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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-Q (Mark One) þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2005
 o
    
    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 LOGO)
COMMUNICATIONS
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   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 þ   No o Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange
Act Rule 12b-2). Yes þ      No o There were 556,170,238 shares of Class A Common Stock, par value $0.01 per share, and
27,597,792 shares of Class C Common Stock, par value $0.01 per share, outstanding as of April 30,
2005.




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Cox Communications, Inc.
Form 10-Q
For the Quarter Ended March 31, 2005
Table of Contents PagePart I  Financial InformationItem 1.
    
    Condensed Consolidated Financial Statements
    
    
    2Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4.
    
    Controls and Procedures
    
    
    24Part II  Other InformationItem 1.
    
    Legal Proceedings
    
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3.
    
    Defaults Upon Senior Securities
    
    
    24Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    24Item 5.
    
    Other Information
    
    
    24Item 6.
    
    Exhibits
    
    
    25EX-4.3 AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCEEX-21 SUBSIDIARIES OF COX COMMUNICATIONS, INC.EX-31.1 SECTION 302, CERTIFICATION OF THE CEOEX-31.2 SECTION 302, CERTIFICATION OF THE CFOEX-32.1 SECTION 906, CERTIFICATION OF THE CEOEX-32.2 SECTION 906, CERTIFICATION OF THE CFO
  Preliminary Note This quarterly report on Form 10-Q is for the three-month period ended March 31, 2005.
This quarterly report modifies and supersedes documents filed prior to this quarterly report. The
SEC allows Cox to incorporate by reference information that Cox files with it, which means that
Cox can disclose important information to you by referring you directly to those documents.
Information incorporated by reference is considered to be part of this quarterly report. In
addition, information that Cox files with the SEC in the future will automatically update and
supersede information contained in this quarterly report. In this quarterly report, Cox, refers
to Cox Communications, Inc. and its subsidiaries, unless the context requires otherwise.




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Part I - Financial Information 
 Item 1. Condensed Consolidated Financial Statements Cox Communications, Inc.
Condensed Consolidated Balance Sheets March 31
    
    
    December 312005
    
    
    2004(unaudited)(Thousands of Dollars)AssetsCurrent assetsCash
    
    $
    112,775
    
    
    $
    76,339Accounts and notes receivable, less allowance for doubtful
accounts of $23,975 and $26,482
    
    
    387,071
    
    
    
    394,540Other current assets
    
    
    157,159
    
    
    
    136,386Total current assets
    
    
    657,005
    
    
    
    607,265Net plant and equipment
    
    
    7,862,193
    
    
    
    7,942,699Investments
    
    
    1,172,190
    
    
    
    1,171,647Intangible assets
    
    
    19,306,274
    
    
    
    19,329,452Goodwill
    
    
    106,889
    
    
    
    106,889Other noncurrent assets
    
    
    71,664
    
    
    
    95,789Total assets
    
    $
    29,176,215
    
    
    $
    29,253,741Liabilities and shareholders equityCurrent liabilitiesAccounts payable and accrued expenses
    
    $
    876,952
    
    
    $
    797,553Other current liabilities
    
    
    331,457
    
    
    
    339,742Cash obligation to untendered shareholders
    
    
    15,905
    
    
    
    483,603Current portion of long-term debt
    
    
    58,613
    
    
    
    59,962Amounts due to Cox Enterprises, Inc. (CEI)
    
    
    60,302
    
    
    
    5,573Total current liabilities
    
    
    1,343,229
    
    
    
    1,686,433Deferred income taxes
    
    
    8,318,571
    
    
    
    8,326,574Other noncurrent liabilities
    
    
    132,564
    
    
    
    148,733Long-term debt, less current portion
    
    
    13,228,034
    
    
    
    12,965,773Total liabilities
    
    
    23,022,398
    
    
    
    23,127,513Commitments and contingencies (Note 11)Shareholders equityClass A common stock, $0.01 par value; 671,000,000 shares
authorized; shares issued and outstanding: 556,170,238
    
    
    5,562
    
    
    
    5,562Class C common stock, $0.01 par value; 62,000,000 shares
authorized; shares issued and outstanding: 27,597,792
    
    
    276
    
    
    
    276Additional paid-in capital
    
    
    4,802,645
    
    
    
    4,802,117Retained earnings
    
    
    1,345,230
    
    
    
    1,318,218Accumulated other comprehensive income
    
    
    104
    
    
    
    55Total shareholders equity
    
    
    6,153,817
    
    
    
    6,126,228Total liabilities and shareholders
equity
    
    $
    29,176,215
    
    
    $
    29,253,741
 See notes to condensed consolidated financial statements. 2




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Cox Communications, Inc.
Condensed Consolidated Statements of Operations Three MonthsEnded March 312005
    
    
    2004(unaudited)(Thousands of Dollars)Revenues
    
    $
    1,704,060
    
    
    $
    1,540,357Costs and expensesCost of services (excluding depreciation and amortization)
    
    
    681,899
    
    
    
    635,816Selling, general and administrative expenses (excluding
depreciation and amortization)
    
    
    368,569
    
    
    
    337,308Depreciation and amortization
    
    
    434,196
    
    
    
    392,066Operating income
    
    
    219,396
    
    
    
    175,167Interest expense
    
    
    (163,488
    )
    
    
    (96,612
    )Loss on derivative instruments, net
    
    
    (30
    )
    
    
    (39
    )Gain on investments, net
    
    
    2
    
    
    
    26,809Other, net
    
    
    218
    
    
    
    (1,509
    )Income before income taxes, minority interest and
equity in net (losses) income of affiliated companies
    
    
    56,098
    
    
    
    103,816Income tax expense
    
    
    28,314
    
    
    
    45,706Income before minority interest and equity in net
(losses) income of affiliated companies
    
    
    27,784
    
    
    
    58,110Minority interest, net of tax
    
    
    
    
    
    
    (985
    )Equity in net (losses) income of affiliated companies, net of tax
of $507 and $(393), respectively
    
    
    (772
    )
    
    
    578Net income
    
    $
    27,012
    
    
    $
    57,703
 See notes to condensed consolidated financial statements. 3




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Cox Communications, Inc.
Condensed Consolidated Statement of Shareholders Equity AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveClass A
    
    
    Class C
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Total
    
    
    Income(unaudited)(Thousands of Dollars)December 31, 2004
    
    $
    5,562
    
    
    $
    276
    
    
    $
    4,802,117
    
    
    $
    1,318,218
    
    
    $
    55
    
    
    $
    6,126,228Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,012
    
    
    
    
    
    
    
    27,012
    
    
    $
    27,012Expenses incurred pursuant to the going-private
transaction paid by CEI on behalf of Cox
    
    
    
    
    
    
    
    
    
    
    528
    
    
    
    
    
    
    
    
    
    
    
    528Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    49
    
    
    
    49Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    27,061March 31, 2005
    
    $
    5,562
    
    
    $
    276
    
    
    $
    4,802,645
    
    
    $
    1,345,230
    
    
    $
    104
    
    
    $
    6,153,817
 See notes to condensed consolidated financial statements. 4




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Cox Communications, Inc.
Condensed Consolidated Statements of Cash Flows Three MonthsEnded March 312005
    
    
    2004(unaudited)(Thousands of Dollars)Cash flows from operating activitiesNet income
    
    $
    27,012
    
    
    $
    57,703Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    434,196
    
    
    
    392,066Deferred income taxes
    
    
    (7,624
    )
    
    
    21,651Loss on derivative instruments, net
    
    
    30
    
    
    
    39Gain on investments, net
    
    
    (2
    )
    
    
    (26,809
    )Minority interest, net of tax
    
    
    
    
    
