $50.9 million, respectively, on certain investments as a result of
a decline in fair value that was considered other than temporary. These
losses are included in net gain (loss) on investments in the Condensed
Consolidated Statement of Operations. Cox assesses the recoverability of all
of its investments on an ongoing basis.8Table of ContentsCox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)Cox has several other fair value, equity and cost method investments that
were not, individually or in the aggregate, significant in relation to the
Condensed Consolidated Balance Sheets at September 30, 2002 and December 31,
2001.4. Goodwill and Intangible AssetsOn January 1, 2002, Cox adopted SFAS No. 142, Goodwill and Other
Intangible Assets, which requires that goodwill and certain intangible assets,
including those recorded in past business combinations, no longer be amortized
through the statement of operations, but instead be tested for impairment at
least annually. The standard also requires the completion of a transition
impairment test within six months of adoption, with any impairments identified
treated as a cumulative effect of change in accounting principle. The adoption
of SFAS No. 142 did not result in an impairment charge.9Table of ContentsCox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)Cox has certain intangible assets that have been determined to have
indefinite useful lives. Accordingly, Cox discontinued the amortization of
intangible assets with indefinite lives, which consist primarily of franchise
value, effective January 1, 2002. Had Cox been accounting for intangible
assets under SFAS No. 142 for all periods presented, Coxs net income (loss)
and net income (loss) per share would have been as follows:

|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|--------------------------------------------------------------------------------- |  | ------------------------------------------------ | ------- | ----------------- |  | ---- | ------- | ---- |  | - | -------- | - |  | - | --------- | 
|                                                                                  |  | Three Months Ended                               |         | Nine Months Ended
|                                                                                  |  | September 30                                     |         | September 30     
|                                                                                  |  |                                                  |         |                  
|                                                                                  |  | 2002                                             |         | 2001              |  | 2002 |         | 2001
|                                                                                  |  |                                                  |         |                   |  |      |         |     
|                                                                                  |  | (Thousands of Dollars, excluding per share data)
|Reported income (loss) before cumulative
effect of change in accounting principle |  | $                                                | (73,060 | )                 |  | $    | 142,963 |      |  | $ | (453,682 | ) |  | $ | 143,148   | 
|Franchise value amortization,
net of tax                                          |  |                                                  |        |                   |  |      | 61,675  |      |  |   |         |   |  |   | 187,929   | 
|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Adjusted income (loss) before cumulative
effect of change in accounting
principle |  |                                                  | (73,060 | )                 |  |      | 204,638 |      |  |   | (453,682 | ) |  |   | 331,077   | 
|Cumulative effect of change in
accounting principle                               |  |                                                  |        |                   |  |      |        |      |  |   |         |   |  |   | 717,090   | 
|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Adjusted net income (loss)                                                        |  | $                                                | (73,060 | )                 |  | $    | 204,638 |      |  | $ | (453,682 | ) |  | $ | 1,048,167 | 
|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Basic net income (loss) per share:                                                |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Reported income (loss) before cumulative
effect of change in accounting principle |  | $                                                | (0.12   | )                 |  | $    | 0.24    |      |  | $ | (0.75    | ) |  | $ | 0.24      | 
|Add back franchise value
amortization, net of tax                                 |  |                                                  |        |                   |  |      | 0.10    |      |  |   |         |   |  |   | 0.31      | 
|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Adjusted income (loss) before cumulative
effect of change in accounting principle |  |                                                  | (0.12   | )                 |  |      | 0.34    |      |  |   | (0.75    | ) |  |   | 0.55      | 
|Cumulative effect of change in
accounting principle                               |  |                                                  |        |                   |  |      |        |      |  |   |         |   |  |   | 1.19      | 
|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Adjusted basic net income (loss) per share                                        |  | $                                                | (0.12   | )                 |  | $    | 0.34    |      |  | $ | (0.75    | ) |  | $ | 1.74      | 
|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Diluted net income (loss) per share:                                              |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Reported income (loss) before cumulative
effect of change in accounting principle |  | $                                                | (0.12   | )                 |  | $    | 0.23    |      |  | $ | (0.75    | ) |  | $ | 0.23      | 
|Add back franchise value
amortization, net of tax                                 |  |                                                  |        |                   |  |      | 0.10    |      |  |   |         |   |  |   | 0.31      | 
|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Adjusted income (loss) before cumulative
effect of change in accounting principle |  |                                                  | (0.12   | )                 |  |      | 0.33    |      |  |   | (0.75    | ) |  |   | 0.54      | 
|Cumulative effect of change in
accounting principle                               |  |                                                  |        |                   |  |      |        |      |  |   |         |   |  |   | 1.18      | 
|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 
|Adjusted diluted net income (loss) per
share                                      |  | $                                                | (0.12   | )                 |  | $    | 0.33    |      |  | $ | (0.75    | ) |  | $ | 1.72      | 
|                                                                                  |  |                                                  |         |                   |  |      |         |      |  |   |          |   |  |   |           | 

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##### Table of Contents



Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

5. Debt

|                                     |  |                        |           |             |  |   |           | 
|------------------------------------ |  | ---------------------- | --------- | ----------- |  | - | --------- | 
|                                     |  | September 30           |           | December 31
|                                     |  | 2002                   |           | 2001       
|                                     |  |                        |           |            
|                                     |  | (Thousands of Dollars)
|Revolving credit facilities          |  | $                      |          |             |  | $ |          | 
|Commercial paper                     |  |                        |          |             |  |   | 727,384   | 
|Medium-term notes                    |  |                        | 391,251   |             |  |   | 391,183   | 
|Notes and debentures                 |  |                        | 5,753,513 |             |  |   | 5,313,517 | 
|Exchangeable subordinated debentures |  |                        | 1,573,489 |             |  |   | 1,829,497 | 
|Capitalized lease obligations        |  |                        | 233,464   |             |  |   | 140,866   | 
|Other                                |  |                        | 15,610    |             |  |   | 15,228    | 
|                                     |  |                        |           |             |  |   |           | 
|Total debt                           |  | $                      | 7,967,327 |             |  | $ | 8,417,675 | 
|                                     |  |                        |           |             |  |   |           | 

See Note 6. Derivative Instruments and Hedging Activities for a
discussion of the accounting for certain derivative instruments embedded in the
exchangeable subordinated debentures and zero-coupon debt, which have been
classified as a component of debt in the Condensed Consolidated Balance Sheets
at September 30, 2002 and December 31, 2001.

Revolving Credit Facilities

In June 2002, Cox amended and restated its 364-day facility to, among
other things, extend the facility for another 364 days, which will now
terminate on June 27, 2003. The size of the facility was also changed from
$1.5 billion to $1.1 billion. As of September 30, 2002, Cox had no borrowings
outstanding under this credit facility or its 5-year credit facility, which
provides for up to $0.9 billion and terminates in 2005.

Notes and Debentures

In accordance with the terms of the indenture governing Coxs convertible
senior notes due 2021, Cox became obligated to purchase for cash convertible
notes tendered and not withdrawn before the close of business on February 22,
2002. Cox repurchased $329.1 million aggregate principal amount at maturity of
the convertible notes that had been properly tendered and not withdrawn, for
aggregate cash consideration of $232.8 million, which represented the accreted
value of the repurchased notes. As a result, $441.7 million aggregate
principal amount at maturity of Coxs convertible notes remain outstanding. In
addition, Cox made an aggregate cash payment of $7.5 million to the remaining
holders of the convertible notes who elected not to require Cox to repurchase
their notes.

In September 2002, Cox issued a series of 7.125% senior notes due October
1, 2012 with an aggregate principal amount of $1.0 billion, less offering costs
and underwriting commissions of $13.9 million. The 7.125% senior notes are
unsecured and rank equally with Coxs other senior unsecured indebtedness. In
addition, the 7.125% senior notes may be redeemed by Cox, in whole or in part,
at any time prior to maturity at 100% of the principal amount plus accrued and
unpaid interest and a make-whole premium. Interest is payable on a semi-annual
basis beginning April 1, 2003.

