<PAGE>
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

                                       OR

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

                 For the transition period from        to
                                                ------    ------

                        Commission File Number: 000-14505

                        ENSTAR INCOME PROGRAM II-2, L.P.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                GEORGIA                                         58-1628872
----------------------------------------                  ----------------------
    (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                       Identification Number)

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

Registrant's telephone number, including area code:            (314) 965-0555
                                                          ----------------------
Securities registered pursuant to Section 12(b) of the Act:         NONE

Securities registered pursuant to Section 12(g) of the Act:

                                                           Name of each exchange
           Title of each class                               on which registered
           -------------------                               -------------------
 UNITS OF LIMITED PARTNERSHIP INTEREST                              NONE

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

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

            State the aggregate market value of the voting equity securities
held by non-affiliates of the registrant : All of the registrant's 29,880 units
of limited partnership interests, its only class of equity securities, are held
by non-affiliates. There is no public trading market for the units, and
transfers of units are subject to certain restrictions; accordingly, the
registrant is unable to state the market value of the units held by
non-affiliates.
================================================================================

                    The Exhibit Index is located at Page E-1.
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          2001 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                     PART I                                 PAGE
                                                                            ----
<S>       <C>                                                               <C>
Item 1.   Business........................................................    3
Item 2.   Properties......................................................   18
Item 3.   Legal Proceedings...............................................   18
Item 4.   Submission of Matters to a Vote of Security Holders.............   19

                                     PART II

Item 5.   Market for the Registrant's Equity Securities and Related
          Security Holder Matters.........................................   20

Item 6.   Selected Financial Data.........................................   21
Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations.......................................   22
Item 7A.  Quantitative and Qualitative Disclosures about Market Risk......   28
Item 8.   Financial Statements and Supplementary Data.....................   28
Item 9.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure........................................   28

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant..............   29
Item 11.  Executive Compensation..........................................   32
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management......................................................   33
Item 13.  Certain Relationships and Related Transactions..................   33

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on
          Form 8-K........................................................   36
Signatures ...............................................................   37
</TABLE>

This Annual Report on Form 10-K is for the year ended December 31, 2001. This
Annual Report modifies and supersedes documents filed prior to this Annual
Report. In addition, information that we file with the Securities and Exchange
Commission in the future will automatically update and supersede information
contained in this Annual Report. In this Annual Report, "we," "us," and "our"
refers to Enstar Income Program II-2, L.P.


                                      -2-
<PAGE>

                                     PART I

ITEM 1. BUSINESS

INTRODUCTION

            Enstar Income Program II-2, L.P., a Georgia limited partnership (the
"Partnership), is engaged in the ownership and operation of cable television
systems serving approximately 7,900 basic customers at December 31, 2001 in and
around the cities of Hillsboro, Jerseyville, Nokomis and Pana, Illinois and
Malden, Missouri.

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

PROPOSED SALE OF ASSETS

            On August 29, 2001, the Partnership entered into an asset purchase
agreement providing for the sale of all of the Partnership's Illinois cable
television systems in and around Hillsboro, Jerseyville, Nokomis and Pana,
Illinois to Charter Communications Entertainment I, LLC ("CCE-1"), an affiliate
of the Corporate General Partner and an indirect subsidiary of Charter, for a
total sale price of approximately $13,541,600 ($2,258 per customer acquired),
anticipated to result in a post-closing distribution of approximately $618 per
partnership unit, prior to applicable taxes (the "Charter Sale"). The Charter
Sale is part of a larger transaction in which the Partnership and five other
affiliated partnerships (which, together with the Partnership are collectively
referred to as the "Selling Partnerships") would sell all of their assets used
in the operation of their respective Illinois cable television systems to CCE-1
and two of its affiliates (also referred to, with CCE-1, as the "Purchasers")
for a total cash sale price of $63,000,000. The total sale price has been
allocated among the Selling Partnerships based on the number of customers served
by each of the Selling Partnerships' respective Illinois cable systems as of
June 30, 2001. Each Selling Partnership will receive the same value per
customer. Closing of the Charter Sale is subject to closing sale price
adjustments, regulatory approvals, customary closing conditions and, unless
waived by the Purchasers, the approval by the Limited Partners of the Selling
Partnerships of the sale of their respective Illinois cable systems. In
addition, the Limited Partners of each of the Selling Partnerships must approve
an amendment to their respective partnership agreement to allow the sale of
assets to an affiliate of such partnership's General Partner. The Purchasers are
each indirect subsidiaries of the Corporate General Partner's ultimate parent
company, Charter, and, therefore, are affiliates of the Partnership and each of
the other Selling Partnerships. The Purchasers have indicated that they may
waive the requirement of limited partner approval by all six Selling
Partnerships. If the Purchasers do waive this requirement, then they might
purchase the Illinois systems in more than one closing, and only with respect to
those Selling Partnerships that have received the approval of their limited
partners. Although it is presently expected that the sale of the Partnership's
Illinois systems will be consummated in the second quarter of 2002, there is no
assurance regarding completion of the transaction. If the sale is approved in
accordance with the terms of the Purchase Agreement, the Partnership will
present the results of its Illinois systems as discontinued operations.


                                      -3-
<PAGE>

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

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

            Following termination of the Gans Agreement, the broker once again
attempted to market the various Illinois systems of the affiliated partnerships,
including the Partnership's system. As a result of a "sealed-bid" auction
process, six bids were received and the bid submitted by certain affiliates of
the Corporate General Partner was the highest, and exceeded the next highest bid
by 25%. Following this second sale process, the Partnership entered into the
asset purchase agreement for the Charter Sale. The broker once again also
attempted to market the Partnership's remaining system in Malden, Missouri.

CONTINUED OPERATION OF THE MALDEN, MISSOURI SYSTEM

            The Malden, Missouri system is not included in the Charter Sale and
will continue to be owned and operated by the Corporate General Partner
indefinitely for the foreseeable future. The Corporate General Partner may seek
potential purchasers for that system from time to time when it believes market
conditions are appropriate. However, the Corporate General Partner can give no
assurance of when, or if, the Malden system will ever be sold.


                                      -4-
<PAGE>

DESCRIPTION OF THE PARTNERSHIP'S SYSTEMS

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

<TABLE>
<CAPTION>
                                                                                                   AVERAGE
                                                                                                   MONTHLY
                                                                 PREMIUM                           REVENUE
                   HOMES         BASIC           BASIC           SERVICE          PREMIUM         PER BASIC
SYSTEM NAME      PASSED(1)     CUSTOMERS     PENETRATION(2)      UNITS(3)      PENETRATION(4)    CUSTOMER(5)
-----------      ---------     ---------     --------------      --------      --------------    -----------
<S>              <C>           <C>           <C>                 <C>           <C>               <C>
Hillsboro, IL      11,649        5,800           49.8%               975            16.8%            $42.38

Malden, MO          3,635        2,065           56.8%               271            13.1%            $36.58
                   ------        -----                             -----

Total              15,284        7,865           51.5%             1,246            15.8%            $40.86
                   ======        =====                             =====
</TABLE>

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

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

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

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

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

SERVICES, MARKETING AND PRICES

            Our cable television systems offer customers various levels of cable
services consisting of:

      -     broadcast television signals of local network, independent and
            educational stations;
      -     a limited number of television signals originating from distant
            cities, such as WGN;
      -     various satellite delivered, non-broadcast channels, such as CNN,
            MTV, The USA Network, ESPN, TNT, and The Disney Channel;
      -     programming originated locally by the cable television system, such
            as public, educational and government access programs; and
      -     digital services delivered over a hybrid fiber and satellite
            delivered system.

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

            In October 2001, we began offering customers digital services
through a hybrid system that delivers traditional cable television services
through the terrestrial cable plant and digital service through a satellite dish
mounted at the customer's home. This hybrid digital package includes a digital
set top terminal, an interactive electronic programming guide, 45 channels of CD
quality digital music, a menu of pay per view channels and at least thirty
additional digital channels. Certain digital packages also offer customers one
or


                                      -5-
<PAGE>

more premium channels with "multiplexes." Multiplexes give customers access to
several different versions of the same premium channels which are varied as to
time of broadcast (such as east and west coast time slots) or programming
content and theme (such as westerns and romance). A customer generally pays an
initial installation charge and fixed monthly fees for basic, expanded basic,
other tiers of satellite services and premium programming services. Such monthly
service fees constitute the primary source of revenues for our cable television
systems. In addition to customer revenues, our cable television systems receive
revenues from the sale of available advertising spots on advertiser-supported
programming and also offer to our customers home shopping services, which pay
the Partnership a share of revenues from sales of products to our customers, in
addition to paying us a separate fee in return for carrying their shopping
service.

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

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

            At December 31, 2001, our monthly prices for basic cable service for
residential customers, including certain discounted prices, ranged from $21.60
to $24.50 and our premium price was $11.95, excluding special promotions offered
periodically in conjunction with our marketing programs. A one-time installation
fee, which we may wholly or partially waive during a promotional period, is
usually charged to new customers. We charge commercial customers, such as
hotels, motels and hospitals, a negotiated, non-recurring fee for installation
of service and monthly fees based upon a standard discounting procedure. We
offer most multi-unit dwellings a negotiated bulk price in exchange for
single-point billing and basic service to all units. These prices are also
subject to regulation.

PROGRAMMING

            We purchase basic and premium programming for our systems from
Charter based on Charter's actual cost. Charter's programming costs are
generally based on a fixed fee per customer or a percentage of the gross
receipts for the particular service. Charter's programming contracts are
generally for a fixed period of time and are subject to negotiated renewal.
Accordingly, no assurances can be given that Charter's, and correspondingly our,
programming costs will not continue to increase substantially in the near
future, or that other materially adverse terms will not be added to Charter's
programming contracts. Management believes, however, that Charter's relations
with its programming suppliers generally are good.

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


                                      -6-
<PAGE>

CABLE SYSTEM AND TECHNOLOGY

            A cable television system receives television, radio and data
signals at the system's headend site by means of over-the-air antennas,
microwave relay systems and satellite earth stations. These signals are then
modulated, amplified and distributed, primarily through coaxial and fiber optic
distribution systems, to customers who pay a fee for this service. The use of
fiber optic cable as an alternative to coaxial cable is playing a major role in
expanding channel capacity and improving the performance of cable television
systems. Fiber optic cable is capable of carrying hundreds of video, data and
voice channels and, accordingly, its utilization is essential to the enhancement
of a cable television system's technical capabilities. Our current policy is to
utilize fiber optic technology where applicable in rebuild projects which we
undertake. The benefits of fiber optic technology over traditional coaxial cable
distribution plant include lower ongoing maintenance and power costs and
improved picture quality and reliability.