    
    985Equity in net losses (income) of affiliated companies, net of
tax
    
    
    772
    
    
    
    (972
    )Other, net
    
    
    448
    
    
    
    4,473Decrease in accounts and notes receivable
    
    
    7,469
    
    
    
    22,943Increase in other assets
    
    
    (22,874
    )
    
    
    (12,510
    )Decrease (increase) in accounts payable and accrued expenses
    
    
    17,465
    
    
    
    (65,662
    )(Decrease) increase in taxes payable
    
    
    (4,074
    )
    
    
    4,500Decrease in other liabilities
    
    
    (29,825
    )
    
    
    (19,585
    )Net cash provided by operating activities
    
    
    422,993
    
    
    
    378,822Cash flows from investing activitiesCapital expenditures
    
    
    (332,022
    )
    
    
    (294,554
    )Investments in affiliated companies
    
    
    (1,929
    )
    
    
    Proceeds from the sale and exchange of investments
    
    
    
    
    
    
    67,247Other, net
    
    
    11,118
    
    
    
    3,578Net cash used in investing activities
    
    
    (322,833
    )
    
    
    (223,729
    )Cash flows from financing activitiesRevolving credit facilities borrowings, net
    
    
    400,000
    
    
    
    Commercial paper repayments, net
    
    
    (96,886
    )
    
    
    (155,016
    )Repayment of debt
    
    
    (41,213
    )
    
    
    (37,739
    )Payments to acquire Coxs former public stock
    
    
    (467,698
    )
    
    
    Proceeds from exercise of stock options
    
    
    
    
    
    
    1,765Increase in amounts due to CEI
    
    
    54,729
    
    
    
    16,630Other, net
    
    
    87,344
    
    
    
    16,461Net cash used in financing activities
    
    
    (63,724
    )
    
    
    (157,899
    )Net increase (decrease) in cash
    
    
    36,436
    
    
    
    (2,806
    )Cash at beginning of period
    
    
    76,339
    
    
    
    83,841Cash at end of period
    
    $
    112,775
    
    
    $
    81,035
 See notes to condensed consolidated financial statements. 5




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited) Quarter Ended March 31, 2005 1. Organization and Basis of Presentation Cox Communications, Inc. (Cox) is a multi-service broadband communications company serving
approximately 6.7 million customers nationwide. Cox is the nations third-largest cable television
provider and offers an array of broadband products and services to both residential and commercial
customers in its markets. These services primarily include analog and digital video, high-speed
Internet access and local and long-distance telephone. Cox operates in one operating segment,
broadband communications. Prior to December 2004, Cox was an indirect, majority-owned subsidiary of Cox Enterprises,
Inc. (CEI). In October 2004, CEI and two of its wholly-owned subsidiaries entered into an
Agreement and Plan of Merger with Cox. Pursuant to this merger agreement, Cox and one of the CEI
subsidiaries commenced a joint tender offer to purchase all of the shares of Cox Class A common
stock not beneficially owned by CEI. In connection with the consummation of the joint tender offer
and related follow-on merger, Cox was merged with a CEI subsidiary, with Cox as the surviving
corporation. Accordingly, at December 31, 2004 and March 31, 2005, Cox was a wholly-owned
subsidiary of CEI. In this report, the going-private transaction refers to the joint tender offer
and the follow-on merger collectively. The accompanying unaudited interim condensed consolidated financial statements of Cox 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
unaudited interim 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, as amended, for the year ended December 31, 2004. 2. Summary of Significant Accounting Policies The following is a summary of certain significant accounting policies. For a detailed
description of all of Coxs significant accounting policies, see Note 2. Summary of Significant
Accounting Policies and Other Items contained in Coxs Annual Report on Form 10-K, as amended, for
the year ended December 31, 2004. Use of Estimates 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, 2005 or any other interim
period. Stock Compensation Plans At March 31, 2005, Cox had one stock-based compensation plan for employees, a Long-Term
Incentive Plan (LTIP). Cox has not made any awards under the LTIP since the consummation of the
going-private transaction and does not expect to make any additional awards under the LTIP. At
March 31, 2004, Cox
had the LTIP and an Employee Stock Purchase Plan (ESPP). Both of these plans are more fully
described in Coxs Annual Report on Form 10-K, as amended, for the year ended December 31, 2004.
Cox accounts 6




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)  Continued for these plans under the intrinsic value method, which follows the recognition and
measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations. All options granted under the LTIP had an
exercise price equal to or greater than the market value of the underlying Class A common stock,
par value $1.00 per share (former public stock), on the grant date; therefore, no employee
compensation cost is reflected in net income with respect to options. Further, the ESPP was a
noncompensatory plan under APB Opinion No. 25, and, as such, no compensation cost was recognized
with respect to the ESPP. Cox recognized compensation cost related to restricted stock awards
granted under the LTIP, as the exercise price of the awards was less than the market value of the
underlying former public stock on the grant date. There were no restricted stock awards
outstanding during the three months ended March 31, 2005. The following table illustrates the effect on net income if Cox had applied the fair value
recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 148, Accounting
for Stock-Based Compensation  Transition and Disclosure, and SFAS No. 123, Accounting for
Stock-Based Compensation, to stock-based employee compensation: Three Months EndedMarch 312005
    
    
    2004(Thousands of Dollars)Net income, as reported
    
    $
    27,012
    
    
    $
    57,703Add: Stock-based compensation, as
reported
    
    
    
    
    
    
    1,116Deduct: Total stock-based compensation
determined under fair value based method
for all awards, net of tax
    
    
    (5,804
    )
    
    
    (7,171
    )Pro forma net income
    
    $
    21,208
    
    
    $
    51,648
 Recently Issued Accounting Pronouncements In March 2005, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No.
47, Accounting for Conditional Asset Retirement Obligations(FIN 47).FIN 47 clarifies that the
term conditional asset retirement obligation as used in FASB Statement No. 143, Accounting for
Asset Retirement Obligations,refers to a legal obligation of an entity to perform an asset
retirement activity in which the timing and/or method of settlement are conditional on a future
event that may or may not be within the control of the entity. Such an obligation to perform the
asset retirement activity is unconditional even though uncertainty exists about the timing and/or
method of settlement. Accordingly, an entity is required to recognize a liability for the fair
value of a conditional asset retirement obligation if the fair value of the liability can be
reasonably estimated. FIN 47 is effective no later than the end of fiscal years ending after
December 15, 2005. Cox is currently assessing the impact of FIN 47 on its consolidated financial
statements. In December 2004, the FASB issued SFAS No. 123 (Revised), Share-Based Payment(SFAS 123 (R)).
This statement replaces SFAS No. 123 and supersedes APB Opinion No. 25. SFAS No. 123 (R) requires
companies to apply a fair-value-based measurement method in accounting for share-based payment
transactions with employees and to record compensation cost for all stock awards granted after the
required effective date and to awards modified, repurchased, or cancelled after that date. In
addition, Cox is required to record compensation expense (as previous awards continue to vest) for
the unvested portion of previously granted awards that remain outstanding at the date of adoption.
As issued, SFAS No. 123 (R) was effective for interim periods beginning after June 15, 2005. In
April 2005, the Securities and Exchange Commission (SEC) amended the compliance date for SFAS No.
123 (R) to the beginning of the next fiscal year that
begins after June 15, 2005. Cox is currently assessing the impact of this statement on its
consolidated financial statements. 7