On November 7, 2002, Coxs $200.0 million aggregate principal amount of
Floating Rate MOPPRS/CHEERS was subject to mandatory tender to the remarketing
dealers. However, the remarketing dealers did not elect to remarket the
MOPPRS/CHEERS, and Cox repurchased the MOPPRS/CHEERS on November 7, 2002. The
total aggregate consideration paid to repurchase the MOPPRS/CHEERS was
$227.2
million, which amount included the remarketing option value paid to the
remarketing dealers and accrued interest paid to the holders.

11



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##### Table of Contents



Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

Exchangeable Subordinated Debentures

Exchangeable subordinated debentures at September 30, 2002 are comprised
of: $1.3 billion aggregate original principal amount of exchangeable
subordinated debentures, referred to as PRIZES, which were issued in November
1999 and are due November 2029; $275.0 million aggregate original principal
amount of exchangeable subordinated debentures, referred to as Premium PHONES,
which were issued in March 2000 and are due March 2030; and $1.8 billion
aggregate principal amount at maturity of exchangeable subordinated discount
debentures, referred to as Discount Debentures, which were issued in April 2000
and are due April 2020. The Discount Debentures were issued at an aggregate
original issue discount of $1.1 billion.

The original principal amount of the PRIZES, Premium PHONES and Discount
Debentures are indexed to the trading price of Sprint PCS common stock.
Accordingly, if the fair value of the Sprint PCS common stock rises above the
market price at the time of issuance, Cox may be obligated to pay an additional
amount in excess of the original principal at maturity or upon the holders
exchange of the PRIZES, Premium PHONES and Discount Debentures. The Premium
PHONES and Discount Debentures are exchangeable for shares of Sprint PCS common
stock held by Cox or cash based on the value of such shares. The PRIZES are
exchangeable for cash based on the value of shares of Sprint PCS common stock.
With respect to the Discount Debentures, the holders may also require Cox to
repurchase these securities on certain dates prior to maturity at a purchase
price equal to the adjusted principal amount plus any accrued and unpaid
interest. See Note 6. Derivative Instruments and Hedging Activities for more
information regarding the accounting for the exchangeable subordinated
debentures.

Interest Rate Swaps

Cox utilizes four interest rate swap agreements to manage its exposure to
changes in interest rates associated with certain of its fixed-rate debt
obligations whereby these fixed-rate debt obligations are effectively converted
into floating-rate debt obligations. The variable rates with respect to Coxs
interest rate swaps are adjusted quarterly or semi-annually based on London
Interbank Offered Rates. The notional amounts with respect to the interest
rate swaps do not quantify risk, but are used in the determination of cash
settlements under the interest rate swap agreements. Cox is exposed to a
credit loss in the event of nonperformance by the counterparties; however, Cox
does not anticipate nonperformance by the counterparties. For a further
discussion regarding Coxs accounting for interest rate swaps, see Note 6.
Derivative Instruments and Hedging Activities.

The following table summarizes the notional amounts, weighted average
interest rate data and maturities for Coxs interest rate swap agreements at
September 30, 2002 and December 31, 2001:

|                                                                      |  |              |           |             |  |   |           |  
|--------------------------------------------------------------------- |  | ------------ | --------- | ----------- |  | - | --------- | -
|                                                                      |  | September 30 |           | December 31
|                                                                      |  | 2002         |           | 2001       
|                                                                      |  |              |           |            
|Notional amount (in
thousands)                                        |  | $            | 1,150,000 |             |  | $ | 1,150,000 |  
|Weighted average fixed interest rate received (for the
quarter ended) |  |              | 7.38      | %           |  |   | 7.38      | %
|Weighted average floating interest rate paid (for the
quarter ended)  |  |              | 3.10      | %           |  |   | 4.10      | %
|Maturity                                                              |  |              | 2004-2006 |             |  |   | 2004-2006 |  

As a result of the settlements under Coxs interest rate swap agreements,
interest expense was reduced by $12.1 million and $35.5 million, respectively,
during the three and nine months ended September 30, 2002 and $5.5 million and
$12.5 million, respectively, during the three and nine months ended September
30, 2001.

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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

6. Derivative Instruments and Hedging Activities

Cox is exposed to fluctuations in interest rates and equity market prices
associated with certain of its assets, liabilities, equity instruments and
forecasted transactions. Cox actively monitors these fluctuations and uses
derivative instruments from time to time to manage its exposure. In accordance
with its risk management strategy, Cox uses derivative instruments only for the
purpose of managing risk associated with fluctuations in the fair value of the
underlying exposures identified by management. Cox does not hold or issue
derivative instruments with the objective of earning financial gains on
interest rates or equity market price fluctuations alone, nor does it use
leveraged instruments or instruments where there are no underlying exposures
identified. Coxs use of derivative instruments may result in short-term gains
or losses and may increase volatility in its earnings.

Cox accounts for derivative instruments in accordance with SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities, as amended, which
requires all freestanding and embedded derivative instruments to be measured at
fair value and recognized on the balance sheet as either assets or liabilities.
In addition, all derivative instruments used in hedging relationships must be
designated, reassessed and accounted for as either fair value hedges or cash
flow hedges pursuant to the provisions of SFAS No. 133.

Cox recorded pre-tax gains on derivative instruments of $102.7 million and
$870.4 million during the three and nine months ended September 30, 2002,
respectively, and pre-tax losses on derivative instruments of $90.3 million and
$347.9 million during the three and nine months ended September 30,
2001, respectively. In addition, cumulative derivative adjustments made in
accordance with SFAS No. 133, which are classified as a component of debt in
the Condensed Consolidated Balance Sheets, reduced reported indebtedness by
approximately $1.1 billion and $0.5 billion at September 30, 2002 and December
31, 2001, respectively. The following is a detail of Coxs gain (loss) on
derivative instruments for the three and nine months ended September 30, 2002
and 2001 followed by a summary of Coxs derivative instruments.

|                                     |  |                       |       |                   |  |      |       |      |  |   |       |   |  |   |        |  
|------------------------------------ |  | --------------------- | ----- | ----------------- |  | ---- | ----- | ---- |  | - | ----- | - |  | - | ------ | -
|                                     |  | Three Months Ended    |       | Nine Months Ended
|                                     |  | September 30          |       | September 30     
|                                     |  |                       |       |                  
|                                     |  | 2002                  |       | 2001              |  | 2002 |       | 2001
|                                     |  |                       |       |                   |  |      |       |     
|                                     |  | (Millions of Dollars)
|Equity collar
arrangements           |  | $                     |      |                   |  | $    | (16.1 | )    |  | $ | 268.8 |   |  | $ | (59.2  | )
|Zero-coupon debt                     |  |                       | 64.2  |                   |  |      | (11.0 | )    |  |   | 397.3 |   |  |   | 14.3   |  
|Exchangeable subordinated
debentures |  |                       | 43.7  |                   |  |      | (61.8 | )    |  |   | 293.0 |   |  |   | (346.5 | )
|Stock purchase
warrants              |  |                       | (5.2  | )                 |  |      | (1.4  | )    |  |   | (88.7 | ) |  |   | (2.7   | )
|Other                                |  |                       |      |                   |  |      |      |      |  |   |      |   |  |   | 46.2   |  
|                                     |  |                       |       |                   |  |      |       |      |  |   |       |   |  |   |        |  
|Total derivative
gain
(loss)         |  | $                     | 102.7 |                   |  | $    | (90.3 | )    |  | $ | 870.4 |   |  | $ | (347.9 | )
|                                     |  |                       |       |                   |  |      |       |      |  |   |       |   |  |   |        |  

Interest Rate Swap Agreements

Cox has designated and accounted for its four interest rate swap
agreements as fair value hedges whereby the fair value of the related interest
rate swap agreements are classified as a component of other assets with the
corresponding fixed-rate debt obligations being classified as a component of
debt in the Condensed Consolidated Balance Sheets. Cox has assumed no
ineffectiveness with regard to these interest rate swap agreements as the
agreements qualify for the short-cut methodof accounting for fair value hedges
of debt instruments, as prescribed by SFAS No. 133. Coxs interest rate swap
agreements approximated a derivative asset of $113.0 million and $53.4 million
at September 30, 2002 and December 31, 2001, respectively.