            In calendar year 1998, the Partnership completed the upgrade of its
cable system served by the Jerseyville headend (24% of the Partnership's cable
plant) to 750 megahertz, offering up to 110 channels. The total cost for this
rebuild was approximately $2.1 million. See "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources." The technical standard for this upgrade incorporates the use
of fiber optic technology to enable future channels of analog service as well as
new digital services, although additional electronics and equipment are
necessary at the headend to activate two-way capability. The system architecture
permits the introduction of high-speed data transmission/Internet access and
telephony services in the future after incurring incremental capital
expenditures related to these services.

            The headends located in Hillsboro and Nokomis, Illinois, covering
approximately 30% of the Partnership's cable plant, operate at 450 megahertz and
are limited to 60 channels while the headend located in Malden, Missouri,
covering approximately 26% of the Partnership's cable plant, operates at 275
megahertz and is limited to 30 channels. The headend in Malden has no available
channel capacity to accommodate the addition of new channels or to provide
pay-per-view offerings to customers. The headend located in the Pana, Illinois
(20% of the Partnership's cable plant) does currently have pay per view
offerings. As a result, capital for future upgrades will be required in order to
increase available channel capacity in those systems, improve quality of service
and facilitate the expansion of new services such as advertising, additional
pay-per-view, new unregulated tiers of satellite-delivered services and home
shopping, so that our cable television systems remain competitive within the
industry.

            The Partnership's capital expenditures for upgrades have been made
with available funds and have enhanced the economic value of the Partnership's
systems. Significant capital would be required for a comprehensive plant and
head-end upgrade, particularly in light of the high cost of electronics to
enable two-way service, to offer high speed cable modem Internet and other
interactive services, as well as to increase channel capacity and allow a
greater variety of video services. The estimated cost of completing a
comprehensive upgrade of the Partnership's systems in order to activate two-way
capability from all four headends, as well as to increase channel capacity and
allow additional video services at the Hillsboro and Nokomis, Illinois headends
and Malden, Missouri headend, would be approximately $5.2 million (for an
upgrade to 550 megahertz (MHz) capacity) to $6.1 million (for an upgrade to 870
MHz capacity). Given the high cost of this comprehensive upgrade plan, the
limited funds available, and the belief that such a plan is not economically
prudent, the Corporate General Partner does not presently anticipate that it
will proceed with a comprehensive upgrade plan. Provided there are available
funds, the Corporate General Partner will, however, continue to evaluate
alternative, cost-effective solutions to increase channel capacity, pay-per-view
services, and digital services which would enhance the value of the
Partnership's systems and be economically prudent.

CUSTOMER SERVICE AND COMMUNITY RELATIONS

            We place a strong emphasis on customer service and community
relations and believe that success in these areas is critical to our business.
We have developed and implemented a wide range of


                                      -7-
<PAGE>

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

FRANCHISES

            As of December 31, 2001, we operated cable systems in 11 franchise
areas, pursuant to permits and similar authorizations issued by local and state
governmental authorities. Each franchise is awarded by a governmental authority
and may not be transferable unless the granting governmental authority consents.
Most franchises are subject to termination proceedings in the event of a
material breach. In addition, franchises can require us to pay the granting
authority a franchise fee of up to 5% of gross revenues as defined by the
franchise agreements, which is the maximum amount that may be charged under the
applicable law.

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

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

            We believe our relations with the franchising authorities under
which our systems are operated are generally good. Substantially all of the
material franchises relating to our systems which are eligible for renewal have
been renewed or extended at or prior to their stated expiration dates.


                                      -8-
<PAGE>

            The following table groups the franchises of our cable television
systems by date of expiration and presents the number of franchises for each
group of franchises and the approximate number and percentage of basic customers
for each group as of December 31, 2001:

<TABLE>
<CAPTION>
                                                  NUMBER OF       PERCENTAGE OF
            YEAR OF            NUMBER OF            BASIC             BASIC
      FRANCHISE EXPIRATION     FRANCHISES         CUSTOMERS         CUSTOMERS
      --------------------    ------------      ------------      ------------
<S>                           <C>               <C>               <C>
      Prior to 2003                     --                --                --
      2003 - 2007                        2               708               9.0%
      2008 and after                     9             7,157              91.0%
                              ------------      ------------      ------------

      Total                             11             7,865             100.0%
                              ============      ============      ============
</TABLE>

            We operate cable television systems which serve multiple communities
and, in some circumstances, portions of such systems extend into jurisdictions
for which we believe no franchise is necessary. In the aggregate, approximately
366 customers, comprising approximately 4.7% of our customers, are served by
unfranchised portions of such systems. We have never had a franchise revoked for
any of our systems and we believe that we have satisfactory relationships with
substantially all of our franchising authorities.

COMPETITION

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

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

            Our key competitors include:

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

            DBS companies historically were prohibited from retransmitting
popular local broadcast programming. However, a change to the copyright laws in
1999 eliminated this legal impediment. As a result, DBS companies now may
retransmit such programming, once they have secured retransmission consent from
the popular broadcast stations they wish to carry, and they faced mandatory
carriage obligations of less popular broadcast stations as of January 2002. In
response to the legislation, DirecTV, Inc. and EchoStar Communications
Corporation have begun carrying the major network stations in the nation's top
television markets. DBS, however, is limited in the local programming it can
provide because of the current capacity limitations of satellite technology, and
the DBS companies currently offer local broadcast


                                      -9-
<PAGE>

programming only in the larger U.S. markets. The DBS industry initiated a
judicial challenge to the 2002 requirement mandating carriage of less popular
broadcast stations. This lawsuit alleges that the requirement (similar to the
one applicable to cable systems) is unconstitutional. The federal district court
and circuit court both rejected the DBS industry's constitutional challenge, but
the industry is now seeking review by the U.S. Supreme Court.

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

            DSL. The deployment of digital subscriber line technology, known as
DSL, allows Internet access to subscribers at data transmission speeds greater
than available over conventional telephone lines. DSL service therefore is
competitive with high-speed Internet access over cable systems. Several
telephone companies and other companies offer DSL service. There are bills now
before Congress that would reduce regulation of Internet services offered by
incumbent telephone companies, and the FCC recently initiated a rulemaking
proceeding that could materially reduce existing regulation of DSL service,
essentially freeing such service from traditional telecommunications regulation.
The FCC's decisions and policies in this area are subject to change. We cannot
predict the likelihood of success of the Internet access services offered by our
competitors, or the impact on our business and operations of these competitive
ventures.

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

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

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


                                      -10-
<PAGE>

cable television programming. As of December 31, 2001, the Partnership is
unaware of any overbuild situations in its cable systems.

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

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

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

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

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

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


                                      -11-
<PAGE>

REGULATION AND LEGISLATION

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

            The operation of a cable system is extensively regulated by the FCC,
some state governments and most local governments. The FCC has the authority to
enforce its regulations through the imposition of substantial fines, the
issuance of cease and desist orders and/or the imposition of other
administrative sanctions, such as the revocation of FCC licenses needed to
operate certain transmission facilities used in connection with cable
operations. The 1996 Telecom Act altered the regulatory structure governing the
nation's communications providers. It removed barriers to competition in both
the cable television market and the local telephone market. Among other things,
it reduced the scope of cable rate regulation and encouraged additional
competition in the video programming industry by allowing local telephone
companies to provide video programming in their own telephone service areas.

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

            CABLE RATE REGULATION. The 1992 Cable Act imposed an extensive rate
regulation regime on the cable television industry, which limited the ability of
cable companies to increase subscriber fees. Under that regime, all cable
systems were subjected to rate regulation, unless they faced "effective
competition" in their local franchise area. Federal law defines "effective
competition" on a community-specific basis as requiring satisfaction of certain
conditions. These conditions are not typically satisfied in the current
marketplace; hence, most cable systems potentially are subject to rate
regulation. However, with the rapid growth of DBS, it is likely that additional
cable systems will soon qualify for "effective competition" and thereby avoid
further rate regulation.

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

            As of December 31, 2001, none of our local franchising authorities
were certified to regulate basic tier rates. Because the 1992 Cable Act permits
communities to certify and regulate prices at any time, it is possible that
additional localities served by the systems may choose to certify and regulate
basic prices in the future.

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

            With regard to cable programming service tiers, which are the
expanded basic programming packages that offer services other than basic
programming and which typically contain satellite-delivered programming, the FCC
historically administered rate regulation of these tiers. Under the 1996 Telecom
Act,


                                      -12-
<PAGE>

however, the FCC's authority to regulate cable programming service tier rates
expired on March 31, 1999. The FCC still adjudicates cable programming service
tier complaints filed prior to that date, but strictly limits its review, and
possible refund orders, to the time period prior to March 31, 1999. As of
December 31, 2001, we had no cable programming service tier rate complaints
pending at the FCC. The elimination of cable programming service tier regulation
affords us substantially greater pricing flexibility.

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

            CABLE ENTRY INTO TELECOMMUNICATIONS AND POLE ATTACHMENT RATES. The
1996 Telecom Act creates a more favorable environment for us to provide
telecommunications services beyond traditional video delivery. It provides that
no state or local laws or regulations may prohibit or have the effect of
prohibiting any entity from providing any interstate or intrastate
telecommunications service. A cable operator is authorized under the 1996
Telecom Act to provide telecommunications services without obtaining a separate
local franchise. States are authorized, however, to impose "competitively
neutral" requirements regarding universal service, public safety and welfare,
service quality, and consumer protection. State and local governments also
retain their authority to manage the public rights-of-way and may require
reasonable, competitively neutral compensation for management of the public
rights-of-way when cable operators provide telecommunications service. The
favorable pole attachment rates afforded cable operators under federal law can
be gradually increased by utility companies owning the poles if the operator
provides telecommunications service, as well as cable service, over its plant.
The FCC clarified that a cable operator's favorable pole rates are not
endangered by the provision of Internet access, and that approach ultimately was
upheld by the United States Supreme Court.