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)- Continued 3. Going-Private Transaction On December 8, 2004, CEI completed the going-private transaction, and Cox became a wholly
owned subsidiary of CEI. The aggregate purchase price (exclusive of estimated fees and expenses)
was approximately $8.4 billion. The purchase price was funded by both CEI and Cox. Of the total
$8.4 billion, CEI paid approximately $1.5 billion, with Cox paying the remaining approximate $6.9
billion, which was funded primarily through borrowings under lines of credit and the issuance of
senior notes of varying maturities. Approximately 50.2 million shares of common stock were not tendered and purchased through the
tender offer. These shares were converted into the right to receive $34.75 per share in cash,
without interest, and cancelled as part of the follow-on merger. As of March 31, 2005, Cox had a
remaining cash obligation to purchase the untendered shares of approximately $15.9 million, which
is reflected as Cash obligation to untendered shareholders
in the accompanying condensed consolidated balance
sheet. CEI elected to apply push-down basis accounting with respect to shares acquired in the
going-private transaction. Accordingly, the aggregate $8.4 billion purchase price has been
pushed-down to the condensed consolidated financial statements of Cox. As a result, the net tangible and
intangible assets of Cox at March 31, 2005 and December 31, 2004 have been stepped-up to fair value
to the extent of the 37.96% minority interest acquired in the going-private transaction pursuant to
the purchase method of accounting for business combinations. These initial purchase price
allocations were based on preliminary estimated fair values of the net tangible and intangible
assets as of the acquisition date and may be adjusted within one year of the purchase date for
changes in estimates of the fair value of assets acquired and liabilities assumed based on the
results of an independent appraisal process expected to be completed during 2005. 4. Investments March 31
    
    
    December 312005
    
    
    2004(Thousands of Dollars)Investments stated at fair value:Available-for-sale
    
    $
    419
    
    
    $
    339Derivative instruments
    
    
    909
    
    
    
    939Equity method investments
    
    
    1,159,783
    
    
    
    1,159,290Investments stated at cost
    
    
    11,079
    
    
    
    11,079Total investments
    
    $
    1,172,190
    
    
    $
    1,171,647
 Investments Stated at Fair Value The aggregate cost of Coxs investments stated at fair value at March 31, 2005 and December
31, 2004 was $1.6 million. Gross unrealized gains on investments were $0.1 million at March 31,
2005 and December 31, 2004. Gross realized gains and losses on investments are as follows: Three Months Ended March 312005
    
    
    2004(Thousands of Dollars)Realized gains
    
    $
    2
    
    
    $
    26,809Realized losses
    
    
    
    
    
    
    
 8




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)- Continued 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 7.
Derivative Instruments and Hedging Activities. Sprint Corporation.In March 2004, Cox sold 0.1 million shares of Sprint Corporations PCS
Group (Sprint PCS) preferred stock for aggregate net proceeds of approximately $56.9 million. Cox
recognized a pre-tax gain of $19.5 million on the sale of these shares. In April 2004, Sprint eliminated its PCS tracking stock by mandating the exchange of its PCS
shares for shares of its FON common stock. Cox held approximately 330,000 PCS shares and received
approximately 165,000 FON shares in the mandatory exchange. In June 2004, Cox sold the FON shares
for net proceeds of approximately $3.0 million. Cox recognized a pre-tax gain of approximately
$2.3 million on the sale of these shares. As a result of the sale, Cox no longer holds any shares
of Sprint stock. Equity Method Investments Discovery Communications, Inc.The principal businesses of Discovery are the
advertiser-supported basic cable networks The Discovery Channel, The Learning Channel, Animal
Planet Network, The Travel Channel and Discovery Europe and the retail businesses of Discovery.com.
In 2000, Cox ceased applying the equity method on its investment in Discovery as Coxs cumulative
proportionate share of equity in net losses exceeded the carrying amount of the investment. As of
March 31, 2005, Cox has not resumed applying the equity method on its investment in Discovery, as
Coxs proportionate share of equity in net income has not exceeded its share of net losses not
recognized during the period in which the equity method has been suspended. As part of the going-private transaction and the related push-down basis accounting pursuant
to the purchase method of accounting for business combinations, as further described in Note 3.
Going-Private Transaction, Coxs investment in Discovery was stepped-up to fair value to the
extent of the 37.96% minority interest acquired in the going-private transaction. Accordingly, a
purchase price adjustment of approximately $1.1 billion is reflected in the accompanying
condensed consolidated balance sheet as of March 31, 2005 and December 31, 2004. Other During the first quarter of 2004, Cox sold certain other non-strategic investments for
aggregate net proceeds of approximately $10.3 million. Cox recognized a pre-tax gain of $7.3
million on the sale of these investments. 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 March 31, 2005 and December 31, 2004. 5. Intangible Assets On January 1, 2002, Cox adopted SFAS No. 142, Goodwill and Other Intangible Assets, which
requires that goodwill and certain intangible assets with indefinite useful lives no longer be
amortized, but instead be tested for impairment at least annually. Cox has determined that its
franchise value intangible assets have an indefinite useful life. Prior to September 2004, Cox assessed franchise value for impairment under SFAS No. 142 by
utilizing a residual approach whereby Cox measured the implied fair value of each franchise value
intangible asset subject to the same unit of accounting by deducting from the fair value of each
cable system cluster the fair value of the cable system clusters other net assets, including
previously unrecognized intangible assets. In performing an impairment test in accordance with
SFAS No. 142, Cox considers the guidance contained in 9




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)- Continued Emerging Issues Task Force Issue No. 02-17,
Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination, whereby
Cox considers assumptions that marketplace participants would consider, such as expectations of
future contract renewals and other benefits related to the intangible asset, when measuring the
fair value of the cable system clusters other net assets. In September 2004, the SEC announced that a direct value method should be used to determine
the fair value of all intangible assets required to be recognized under SFAS No. 141, Business
Combinations, and that registrants should apply a direct value method to such assets acquired in
business combinations completed after September 29, 2004. Further, registrants who had applied the
residual method to the valuation of intangible assets for purposes of impairment testing were
required to perform an impairment test, a transition impairment test, using a direct value method
on all intangible assets that had been previously valued using the residual method under SFAS No.
142 no later than the beginning of their first fiscal year beginning after December 15, 2004.
Impairments of intangible assets recognized upon application of a direct value method by entities
previously applying the residual method, including the related deferred tax effects, were to be
reported as a cumulative effect of a change in accounting principle. Consistent with this SEC position, Cox began applying a direct value method to determine the
fair value of its indefinite-lived intangible assets comprised of cable franchise rights, acquired
prior to September 29, 2004. During the fourth quarter of 2004, Cox performed a transition
impairment test, which resulted in a charge of approximately $2.0 billion ($1.2 billion, net of
tax). Also during the fourth quarter of 2004, Cox revised its marketplace assumption surrounding its
estimated cost of capital as a result of the going-private transaction. In accordance with SFAS
No. 142, Cox performed an impairment test, which along with the revised estimated cost of capital,
included a revised long-range operating forecast. As a result of the impairment test, Cox
recognized an impairment charge of approximately $2.4 billion related to its cable franchise
rights, as calculated using a direct value method. As part of the going-private transaction and the related push-down basis accounting pursuant
to the purchase method of accounting for business combinations, as further described in Note 3.
Going-Private Transaction, Cox recorded customer relationship, trade name and goodwill
intangibles. The trade name intangible asset, which represents the value associated with the Cox
name, is deemed to have an indefinite useful life. Customer relationship intangible assets, which represent the value attributable to Cox
customers, are deemed to have a finite useful life of six years. Coxs other intangible assets
that have a finite useful life are comprised primarily of non-compete agreements, contractual
rights and cable franchise renewal costs. These intangible assets are amortized on a straight-line
basis over the term of the related agreement. Cox evaluates the useful lives of its finite lived
intangible assets each reporting period to determine whether events or circumstances warrant
revised estimates of useful lives. Summarized below are the carrying value and accumulated amortization of intangible assets that
continue to be amortized under SFAS No. 142, as well as the carrying value of those intangible
assets, which are no longer amortized: 10