13



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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

Equity Collar Arrangements

Cox had a series of costless equity collar arrangements to manage its
exposure to market price fluctuations of approximately 15.8 million shares of
its Sprint PCS common stock. Cox also had costless equity collar arrangements
to manage its exposure to market price fluctuations of 17.2 million shares of
its AT&T Wireless common stock and of 22.5 million shares of its AT&T common
stock. Cox had designated and accounted for all of these costless equity
collars as fair value hedges. During the first quarter of 2002, Cox terminated
these equity collar arrangements for aggregate proceeds of $264.4 million and
recognized a pre-tax derivative gain of approximately $268.8 million. For a
further discussion of these transactions, see Note 3. Investments.

Zero-Coupon Debt

In January 2001, Cox issued a series of prepaid forward contracts to sell
up to 19.5 million shares of its Sprint PCS common stock with an aggregate fair
value as of the respective trade dates of $502.0 million for aggregate proceeds
of $389.4 million, which was net of an original issue discount of $112.6
million. These contracts mature at various dates between 2004 and 2006, and at
Coxs election, may be settled in cash or shares of Sprint PCS common stock.
These contracts meet the definition of a hybrid instrument, as prescribed by
SFAS No. 133. These hybrid instruments are comprised of a zero-coupon debt
instrument, as the host contract, and an embedded derivative, which derives its
value, in part, based on the trading price of Sprint PCS common stock. Cox has
not designated these embedded derivatives as a hedge of its investment in
Sprint PCS common stock. As a result, changes in the fair value of these
embedded derivatives are recognized in earnings and classified within gain
(loss) on derivative instruments in the Condensed Consolidated Statements of
Operations. The aggregate fair value of these embedded derivatives
approximated a derivative asset of $438.0 million and $40.8 million at
September 30, 2002 and December 31, 2001, respectively, and have been
classified as a component of the zero-coupon debt instruments. Accordingly,
the carrying value of the zero-coupon debt instruments, net of the embedded
derivative assets, amounted to a net asset of $3.5 million and a net liability
of $373.5 million at September 30, 2002 and December 31, 2001, respectively,
and have been classified within debt in the Condensed Consolidated Balance
Sheets.

Exchangeable Subordinated Debentures

Cox has three series of exchangeable subordinated debentures outstanding,
referred to as PRIZES, Premium PHONES and Discount Debentures, as further
described in Note 5. Debt. The exchangeable subordinated debentures meet the
definition of a hybrid instrument, as prescribed by SFAS No. 133. These hybrid
instruments are comprised of an exchangeable subordinated debt instrument, as
the host
contract, and an embedded derivative, which derives, in part, its value
based on the trading price of Sprint PCS common stock. Cox has not designated
these embedded derivatives as a hedge of its investment in Sprint PCS common
stock. As a result, changes in the fair value of these embedded derivatives
are recognized in earnings and classified within gain (loss) on derivative
instruments in the Condensed Consolidated Statements of Operations. The
aggregate fair value of these embedded derivatives approximated a derivative
obligation of $290.7 million and $583.7 million at September 30, 2002 and
December 31, 2001, respectively, and have been classified as a component of the
corresponding exchangeable subordinated debt instruments. Accordingly, the
aggregate carrying value of the exchangeable subordinated debt instruments,
including the embedded derivative obligations, amounted to $1,573.5 million and
$1,829.5 million at September 30, 2002 and December 31, 2001, respectively, and
have been classified within debt in the Condensed Consolidated Balance Sheets.

14



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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

Stock Purchase Warrants

Cox holds strategic investments in warrants to purchase equity securities
of certain publicly-traded and privately-held entities that meet the definition
of a freestanding derivative instrument, as prescribed by SFAS No. 133, and
have not been designated by Cox as hedging instruments. As a result, changes
in the fair value of these warrants are recognized in earnings and classified
within gain (loss) on derivative instruments in the Condensed Consolidated
Statements of Operations. The aggregate fair value of these warrants
approximated a derivative asset of $3.4 million and $90.5 million at September
30, 2002 and December 31, 2001, respectively, and have been classified as a
component of investments in the Condensed Consolidated Balance Sheets.

7. Cox-Obligated Capital and Preferred Securities of Subsidiary Trusts

FELINE PRIDES

In August 1999, Cox Trust II issued 13.0 million FELINE PRIDES (which
consisted of 11.7 million Income PRIDES and 1.3 million Growth PRIDES) and 1.3
million Trust capital securities for aggregate proceeds of $650.0 million. Cox
Trust II was a subsidiary of Cox, and the sole assets of Cox Trust II were
senior notes issued by Cox. On August 16, 2002, Cox issued approximately 18.7
million shares of Cox Class A common stock to holders of its Income PRIDES and
Growth PRIDES in settlement of such holders underlying obligation to purchase
Cox Class A common stock. Also on August 16, 2002, Cox retained approximately
$590.4 million aggregate principal amount (out of the original $650.0 million
aggregate principal amount) of debentures securing the purchase contract
obligations of the Income PRIDES holders in full satisfaction of such holders
obligations to purchase Cox Class A common stock. On September 3, 2002, Cox
repurchased approximately $58.6 million of the remaining debentures, funded
primarily with the proceeds from maturing Treasury securities received upon
settlement of the Growth PRIDES. After such repurchase, approximately $1.0
million aggregate principal amount of the debentures remains outstanding. The
reset interest rate, effective August 16, 2002, for the remaining debentures is
4.05%. As a result of the foregoing, approximately $650.0 million
previously classified as Cox-obligated capital securities of
subsidiary trusts attributable to the FELINE PRIDES has been settled
with the issuance of Cox Class A common stock. Additionally, Cox wrote
off approximately $7.9 million of unamortized issuance
costs upon settlement.

RHINOS

In October 1999, Cox RHINOS Trust issued 500,000 RHINOS in a private
transaction for aggregate proceeds of $500.0 million. Cox RHINOS Trust was a
subsidiary of Cox, and the sole assets of Cox RHINOS Trust were senior notes
issued by Cox. On August 28, 2002, Cox, Cox RHINOS Trust and the holder of the
RHINOS amended the terms of the RHINOS. As a result of these amendments, among
other things, Cox obtained the discretionary right to redeem its senior notes
held by Cox RHINOS Trust, in whole or in part, at any time from August 28, 2002
to and including October 1, 2002. On September 26, 2002, Cox redeemed its
senior notes held by Cox RHINOS Trust, which, in turn, resulted in Cox RHINOS
Trust repurchasing all of the outstanding RHINOS for $502.6 million, which
amount included interest accrued to the redemption date. As a result of the
RHINOS repurchase described above, Cox no longer has any Cox-obligated
preferred securities of subsidiary trusts. Additionally, Cox wrote off
approximately $10.2 million of unamortized issuance costs upon repurchase.

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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

8. Earnings Per Share

For the three and nine months ended September 30, 2002, 28.8 million and
28.6 million Class A common shares, respectively, related to employee
stock-based compensation plans, convertible senior notes and convertible
preferred stock were not included in the computation of diluted EPS, because
such effects would have been antidilutive for the periods.

The following table reconciles the numerator and the denominator of the
basic and diluted per share computations for income from operations for the
three and nine months ended September 30, 2001:

|                                                                              |                                                                |   |                           |       |                    |   |         |       | 
|----------------------------------------------------------------------------- | -------------------------------------------------------------- | - | ------------------------- | ----- | ------------------ | - | ------- | ----- | 
|                                                                              |                                                                |   | Three Months              |       | Nine Months       
|                                                                              |                                                                |   | Ended                     |       | Ended             
|                                                                              |                                                                |   | September 30, 2001        |       | September 30, 2001
|                                                                              |                                                                |   |                           |       |                   
|                                                                              |                                                                |   | (Thousands of Dollars,   
|                                                                              |                                                                |   | excluding per share data)
|Income before cumulative effect of
change in accounting principle (A)         |                                                                | $ | 142,963                   |       |                    | $ | 143,148 |      
|                                                                              |                                                                |   |                           |       |                    |   |         |      
|Basic weighted average shares
outstanding (B)                                 |                                                                |   | 600,439                   |       |                    |   | 600,295 |      
|Effect of dilutive securities:                                                |                                                                |   |                           |       |                    |   |         |      
|                                                                              | Employee stock
options                                         |   |                           | 643   |                    |   |         | 880   | 
|                                                                              | Employee stock purchase
plan                                   |   |                           | 555   |                    |   |         | 557   | 
|                                                                              | Convertible preferred
stock                                    |   |                           | 6,894 |                    |   |         | 6,894 | 
|                                                                              | Forward purchase contracts forming
a part of the FELINE
PRIDES |   |                           |      |                    |   |         | 416   | 
|                                                                              |                                                                |   |                           |       |                    |   |         |      
|Diluted weighted average shares
outstanding (C)                               |                                                                |   | 608,531                   |       |                    |   | 609,042 |      
|                                                                              |                                                                |   |                           |       |                    |   |         |      
|Earnings per share before cumulative
effect of change in accounting principle |                                                                |   |                           |       |                    |   |         |      
|                                                                              | Basic earnings per share (A/B)                                 |   | $                         | 0.24  |                    |   | $       | 0.24  | 
|                                                                              |                                                                |   |                           |       |                    |   |         |      
|                                                                              | Diluted earnings per share
(A/C)                               |   | $                         | 0.23  |                    |   | $       | 0.23  | 
|                                                                              |                                                                |   |                           |       |                    |   |         |      