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

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

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


                                      -13-
<PAGE>

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

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

            Under the 1996 Telecom Act, local exchange carriers or any other
cable competitor providing video programming to subscribers through broadband
wire should be regulated as a traditional cable operator, subject to local
franchising and federal regulatory requirements, unless the local exchange
carrier or other cable competitor elects to deploy its broadband plant as an
open video system. To qualify for favorable open video system status, the
competitor must reserve two-thirds of the system's activated channels for
unaffiliated entities. Even then, the FCC revised its open video system policy
to leave franchising discretion to state and local authorities. It is unclear
what effect this ruling will have on the entities pursuing open video system
operation.

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

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

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


                                      -14-
<PAGE>

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

            MUST CARRY/RETRANSMISSION CONSENT. The 1992 Cable Act contains
broadcast signal carriage requirements. Broadcast signal carriage is the
transmission of broadcast television signals over a cable system to cable
customers. These requirements, among other things, allow local commercial
television broadcast stations to elect once every three years between "must
carry" status or "retransmission consent" status. Less popular stations
typically elect must carry, which is the broadcast signal carriage requirement
that allows local commercial television broadcast stations to require a cable
system to carry the station. More popular stations, such as those affiliated
with a national network, typically elect retransmission consent which is the
broadcast signal carriage requirement that allows local commercial television
broadcast stations to negotiate for payments for granting permission to the
cable operator to carry the stations. Must carry requests can dilute the appeal
of a cable system's programming offerings because a cable system with limited
channel capacity may be required to forego carriage of popular channels in favor
of less popular broadcast stations electing must carry. Retransmission consent
demands may require substantial payments or other concessions. Either option has
a potentially adverse effect on our business. The burden associated with must
carry may increase substantially if broadcasters proceed with planned conversion
to digital transmission and the FCC determines that cable systems simultaneously
must carry all analog and digital broadcasts in their entirety. This burden
would reduce capacity available for more popular video programming and new
Internet and telecommunication offerings. The FCC tentatively decided against
imposition of dual digital and analog must carry in a January 2001 ruling. At
the same time, however, it initiated further fact-gathering which ultimately
could lead to a reconsideration of the tentative conclusion. The FCC is also
considering whether it should maintain its initial ruling that, whenever a
digital broadcast signal does become eligible for must carry, a cable operator's
obligation is limited to carriage of the primary video signal. If the Commission
reverses itself, and cable operators are required to carry ancillary digital
feeds, the burden associated with digital must carry could be significantly
increased.

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

            ACCESS TO PROGRAMMING. To spur the development of independent cable
programmers and competition to incumbent cable operators, the 1992 Cable Act
imposed restrictions on the dealings between cable operators and cable
programmers. Of special significance from a competitive business position, the
1992 Cable Act precludes video programmers affiliated with cable companies from
favoring their cable operators over new competitors and requires such
programmers to sell their satellite-delivered programming to other multichannel
video distributors. This provision limits the ability of vertically integrated
cable programmers to offer exclusive programming arrangements to cable
companies. This prohibition is scheduled


                                      -15-
<PAGE>

to expire in October 2002, unless the FCC determines in a pending proceeding
that an extension is necessary to protect competition and diversity. There also
has been interest expressed in further restricting the marketing practices of
cable programmers, including subjecting programmers who are not affiliated with
cable operators to all of the existing program access requirements, and
subjecting terrestrially-delivered programming (especially regional sports
networks) to the program access requirements. Terrestrially-delivered
programming is programming delivered other than by satellite and is currently
exempt from the ban on exclusivity. These changes should not have a dramatic
impact on us, but would limit potential competitive advantages we now enjoy. DBS
providers have no similar restrictions on exclusive programming contracts.
Pursuant to the Satellite Home Viewer Improvement Act, the FCC has adopted
regulations governing retransmission consent negotiations between broadcasters
and all multichannel video programming distributors, including cable and DBS.

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

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

            -     subscriber privacy,
            -     programming practices, including, among other things,
                  (1)   blackouts of programming offered by a distant broadcast
                        signal carried on a cable system which duplicates the
                        programming for which a local broadcast station has
                        secured exclusive distribution rights,
                  (2)   local sports blackouts,
                  (3)   indecent programming,
                  (4)   lottery programming,
                  (5)   political programming,
                  (6)   sponsorship identification,
                  (7)   children's programming advertisements, and
                  (8)   closed captioning,
            -     registration of cable systems and facilities licensing,
            -     maintenance of various records and public inspection files,
            -     aeronautical frequency usage,
            -     lockbox availability,
            -     antenna structure notification,
            -     tower marking and lighting,
            -     consumer protection and customer service standards,
            -     technical standards,
            -     equal employment opportunity,
            -     consumer electronics equipment compatibility, and
            -     emergency alert systems.


                                      -16-
<PAGE>

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

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

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

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

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

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

            Federal law contains renewal procedures designed to protect
incumbent franchisees against arbitrary denials of renewal. Even if a franchise
is renewed, the local franchising authority may seek to impose new and more
onerous requirements such as significant upgrades in facilities and service or
increased franchise fees as a condition of renewal. Similarly, if a local
franchising authority's consent is required for the


                                      -17-
<PAGE>

purchase or sale of a cable system or franchise, such local franchising
authority may attempt to impose more burdensome or onerous franchise
requirements in connection with a request for consent. Historically, most
franchises have been renewed for and consents granted to cable operators that
have provided satisfactory services and have complied with the terms of their
franchise.

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

            Additional regulatory policies may be added in the future. The
Federal Communications Commission recently initiated an inquiry to determine
whether the cable industry's future provision of interactive services should be
subject to regulations ensuring equal access and competition among service
vendors. The inquiry, which grew out of the Commission's review of the AOL-Time
Warner merger, is in its earliest stages, but is yet another expression of
regulatory concern regarding control over cable capacity.

EMPLOYEES

            The various personnel required to operate our business are employed
by the Partnership, the Corporate General Partner, its subsidiary corporation
and Charter. The Partnership believes that its relations with its employees are
good. As of December 31, 2001, we had one employee, the cost of which is charged
directly to the Partnership. The employment costs incurred by the Corporate
General Partner, its subsidiary corporation and Charter are allocated and
charged to the Partnership for reimbursement pursuant to the Amended and
Restated Agreement of Limited Partnership (the "Partnership Agreement") and the
management agreement between the Partnership and Enstar Cable Corporation (the
"Management Agreement"). The amounts of these reimbursable costs are set forth
in Item 11. "Executive Compensation."

ITEM 2. PROPERTIES

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

ITEM 3. LEGAL PROCEEDINGS

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


                                      -18-
<PAGE>

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

            None.


                                      -19-
<PAGE>

                                     PART II

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

LIQUIDITY

            While our equity securities, which consist of units of limited
partnership interests, are publicly held, there is no established public trading
market for the units and we do not expect that a market will develop. The
approximate number of equity security holders of record was 657 as of December
31, 2001. In addition to restrictions on the transferability of units described
in our Partnership Agreement, the transferability of units may be affected by
restrictions on resales imposed by federal or state law.

DISTRIBUTIONS

            The amended Partnership Agreement generally provides that all cash
distributions (as defined) be allocated 1% to the General Partners and 99% to
the Limited Partners until the Limited Partners have received aggregate cash
distributions equal to their original capital contributions ("Capital Payback").
The Partnership Agreement also provides that all partnership profits, gains,
operational losses, and credits (all as defined) be allocated 1% to the General
Partners and 99% to the Limited Partners until the Limited Partners have been
allocated net profits equal to the amount of cash flow required for Capital
Payback. After the Limited Partners have received cash flow equal to their
initial investments, the General Partners will receive a 1% allocation of cash
flow from sale or liquidation of a system until the Limited Partners have
received an annual simple interest return of at least 18% of their initial
investments less any distributions from previous system sales and cash
distributions from operations after Capital Payback. Thereafter, the respective
allocations will be made 15% to the General Partners and 85% to the Limited
Partners. Any losses from system sales or exchanges shall be allocated first to
all partners having positive capital account balances (based on their respective
capital accounts) until all such accounts are reduced to zero and thereafter to
the Corporate General Partner. All allocations to Limited Partners will be based
on their respective limited partnership ownership interests.

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

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

            We began making periodic cash distributions to the Limited Partners
from operations during 1986. No distributions were made during 2001, 2000, or
1999. As a result of its liquidity requirements, management has concluded that
it is not prudent for the Partnership to resume paying distributions at this
time.

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


                                      -20-
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

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

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                             ---------------------------------------------------------------------------------
OPERATIONS STATEMENT DATA                         2001              2000             1999             1998             1997
                                             ------------      ------------      -----------      -----------      -----------
<S>                                          <C>               <C>               <C>              <C>              <C>
  Revenues                                   $  3,856,100      $  3,916,300      $ 3,928,800      $ 3,968,300      $ 3,836,000
  Operating expenses                           (2,370,400)       (2,215,800)      (2,308,000)      (2,219,000)      (2,094,100)
  Depreciation and amortization                  (422,300)         (503,400)        (625,600)        (671,100)        (706,300)
                                             ------------      ------------      -----------      -----------      -----------

  Operating income                              1,063,400         1,197,100          995,200        1,078,200        1,035,600

  Interest income                                 279,600           375,500          225,200          175,100          129,000
  Interest expense                                     --                --          (18,400)         (15,300)         (22,300)
  Loss on disposal of cable assets                     --                --               --           (1,500)              --
  Other expense                                   (43,400)          (26,700)              --               --               --
                                             ------------      ------------      -----------      -----------      -----------

  Net income                                 $  1,299,600      $  1,545,900      $ 1,202,000      $ 1,236,500      $ 1,142,300
                                             ============      ============      ===========      ===========      ===========

PER UNIT OF LIMITED PARTNERSHIP INTEREST:

   Net income                                $      43.06      $      51.22      $     39.83      $     40.97      $     37.85
                                             ============      ============      ===========      ===========      ===========

OTHER OPERATING DATA

   Net cash from operating activities        $  2,705,200      $  1,745,600      $ 1,658,800      $ 1,671,300      $ 2,062,900
   Net cash from investing activities            (146,300)         (311,700)        (374,400)        (281,800)        (952,200)
   EBITDA(1)  (Unaudited)                       1,442,300         1,673,800        1,620,800        1,749,300        1,741,900
   EBITDA as a percentage of revenues
      (Unaudited)                                    37.4%             42.7%            41.3%            44.1%            45.4%
   Capital expenditures                      $    147,900      $    309,700      $   367,300      $   273,000      $   930,600
</TABLE>

<TABLE>
<CAPTION>
                                                                             AS OF DECEMBER 31,
                                             ---------------------------------------------------------------------------------
BALANCE SHEET DATA                               2001              2000             1999             1998             1997
                                             ---------------------------------------------------------------------------------
<S>                                          <C>               <C>               <C>              <C>              <C>
    Total assets                             $ 12,316,400      $ 10,241,300      $ 8,890,700      $ 7,797,300      $ 6,649,400
    General Partners' capital (deficit)            38,700            25,700           10,200           (1,800)         (14,200)
    Limited Partners' capital                $ 11,200,700      $  9,914,100      $ 8,383,700      $ 7,193,700      $ 5,969,600
</TABLE>

----------

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


                                      -21-
<PAGE>

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

INTRODUCTION

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

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

RESULTS OF OPERATIONS

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

            Revenues decreased $60,200 from $3,916,300 to $3,856,100, or 1.5%,
for the year ended December 31, 2001 as compared to 2000. The decrease is due to
a decline in the number of basic and premium service customers. As of December
31, 2001 and 2000, we had approximately 7,900 and 8,400 basic service customers,
respectively, and 1,200 and 2,100 premium service customers, respectively.