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)- Continued March 31, 2005
    
    
    
    
    
    
    
    
    
    
    December 31, 2004Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingValue
    
    
    Amortization
    
    
    Value
    
    
    Value
    
    
    Amortization
    
    
    Value(Thousands of Dollars)Intangible assets
subject
to amortization
    
    $
    662,676
    
    
    $
    56,630
    
    
    $
    606,046
    
    
    $
    659,967
    
    
    $
    30,743
    
    
    $
    629,224Trade name
    
    
    
    
    
    
    
    
    
    
    380,844
    
    
    
    
    
    
    
    
    
    
    
    380,844Franchise value
    
    
    
    
    
    
    
    
    
    
    18,319,384
    
    
    
    
    
    
    
    
    
    
    
    18,319,384Goodwill
    
    
    
    
    
    
    
    
    
    
    106,889
    
    
    
    
    
    
    
    
    
    
    
    106,889Total intangible assets
    
    
    
    
    
    
    
    
    
    $
    19,413,163
    
    
    
    
    
    
    
    
    
    
    $
    19,436,341
 6. Debt March 31
    
    
    December 312005
    
    
    2004(Thousands of Dollars)Revolving credit facilities
    
    $
    2,050,000
    
    
    $
    1,650,000Commercial paper
    
    
    
    
    
    
    96,142Term loan
    
    
    2,000,000
    
    
    
    2,000,000Medium-term notes
    
    
    264,446
    
    
    
    264,429Notes and debentures
    
    
    8,739,300
    
    
    
    8,765,359Exchangeable subordinated debentures
    
    
    19,892
    
    
    
    19,546Capitalized lease obligations
    
    
    192,437
    
    
    
    209,576Other
    
    
    20,572
    
    
    
    20,68313,286,647
    
    
    
    13,025,735Less current portion
    
    
    58,613
    
    
    
    59,962Total long-term debt
    
    $
    13,228,034
    
    
    $
    12,965,773
 See Note 7. Derivative Instruments and Hedging Activities for a discussion of the accounting
for certain derivative instruments embedded in the exchangeable subordinated debentures, which have
been classified as a component of debt in the Condensed Consolidated Balance Sheets at March 31,
2005 and December 31, 2004. Revolving Credit Facilities In June 2004, Cox entered into a new five-year, unsecured revolving bank credit facility with
a capacity of $1.25 billion which will be available through June 4, 2009. This credit facility
replaced Coxs $900.0 million 364-day and $900.0 million five-year revolving bank credit
facilities. In December 2004, Cox entered into a second five-year, unsecured revolving bank credit
facility with a capacity of $1.5 billion. Also in December 2004, Cox amended and restated its June
2004 facility to conform the terms with the new facility. At Coxs election, the interest rate on
the credit agreements is based on London Interbank Offered Rate (LIBOR), the Federal funds rate or
an alternate base rate. The credit agreements also impose commitment fees on the unused portion of
the total amounts available based on Coxs corporate credit ratings. At March 31, 2005, Cox had
outstanding borrowings of $1.1 billion and $922.5 million under the $1.5 billion facility and the
$1.25 billion facility, respectively. At December 31, 2004, Cox had outstanding borrowings of
$907.5 million and $742.5 million under the $1.5 billion facility and the $1.25 billion facility,
respectively. At March 31, 2005 and December 31, 2004, Cox was in compliance with the covenants
of its credit facilities. Exchangeable Subordinated Debentures Exchangeable subordinated debentures at March 31, 2005 are comprised of $62.3 million
aggregate principal amount at maturity of exchangeable subordinated discount debentures, referred
to as Discount Debentures. Interest Rate Swaps 11




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)- Continued Cox utilizes 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 LIBOR. 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, these counterparties are
major financial institutions, rated investment grade or better. Accordingly, Cox does not
anticipate nonperformance by the counterparties. For a further discussion regarding Coxs
accounting for interest rate swaps, see Note 7. 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 March 31, 2005 and December 31, 2004: March 31
    
    
    December 312005
    
    
    2004Notional amount (in thousands)
    
    $
    1,375,000
    
    
    $
    1,375,000Weighted average fixed interest rate received
    
    
    7.35
    %
    
    
    7.35
    %Weighted average floating interest rate paid
    
    
    4.95
    %
    
    
    4.37
    %Maturity
    
    
    2005  2009
    
    
    
    2005 - 2009
 As a result of the settlements under Coxs interest rate swap agreements, interest expense was
reduced by $8.0 million and $18.1 million, respectively, during the three months ended March 31,
2005 and 2004. 7. Derivative Instruments and Hedging Activities Cox accounts for derivative instruments in accordance with SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, 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 does not hold or issue derivative instruments for trading purposes and is not a party to
leveraged instruments. From time to time, however, Cox uses derivative instruments to manage its
exposure to changes in the fair value of certain of its assets or liabilities or to manage its
exposure to changes in interest rates or equity prices. These derivative instruments are
designated and accounted for by Cox as hedges of the underlying exposure being managed, as
prescribed by SFAS No. 133. In addition, upon adoption of SFAS No. 133, certain of Coxs debt
instruments and investments contained embedded or freestanding derivatives, as defined. Cox has
not designated these embedded and freestanding derivatives as hedges under SFAS No. 133 and, as
such, changes in their fair value are being recognized in earnings as derivative gains or losses. The credit risks associated with Coxs derivative financial instruments are controlled through
the evaluation and monitoring of the creditworthiness of the counterparties. The counterparties
are major financial institutions, rated investment grade or better. Accordingly, Cox does not
anticipate nonperformance by the counterparties. 12




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)- Continued Cox recorded nominal pre-tax losses on derivative instruments during the three months ended
March 31, 2005 and 2004 related to its stock purchase warrants. Following is a summary of Coxs
derivative instruments. Interest Rate Swap Agreements Cox utilizes interest rate swap agreements designed to assist Cox in maintaining a mix of
fixed and floating rate debt by converting a portion of existing fixed rate debt into a floating
rate obligation. Cox has designated and accounted for its 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 liabilities as of March 31, 2005 and other
assets as of December 31, 2004 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 liability of $6.1 million
at March 31, 2005 and a derivative asset of $16.4 million at December 31, 2004. Exchangeable Subordinated Debentures As of March 31, 2005, Cox had one series of exchangeable subordinated debentures outstanding,
referred to as Discount Debentures. The Discount 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 its value, in part, based on the trading price of Sprint common stock (FON), U.S. Treasury
rates and Coxs credit spreads. Cox has not designated these embedded derivatives as a hedge of its
investment in FON 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 $0 at March 31, 2005 and December 31, 2004. Stock Purchase Warrants Cox holds warrants to purchase equity securities of certain publicly-traded and privately-held
entities. Warrants that can be exercised and settled by the delivery of net shares such that Cox
pays no cash upon exercise are deemed freestanding derivative instruments, as prescribed by SFAS
No. 133. Cox has not designated net share warrants as hedging instruments; accordingly, 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 $0.9 million at March 31, 2005 and
December 31, 2004, and has been classified as a component of investments in the Condensed
Consolidated Balance Sheets. 8. Transactions with Affiliated Companies Cox receives day-to-day cash management services from CEI, with settlements of outstanding
balances between Cox and CEI occurring periodically at market interest rates. The amounts due to
CEI are generally due on demand and represent the net balance of the intercompany transactions.
The amount due to CEI from Cox was $60.3 million and $5.6 million at March 31, 2005 and December
31, 2004, respectively. The
interest rate was 3.0% and 2.4% at March 31, 2005 and December 31, 2004, respectively.
Included in amounts due from CEI are the following transactions: (Thousands of Dollars)Intercompany due to CEI, December 31, 2004
    