For the three and nine months ended September 30, 2001, 35.0 million and
17.2 million Class A common shares, respectively, related to convertible senior
notes and the RHINOS were not included in the computation of diluted EPS,
because such effects would have been antidilutive for the periods.

9. Transactions with Affiliated Companies

Cash requirements are funded by internally generated funds, by various
external financing transactions and, as needed, through intercompany loans from
CEI. CEI performs day-to-day cash management services for Cox. Outstanding
amounts due from CEI bear interest equal to CEIs current commercial paper
borrowing rate, which was 2.4% and 3.0% at September 30, 2002 and December 31,
2001, respectively.

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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

Included in amounts due (to) from CEI are the following transactions:

|                                              |  |                        |          |  
|--------------------------------------------- |  | ---------------------- | -------- | -
|                                              |  | (Thousands of Dollars)
|                                              |  |                       
|Intercompany due from CEI, December
31, 2001  |  | $                      | 13,245   |  
|Cash transferred to
CEI                       |  |                        | 149,834  |  
|Net operating expense
reimbursements          |  |                        | (142,927 | )
|                                              |  |                        |          |  
|Intercompany due from CEI, September
30, 2002 |  | $                      | 20,152   |  
|                                              |  |                        |          |  

For the last several years, Cox has had a number of local partnerships
with Cox Interactive Media (CIM), an indirect wholly-owned subsidiary of CEI,
for the development and maintenance of Internet sites based on local
advertising and content. While Cox believes local content is important, this
Internet city site business has not developed as planned. Cox has entered into
an agreement pursuant to which CIM will continue to develop and operate these
local content city sites for Cox through the remainder of 2002. The previously
formed partnerships will be dissolved. This transition time provides Cox the
opportunity to assess and then implement a more cost effective strategy for
Coxs home page. The expense to Cox for the local content services is not
significant.

10. Supplemental Financial Information

|                                     |  |                        |         |      |  |   |           | 
|------------------------------------ |  | ---------------------- | ------- | ---- |  | - | --------- | 
|                                     |  | Nine Months Ended     
|                                     |  | September 30          
|                                     |  |                       
|                                     |  | 2002                   |         | 2001
|                                     |  |                        |         |     
|                                     |  | (Thousands of Dollars)
|Significant non-cash transactions    |  |                        |         |      |  |   |           | 
|Exercise of Excite@Home right        |  | $                      |        |      |  | $ | 1,282,789 | 
|Settlement of FELINE PRIDES          |  |                        | 650,000 |      |  |   |          | 
|                                     | 
|Additional cash flow information     |  |                        |         |      |  |   |           | 
|Cash paid for
interest               |  | $                      | 323,970 |      |  | $ | 379,839   | 
|Cash received for income tax refunds |  |                        | 126,306 |      |  |   | 273,161   | 

11. Commitments and Contingencies

Cox and certain subsidiaries are defendants in two putative subscriber
class action suits in state courts in Louisiana and Texas initiated between
October 17, 1997 and December 17, 1998. The suits challenge the propriety of
late fees charged by the subsidiaries to customers who fail to pay for services
in a timely manner. The suits seek injunctive relief and various formulations
of damages under certain claimed causes of action under various bodies of state
law. These actions are in various stages of defense and are being defended
vigorously. The outcome of these matters cannot be predicted at this time.

Coxs subsidiary Cox California Telcom, L.L.C. (Cox Telcom) is a defendant
in two suits that were filed in state courts in California relating to the
unauthorized publication of information pertaining to approximately 11,400 Cox
Telcom telephone customers in the PacBell 2000 White Pages and 411 directory
and in the Cox TelTrust information directory. The lawsuits assert various
causes of action for breach of contract, invasion of privacy, negligence,
commission of fraudulent or unfair business acts and practices in violation of
California Business & Professions Code Section 17-200 and violation of
California Public Utilities Code Sections 2891 and 2891.1. The suits seek
damages and injunctive relief. The suits have been settled, and on October 2,
2002, were dismissed with prejudice.

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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

On November 14, 2000, GTE.NET, L.L.C. d/b/a Verizon Internet Solutions and
Verizon Select Services, Inc. filed suit against Cox in the United States
District Court for the Southern District of California. Verizon alleged that
Cox has violated various sections of the Communications Act of 1934 by
allegedly refusing to provide Verizon with broadband telecommunications service
and interconnection, among other things. On November 29, 2000, Verizon
amended its complaint to add CoxCom, Inc., a subsidiary of Cox, as an
additional defendant. On January 8, 2002, Verizon filed a second amended
complaint, dropping its claims for interconnections and damages. Verizon seeks
various forms of relief, including declaratory and injunctive relief. On
January 29, 2002, the Court granted defendants motion to stay the case on
primary jurisdiction grounds. Cox and CoxCom intend to defend this action
vigorously. The outcome cannot be predicted at this time.

On August 23, 2002, plaintiff Redefining Progress, on behalf of itself and
all others similarly situated, sued Fax.com, Cox Business Services, L.L.C. and
others in United States District Court for the Northern District of California,
alleging that Fax.com has sent numerous unsolicited advertisements by facsimile
in violation of federal law. The complaint alleges that Cox Business Services,
which provides telecommunications services to Fax.com, is also liable for the
facsimiles in violation of the Telephone Consumer Protection Act of 1991
(TCPA), Sections 206 and 207 of the Telecommunications Act of 1996 and certain
state laws. The suit seeks an award of statutory damages in the amount of $500
for each violation of the TCPA, treble damages, injunctive relief, the
establishment of a constructive trust and other relief. On October 11, 2002,
Cox Business Services moved to dismiss for lack of subject matter jurisdiction,
for failure to state a claim, and based on the primary jurisdiction of the FCC.
In addition, on September 8, 2002, plaintiff Daniel David, on behalf of
himself and all others similarly situated, filed a related case against
Fax.com, Inc., Cox Business Services and others in the Superior Court of
California, Alameda County. The complaint asserts various federal and state
law causes of action including violation of the TCPA, trespass to chattels,
violation of Section 17-200 of the California Business and Professions Code and
unjust enrichment. The suit seeks damages and injunctive relief similar to
that sought in the related federal suit. Cox Business Services intends to
defend these actions vigorously. Their outcomes cannot be predicted at this
time.

Cox @Home, Inc., a wholly-owned subsidiary of Cox, is a shareholder of At
Home Corporation, also called Excite@Home, formerly a provider of high-speed
Internet access and content services, which filed for bankruptcy protection in
September 2001. On September 24, 2002, a committee of bondholders of
Excite@Home sued Cox, Cox @Home and Comcast Corporation, among others, in the
United States District Court for the District of Delaware. The suit alleges
the realization of short-swing profits under Section 16(b) of the Securities
Exchange Act of 1934 from purported transactions relating to Excite@Home common
stock involving Cox, Comcast and AT&T Corp., and purported breaches of
fiduciary duty. The suit seeks disgorgement of short-swing profits allegedly
received by the Cox and Comcast defendants totaling at least $600.0 million,
damages for breaches of fiduciary duties in an unspecified amount, attorneys
fees, pre-judgment interest and post-judgment interest. Cox and Cox @Home
intend to defend this action vigorously. The outcome cannot be predicted at
this time.