            The Partnership reimburses the Corporate General Partner and its
affiliates for service costs and general and administrative expenses based on
actual costs incurred on behalf of the Partnership. These reimbursed costs are
included in general partner management fees and reimbursed expenses on the
Partnership's statements of operations. The total of service costs, general and
administrative expenses and general partner management fees and reimbursed
expenses increased $154,600 from $2,215,800 to $2,370,400, or 7.0%, for the year
ended December 31, 2001 as compared to 2000.

            Service costs increased $58,800 from $1,182,900 to $1,241,700, or
5.0%, for the year ended December 31, 2001 as compared to 2000. Service costs
represent costs directly attributable to providing cable services to customers.
The increase is primarily due to increased programming costs incurred by the
Partnership in 2001 as compared to 2000.

            General and administrative expenses increased $38,700 from $394,400
to $433,100, or 9.8%, for the year ended December 31, 2001 as compared to 2000,
primarily due to an increase in professional fees and bad debt expense.

            General partner management fees and reimbursed expenses increased
$57,100 from $638,500 to $695,600, or 8.9%, for the year ended December 31, 2001
as compared to 2000. The increase is due to an increase in service costs being
provided and billed to us by Charter during the year ended December 31, 2001 as
compared to 2000.

            Depreciation and amortization expense decreased $81,100 from
$503,400 to $422,300, or 16.1%, for the year ended December 31, 2001 as compared
to 2000 due to fewer capital expenditures and


                                      -22-
<PAGE>

certain fixed assets becoming fully depreciated during 2000 and 2001.

            Due to the factors described above, operating income decreased
$133,700 from $1,197,100 to $1,063,400, or 11.2%, for the year ended December
31, 2001 as compared to 2000.

            Interest income decreased $95,900 from $375,500 to $279,600, or
25.5%, for the year ended December 31, 2001 as compared to 2000, primarily due
to lower average cash balances available for investment during 2001 coupled with
a decrease in average interest rates.

            Other expense of $43,400 and $26,700 for the years ended December
31, 2001 and 2000, respectively, represent legal and proxy costs associated with
the proposed sales of the Partnership's assets.

            Due to the factors described above, our net income decreased
$246,300 from $1,545,900 to $1,299,600, or 15.9%, for the year ended December
31, 2001 as compared to 2000.

            Based on our experience in the cable television industry, we believe
that income before interest, income taxes, depreciation and amortization, or
EBITDA, and related measures of cash flow serve as important financial analysis
tools for measuring and comparing cable television companies in several areas,
such as liquidity, operating performance and leverage. EBITDA is not a
measurement determined under GAAP and does not represent cash generated from
operating activities in accordance with GAAP. EBITDA should not be considered by
the reader as an alternative to net income as an indicator of financial
performance or as an alternative to cash flows as a measure of liquidity. In
addition, the definition of EBITDA may not be identical to similarly titled
measures used by other companies. Due to the factors described above, EBITDA
decreased $231,500 from $1,673,800 to $1,442,300, or 13.8%. EBITDA as a
percentage of revenues decreased 5.3% from 42.7% during 2000 to 37.4% in 2001.

            Operating activities provided $959,600 more cash in the year ended
December 31, 2001 than in 2000. Changes in liabilities owed to affiliates and
third-party creditors provided $961,800 more cash in 2001 due to differences in
the timing of payments. Changes in accounts receivable, prepaid expenses and
other assets provided $316,200 more cash in 2001 than in 2000 due to differences
in the timing of receivable collections and in the payment of prepaid expenses.

            We used $165,400 less cash in investing activities in 2001 than in
2000 primarily due to a $161,800 decrease in capital expenditures.

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

            Revenues decreased $12,500 from $3,928,800 to $3,916,300, or less
than 1.0%, for the year ended December 31, 2000 as compared to 1999. Of the
decrease, $60,900 was due to decreases in the number of subscriptions for basic,
premium, tier and equipment rental services and $102,700 was due to decreases in
other revenue producing items. The decrease was partially offset by a $151,100
increase in regulated prices that we implemented in 2000. As of December 31,
2000 and 1999, we had approximately 8,400 and 8,700 basic customers and 2,100
and 1,500 premium service units, respectively.

            Effective with the acquisition of the Corporate General Partner and
certain affiliates by Charter on November 12, 1999, certain activities
previously performed by the Partnership and expensed through service cost and
general and administrative expense have been either eliminated by Charter, or
have been performed by Charter and then been reimbursed by the Partnership based
on Charter's costs incurred. These reimbursed costs are included in general
partner management fees and reimbursed expenses on the Partnership's statements
of operations. The total of service costs, general and administrative expenses
and general partner management fees and reimbursed expenses decreased $92,200
from $2,308,000 to $2,215,800, or 4.0%, for the year ended December 31, 2000 as
compared to 1999.


                                      -23-
<PAGE>

            Service costs decreased $119,900 from $1,302,800 to $1,182,900, or
9.2%, for the year ended December 31, 2000 as compared to 1999. Service costs
represent costs directly attributable to providing cable services to customers.
The decrease is primarily due to decreases in programming fees, personnel costs
and certain costs incurred by the Partnership prior to the Charter acquisition
that are now incurred by Charter and reimbursed by the Partnership, as described
above. Programming fees decreased as a result of lower prices that Charter has
extended to us and a decrease in customers.

            General and administrative expenses decreased $84,100 from $478,500
to $394,400, or 17.6%, for the year ended December 31, 2000 as compared to 1999.
As discussed above, Charter now performs certain management and operational
functions formerly performed by the Partnership. This has resulted in more
reimbursable costs and lower service costs and general and administrative
expenses.

            General partner management fees and reimbursed expenses increased
$111,800 from $526,700 to $638,500, or 21.2%, for the year ended December 31,
2000 as compared to 1999. General partner management fees decreased in direct
relation to decreased revenues as described above. As described above, Charter
now performs certain management and operational functions formerly performed by
the Partnership. This has resulted in us recording more reimbursable costs and
lower service costs and general and administrative expenses.

            Depreciation and amortization expense decreased $122,200 from
$625,600 to $503,400, or 19.5%, for the year ended December 31, 2000 as compared
to 1999 due to certain plant assets becoming fully depreciated.

            Due to the factors described above, operating income increased
$201,900 from $995,200 to $1,197,100, or 20.3%, for the year ended December 31,
2000 as compared to 1999.

            Interest income, net of interest expense, increased $168,700 from
$206,800 to $375,500, or 81.6%, for the year ended December 31, 2000 as compared
to 1999, primarily due to higher average cash balances available for investment
during 2000 and to the reclassification of certain bank charges from interest
expense to general and administrative expense.

            Other expense of $26,700 for the year ended December 31, 2000
consisted of legal and proxy costs associated with the proposed sale of the
Partnership's assets.

            Due to the factors described above, our net income increased
$343,900 from $1,202,000 to $1,545,900, or 28.6%, for the year ended December
31, 2000 as compared to 1999.

            Based on our experience in the cable television industry, we believe
that income before interest, income taxes, depreciation and amortization, or
EBITDA, and related measures of cash flow serve as important financial analysis
tools for measuring and comparing cable television companies in several areas,
such as liquidity, operating performance and leverage. EBITDA is not a
measurement determined under GAAP and does not represent cash generated from
operating activities in accordance with GAAP. EBITDA should not be considered by
the reader as an alternative to net income as an indicator of financial
performance or as an alternative to cash flows as a measure of liquidity. In
addition, the definition of EBITDA may not be identical to similarly titled
measures used by other companies. Due to the factors described above, EBITDA
increased $53,000 from $1,620,800 to $1,673,800, or 3.3%. EBITDA as a percentage
of revenues increased 1.4% from 41.3% during 1999 to 42.7% in 2000.

            Operating activities provided $86,800 more cash in the year ended
December 31, 2000 than in 1999. We used $77,700 more cash to pay liabilities
owed to affiliates and third-party creditors in 2000 due to differences in the
timing of payments. Changes in accounts receivable, prepaid expenses and other
assets used $48,200 more cash in 2000 than in 1999 due to differences in the
timing of receivable collections and in the payment of prepaid expenses.


                                      -24-
<PAGE>

            We used $62,700 less cash in investing activities in 2000 than in
1999 due to a $57,600 decrease in capital expenditures and a $5,100 decrease in
spending for intangible assets.

LIQUIDITY AND CAPITAL RESOURCES

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

            We believe that cash generated by operations of the Partnership will
be adequate to fund capital expenditures, debt service and other liquidity
requirements in 2002 and beyond. At this time, the Partnership does not
anticipate making significant additional upgrades to cable plant or headend
electronics because of the contemplated sale of assets. See "Results of
Operations" for discussion regarding cash from operating, investing and
financing activities.

INVESTING ACTIVITIES

            The Partnership's capital expenditures for upgrades have been made
with available funds and have enhanced the economic value of the Partnership's
systems. Significant capital would be required for a comprehensive plant and
head-end upgrade, particularly in light of the high cost of electronics to
enable two-way service, to offer high speed cable modem Internet and other
interactive services, as well as to increase channel capacity and allow a
greater variety of video services. The estimated cost of completing a
comprehensive upgrade of the Partnership's systems in order to activate two-way
capability from all four headends, as well as to increase channel capacity and
allow additional video services at the Hillsboro and Nokomis, Illinois headends
and Malden, Missouri headend, would be approximately $5.2 million (for an
upgrade to 550 megahertz (MHz) capacity) to $6.1 million (for an upgrade to 870
MHz capacity). Given the high cost of this comprehensive upgrade plan, the
limited funds available, and the belief that such a plan is not economically
prudent, the Corporate General Partner does not presently anticipate that it
will proceed with a comprehensive upgrade plan. Provided there are available
funds, the Corporate General Partner will, however, continue to evaluate
alternative, cost-effective solutions to increase channel capacity, pay-per-view
services, and digital services which would enhance the value of the
Partnership's systems and be economically prudent.