    $
    5,573Cash transferred to CEI
    
    
    (58,366
    )Net operating expense reimbursements
    
    
    113,095Intercompany due to CEI, March 31, 2005
    
    $
    60,302
 13




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)- Continued 9. Retirement Plans The following table provides a detail of the components of net periodic benefit cost for the
three months ended March 31, 2005 and 2004: Three Months Ended March 312005
    
    
    2004Pension
    
    
    Other
    
    
    Pension
    
    
    OtherBenefits
    
    
    Benefits
    
    
    Benefits
    
    
    Benefits(Thousands of Dollars)Service cost
    
    $
    8,972
    
    
    $
    1,576
    
    
    $
    7,193
    
    
    $
    1,338Interest cost
    
    
    6,141
    
    
    
    951
    
    
    
    5,271
    
    
    
    777Expected return on plan
assets
    
    
    (7,087
    )
    
    
    (416
    )
    
    
    (5,791
    )
    
    
    (301
    )Prior service cost
amortization
    
    
    33
    
    

    
    
    
    
    
    59
    
    
    
    Actuarial loss amortization
    
    
    357
    
    
    
    10
    
    
    
    895
    
    
    
    75Net periodic benefit
cost
    
    $
    8,416
    
    
    $
    2,121
    
    
    $
    7,627
    
    
    $
    1,889
 In December 2004, Cox contributed $10.0 million of its overall 2004 minimum required
contribution; the remaining $28.8 million will be contributed during 2005. Cox expects to
contribute $6.0 million to its other postretirement benefit plans during 2005. 10. Supplemental Financial Information March 31
    
    
    December 312005
    
    
    2004(Thousands of Dollars)Other current assetsInventory
    
    $
    68,014
    
    
    $
    68,221Prepaid assets
    
    
    52,116
    
    
    
    31,974Deferred income tax asset
    
    
    33,988
    
    
    
    33,988Other
    
    
    3,041
    
    
    
    2,203Total other current assets
    
    $
    157,159
    
    
    $
    136,386Other current liabilitiesDeposits and advances
    
    $
    112,602
    
    
    $
    103,800Income tax payable
    
    
    117,097
    
    
    
    121,269Other
    
    
    101,758
    
    
    
    114,673Total other current liabilities
    
    $
    331,457
    
    
    $
    339,742
 Three Months EndedMarch 312005
    
    
    2004(Thousands of Dollars)Additional cash flow informationCash paid for interest
    
    $
    104,480
    
    
    $
    69,030Cash paid for income taxes
    
    
    39,603
    
    
    
    20,169
 14




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)  Continued 11. Commitments and Contingencies In connection with certain of Coxs recent acquisitions and other transactions, Cox has
provided certain indemnities to the respective counterparties with respect to future claims that
may arise from state or federal taxing authorities. The nature and terms of these indemnities vary
by transaction and generally remain in force through the requisite statutory review periods. In
addition, the events or circumstances that would require Cox to perform under these indemnities are
transaction and circumstance specific. As of March 31, 2005, Cox believes the likelihood that it
will be required to perform under these indemnities is remote and that the maximum potential future
payments that Cox could be required to make under these indemnifications are not determinable at
this time, as any future payments would be dependent on the type and extent of the related claims,
and all available defenses, which are not reasonably estimable. Cox has not historically incurred
any material costs related to performance under these types of indemnities. 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. (CoxCom), 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 District 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. Cox @Home, Inc., a wholly-owned subsidiary of Cox, is a stockholder 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 alleged 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. On November 12, 2002, Cox, Cox @Home, and David Woodrow filed a motion to
dismiss or transfer the action for improper venue or, in the alternative, to transfer the action
pursuant to 28 U.S.C. Sec. 1404. On September 30, 2003, the Delaware District Court ordered the
action transferred to the United States District Court for the Southern District of New York. On
December 22, 2003, Cox and Cox@Home filed a motion to dismiss, or, in the alternative, for judgment
on the pleadings, with respect to the Section 16(b) claim. On August 12, 2004, the court granted
Coxs and Cox @Homes motion and dismissed the Section 16(b) claim. Cox and Cox @Home, among
others, subsequently entered into an agreement with Excite@Home tolling the statute of limitations
on the remaining claim for purported breach of fiduciary duty, and on December 3, 2004, the court
dismissed that claim without prejudice. On January 4, 2005, plaintiff noticed its appeal of the
dismissal of the Section 16(b) claim to the United States Court of the Appeals for the Second
Circuit. Briefing on the appeal has been completed. 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 California, San Mateo County, on behalf of
themselves and all other stockholders 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 15




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Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)  Continued 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 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 subsequently appealed the Bankruptcy Courts
decision to the United States District Court for the Northern District of California. On September
29, 2003, the District Court affirmed the order of the Bankruptcy Court. On October 27, 2003,
plaintiffs filed a notice of appeal of the District Courts decision to the United States Court of
Appeals for the Ninth Circuit, and briefing of the appeal has concluded. Cox intends to defend
this action 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 class action lawsuit in the United States District Court for the Southern District
of New York against AT&T Corp. and certain former officers and directors of Excite@Home, among
others. Cox was served on May 10, 2002. This case subsequently was consolidated with a related
case captioned Semen Leykin v. AT&T Corp., et al., and another related case, and an amended
complaint in the consolidated case, naming Cox as a defendant, was filed and served on November 7,
2002. On March 10, 2005, the Court issued an order certifying a class of all persons and entities
who purchased the publicly traded common stock of Excite@Home during the period March 28, 2000
through September 28, 2001, and directing that notice of the certification be given to the class.
The class excludes the defendants in the action and certain of their related persons. The
complaint asserts a claim against Cox as an alleged 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 formerly 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. On February 11, 2003, Cox and Woodrow filed a dispositive motion to dismiss on
various grounds, including failure to state a claim. On September 17, 2003, the District Court
granted the motion in part and denied it in part. Specifically, the Court dismissed several
purported statements by Excite@Home as bases for potential liability because they were merely
generalized expressions of confidence and optimism constituting puffery, dismissed the fiduciary
duty claim against Mr. Woodrow as pre-empted by the federal securities laws, and denied the motions
as to the remaining allegations of the complaint. On October 7, 2003, Cox and Mr. Woodrow sought
reconsideration of a portion of the Courts order. On February 17, 2004, the Court granted
plaintiffs leave to file a motion to amend the complaint to add an additional claim for relief
against all defendants under Section 14(a) of the Securities Exchange Act in connection with an
allegedly false or misleading proxy statement issued by Excite@Home. On February 24, 2004, the
Court granted Coxs and Mr. Woodrows motion for reconsideration and dismissed plaintiffs
allegations that Cox and Mr. Woodrow were control persons with respect to primary violations of
Rule 10b-5 alleged to have occurred after August 28, 2000. On April 5, 2004, Cox and certain other
defendants jointly filed a motion to dismiss the Section 14(a) cause of action that was added in
plaintiffs amended
complaint. On August 9, 2004, the District Court granted defendants motion, and dismissed
the Section 14(a) cause of action. Cox intends to defend this action vigorously. The outcome
cannot be predicted at this time. On June 14, 2004, Acacia Media Technologies Corporation filed a lawsuit against Cox and
Hospitality Network, Inc., (a wholly-owned subsidiary of Cox) among others, in the United States
District Court for the Northern District of California asserting claims for patent infringement.
The complaint seeks preliminary and permanent injunctive relief and damages in an unspecified
amount. On July 7, 2004, Acacia Media 16