Jerrold Schaffer and Kevin J. Yourman, on May 26, 2000 and May 30, 2000,
respectively, filed class action lawsuits in the Superior Court of the State of
California for the County of San Mateo on behalf of themselves and all other
shareholders of Excite@Home as of
March 28, 2000 seeking (a) to enjoin consummation of a March 28, 2000 letter
agreement among Excite@Homes principal investors, including Cox, and (b)
unspecified compensatory damages. Cox and David Woodrow, Coxs former
Executive Vice President, Business Development, among others, are named
defendants in both lawsuits. Mr. Woodrow formerly served on the Excite@Home
board of directors. The plaintiffs assert that the defendants breached
purported fiduciary duties of care, candor and loyalty to the plaintiffs by
entering into the letter agreement and/or taking certain actions to facilitate
the consummation of the transactions contemplated by the letter agreement. On
February 26, 2001, the Court stayed both actions, which had been previously
consolidated, on grounds of forum non-conveniens. A related suit

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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements  Continued (Unaudited)

styled Linda
Ward, et al. v. At Home Corporation(No. 418233) was filed on September 6, 2001
in the same court. On February 7, 2002, the Court consolidated the Ward action
with the Schaffer/Yourman action, thereby also staying the Ward action. On June
18, 2002, the court granted plaintiffs motion to lift the stay and authorized
discovery to proceed regarding Coxs pending motion to dismiss for lack of
personal jurisdiction. On September 10, 2002 the United States Bankruptcy
Court for the Northern District of California in the Excite@Home bankruptcy
proceeding held that the claims in the suits were derivative and, thus
constituted the exclusive property of the Excite@Home bankruptcy estate. The
Bankruptcy Court thereafter ordered the plaintiffs to dismiss the suits.
Plaintiffs have appealed the Bankruptcy Courts decision to the United States
District Court for the Northern District of California. Cox intends to defend
these actions vigorously. The outcome cannot be predicted at this time.

On April 26, 2002, Frieda and Michael Eksler filed an amended complaint
naming Cox as a defendant in a putative class action lawsuit in the United
States District Court for the Southern District of New York against AT&T Corp.
and certain former officers of Excite@Home, among others. Cox was served on
May 10, 2002. This case has been consolidated with a related
case captioned Semen Leykin v. AT&T Corp., et al., and
another related case, and an amended complaint in that case, naming
Cox as a defendant, was filed and served on November 7, 2002. The putative class includes persons who purchased shares of
Excite@Home common stock between the time period March 28, 2000
and September 28,
2001. The sole count against Cox asserts a claim against Cox as a controlling
person of Excite@Home under Section 20(a) of the Securities Exchange Act for
violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5
thereunder. The suit seeks from Cox unspecified monetary damages,
statutory compensation and other relief. In addition, a claim against
Coxs former Executive Vice President, David Woodrow, who served on
Excite@Homes board of directors, is asserted for breach of purported
fiduciary duties. The suit seeks from Woodrow unspecified monetary
and punitive damages. The time for Cox to answer or otherwise respond
to the amended complaint has been extended until January 29, 2003.
Cox intends to defend this action vigorously. The outcome cannot be
predicted at this time.

Cox and its subsidiaries are parties to various other legal proceedings
that are ordinary and incidental to their businesses. Management does not
expect that any of these other currently pending legal proceedings will have a
material adverse impact on Coxs consolidated financial position, results of
operations or cash flows.

19



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##### Table of Contents






Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the
accompanying unaudited condensed consolidated financial statements for the
three and nine month periods ended September 30, 2002 and 2001.

Overview

Cox Communications, Inc., an indirect 63.4% majority-owned subsidiary of
Cox Enterprises, Inc. (CEI), is one of the nations largest multi-service
advanced communications providers. As of September 30, 2002, Cox served
approximately 6.3 million basic video customers nationwide, making it the fifth
largest cable television provider in the U.S.

Coxs principal lines of business include traditional analog video
programming, advanced digital video programming, high-speed Internet access and
local and long-distance telephone. In select markets, additional services
include video on demand (VOD), Internet to the television (iTV), high
definition television (HDTV), targeted advertising and other types of
interactive and e-commerce applications and services. Coxs business strategy
is to utilize the technological capabilities of its advanced broadband network,
its strong locally and regionally clustered cable systems and its longstanding
commitment to superior customer service to provide an array of entertainment
and communications services to both residential and commercial customers in its
markets.

Results of Operations

Three Months Ended September 30, 2002 Compared with Three Months Ended
September 30, 2001

Total revenues for the three months ended September 30, 2002 were $1,275.0
million, an 18% increase over revenues of $1,079.5 million for the three months
ended September 30, 2001. This increase includes the effects of:



| |  |  | basic and digital video customer growth;                                                                                                                               
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | basic rate increases implemented over the past twelve months
resulting from increased programming costs and increased channel
availability;                            
|
| |  |  | residential and commercial high-speed Internet access and telephony customer growth;                                                                                   
|
| |  |  | a continuing rebound in local and national advertising sales; and                                                                                                      
|
| |  |  | costs associated with Coxs high-speed Internet service, which had
been netted against revenues in the prior period under a revenue
sharing agreement with Excite@Home.

Programming costs were $266.4 million for the third quarter of 2002, an
increase of 11% over the same period in 2001, due to programming rate increases
implemented over the past twelve months, basic and digital customer growth and
channel additions. Selling, general and administrative expenses for the three
months ended September 30, 2002 increased 25% to $555.2 million due to:



| |  |  | increased labor costs due to the transition from upgrade
construction and new product launches to maintenance and related
customer costs directly associated with the growth of new subscribers;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | increased bad debt expense due to a $4.9 million reserve
established as a result of the July 2002 bankruptcy filing of WorldCom,
Inc.; and                                                      
|
| |  |  | costs associated with Coxs high-speed Internet service, which had
been netted against revenues in the prior period under a revenue
sharing agreement with Excite@Home.                         

Depreciation and amortization decreased to $343.1 million from $368.6
million in the third quarter of 2001 due to a reduction in amortization of
approximately $86.7 million from intangible assets determined to
have an
indefinite life, offset by an increase in depreciation from Coxs continuing
investments in its broadband network in order to deliver additional programming
and services.

20



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For the third quarter of 2002, Cox recorded a $102.7 million pre-tax gain
on derivative instruments due to the following:



| |  |  | $43.7 million pre-tax gain resulting from the change in the fair
value of certain derivative instruments embedded in Coxs exchangeable
subordinated debentures and indexed to shares of Sprint PCS common
stock that Cox owns;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | $64.2 million pre-tax gain resulting from the change in the fair
value of certain derivative instruments embedded in Coxs zero-coupon
debt and indexed to shares of Sprint PCS common stock that Cox owns;
and                
|
| |  |  | $5.2 million pre-tax loss resulting from the change in the fair
value of certain derivative instruments associated with Coxs
investments.                                                                                     

Net loss on investments of $157.9 million is primarily due to a $48.9
million pre-tax loss as a result of the change in market value of Coxs
investment in Sprint PCS common stock classified as trading and a $127.0
million decline in the fair value of certain investments, primarily Sprint PCS,
considered to be other than temporary.

Included in net gain on investments for the comparable period in 2001 were
a pre-tax gain associated with Coxs investment in Sprint PCS common stock
classified as trading and a pre-tax gain related to the sale of Coxs interests
in Outdoor Life Network, L.L.C., Speedvision Network, L.L.C. and Cable Network
Services, L.L.C.

Minority interest of $12.5 million primarily represents distributions on
Coxs obligated capital and preferred securities of subsidiary trusts, referred
to as FELINE PRIDESand RHINOS. Net loss for the current quarter was $73.1
million compared to net income of $143.0 million for the third quarter of 2001.