PROPOSED SALE OF ASSETS

            On August 29, 2001, the Partnership entered into an asset purchase
agreement providing for the sale of all of the Partnership's Illinois cable
television systems in and around Hillsboro, Jerseyville, Nokomis and Pana,
Illinois to Charter Communications Entertainment I, LLC ("CCE-1"), an affiliate
of the Corporate General Partner and an indirect subsidiary of Charter, for a
total sale price of approximately $13,541,600 ($2,258 per customer acquired),
anticipated to result in a post-closing distribution of approximately $618 per
partnership unit, prior to applicable taxes (the "Charter Sale"). The Charter
Sale is part of a larger transaction in which the Partnership and five other
affiliated partnerships (which, together with the Partnership are collectively
referred to as the "Selling Partnerships") would sell all of their assets used
in the operation of their respective Illinois cable television systems to CCE-1
and two of its affiliates (also referred to, with CCE-1, as the "Purchasers")
for a total cash sale price of $63,000,000. The total sale price has been
allocated among the Selling Partnerships based on the number of customers served
by each of the Selling Partnerships' respective Illinois cable systems as of
June 30, 2001. Each Selling Partnership will receive the same value per
customer. Closing of the Charter Sale is subject to closing sale price
adjustments, regulatory approvals, customary closing conditions and, unless
waived by the Purchasers, the approval by the Limited Partners of the Selling
Partnerships of the sale of their respective Illinois cable systems. In
addition, the Limited Partners of each of the Selling Partnerships must approve
an amendment to their respective partnership agreement to allow the sale of
assets to an affiliate of such partnership's General Partner. The Purchasers are
each indirect subsidiaries of the Corporate General Partner's ultimate parent
company, Charter,


                                      -25-
<PAGE>

and, therefore, are affiliates of the Partnership and each of the other Selling
Partnerships. The Purchasers have indicated that they may waive the requirement
of limited partner approval by all six Selling Partnerships. If the Purchasers
do waive this requirement, then they might purchase the Illinois systems in more
than one closing, and only with respect to those Selling Partnerships that have
received the approval of their limited partners. Although it is presently
expected that the sale of the Partnership's Illinois systems will be consummated
in the second quarter of 2002, there is no assurance regarding completion of the
transaction. If the sale is approved in accordance with the terms of the
Purchase Agreement, the Partnership will present the results of its Illinois
systems as discontinued operations.

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

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

            Following termination of the Gans Agreement, the broker once again
attempted to market the various Illinois systems of the affiliated partnerships,
including the Partnership's system. As a result of a "sealed-bid" auction
process, six bids were received and the bid submitted by certain affiliates of
the Corporate General Partner was the highest, and exceeded the next highest bid
by 25%. Following this second sale process, the Partnership entered into the
asset purchase agreement for the Charter Sale. The broker once again also
attempted to market the Partnership's remaining system in Malden, Missouri.

            The Malden, Missouri system is not included in the Charter Sale and
will continue to be owned and operated by the Corporate General Partner
indefinitely for the foreseeable future. The Corporate General Partner may seek
potential purchasers for that system from time to time when it believes market
conditions are appropriate. However, the Corporate General Partner can give no
assurance of when, or if, the Malden system will ever be sold.


                                      -26-
<PAGE>

FINANCING ACTIVITIES

            At December 31, 2001, the Partnership had no debt outstanding. The
Partnership relies upon cash flow from operations to meet liquidity requirements
and fund necessary capital expenditures. Although the Partnership currently
maintains a cash balance, there can be no assurance that the Partnership's
future cash flows combined with available cash will be adequate to meet its
future liquidity requirements or to fund future capital expenditures.

CERTAIN TRENDS AND UNCERTAINTIES

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

            Approximately 74% of our customers are served by our system in
Hillsboro, Illinois, and neighboring communities. Significant damage to the
system due to seasonal weather conditions or other events could have a material
adverse effect on our liquidity and cash flows. We continue to purchase
insurance coverage in amounts our management views as appropriate for all other
property, liability, automobile, workers' compensation and other insurable
risks.

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

RECENTLY ISSUED ACCOUNTING STANDARDS

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

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

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

            In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "Accounting for the Impairment of Disposal of Long-Lived Assets." SFAS
No. 144 addresses financial accounting and reporting for the impairment of
long-lived assets and for long-lived assets to be disposed of


                                      -27-
<PAGE>

and supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of." SFAS No. 144 establishes a single
accounting model for long-lived assets to be disposed of by sale and resolves
implementation issues related to SFAS No. 121. SFAS No. 144 was implemented by
the Partnership on January 1, 2002. The Partnership is currently in process of
assessing the impact of adoption of SFAS No. 144. See "Proposed Sale of Assets."

INFLATION

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

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

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

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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

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


                                      -28-
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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

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

<TABLE>
<CAPTION>
NAME                   POSITION
----                   --------
<S>                    <C>
Carl E. Vogel          President and Chief Executive Officer

David G. Barford       Executive Vice President and Chief Operating Officer

Kent D. Kalkwarf       Executive Vice President and Chief Financial Officer

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

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

David C. Andersen      Senior Vice President - Communications

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

Eric A. Freesmeier     Senior Vice President - Administration

Thomas R. Jokerst      Senior Vice President - Advanced Technology Development

Ralph G. Kelly         Senior Vice President - Treasurer

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

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

John C. Pietri         Senior Vice President - Engineering

Michael E. Riddle      Senior Vice President and Chief Information Officer

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

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

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

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


                                      -29-
<PAGE>

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

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

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

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

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

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

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

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


                                      -30-
<PAGE>

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

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

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

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

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

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

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

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

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


                                      -31-
<PAGE>

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

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

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

ITEM 11. EXECUTIVE COMPENSATION

MANAGEMENT FEE

            The Partnership has a management agreement with Enstar Cable
Corporation ("Enstar Cable"), a wholly-owned subsidiary of the Corporate General
Partner, pursuant to which Enstar Cable manages our systems and provides all
operational support for our activities. For these services, Enstar Cable
receives a management fee of 5% of our gross revenues, excluding revenues from
the sale of cable television systems or franchises, which is calculated and paid
monthly. In addition, we reimburse Enstar Cable for operating expenses incurred
by Enstar Cable in the daily operation of our cable systems. The Management
Agreement also requires us to indemnify Enstar Cable (including its officers,
employees, agents and shareholders) against loss or expense, absent negligence
or deliberate breach by Enstar Cable of the Management Agreement. The Management
Agreement is terminable by the Partnership upon 60 days written notice to Enstar
Cable. Enstar Cable had, prior to November 12, 1999, engaged Falcon
Communications, L.P. ("Falcon") to provide management services for us and paid
Falcon a portion of the management fees it received in consideration of such
services and reimbursed Falcon for expenses incurred by Falcon on its behalf.
Subsequent to November 12, 1999, Charter, as successor-by-merger to Falcon, has
provided such services and received such payments. Additionally, we receive
system operating management services from affiliates of Enstar Cable in lieu of
directly employing personnel to perform those services. We reimburse the
affiliates for our allocable share of their operating costs. The Corporate
General Partner also performs supervisory and administrative services for the
Partnership, for which it is reimbursed.

            For the fiscal year ended December 31, 2001, Enstar Cable charged us
management fees of approximately $192,800. Enstar Cable, Charter and its
affiliates also charged us approximately $502,800 for system operating
management services. In addition, programming services were purchased through
Charter. We were charged approximately $848,300 for these programming services
for fiscal year 2001.


                                      -32-
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

<TABLE>
<CAPTION>
                                                    Name and Address           Amount and Nature of    Percent
           Title of Class                         of Beneficial Owner          Beneficial Ownership    of Class
-------------------------------------    ----------------------------------    --------------------    --------
<S>                                      <C>                                   <C>                     <C>
Units of limited partnership interest    Everest Cable Investors LLC                 2,086(1)            7.0%
                                         199 So. Los Robles Ave., Suite 440
                                         Pasadena, CA  91101

Units of limited partnership interest    Paul J. Isaac, Individual                   1,486(1)            5.0%
                                         75 Prospect Avenue
                                         Larchmont, NY 10538

Units of limited partnership interest    Madison Partnership                         1,451(1)            5.0%
                                         Liquidity Investors 52, LLC
                                         6143 S Willow Drive Ste 200
                                         Greenwood Village, CO 80111
</TABLE>

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

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

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT SERVICES

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

            Pursuant to the Management Agreement dated November 26, 1985 between
the Partnership and Enstar Cable, a subsidiary of the Corporate General Partner,
Enstar Cable provides financial, management, supervisory and marketing services,
as necessary to the Partnership's operations. This Management Agreement provides
that the Partnership shall pay management fees equal to 5% of the Partnership's
gross receipts from customers. In addition, Enstar Cable is to be reimbursed for
amounts paid to third parties, the cost of administrative services in an amount
equal to the lower of actual cost or the amount the Partnership would be
required to pay to independent parties for comparable administrative services,
salaries and benefits of employees necessary for day-to-day operation of the
Partnership's systems, and an allocable shares of costs associated with
facilities required to manage the Partnership's systems. To provide these
management services, Enstar Cable has engaged Charter Communications Holding
Company, an


                                      -33-
<PAGE>

affiliate of the Corporate General Partner and Charter, to provide management,
consulting, programming and billing services for the Partnership.

            Since November 12, 1999, when Charter acquired control of the
Corporate General Partner and its subsidiary, Enstar Cable, as well as Falcon
Communications, L.P., the management fees payable have been limited to
reimbursement of an allocable share of Charter's management costs, which is less
than the fee permitted by the existing agreement. For the year ended December
31, 2001, accrued and unpaid management fees to Charter Communications Holding
Company LLC. were $205,200. In addition, the Partnership was charged directly
for the salaries and benefits of employees for daily operations, and where
shared by other Charter systems, an allocable share of facilities costs, with
programming and billing being charged to the Partnership at Charter's actual
cost. For the year ended December 31, 2001, service costs directly attributable
to providing cable services to customers which were incurred by Charter and
reimbursed by the Partnership, were $502,800. In addition, programming services
were purchased through Charter. We were charged approximately $848,300 for these
programming services for fiscal year 2001.