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##### Table of Contents



Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)  Continued filed an amended complaint to its lawsuit to add CoxCom as a
defendant. Cox and CoxCom timely filed their answer to the amended complaint on October 21, 2004.
On November 11, 2004, Acacia Media filed a motion before the Multi-District Litigation Panel to
transfer related patent actions under 28 U.S.C. § 1407. That motion sought to transfer several
related cases brought by Acacia in other jurisdictions to a single court. All of the defendants
opposed that motion. A hearing on the motion was held on January 27, 2005. On February 24, 2005,
the Multi-District Litigation panel transferred all of the Acacia litigation to Judge Ware in the
Northern District of California. CoxCom and Hospitality Network intend to defend the action
vigorously. The outcome cannot be predicted at this time. Eighteen putative class action lawsuits were filed, purportedly on behalf of the public
stockholders of Cox, challenging CEIs August 2, 2004 proposal to acquire all of the issued and
outstanding shares of Cox Class A common stock not beneficially owned by CEI, for $32.00 in cash
per share. Fifteen of the lawsuits were filed in the Court of Chancery of the State of Delaware.
Following a hearing held on August 24, 2004, the Delaware court consolidated the actions under the
caption In re Cox Communications, Inc. Shareholders Litigation, Consolidated C.A. No. 613-N. The
Delaware complaint names as defendants Cox, CEI, Cox Holdings, Barbara Cox Anthony and Anne Cox
Chambers, and the members of the Cox Board of Directors. The Delaware complaint alleges, among
other things, that the price proposed to be paid in the proposed transaction was unfairly low, that
the initiation and timing of the proposed transaction were in breach of the defendants purported
duties of loyalty and constituted unfair dealing, that the structure of the proposed transaction
was inequitably coercive, that defendants caused materially misleading and incomplete information
to be disseminated to the public holders of the Cox shares, and that the Board defendants would
breach their duty of care and good faith by approving the proposed transaction and by purportedly
attempting to disenfranchise the holders of the Cox shares by circumventing certain alleged
contractual voting rights. The Delaware complaint seeks an injunction against the proposed
transaction, or, if it is consummated, rescission of the transaction and imposition of a
constructive trust, as well as money damages, an accounting, attorneys fees, expenses and other
relief. The remaining three putative class action lawsuits were filed in the Superior Court of Fulton
County, Georgia, styled Brody v. Cox Communications, Inc., et al., 2004CV89198, Golombuski v. Cox
Communications, Inc., et al., 2004CV89216, and Durgin v. Cox Communications, Inc., et al.,
2004CV89301. The Georgia actions were purportedly brought on behalf of the public holders of
shares of Cox Class A common stock against Cox, CEI and the Cox Board, although four counts of the
Golombuski complaint were brought derivatively on behalf of Cox against the Cox Board and CEI.
With the exception of the Durgin action, which did not assert claims against CEI, the Georgia
actions each allege that CEI and the Cox Board breached their fiduciary duties in connection with
the proposed transaction, which plaintiffs allege proposed a purchase price which was below the
fair value of the Cox shares. On August 18, 2004, plaintiffs in the Georgia actions moved for
entry of a case management order to consolidate the Georgia Actions under the caption In re Cox
Communications, Inc. Shareholder Litigation, C.A. No. 2004-CV-89198. On October 19, 2004, CEI and Cox publicly announced that they had entered into a Merger
Agreement pursuant to which the shares of Cox Class A common stock not beneficially owned by CEI
would be proposed to be acquired for $34.75 per share by means of a tender offer and follow-on
merger. On October 18, 2004, prior to the announcement of the Merger Agreement, the parties to the
Delaware action agreed upon and executed a memorandum of understanding. Pursuant to the Delaware
memorandum of understanding, the parties to the Delaware action agreed, subject to the conditions
set forth therein, to enter
into a stipulation of settlement, to cooperate in public disclosures related to the Merger
Agreement, and to use their best efforts to gain approval of the proposed settlement terms by the
Delaware court. Also on October 18, 2004, the parties to the Georgia actions entered into a memorandum of
understanding which set forth the agreement by the parties for the dismissal of the Georgia
actions. Pursuant to the Delaware memorandum of understanding and the Georgia memorandum of
understanding, defendants provided plaintiffs counsel in the Delaware action and the Georgia
actions with 17




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##### Table of Contents



Cox Communications, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)  Continued confirmatory discovery relating to the Merger Agreement, including additional document
production and depositions, and that the parties agreed to suspend all other proceedings in the
actions except any settlement related proceedings in Delaware and Georgia. On November 18, 2004, the court entered a scheduling order in the Delaware action. The
scheduling order preliminarily certified the Delaware action as a class action on behalf of a class
consisting of all record and beneficial holders of Cox shares (other than CEI and its
subsidiaries), from and including August 2, 2004 through and including the date of the consummation
of the merger, and certain persons related to the class members. The defendants in the Delaware
action are excluded from the class. On January 13, 2005, an individual shareholder and several mutual funds who purportedly were
members of the plaintiff class filed a joint objection to the requested attorneys fees sought by
plaintiffs counsel, but did not object to the proposed settlement itself. On March 16, 2005, the
Delaware Court of Chancery held a hearing at which the court considered the merits of the proposed
settlement of the Delaware action. On March 18, 2005, the Delaware court entered a final order
approving the proposed settlement, certifying the requested class, and dismissing the claims
asserted against the defendants with prejudice. The time to appeal this order has expired, and no
appeal was taken. The court separately will consider the plaintiffs pending request for
attorneys fees on May 9, 2005. Pursuant to the Georgia memorandum of understanding, the parties to the Georgia actions have
agreed jointly to seek the dismissal with prejudice of the Georgia actions within two business days
of the date that the Delaware courts orders approving the settlement and addressing the Delaware
plaintiffs request for attorneys fees become final and are no longer subject to further appeal or
review. In addition, in connection with the joint motion, the plaintiffs in the Georgia actions
will seek the Georgia courts authorization for Cox to satisfy an award of attorneys fees. 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. 18




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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-month periods ended March 31, 2005 and
2004. Results of Operations The following table sets forth summarized consolidated financial information for the three
months ended March 31, 2005 and 2004. Three Months EndedMarch 312005
    
    
    2004
    
    
    $ Change
    
    
    % Change(Thousands of Dollars)Revenues
    
    $
    1,704,060
    
    
    $
    1,540,357
    
    
    $
    163,703
    
    
    
    11
    %Cost of services
    
    
    681,899
    
    
    
    635,816
    
    
    
    46,083
    
    
    
    7
    %Selling, general and administrative
expenses
    
    
    368,569
    
    
    
    337,308
    
    
    
    31,261
    
    
    
    9
    %Depreciation and amortization
    
    
    434,196
    
    
    
    392,066
    
    
    
    42,130
    
    
    
    11
    %Operating income
    
    
    219,396
    
    
    
    175,167
    
    
    
    44,229
    
    
    
    25
    %Interest expense
    
    
    (163,488
    )
    
    
    (96,612
    )
    
    
    (66,876
    )
    
    
    69
    %Loss on derivative
instruments, net
    
    
    (30
    )
    
    
    (39
    )
    
    
    9
    

    
    
    (23
    %)Gain on investments, net
    
    
    2
    
    
    
    26,809
    
    
    
    (26,807
    )
    
    
    (100
    %)Other, net
    
    
    218
    
    
    
    (1,509
    )
    
    
    1,727
    
    
    
    (114
    %)Income tax expense
    
    
    28,314
    
    
    
    45,706
    
    
    
    (17,392
    )
    
    
    (38
    %)Minority interest, net of tax
    
    
    
    
    