Nine Months Ended September 30, 2002 Compared with Nine Months Ended September
30, 2001

Total revenues for the nine months ended September 30, 2002 were $3,697.7
million, a 19% increase over revenues of $3,119.0 million for the nine months
ended September 30, 2001. This increase includes the effects of:



| |  |  | basic and digital video customer growth;                                                                                                                               
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | basic rate increases implemented over the past twelve months
resulting from increased programming costs and increased channel
availability;                            
|
| |  |  | residential and commercial high-speed Internet access and telephony customer growth;                                                                                   
|
| |  |  | the Tyson/Holyfield boxing event in the second quarter of 2002;                                                                                                        
|
| |  |  | a continuing rebound in local and national advertising sales; and                                                                                                      
|
| |  |  | costs associated with Coxs high-speed Internet service, which had
been netted against revenues in the prior period under a revenue
sharing agreement with Excite@Home.

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Programming costs were $800.5 million for the nine months ended September
30, 2002, an increase of 12% over the same period in 2001, due to programming
rate increases implemented over the past twelve months, basic and digital
customer growth and channel additions. Selling, general and administrative
expenses for the nine months ended September 30, 2002 increased 27% to $1,609.8
million due to:



| |  |  | increased labor costs due to the transition from upgrade
construction and new product launches to maintenance and related
customer costs directly associated with the growth of new subscribers;                               
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | increased marketing costs in the first half of 2002 as compared to
the first half of 2001 aimed at enhancing customer awareness, the
promotion of new services and bundling alternatives, and the
acquisition of new customers;
|
| |  |  | increased bad debt expense due to the lagging effect of the general
economic slowdown and a $4.9 million reserve for the bankruptcy filing
of WorldCom;                                                                        
|
| |  |  | a one-time non-recurring charge of $9.8 million related to the
continuation of Excite@Home high-speed Internet service through
February 2002; and                                                                              
|
| |  |  | costs associated with Coxs high-speed Internet service, which had
been netted against revenues in the prior period under a revenue
sharing agreement with Excite@Home.                                                        

Depreciation and amortization decreased to $1,006.6 million from $1,076.6
million in the first nine months of 2001 due to a reduction in amortization of
approximately $264.9 million from intangible assets determined to have an
indefinite life, offset by an increase in depreciation from Coxs continuing
investments in its broadband network in order to deliver additional programming
and services. During the second quarter of 2002, Cox sold certain cable
systems and recognized a pre-tax loss of $3.9 million. Interest expense
decreased to $397.8 million primarily due to decreased interest rates on
floating rate debt, interest savings as a result of Coxs interest rate swap
agreements and repayment of all commercial paper borrowings.

For the nine months ended September 30, 2002, Cox recorded an $870.4
million pre-tax gain on derivative instruments due to the following:



| |  |  | $293.0 million pre-tax gain resulting from the change in the fair
value of certain derivative instruments embedded in Coxs exchangeable
subordinated debentures and indexed to shares of Sprint PCS common
stock that Cox owns;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | $397.3 million pre-tax gain resulting from the change in the fair
value of certain derivative instruments embedded in Coxs zero-coupon
debt and indexed to shares of Sprint PCS common stock that Cox owns;
and                
|
| |  |  | $180.1 million pre-tax gain resulting from the change in the fair
value of certain derivative instruments associated with Coxs
investments.                                                                                    

Net loss on investments of $1.4 billion is primarily due to:



| |  |  | $170.4 million pre-tax loss related to the sale of 23.9 million
shares of Sprint PCS common stock;                                             
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | $437.7 million pre-tax loss as a result of the change in market
value of Coxs investment in Sprint PCS common stock classified as
trading; and
|
| |  |  | $804.4 million decline in the fair value of certain investments,
primarily Sprint PCS, considered to be other than temporary.                  

Included in net gain on investments for the comparable period in 2001 were
pre-tax gains associated with Coxs investment in Sprint PCS classified as
trading, a pre-tax gain related to the sale of Coxs
interests in Outdoor Life, Speedvision and Cable Network Services and a
pre-tax gain related to the exercise of Coxs Excite@Home right.

22



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Minority interest of $36.1 million primarily represents distributions on
the FELINE PRIDES and RHINOS. Net loss for nine months ended September 30,
2002 was $453.7 million compared to net income of $860.2 million for the
comparable period in 2001, which included an after-tax cumulative effect of
change in accounting principle from adoption of Statement of Financial
Accounting Standards (SFAS) No. 133, which increased earnings by $717.1
million.

Liquidity and Capital Resources

Uses of Cash

As part of Coxs ongoing strategic plan, Cox has invested, and will
continue to invest, capital to enhance the reliability and capacity of its
broadband network in preparation for the offering of new services and to make
investments in companies primarily focused on cable programming,
telecommunications and technology.

During the nine months ended September 30, 2002, Cox made capital
expenditures of $1.4 billion. These expenditures were primarily directed at
costs for electronic equipment located in customer houses, costs to upgrade and
rebuild its broadband network to allow for the delivery of advanced broadband
services and network costs associated with entering new service areas. Capital
expenditures for the year ending December 31, 2002 are expected to be
approximately $2.0 billion.

Net commercial paper repayments during the nine months ended September 30,
2002 were $727.4 million. As a result, Cox had no outstanding commercial paper
borrowings as of September 30, 2002. During the nine months ended September
30, 2002, Cox repaid $284.8 million of debt, which primarily consisted of the
repurchase of convertible senior notes.

In September 2002, Cox redeemed the senior notes held by the Cox RHINOS
Trust for approximately $502.6 million. Distributions paid on capital and
preferred securities of subsidiary trusts of $47.8 million consisted of
quarterly interest payments on the FELINE PRIDES and RHINOS.

Sources of Cash

During the nine months ended September 30, 2002, Cox generated $1.2
billion from operating activities. Proceeds from the sale of investments of
$1.3 billion primarily include:



| |  |  | the sale of 25.2 million shares of Sprint PCS common stock for
aggregate net proceeds of approximately $238.7 million;                                                                                      
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the sale of 35.0 million shares of AT&T common stock for aggregate
net proceeds of approximately $542.6 million;                                                                                            
|
| |  |  | the sale of 23.9 million shares of AT&T Wireless common stock for
aggregate net proceeds of approximately $248.2 million; and                                                                               
|
| |  |  | the termination of all costless equity collar arrangements with
respect to Sprint PCS common stock, AT&T common stock and AT&T Wireless
common stock for aggregate proceeds of approximately $264.4 million.

For a more detailed description of investment monetizations in the first
nine months of 2002, see Note 3. Investments in Part I, Item 1. Condensed
Consolidated Financial Statements.

Proceeds from the issuance of debt, net of debt issuance costs,
underwriting commissions and discounts includes the issuance of 7.125% notes
due 2012 in September 2002 for net proceeds of
approximately $986.1 million. Cox used a portion of these net proceeds to
redeem the RHINOS and to repurchase the MOPPRS/CHEERS, as described below under
Other. Cox will use the remaining proceeds to repay its 6.5% notes with an
aggregate principal amount of $200.0 million upon their maturity on November
15, 2002 and for general corporate purposes.

23



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##### Table of Contents



Other

At September 30, 2002, Cox had approximately $8.0 billion of outstanding
indebtedness (net of cumulative derivative adjustments made in accordance with
SFAS No. 133 which reduced reported indebtedness by approximately $1.1
billion).

In June 2002, Cox amended and restated its 364-day credit facility. A
more detailed description of this credit facility appears in Note 5. Debt in
Part I, Item 1 Condensed Consolidated Financial Statements. As of September
30, 2002, Cox had no borrowings outstanding under this credit agreement or its
existing 5-year credit facility, but may draw upon them for future funding
needs. Cox and Cox Trust I, a wholly-owned consolidated subsidiary of Cox,
have filed a universal shelf registration statement with the SEC for the offer
and sale from time to time of up to $2.0 billion of various securities, which
securities would be identified and described in a prospectus supplement. Cox
expects to accelerate the effective date of this universal shelf
registration statement in November 2002.

On August 16, 2002, Cox issued approximately 18.7 million shares of Cox
Class A common stock to holders of its Income PRIDES and Growth PRIDES in
settlement of such holders underlying obligation to purchase Cox Class A
common stock. Also on August 16, 2002, Cox retained the approximately $590.4
million aggregate principal amount (out of the original $650.0 million
aggregate principal amount) of debentures securing the purchase contract
obligations of the Income PRIDES holders in full satisfaction of such holders
obligations to purchase Cox Class A common stock. On September 3, 2002, Cox
repurchased approximately $58.6 million of the remaining debentures, funded
primarily with the proceeds from maturing Treasury securities received upon
settlement of the Growth PRIDES. After such repurchase, approximately $1.0
million aggregate principal amount of the debentures remain outstanding. The
reset interest rate, effective August 16, 2002, for the remaining debentures is
4.05%.