CONFLICTS OF INTEREST

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

PROPOSED SALE OF ASSETS

            On August 29, 2001, the Partnership entered into an asset purchase
agreement providing for the sale of all of the Partnership's Illinois cable
television systems in and around Hillsboro, Jerseyville, Nokomis and Pana,
Illinois to Charter Communications Entertainment I, LLC ("CCE-1"), an affiliate
of the Corporate General Partner and an indirect subsidiary of Charter, for a
total sale price of approximately $13,541,600 ($2,258 per customer acquired),
anticipated to result in a post-closing distribution of approximately $618 per
partnership unit, prior to applicable taxes (the "Charter Sale"). The Charter
Sale is part of a larger transaction in which the Partnership and five other
affiliated partnerships (which, together with the Partnership are collectively
referred to as the "Selling Partnerships") would sell all of their assets used
in the operation of their respective Illinois cable television systems to CCE-1
and two of its affiliates (also referred to, with CCE-1, as the "Purchasers")
for a total cash sale price of $63,000,000. The total sale price has been
allocated among the Selling Partnerships based on the number of customers served
by each of the Selling Partnerships' respective Illinois cable systems as of
June 30, 2001. Each Selling Partnership will receive the same value per
customer. Closing of the Charter Sale is subject to closing sale price
adjustments, regulatory approvals, customary closing conditions and the approval
by the Limited Partners of the Selling Partnerships of the sale of their
respective Illinois cable systems. In addition, the Limited Partners of each of
the Selling Partnerships must approve an amendment to their respective
partnership agreement to allow the sale of assets to an affiliate of such
partnership's General Partner. The Purchasers are each indirect subsidiaries of
the Corporate General Partner's ultimate parent company, Charter, and,
therefore, are affiliates of the Partnership and each of the other Selling
Partnerships. The Purchasers have indicated that they may waive the requirement
of limited partner approval by all six Selling Partnerships. If the Purchasers
do waive this requirement, then they might purchase the Illinois systems in more
than one closing, and only with respect to those Selling Partnerships that have
received the approval of their limited partners. Although it is presently
expected that the sale of the Partnership's Illinois systems will be consummated
in the second quarter of 2002, there is no assurance regarding completion of the
transaction. If the sale is approved in accordance with the terms of the
Purchase Agreement, the Partnership will present the results of its Illinois
systems as discontinued operations.


                                      -34-
<PAGE>

FIDUCIARY RESPONSIBILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS

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

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


                                      -35-
<PAGE>

                                     PART IV

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

(a)   1.    Financial Statements

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

      2.    Financial Statement Schedules

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

      3.    Exhibits

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

(b)         Reports on Form 8-K

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


                                      -36-
<PAGE>

                                   SIGNATURES

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

                                        ENSTAR INCOME PROGRAM II-2, L.P.
                                        By: Enstar Communications Corporation,
                                            Corporate General Partner


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

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


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


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

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


                                      -37-
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Report of Independent Public Accountants                                     F-2

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

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

Statements of Partnership Capital for the years ended December 31,
  2001 and 2000                                                              F-5

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

Notes to Financial Statements                                                F-7

Report of Independent Auditors                                              F-15

Statement of Operations for the year ended December 31, 1999                F-16

Statement of Partnership Capital (Deficit) for the year ended
  December 31, 1999                                                         F-17

Statement of Cash Flows for the year ended December 31, 1999                F-18

Notes to Financial Statements                                               F-19
</TABLE>

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


                                      F-1
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
   Enstar Income Program II-2, L.P.:

We have audited the accompanying balance sheets of Enstar Income Program II-2,
L.P. (a Georgia limited partnership) as of December 31, 2001 and 2000, and the
related statements of operations, partnership capital and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Enstar Income Program II-2,
L.P. as of December 31, 2001 and 2000, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States.


/s/ ARTHUR ANDERSEN LLP

St. Louis, Missouri,
   March 29, 2002


                                      F-2
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                                 BALANCE SHEETS

                        AS OF DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                         2001           2000
                                                                     -----------    -----------
<S>                                                                  <C>            <C>
                                     ASSETS

ASSETS:
   Cash                                                              $ 9,745,500    $ 7,186,600
   Accounts receivable                                                    75,000        239,000
   Prepaid expenses and other assets                                       7,400         51,200
   Property, plant and equipment, net of accumulated depreciation
      of $8,795,700 and $8,379,200, respectively                       2,480,200      2,748,800
   Franchise cost, net of accumulated amortization of $1,393,800
      and $1,388,200, respectively                                         8,300         15,700
                                                                     -----------    -----------

                 Total assets                                        $12,316,400    $10,241,300
                                                                     ===========    ===========

                       LIABILITIES AND PARTNERSHIP CAPITAL

LIABILITIES:
   Accounts payable                                                  $    65,000    $    68,500
   Accrued liabilities                                                   135,700        170,400
   Due to affiliates                                                     876,300         62,600
                                                                     -----------    -----------

               Total liabilities                                       1,077,000        301,500
                                                                     -----------    -----------

PARTNERSHIP CAPITAL:
   General Partners                                                       38,700         25,700
   Limited Partners                                                   11,200,700      9,914,100
                                                                     -----------    -----------

               Total partnership capital                              11,239,400      9,939,800
                                                                     -----------    -----------

               Total liabilities and partnership capital             $12,316,400    $10,241,300
                                                                     ===========    ===========
</TABLE>

                See accompanying notes to financial statements.


                                      F-3
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                            STATEMENTS OF OPERATIONS

                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                  2001            2000
                                                              -----------     -----------
<S>                                                           <C>             <C>
REVENUES                                                      $ 3,856,100     $ 3,916,300
                                                              -----------     -----------

OPERATING EXPENSES:
   Service costs                                                1,241,700       1,182,900
   General and administrative expenses                            433,100         394,400
   General partner management fees and reimbursed expenses        695,600         638,500
   Depreciation and amortization                                  422,300         503,400
                                                              -----------     -----------

                                                                2,792,700       2,719,200
                                                              -----------     -----------

               Operating income                                 1,063,400       1,197,100
                                                              -----------     -----------

OTHER INCOME (EXPENSE):
   Interest income                                                279,600         375,500
   Other expense                                                  (43,400)        (26,700)
                                                              -----------     -----------

                                                                  236,200         348,800
                                                              -----------     -----------

               Net income                                     $ 1,299,600     $ 1,545,900
                                                              ===========     ===========

NET INCOME ALLOCATED TO GENERAL PARTNERS                      $    13,000     $    15,500
                                                              ===========     ===========

NET INCOME ALLOCATED TO LIMITED PARTNERS                      $ 1,286,600     $ 1,530,400
                                                              ===========     ===========

NET INCOME PER UNIT OF LIMITED PARTNERSHIP INTEREST           $     43.06     $     51.22
                                                              ===========     ===========

WEIGHTED AVERAGE LIMITED PARTNERSHIP UNITS OUTSTANDING
   DURING THE YEAR                                                 29,880          29,880
                                                              ===========     ===========
</TABLE>

                See accompanying notes to financial statements.


                                      F-4
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                        STATEMENTS OF PARTNERSHIP CAPITAL

                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                            GENERAL        LIMITED
                                            PARTNERS       PARTNERS        TOTAL
                                          -----------    -----------    -----------
<S>                                       <C>            <C>            <C>
PARTNERSHIP CAPITAL, January 1, 2000      $    10,200    $ 8,383,700    $ 8,393,900

   Net income                                  15,500      1,530,400      1,545,900
                                          -----------    -----------    -----------

PARTNERSHIP CAPITAL, December 31, 2000         25,700      9,914,100      9,939,800

   Net income                                  13,000      1,286,600      1,299,600
                                          -----------    -----------    -----------

PARTNERSHIP CAPITAL, December 31, 2001    $    38,700    $11,200,700    $11,239,400
                                          ===========    ===========    ===========
</TABLE>

                See accompanying notes to financial statements.


                                      F-5
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                            STATEMENTS OF CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                                     2001            2000
                                                                                 -----------     -----------
<S>                                                                              <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                    $ 1,299,600     $ 1,545,900
   Adjustments to reconcile net income to net cash from operating activities:
      Depreciation and amortization                                                  422,300         503,400
      Changes in:
         Accounts receivable, prepaid expenses and other assets                      207,800        (108,400)
         Accounts payable, accrued liabilities and due to affiliates                 775,500        (186,300)
                                                                                 -----------     -----------

               Net cash from operating activities                                  2,705,200       1,745,600
                                                                                 -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                             (147,900)       (309,700)
   Change in intangible assets                                                         1,600          (2,000)
                                                                                 -----------     -----------

               Net cash from investing activities                                   (146,300)       (311,700)
                                                                                 -----------     -----------

               Net increase in cash                                                2,558,900       1,433,900

CASH, beginning of year                                                            7,186,600       5,752,700
                                                                                 -----------     -----------

CASH, end of year                                                                $ 9,745,500     $ 7,186,600
                                                                                 ===========     ===========
</TABLE>

                See accompanying notes to financial statements.


                                      F-6
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

            Enstar Income Program II-2, L.P., a Georgia limited partnership (the
"Partnership"), owns and operates cable television systems in small to
medium-sized communities in areas of Illinois and Missouri.

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

Property, Plant and Equipment

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

<TABLE>
<S>                             <C>
Cable distribution systems                         5-15 years
Vehicles                                            3 years
Furniture and equipment                            5-7 years
Leasehold improvements          Shorter of life of lease or useful life of asset
</TABLE>

Franchise Cost

            Costs incurred in obtaining and renewing cable franchises are
deferred and amortized over the lives of the franchises. Franchise rights
acquired through the purchase of cable television systems represent management's
estimate of fair value and are generally amortized using the straight-line
method over a period of up to 15 years. This period represents management's best
estimate of the useful lives of the franchises and assumes substantially all of
those franchises that expire during the period will be renewed by the
Partnership. As of December 31, 2001, no franchise agreements have expired in
the Partnership's franchise areas. Amortization expense related to franchises
for the years ended December 31, 2001 and 2000 was $5,600 and $56,300,
respectively.