    
    (985
    )
    
    
    985
    
    
    NMEquity in net (losses) income of
affiliated companies, net of
tax
    
    
    (772
    )
    
    
    578
    
    
    
    (1,350
    )
    
    NMNet income
    
    $
    27,012
    
    
    $
    57,703
    
    
    $
    (30,691
    )
    
    
    (53
    %)
 NM denotes percentage is not meaningful Revenues The following table sets forth summarized revenue information for the three months ended March
31, 2005 and 2004. Three Months Ended March 312005
    
    
    % of Total
    
    
    2004
    
    
    % of Total
    
    
    $ Change
    
    
    % Change(Thousands of Dollars)ResidentialVideo
    
    $
    989,481
    
    
    
    58
    %
    
    $
    950,631
    
    
    
    62
    %
    
    $
    38,849
    
    
    
    4
    %Data
    
    
    321,269
    
    
    
    19
    %
    
    
    257,683
    
    
    
    17
    %
    
    
    63,586
    
    
    
    25
    %Telephony
    
    
    169,628
    
    
    
    10
    %
    
    
    133,960
    
    
    
    9
    %
    
    
    35,668
    
    
    
    27
    %Other
    
    
    26,618
    
    
    
    1
    %
    
    
    26,507
    
    
    
    1
    %
    
    
    111
    
    
    
    
    %Total
residential
    
    
    1,506,996
    
    
    
    88
    %
    
    
    1,368,781
    
    
    
    89
    %
    
    
    138,214
    
    
    
    10
    %Commercial
    
    
    99,344
    
    
    
    6
    %
    
    
    83,183
    
    
    
    5
    %
    
    
    16,161
    
    
    
    19
    %Advertising
    
    
    97,720
    
    
    
    6
    %
    
    
    88,393
    
    
    
    6
    %
    
    
    9,327
    
    
    
    11
    %Total revenues
    
    $
    1,704,060
    
    
    
    100
    %
    
    $
    1,540,357
    
    
    
    100
    %
    
    $
    163,703
    
    
    
    11
    %
 The 11% increase in total revenues is primarily attributable to:  
    a 23% increase in customers for advanced services, including digital cable, high-speed
Internet access and telephony customers; 19




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##### Table of Contents




    an increase in basic cable rates resulting from increased programming costs and
inflation, as well as increased channel availability; and
    an increase in commercial broadband customers. Cox has experienced solid growth in digital cable, residential high-speed Internet and
telephony customers. For the first quarter of 2005, Cox:  
    ended the quarter with approximately 6.3 million basic video customers, up 0.2% from
March 31, 2004.
    added 94,499 digital cable customers, which contributed to year-over-year growth of
13%.
    added 177,413 high-speed Internet customers, which contributed to year-over-year growth
of 28%.
    added 111,522 telephony customers, which contributed to year-over-year growth of 33%. Cox expects its overall growth trend to continue; however, Cox has historically experienced
slower customer growth in the second quarter, and management expects this trend to continue in
2005. Cox also anticipates continued customer demand for its existing portfolio of broadband
products, as well as for new services such as Entertainment On Demand, Home Networking,
high-definition television and digital video recorders. Costs and expenses (cost of services and selling, general and administrative expenses) The following table sets forth summarized operating expenses for the three months ended March
31, 2005 and 2004. Three Months EndedMarch 312005
    
    
    2004
    
    
    $ Change
    
    
    % Change(Thousands of Dollars)Cost of servicesProgramming costs
    
    $
    347,785
    
    
    $
    317,659
    
    
    $
    30,126
    
    
    
    9
    %Other cost of services
    
    
    334,114
    
    
    
    318,157
    
    
    
    15,957
    
    
    
    5
    %Total cost of services
    
    
    681,899
    
    
    
    635,816
    
    
    
    46,083
    
    
    
    7
    %Selling, general and administrativeMarketing
    
    
    86,958
    
    
    
    78,982
    
    
    
    7,976
    
    
    
    10
    %General and administrative
    
    
    281,611
    
    
    
    258,326
    
    
    
    23,285
    
    
    
    9
    %Total selling, general and
administrative
    
    
    368,569
    
    
    
    337,308
    
    
    
    31,261
    
    
    
    9
    %Total costs and expenses
    
    $
    1,050,468
    
    
    $
    973,124
    
    
    $
    77,344
    
    
    
    8
    %
 Cost of services includes cable programming costs, which are costs paid to programmers
for cable content and are generally paid on a per-subscriber basis. Cost of services also includes
other direct costs and field service and call center costs. Other direct costs include costs that
Cox incurs in conjunction with providing its residential, commercial and advertising services.
Field service costs include costs associated with providing and maintaining Coxs broadband network
and customer care costs necessary to maintain its customer base. Cost of services increased $46.1 million over the comparable period in 2004 due to a $30.1
million increase in programming costs reflecting programming rate increases and customer growth.
Approximately 8% of the increase in programming costs was attributable to programming rate
increases, and 1% was related to customer growth. Other cost of services increased $16.0 million,
primarily due to 11% growth in total customers over the last twelve months, partially offset by
cost savings achieved through successful field service initiatives. 20




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##### Table of Contents



Selling, general and administrative expenses include marketing, salaries and benefits,
commissions and bonuses, travel, facilities, insurance and other administrative expenses. Selling,
general and administrative expenses increased $31.3 million primarily due to:  
    a $23.3 million increase in general and administrative expenses primarily related to
increased salaries and benefits; and
    an $8.0 million increase in marketing expense primarily due to additional marketing
related to new video products, as well as a 9% increase in costs associated with Cox
Media, Coxs advertising sales business. Cox expects continued increases in programming costs and will continue to pass through some
portion of these increases to its customers. In addition, Cox expects to have continued growth in
advanced services,
which include digital cable, high-speed Internet access and telephony, both as a result of
increased penetration where these services were available in 2004 and continued roll-out of these
services in new areas during 2005. As a result of these trends, Cox expects its cost of services
and, to a lesser degree, selling, general and administrative expenses to continue to increase. Depreciation and amortization Depreciation and amortization increased to $434.2 million from $392.1 million in the first
quarter of 2004 due to an increase in depreciation from Coxs continuing investments in its
broadband network in order to deliver additional programming and services. Cox will continue to
invest in its broadband network and new services, which management expects will result in increased
revenues to offset increased depreciation expense. Interest expense Interest expense increased 69% to $163.5 million primarily due to increased outstanding
indebtedness incurred in December 2004 as a result of
the going-private transaction discussed
further in Note 3. Going- Private Transaction in Part 1, Item 1. Condensed Consolidated Financial
Statements. Gain on investments, net The net gain on investments for the three months ended March 31, 2004 of $26.8 million was due
to a $19.5 million pre-tax gain on the sale of 0.1 million shares of Sprint PCS preferred stock and
a $7.3 million pre-tax gain on the sale of certain non-strategic investments. Equity in net (losses) income of affiliated companies, net of tax Equity in net losses of affiliated companies for the first quarter of 2005 was $0.8 million
compared to equity in net income of affiliated companies of $0.6 million for the first quarter of
2004. Generally, this loss or income is attributable to Coxs proportionate share of the investees
loss or income. Although Cox has various levels of ownership and rights with respect to the
companies in which it has equity investments, Cox has little, if any, control over the financial
position of these companies. Therefore, Cox cannot predict the impact that its equity investments
will have on its future operations. Net income Net income for the first quarter of 2005 was $27.0 million compared to $57.7 million for the
comparable period in 2004. Liquidity and Capital Resources Uses of Cash 21