On August 28, 2002, Cox, Cox RHINOS Trust and the holder of the RHINOS
amended the terms of the RHINOS. As a result of these amendments, among other
things, Cox obtained the discretionary right to redeem its senior notes held by
Cox RHINOS Trust, in whole or in part, at any time from August 28, 2002 to and
including October 1, 2002. On September 26, 2002, Cox redeemed its senior
notes held by Cox RHINOS Trust, which, in turn, resulted in Cox RHINOS Trust
repurchasing all of the outstanding RHINOS for $502.6 million, which amount
included interest accrued to the redemption date.

As a result of the
FELINE PRIDES settlement and the RHINOS repurchase discussed above, Cox no
longer has any Cox-obligated capital or preferred securities of subsidiary
trusts outstanding.

On November 1, 2002, Moodys Investor Service confirmed Coxs senior
unsecured debt rating of Baa2. The confirmation of the Baa2 rating with a
negative outlook concludes Moodys review of Coxs credit rating, which had
commenced in February 2002, as disclosed in Coxs Annual Report on Form 10-K
for the year ended December 31, 2001, as amended.

On November 7, 2002, Coxs $200.0 million aggregate principal amount of
Floating Rate MOPPRS/CHEERS was subject to mandatory tender to the remarketing
dealers. However, the remarketing dealers did not elect to remarket the
MOPPRS/CHEERS, and Cox repurchased the MOPPRS/CHEERS on November 7, 2002. The
total aggregate consideration paid to repurchase the MOPPRS/CHEERS was $227.2
million, which amount included the remarketing option value paid to the
remarketing dealers and accrued interest paid to the holders.

Recently Issued Accounting Pronouncements

On January 1, 2002, Cox adopted SFAS No. 142, Goodwill and Other
Intangible Assets, which requires that goodwill and certain intangible assets,
including those recorded in past business
combinations,

24



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##### Table of Contents



no longer be amortized through the statement of operations,
but instead be tested for impairment at least annually. The adoption of SFAS
No. 142 did not result in an impairment charge.

Effective January 1, 2003, Cox will adopt SFAS No. 143, Accounting for
Asset Retirement Obligations, which addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The adoption of SFAS No. 143
is not expected to have a material impact on Coxs financial position or
results of operations.

Also on January 1, 2002, Cox adopted SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which addresses financial
accounting and reporting for the impairment and disposition of long-lived
assets. The adoption of SFAS No. 144 did not have a material impact on Coxs
financial position or results of operations.

Also on January 1, 2002, Cox adopted the guidance prescribed in Emerging
Issues Task Force Issue No. 01-14, Income Statement Characterization of
Reimbursements Received for Out-of-Pocket Expenses Incurred, which specifies
that the collection and payment of certain fees must be presented on a gross
basis, as revenue and expense, rather than on a net basis. Retroactive
application of this standard is required. Accordingly, collection and payment
of fees by Cox, primarily franchise fees, have been reclassified on a gross
basis for all periods presented herein to conform to this new guidance.
Approximately $48.7 million and $145.4 million have been classified as revenues
for the three and nine months ended September 30, 2002, respectively, and
approximately $47.6 million and $137.3 million were reclassified from operating
expenses to revenues for the three and nine months ended September 30, 2001,
respectively.

In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS
No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections, which provides for the rescission
of several previously issued accounting standards, new accounting guidance for
the accounting of certain lease modifications and various technical corrections
that are not substantive in nature to existing pronouncements. Cox will adopt
SFAS No. 145 on January 1, 2003, except for the provisions relating to the
amendment of SFAS No. 13, which was adopted for transactions occurring
subsequent to May 15, 2002. Cox is currently assessing the impact of SFAS No.
145 on its financial position and results of operations.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, which requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
SFAS No. 146 will be applied prospectively to exit or disposal activities
initiated after December 31, 2002.

Critical Accounting Policies

Critical accounting policies are defined as those that are reflective of
significant judgments and uncertainties and that could potentially result in
materially different results under different assumptions and conditions. For a
more detailed discussion of these policies, see the Critical Accounting
Policies section of Coxs Annual Report on Form 10-K for the year ended
December 31, 2001, as amended. In addition to those discussed in Coxs annual
report, the following policy has been added due to the adoption of SFAS No.
142.



| |  | Intangible Assets. As discussed above, on January 1, 2002, Cox
adopted SFAS No. 142, Goodwill and Other Intangible Assets,and was
required to assess its intangible assets for impairment during the
three months ended March 31, 2002, and on at least an annual basis
thereafter. Coxs intangible assets are primarily made up of franchise
value. In assessing the recoverability of Coxs intangible assets, Cox
must make assumptions regarding estimated future cash flows to
determine the fair value of the respective assets. If these estimates
or their related
assumptions change in the future, Cox may be required to record
impairment charges for these assets.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Caution Concerning Forward-Looking Statements

This Form 10-Q includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements include, among others, statements that relate to
Coxs future plans, earnings, objectives, expectations, performance, and
similar projections, as well as any facts or assumptions underlying these
statements or projections. Actual results may differ materially from the
results expressed or implied in these forward-looking statements due to various
risks, uncertainties or other factors. These factors include competition
within the broadband communications industry, Coxs ability to achieve
anticipated subscriber and revenue growth, Coxs success in implementing new
services and other operating initiatives, and Coxs ability to generate
sufficient cash flow to meet debt service obligations and finance operations.
For a more detailed discussion of these and other risk factors, see the
Caution Concerning Forward-Looking Statements section of Coxs Annual Report
on Form 10-K for the year ended December 31, 2001, as amended. Cox assumes no
responsibility to update any forward-looking statements as a result of new
information, future events or otherwise.




Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Cox has estimated the fair value of its financial instruments as of
September 30, 2002 and December 31, 2001 using available market information or
other appropriate valuation methodologies. Considerable judgment, however, is
required in interpreting market data to develop the estimates of fair value.
Accordingly, the estimates presented herein are not necessarily indicative of
the amounts that Cox would realize in a current market exchange.

The carrying amount of cash, accounts and other receivables, accounts and
other payables and amounts due to/from CEI approximates fair value because of
the short maturity of those instruments. The fair value of Coxs investments
stated at fair value are estimated and recorded based on quoted market prices.
The fair value of Coxs equity method investments and investments stated at
cost cannot be estimated without incurring excessive costs. Cox is exposed to
market price risk volatility with respect to investments in publicly-traded and
privately-held entities. Additional information pertinent to the value of
Coxs investments is discussed in Note 3. Investments in Part I, Item 1.
Condensed Consolidated Financial Statements.

The fair value of interest rate swaps used for hedging purposes was
approximately $113.0 million and $53.4 million at September 30, 2002 and
December 31, 2001, respectively, and represents the estimated amount that Cox
would receive upon termination of the swap agreements.

Coxs outstanding commercial paper, revolving credit facilities, RHINOS
and floating rate notes and debentures bear interest at current market rates
and, thus, approximate fair value at September 30, 2002 and December 31, 2001.
Cox is exposed to interest rate volatility with respect to these variable-rate
instruments.