Long-Lived Assets

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

Revenue Recognition

            Cable television revenues from basic and premium services are
recognized when the related services are provided. Advertising revenues are
recognized when commercials are broadcast. Installation revenues are recognized
to the extent of direct selling costs incurred. The remainder, if any, is
deferred and amortized to income over the estimated average period that
customers are expected to remain connected to the


                                      F-7
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

cable system. As of December 31, 2001 and 2000, no installation revenues have
been deferred, as direct selling costs have exceeded installation revenues.

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

Income Taxes

            As a partnership, Enstar Income Program II-2, L.P. pays no income
taxes. All of the income, gains, losses, deductions and credits of the
Partnership are passed through to its partners. The basis in the Partnership's
assets and liabilities differs for financial and tax reporting purposes. As of
December 31, 2001 and 2000, the book basis of the Partnership's net assets
exceeded its tax basis by approximately $1,342,000 and $1,260,300, respectively.
The accompanying financial statements, which are prepared in accordance with
accounting principles generally accepted in the United States, differ from the
financial statements prepared for tax purposes due to the different treatment of
various items as specified in the Internal Revenue Code. The net effect of these
accounting differences is that net income for the year ended December 31, 2001
and 2000, in the financial statements is approximately $103,600 and $59,900 more
than tax income or loss of the Partnership for the same period, respectively,
caused principally by timing differences in depreciation expense.

Net Income per Unit of Limited Partnership Interest

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

Use of Estimates

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

(2) PARTNERSHIP MATTERS

            The Partnership was formed on July 3, 1984 by a partnership
agreement, as amended (the "Partnership Agreement"), to acquire, construct,
improve, develop and operate cable television systems in various locations in
the United States. The Partnership Agreement provides for Enstar Communications
Corporation (the "Corporate General Partner") and Robert T. Graff, Jr. to be the
General Partners and for the admission of Limited Partners through the sale of
interests in the Partnership.


                                      F-8
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

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

            The amended Partnership Agreement generally provides that all cash
distributions, as defined, be allocated 1% to the General Partners and 99% to
the Limited Partners until the Limited Partners have received aggregate cash
distributions equal to their original capital contributions ("Capital Payback").
The Partnership Agreement also provides that all partnership profits, gains,
operational losses, and credits, all as defined, be allocated 1% to the General
Partners and 99% to the Limited Partners until the Limited Partners have been
allocated net profits equal to the amount of cash flow required for Capital
Payback. After the Limited Partners have received cash flow equal to their
initial investments, the General Partners will receive a 1% allocation of cash
flow from sale or liquidation of a system until the Limited Partners have
received an annual simple interest return of at least 18% of their initial
investments less any distributions from previous system sales and cash
distributions from operations. Thereafter, the respective allocations will be
made 15% to the General Partners and 85% to the Limited Partners. Any losses
from system sales or exchanges shall be allocated first to all partners having
positive capital account balances (based on their respective capital accounts)
until all such accounts are reduced to zero and thereafter to the Corporate
General Partner. All allocations to individual Limited Partners will be based on
their respective limited partnership ownership interests.

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

(3) PROPOSED SALE OF ASSETS

            On August 29, 2001, the Partnership entered into an asset purchase
agreement providing for the sale of all of the Partnership's Illinois cable
television systems in and around Hillsboro, Jerseyville, Nokomis and Pana,
Illinois to Charter Communications Entertainment I, LLC ("CCE-1"), an affiliate
of the Corporate General Partner and an indirect subsidiary of Charter, for a
total sale price of approximately $13,541,600 ($2,258 per customer acquired)
(the "Charter Sale"). The Charter Sale is part of a larger transaction in which
the Partnership and five other affiliated partnerships (which, together with the
Partnership are collectively referred to as the "Selling Partnerships") would
sell all of their assets used in the operation of their respective Illinois
cable television systems to CCE-1 and two of its affiliates (also referred to,
with CCE-1, as the "Purchasers") for a total cash sale price of $63,000,000. The
total sale price has been


                                      F-9
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

allocated among the Selling Partnerships based on the number of customers served
by each of the Selling Partnerships' respective Illinois cable systems as of
June 30, 2001. Each Selling Partnership will receive the same value per
customer. Closing of the Charter Sale is subject to closing sale price
adjustments, regulatory approvals, customary closing conditions and, unless
waived by the Purchasers, the approval by the Limited Partners of the Selling
Partnerships of the sale of their respective Illinois cable systems. In
addition, the Limited Partners of each of the Selling Partnerships must approve
an amendment to their respective partnership agreement to allow the sale of
assets to an affiliate of such partnership's General Partner. The Purchasers are
each indirect subsidiaries of the Corporate General Partner's ultimate parent
company, Charter, and, therefore, are affiliates of the Partnership and each of
the other Selling Partnerships. The Purchasers have indicated that they may
waive the requirement of limited partner approval by all six Selling
Partnerships. If the Purchasers do waive this requirement, then they might
purchase the Illinois systems in more than one closing, and only with respect to
those Selling Partnerships that have received the approval of their limited
partners. Although it is presently expected that the sale of the Partnership's
Illinois systems will be consummated in the second quarter of 2002, there is no
assurance regarding completion of the transaction. If the sale is approved in
accordance with the terms of the Purchase Agreement, the Partnership will
present the results of its Illinois systems as discontinued operations.

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

            As a result of marketing efforts using an independent broker
experienced in the sale of cable systems, the Partnership, together with certain
affiliated partnerships for which the Corporate General Partner also served as a
General Partner (collectively, the "Gans Selling Partnerships"), entered into a
purchase and sale agreement, dated as of August 8, 2000, as amended as of
September 29, 2000 (the "Gans Agreement"), with Multimedia Acquisition Corp., an
affiliate of Gans Multimedia Partnership ("Gans"). The Gans Agreement provided
for Gans to acquire the assets comprising the Partnership's systems, as well as
certain assets of the other Gans Selling Partnerships. Following a series of
discussions and meetings, the Partnership and Gans determined that they were not
able to agree on certain further amendments to the Gans Agreement required to
satisfy conditions precedent to close the transactions. In light of these
conditions and existing


                                      F-10
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

economic and financial market conditions, and their impact on Gans' inability to
arrange financing in order to close the acquisitions, on April 18, 2001, the
parties agreed to terminate the Gans Agreement.

            Following termination of the Gans Agreement, the broker once again
attempted to market the various Illinois systems of the affiliated partnerships,
including the Partnership's system. Following this second sale process, the
Partnership entered into the asset purchase agreement for the Charter Sale. The
broker once again also attempted to market the Partnership's remaining system in
Malden, Missouri.

            The Malden, Missouri system is not included in the Charter Sale and
will continue to be owned and operated by the Corporate General Partner
indefinitely for the foreseeable future. The Corporate General Partner may seek
potential purchasers for that system from time to time when it believes market
conditions are appropriate. However, the Corporate General Partner can give no
assurance of when, or if, the Malden system will ever be sold.

            Other expense of $43,400 and $26,700 for the years ended December
31, 2001 and 2000, respectively, represent legal and proxy costs associated with
the proposed sales of the Partnership's assets.

(4) PROPERTY, PLANT AND EQUIPMENT

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

<TABLE>
<CAPTION>
                                                    DECEMBER 31,
                                           -----------------------------
                                               2001             2000
                                           ------------     ------------
<S>                                        <C>              <C>
      Cable distribution systems           $ 10,845,900     $ 10,699,000
      Land and improvements                      17,000           17,000
      Vehicles, furniture and equipment         413,000          412,000
                                           ------------     ------------

                                             11,275,900       11,128,000

      Less:  accumulated depreciation        (8,795,700)      (8,379,200)
                                           ------------     ------------

                                           $  2,480,200     $  2,748,800
                                           ============     ============
</TABLE>

            Depreciation expense for the years ended December 31, 2001 and 2000,
was $416,500 and $443,900, respectively.

(5) COMMITMENTS AND CONTINGENCIES

Litigation

            The Partnership is a party to lawsuits and claims that arose in the
ordinary course of conducting its business. In the opinion of management, after
consulting with legal counsel, the outcome of these lawsuits and claims will not
have a material adverse effect on the Partnership's financial position or
results of operations.


                                      F-11
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

Regulation in the Cable Television Industry

            The operation of a cable system is extensively regulated by the
Federal Communications Commission (FCC), some state governments and most local
governments. The FCC has the authority to enforce its regulations through the
imposition of substantial fines, the issuance of cease and desist orders and/or
the imposition of other administrative sanctions, such as the revocation of FCC
licenses needed to operate certain transmission facilities used in connection
with cable operations. The 1996 Telecommunications Act ("1996 Telecom Act")
altered the regulatory structure governing the nation's communications
providers. It removed barriers to competition in both the cable television
market and the local telephone market. Among other things, it reduced the scope
of cable rate regulation and encouraged additional competition in the video
programming industry by allowing local telephone companies to provide video
programming in their own telephone service areas.

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

Insurance

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

            Approximately 74% of the Partnership's customers are served by the
Partnership's system in Hillsboro, Illinois and neighboring communities.
Significant damage to the system due to seasonal weather conditions or other
events could have a material adverse effect on the Partnership's liquidity and
cash flow. The Partnership continues to maintain insurance coverage in amounts
the Partnership's management views as appropriate for all other property,
liability, automobile, workers' compensation and other insurable risks.

(6) EMPLOYEE BENEFIT PLAN

            The Partnership participates in a cash or deferred profit sharing
plan (the "Profit Sharing Plan") sponsored by a subsidiary of the Corporate
General Partner, which covers substantially all of its employees. The Profit
Sharing Plan provides that each participant may elect to make a contribution in
an amount up to 15% of the participant's annual compensation which otherwise
would have been payable to the participant as salary. Effective January 1, 1999,
the Profit Sharing Plan was amended, whereby the Partnership would make an
employer contribution equal to 100% of the first 3% and 50% of the next 2% of
the participants' contributions. Contributions of $600 were made during 2001. No
contributions were made during 2000.


                                      F-12
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

(7) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES

            The Partnership has a management and service agreement (the
"Management Agreement") with Enstar Cable Corporation ("Enstar Cable"), a wholly
owned subsidiary of the Corporate General Partner, pursuant to which the
Partnership pays a monthly management fee of 5% of gross revenues of the
Partnership. Management fee expense was $192,800 and $195,800 for the years
ended December 31, 2001 and 2000, respectively. No management fee is payable to
Enstar Cable by the Partnership and management fees are non-interest bearing.