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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. Cox believes it will be able to meet its capital needs for the next
twelve months and the foreseeable future with amounts available under existing revolving credit
facilities and its commercial paper program. During the three months ended March 31, 2005, Cox made capital expenditures of $332.0 million.
These expenditures were primarily directed at costs related to electronic equipment located on
customers premises and costs associated with network equipment used to enter new service areas. Cox
expects total capital expenditures for 2005 to be slightly greater
than its 2004 level of capital spending, primarily as a result of the
robust demand for new products and services. Although management continuously reviews industry and economic conditions to identify
opportunities, Cox does not have any current plans to make any material acquisitions or enter into
any material cable
system exchanges in 2005. In March 2005, Cox announced it is exploring a sale of five cable
operations serving approximately 900,000 subscribers. Net commercial paper repayments during the three months ended March 31, 2005 were $96.9
million. Sources of Cash During the three months ended March 31, 2005, Cox generated $423.0 million from operating
activities. Borrowings under revolving credit agreements were $400.0 million and were used
primarily to fund the purchase of untendered shares of former public stock that were converted into
the right to receive cash as part of the follow-on merger. Recent Developments On April 7, 2005, Double C Technologies, LLC, an entity majority owned and controlled by
Comcast Corporation with a minority interest by Cox, completed its purchase of substantially all of
the North American assets of Liberate Technologies, a provider of software that enables cable
operators to run multiple service, including high-definition television, video on demand and
personal video recorders, on multiple platforms. Liberate Technologies received cash consideration
of approximately $82.0 million, and in connection with closing, Cox contributed $30.0 million to
Double C Technologies, of which $27.0 million was used to fund the purchase of the Liberate North
American assets. Cox financed its contribution with commercial paper borrowings. In 2003, Cox purchased approximately 96.6% of its outstanding exchangeable subordinated
discount debentures due 2020 (Discount Debentures) pursuant to a cash tender offer. On March 17,
2005, Cox notified holders of the Discount Debentures that it would redeem all remaining
outstanding Discount Debentures on April 20, 2005. Cox funded the aggregate $32.5 million
redemption price with commercial paper borrowings. In connection with the redemption, the Discount
Debentures were de-listed from the New York Stock Exchange, and Cox filed a Form 15 with the
Securities and Exchange Commission to deregister the Discount Debentures on April 20, 2005. 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 22




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##### Table of Contents



section of Coxs Annual
Report on Form 10-K, as amended, for the year ended December 31, 2004. 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 March 31, 2005 and
December 31, 2004 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 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 4. Investments in
Part I, Item 1. Condensed Consolidated Financial Statements. The fair value of interest rate swaps used for hedging purposes was approximately $(6.1)
million and $16.4 million at March 31, 2005 and December 31, 2004, respectively, and represents the
estimated amount that Cox would (pay)/receive upon termination of the swap agreements. Coxs outstanding commercial paper bears interest at current market rates and, thus,
approximates fair value at March 31, 2005 and December 31, 2004. Cox is exposed to interest rate
volatility with respect to these variable-rate instruments. The estimated fair value of Coxs fixed-rate notes and debentures and exchangeable
subordinated debentures at March 31, 2005 and December 31, 2004 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 March 31, 2005 and December 31, 2004 is as follows: March 31, 2005
    
    
    December 31, 2004Fair Value
    
    
    
    
    
    
    
    
    
    
    Fair ValueCarrying
    
    
    Fair
    
    
    (1% Decrease
    
    
    Carrying
    
    
    Fair
    
    
    (1% DecreaseValue
    
    
    Value
    
    
    in Interest Rates)
    
    
    Value
    
    
    Value
    
    
    in Interest Rates)(Millions of Dollars)Fixed-rate notes and
debentures
    
    $
    8,716.8
    
    
    $
    8,901.7
    
    
    $
    9.380.1
    
    
    $
    8,760.0
    
    
    $
    9,092.6
    
    
    $
    9,593.0Exchangeable
subordinated
debentures
    
    
    19.9
    
    
    
    31.8
    
    
    
    31.9
    
    
    
    19.5
    
    
    
    31.4
    
    
    
    31.6
 23




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##### Table of Contents



Item 4. Controls and Procedures Evaluation of 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 March 31, 2005, 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. Coxs disclosure controls and procedures are designed to provide a reasonable level of
assurance of reaching Coxs desired disclosure control objectives and are effective in reaching
that level of reasonable assurance. Changes in Internal Controls. There have been no significant changes in Coxs internal
controls or in other factors that could significantly affect internal controls subsequent to the
date the Chief Executive Officer and the Chief Financial Officer carried out their evaluation,
other than the migration to a new financial system that began as of January 1, 2005. The migration,
which represents a culmination of more than a year of preparation, testing and training, is
scheduled to take place in planned stages over the course of 2005. Implementation of the new
financial system necessarily involves changes to Coxs procedures for control over financial
reporting. Coxs Chief Executive Officer and Chief Financial Officer believe that throughout this
migration process, Cox has maintained internal financial controls sufficient to ensure appropriate
internal control over financial reporting for the quarter ended March 31, 2005. 
 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. 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None. 
 Item 3. Defaults Upon Senior Securities. None. 
 Item 4. Submission of Matters to a Vote of Security Holders. None. 
 Item 5. Other Information. None. 24




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##### Table of Contents



Item 6. Exhibits (a) Exhibits: 3.1
    
    
    
    Certificate of Incorporation of Cox Communications,
Inc., as amended (incorporated by reference to exhibit
3.1 to Coxs Registration Statement on Form S-4, file
no. 333-122050, filed on January 14, 2005).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. 333-122050,filed on January 14,
2005).4.1
    
    
    
    Indenture, dated as of June 27, 1995, between Cox
Communications, Inc. and The Bank of New York, as
Trustee, relating to the debt securities (incorporated
by reference to exhibit 4.1 to Coxs Registration
Statement on Form S-1, file no. 33-99116, filed on
November 8, 1995) (global notes representing Coxs
senior unsecured non-convertible debt have not been
filed or incorporated by reference in accordance with
Item 601(b)(4)(iii) of Regulation S-K, and Cox agrees to
furnish copies of such instruments to the Securities and
Exchange Commission upon request).4.2
    
    
    
    Seventh Supplemental Indenture, dated as of December 15,
2004, between Cox Communications, Inc. and The Bank of
New York Trust Company, N.A., as Trustee (incorporated
by reference to exhibit 4.1 to Coxs Current Report on
Form 8-K, filed on December 16, 2004).4.3
    
    
    
    Agreement of Resignation, Appointment and Acceptance,
effective as of April 27, 2005, by and among Cox
Communications, Inc., The Bank of New York and The Bank
of New York Trust Company.10.1
    
    
    
    Cox Communications, Inc. 2005 Performance Plan
(management contract or compensatory plan) (incorporated
by reference to exhibit 10.1 to Coxs Current Report on
Form 8-K, filed on March 21, 2005).10.2
    
    
    
    Form of Performance Award Statement (management contract
or compensatory plan) (incorporated by reference to
exhibit 10.2 to Coxs Current Report on Form 8-K, filed
on March 21, 2005).21
    
    
    
    Subsidiaries of Cox Communications, Inc.31.1
    
    
    
    Certification of Chief Executive Officer Pursuant to
Rule 13a-14(a) of the Securities Exchange Act of 1934.31.2
    
    
    
    Certification of Chief Financial Officer Pursuant to
Rule 13a-14(a) of the Securities Exchange Act of 1934.32.1
    
    
    
    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 2002.32.2
    
    
    
    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.
 25




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##### Table of Contents



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: May 9, 2005
    
    /s/ Jimmy W. HayesJimmy W. HayesExecutive Vice President, Financeand Chief Financial Officer(principal financial officer andduly authorized officer)
 26