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The estimated fair value of Coxs fixed-rate notes and debentures,
exchangeable subordinated debentures and FELINE PRIDES at September 30, 2002
and December 31, 2001 are based on quoted market prices or a discounted cash
flow analysis using Coxs incremental borrowing rate for similar types of
borrowing arrangements and dealer quotations. A summary of the carrying
value, estimated fair value and the effect of a hypothetical one percentage
point decrease in interest rates on the foregoing fixed-rate instruments at
September 30, 2002 and December 31, 2001 is as follows:

|                                     |  |                       |         |                   |  |                    |         |          |  |            |         |                    |  |   |         |  |  |   |         |            |  |   |         | 
|------------------------------------ |  | --------------------- | ------- | ----------------- |  | ------------------ | ------- | -------- |  | ---------- | ------- | ------------------ |  | - | ------- |  |  | - | ------- | ---------- |  | - | ------- | 
|                                     |  | September 30, 2002    |         | December 31, 2001
|                                     |  |                       |         |                  
|                                     |  |                       |         |                   |  |                    |         |          |  | Fair Value |         |                    |  |   |         |  |  |   |         | Fair Value
|                                     |  | Carrying              |         | Fair              |  | (1% Decrease       |         | Carrying |  | Fair       |         | (1% Decrease      
|                                     |  | Value                 |         | Value             |  | in Interest Rates) |         | Value    |  | Value      |         | in Interest Rates)
|                                     |  |                       |         |                   |  |                    |         |          |  |            |         |                   
|                                     |  | (Millions of Dollars)
|Fixed-rate notes and
debentures      |  | $                     | 6,192.0 |                   |  | $                  | 6,234.5 |          |  | $          | 6,484.3 |                    |  | $ | 5,280.7 |  |  | $ | 5,258.0 |            |  | $ | 5,522.9 | 
|FELINE PRIDES                        |  |                       |        |                   |  |                    |        |          |  |            |        |                    |  |   | 652.3   |  |  |   | 717.0   |            |  |   | 719.0   | 
|Exchangeable subordinated
debentures |  |                       | 1,573.5 |                   |  |                    | 1,264.3 |          |  |            | 1,431.8 |                    |  |   | 1,829.5 |  |  |   | 1,762.6 |            |  |   | 1,888.2 | 




Item 4.  Disclosure
Controls and Procedures

The Chief Executive Officer and the Chief Financial Officer of Cox (its
principal executive officer and principal financial officer, respectively) have
concluded, based on their evaluation as of a date within 90 days prior to the
date of the filing of this Form 10-Q, that Coxs disclosure controls and
procedures: are effective to ensure that information required to be disclosed
by Cox in the reports filed or submitted by it under the Securities Exchange
Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the SECs rules and forms; and include controls
and procedures designed to ensure that information required to be disclosed by
Cox in such reports is accumulated and communicated to Coxs management,
including the Chief Executive Officer and the Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.

There were no significant changes in Coxs internal controls or in other
factors that could significantly affect these controls subsequent to the date
of such evaluation.




Part II  Other Information




Item 1.  Legal Proceedings

For a description of certain legal matters, refer to Note 11. Commitments
and Contingencies in Part I, Item 1. Condensed Consolidated Financial
Statements.

Cox is also a party to various legal proceedings that are ordinary and
incidental to its business. Management does not expect that any legal
proceedings currently pending will have a material adverse impact on Coxs
consolidated financial position, consolidated results of operations or
consolidated cash flows.

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Item 6.  Exhibits and Reports on Form 8-K



|(a) |  | Exhibits:
|--- |  | ---------

|     |  |   |  |                                                                                                                                                                                                                                                                                                                                                                        
|---- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  |  |  | Amended Certificate of Incorporation of Cox Communications, Inc. (Incorporated by reference to Exhibit 3.1 to Coxs Quarterly Report on Form
10-Q, filed with the Commission on November 14, 2000.)                                                                                                                                                                    
|3.2  |  |  |  | Bylaws of Cox Communications, Inc. (Incorporated by reference to Exhibit 3.2 to Coxs Registration Statement on Form S-4, File No. 33-80152,
filed with the Commission on December 16, 1994.)                                                                                                                                                                          
|10.1 |  |  |  | Joinder Agreement and Acknowledgement of Rights and Obligations, dated as of August 31, 2002, by and among Cox Communications, Inc., G.C.
Investments, A Limited Liability Company, Barbara J. Greenspun, as Trustee of the Unified Credit Trust created under a Declaration of Trust
dated December 6, 1988, Greenspun Legacy Limited Partnership and 3G Capital, LLC.
|21   |  |  |  | Subsidiaries of Cox Communications, Inc. (Incorporated by reference to Exhibit 21 to Coxs Quarterly Report on Form 10-Q, filed with the
Commission on August 8, 2002.)                                                                                                                                                                                                
|99.1 |  |  |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                     
|99.2 |  |  |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                     



|(b) |  | Reports on Form 8-K filed during the quarter ended September 30, 2002:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Form 8-K dated August 12, 2002 (filed August 12, 2002) filing under Item 7
the Statements Under Oath Regarding Facts and Circumstances Relating to
Securities Exchange Act Filings of James O. Robbins, Principal Executive
Officer, and Jimmy W. Hayes, Principal Financial Officer, of Cox
Communications, Inc., and reporting under Item 9 the signing of such
statements under oath as required by the Commissions June 27, 2002 Order
Requiring the Filing of Sworn Statements Pursuant to Section 21(a)(1) of the
Securities Exchange Act of 1934.                                                                                                                                                                                                                                                                                                                          
|   
|    |  | Form 8-K dated August 16, 2002 (filed September 3, 2002) reporting under
Item 5 each of the following: (1) the issuance by Cox of approximately 18.7
million shares of Cox Class A common stock to holders of its Income PRIDES
and Growth PRIDES in settlement of such holders underlying obligation to
purchase Cox Class A common stock; (2) the repurchase by Cox of
approximately $58.6 million of Coxs Senior Debentures due 2004, which were
tendered by the holders thereof pursuant to their right to require Cox to
repurchase their debentures following an unsuccessful remarketing of the
FELINE PRIDES; and (3) that Cox, Cox RHINOS Trust and the holder of the
RHINOS amended the terms of the RHINOS, and filing under Item 7 the Fifth
Supplemental Indenture and the First Amendment to the Remarketing Agreement
associated with the amendment of the RHINOS.
|   
|    |  | Form 8-K dated July 10, 2002 (filed September 17, 2002) reporting under Item
5 both (1) that Cox Communications and Cox Enterprises, Inc. amended their
Tax Allocation Agreement and (2) providing certain updated information
regarding legal proceedings, and reporting under Item 9 Coxs announcement
that it expects to be free cash flow positive for the entire year 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | Form 8-K/A dated July 10, 2002 (filed September 20, 2002) reporting under
Item 5 each of the following: (1) the issuance and sale of $1.0 billion
aggregate principal amount of Coxs 7.125% Notes due 2012; (2) that Cox
Communications and Cox Enterprises, Inc. amended their Tax Allocation
Agreement; and (3) providing certain updated information regarding legal
proceedings and filing under                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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| |  | Item 7 the underwriting agreement, the form of
global 7.125% Note due 2012,
statements setting forth the computation of ratio of earnings to fixed
charges and a Form T-1 (Statement of Eligibility of Trustee) all related to
the issuance and sale of Coxs 7.125% Notes due 2012. Cox also reported
under Item 9 its announcement that it expects to be free cash flow positive
for the entire year 2003.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Form 8-K dated September 24, 2002 (filed September 26, 2002) reporting under
Item 5 certain updated information concerning legal proceedings and Coxs
redemption of the senior notes held by Cox RHINOS Trust, which, in turn,
resulted in Cox RHINOS Trust repurchasing all of the outstanding RHINOS.                                                                                                    

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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.

|                         |  |                                                                                                                                       
|------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------
|                         |  | Cox Communications, Inc.                                                                                                              
|                         |  |                                                                                                                                       
|Date:  November 12, 2002 |  | /s/ Jimmy W. Hayes                                                                                                                    
|                         |  |                                                                                                                                       
|                         |  | Jimmy W. Hayes
Executive Vice President, Finance
and Chief Financial Officer
(principal financial officer and
duly authorized officer)

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CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14 OF THE
SECURITIES EXCHANGE ACT OF 1934

I, James O. Robbins, Chief Executive Officer of Cox Communications, Inc.,
certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Cox Communications,
Inc.;

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 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.

Date:  November 12, 2002

/s/ James O.
Robbins
James O. Robbins
Chief Executive Officer

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CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14 OF THE
SECURITIES EXCHANGE ACT OF 1934

I, Jimmy W. Hayes, Chief Financial Officer of Cox Communications, Inc., certify
that:

1.  I have reviewed this quarterly report on Form 10-Q of Cox Communications,
Inc.;

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 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.

Date:  November 12, 2002

/s/ Jimmy W.
Hayes
Jimmy W. Hayes
Chief Financial Officer

32