            The Management Agreement also provides that the Partnership
reimburse Enstar Cable for direct expenses incurred on behalf of the Partnership
and the Partnership's allocable share of Enstar Cable's operational costs.
Additionally, Charter and its affiliates provide other management and
operational services for the Partnership. These expenses are charged to the
properties served based primarily on the Partnership's allocable share of
operational costs associated with the services provided. The total amount
charged to the Partnership for these costs approximated $502,800 and $442,700
for the years ended December 31, 2001 and 2000, respectively.

            Substantially all programming services had been purchased through
Charter. Charter charges the Partnership for these costs based on its costs. The
Partnership recorded programming fee expense of $848,300 and $761,100 for the
years ended December 31, 2001 and 2000, respectively. Programming fees are
included in service costs in the accompanying statements of operations.

            The cable system in one of the Partnership's franchise areas does
not have head-end equipment to receive and retransmit its cable television
signal. The system relies on another partnership managed by the Corporate
General Partner with systems located in neighboring communities to provide its
cable television signal. The Partnership is not charged a fee for this service.

(8) NEW ACCOUNTING STANDARDS

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

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

            Under SFAS No. 143, the fair value of a liability for an asset
retirement obligation is required


                                      F-13
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2001 AND 2000

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

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


                                      F-14
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

Partners
  Enstar Income Program  II-2, L.P. (a Georgia limited partnership):

We have audited the accompanying statements of operations, partnership capital
(deficit), and cash flows of Enstar Income Program II-2, L.P. (a Georgia limited
partnership) for the year ended December 31, 1999. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, results of operations and cash flows of Enstar Income
Program II-2, L.P for the year ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States.


                                                    /s/ ERNST & YOUNG LLP

Los Angeles, California,
   March 24, 2000


                                      F-15
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                             STATEMENT OF OPERATIONS

                      FOR THE YEAR ENDED DECEMBER 31, 1999

<TABLE>
<S>                                                           <C>
REVENUES                                                      $ 3,928,800
                                                              -----------

OPERATING EXPENSES:
   Service costs                                                1,302,800
   General and administrative expenses                            478,500
   General partner management fees and reimbursed expenses        526,700
   Depreciation and amortization                                  625,600
                                                              -----------

                                                                2,933,600
                                                              -----------

               Operating income                                   995,200
                                                              -----------

OTHER INCOME (EXPENSE):
   Interest expense                                               (18,400)
   Interest income                                                225,200
                                                              -----------

                                                                  206,800
                                                              -----------

               Net income                                     $ 1,202,000
                                                              ===========

NET INCOME ALLOCATED TO GENERAL PARTNERS                      $    12,000
                                                              ===========

NET INCOME ALLOCATED TO LIMITED PARTNERS                      $ 1,190,000
                                                              ===========

NET INCOME PER UNIT OF LIMITED PARTNERSHIP INTEREST           $     39.83
                                                              ===========

WEIGHTED AVERAGE LIMITED PARTNERSHIP UNITS OUTSTANDING
   DURING THE YEAR                                                 29,880
                                                              ===========
</TABLE>

                See accompanying notes to financial statements.


                                      F-16
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                   STATEMENT OF PARTNERSHIP CAPITAL (DEFICIT)

                      FOR THE YEAR ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                      GENERAL        LIMITED
                                                     PARTNERS       PARTNERS       TOTAL
                                                    ----------     ----------    ----------
<S>                                                 <C>            <C>           <C>
PARTNERSHIP CAPITAL (DEFICIT), January 1, 1999      $   (1,800)    $7,193,700    $7,191,900

   Net income for year                                  12,000      1,190,000     1,202,000
                                                    ----------     ----------    ----------

PARTNERSHIP CAPITAL (DEFICIT), December 31, 1999    $   10,200     $8,383,700    $8,393,900
                                                    ==========     ==========    ==========
</TABLE>

                See accompanying notes to financial statements.


                                      F-17
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                             STATEMENT OF CASH FLOWS

                      FOR THE YEAR ENDED DECEMBER 31, 1999

<TABLE>
<S>                                                                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                         $ 1,202,000
   Adjustments to reconcile net income to net cash provided by
      operating activities:
         Depreciation and amortization                                    625,600
         Decrease from changes in:
            Accounts receivable, prepaid expenses and other assets        (60,200)
            Accounts payable and due to affiliates                       (108,600)
                                                                      -----------

               Net cash provided by operating activities                1,658,800
                                                                      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                                  (367,300)
   Increase in intangible assets                                           (7,100)
                                                                      -----------

               Net cash used in investing activities                     (374,400)
                                                                      -----------

               Net increase in cash                                     1,284,400

CASH, BEGINNING OF YEAR                                                 4,468,300
                                                                      -----------

CASH, END OF YEAR                                                     $ 5,752,700
                                                                      ===========
</TABLE>

                See accompanying notes to financial statements.


                                      F-18
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

Form of Presentation

            Enstar Income Program II-2, L.P., a Georgia limited partnership (the
"Partnership"), owns and operates cable television systems in rural areas of
Illinois and Missouri.

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

Property, Plant and Equipment

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

<TABLE>
<S>                             <C>
Cable distribution systems                          5-15 years
Vehicles                                             3 years
Furniture and equipment                             5-7 years
Leasehold improvements          Shorter of life of lease or useful life of asset
</TABLE>

Franchise Cost

            The excess of cost over the fair values of tangible assets and
customer lists of cable television systems acquired represents the cost of
franchises. In addition, franchise cost includes capitalized costs incurred in
obtaining new franchises and the renewal of existing franchises. These costs are
amortized using the straight-line method over the lives of the franchises,
ranging up to 15 years. The Partnership periodically evaluates the amortization
periods of these intangible assets to determine whether events or circumstances
warrant revised estimates of useful lives. Costs relating to unsuccessful
franchise applications are charged to expense when it is determined that the
efforts to obtain the franchise will not be successful. The Partnership is in
the process of negotiating the renewal of expired franchise agreements for three
of the Partnership's 11 franchises, which include approximately 32% of the
Partnership's basic customers at December 31, 1999.

Deferred Charges

            Deferred charges are amortized using the straight-line method over
two years.

Recoverability of Assets

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


                                      F-19
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

Revenue Recognition

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

Income Taxes

            As a partnership, Enstar Income Program II-2, L.P. pays no income
taxes. All of the income, gains, losses, deductions and credits of the
Partnership are passed through to its partners. The basis in the Partnership's
assets and liabilities differs for financial and tax reporting purposes. At
December 31, 1999, the book basis of the Partnership's net assets exceeded its
tax basis by $1,164,100.

            The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles, differ from the
financial statements prepared for tax purposes due to the different treatment of
various items as specified in the Internal Revenue Code. The net effect of these
accounting differences is that net income for 1999 in the financial statements
is $131,300 more than tax income of the Partnership for the same period, caused
principally by timing differences in depreciation expense.

Advertising Costs

            All advertising costs are expensed as incurred.

Earnings Per Unit of Limited Partnership Interest

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

Use of Estimates

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

NOTE 2 - PARTNERSHIP MATTERS

            The Partnership was formed on July 3, 1984, to acquire, construct,
improve, develop and operate cable television systems in various locations in
the United States. The Partnership Agreement provides for Enstar Communications
Corporation (the "Corporate General Partner") and Robert T. Graff, Jr. to be the
General Partners and for the admission of Limited Partners through the sale of
interests in the Partnership.


                                      F-20
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

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

            The Partnership was formed with an initial capital contribution of
$1,100 comprising $1,000 from the Corporate General Partner and $100 from the
initial Limited Partner. Sale of interests in the Partnership began in January
1985, and the initial closing took place in October 1985. The Partnership
continued to raise capital until $7,500,000 (the maximum) was sold by January
1986.

            The amended partnership agreement generally provides that all cash
distributions (as defined) be allocated 1% to the General Partners and 99% to
the Limited Partners until the Limited Partners have received aggregate cash
distributions equal to their original capital contributions ("Capital Payback").
The partnership agreement also provides that all partnership profits, gains,
operational losses, and credits (all as defined) be allocated 1% to the General
Partners and 99% to the Limited Partners until the Limited Partners have been
allocated net profits equal to the amount of cash flow required for Capital
Payback. After the Limited Partners have received cash flow equal to their
initial investments, the General Partners will receive a 1% allocation of cash
flow from sale or liquidation of a system until the Limited Partners have
received an annual simple interest return of at least 18% of their initial
investments less any distributions from previous system sales and cash
distributions from operations. Thereafter, the respective allocations will be
made 15% to the General Partners and 85% to the Limited Partners. Any losses
from system sales or exchanges shall be allocated first to all partners having
positive capital account balances (based on their respective capital accounts)
until all such accounts are reduced to zero and thereafter to the Corporate
General Partner. All allocations to individual Limited Partners will be based on
their respective limited partnership ownership interests.

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

NOTE 3 - POTENTIAL SALE OF PARTNERSHIP ASSETS

            In accordance with the partnership agreement, the Corporate General
Partner has implemented a plan for liquidating the Partnership. In connection
with that strategy, the Corporate General Partner has entered into an agreement
with a cable broker to market the Partnership's cable systems to third parties.
Should the Partnership receive offers from third parties for such assets, the
Corporate General Partner will prepare a proxy for submission to the Limited
Partners for the purpose of approving or disapproving such sale. Should such a
sale be approved, the Corporate General Partner will proceed to liquidate the
Partnership following the settlement of its final liabilities. The Corporate
General Partner can give no assurance,


                                      F-21
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

however, that it will be able to generate a sale of the Partnership's cable
assets. The financial statements do not reflect any adjustments that may result
from the outcome of this uncertainty.

NOTE 4 - COMMITMENTS AND CONTINGENCIES

            The Partnership leases buildings and tower sites associated with the
systems under operating leases expiring in various years through 2012.

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

<TABLE>
<CAPTION>
                               Year           Amount
                        -----------------   ---------
<S>                                         <C>
                        2000                $   5,300
                        2001                    5,300
                        2002                    5,300
                        2003                    5,300
                        2004                    2,900
                        Thereafter              9,200
                                            ---------

                                             $ 33,300
                                            =========
</TABLE>

            Rentals, other than pole rentals, charged to operations amounted to
$7,800 in 1999. Pole rentals were $43,600 in 1999.

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

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


                                      F-22
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

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

            Approximately 73% of the Partnership's customers are served by its
system in Hillsboro, Illinois, and neighboring communities. Significant damage
to the system due to seasonal weather conditions or other events could have a
material adverse effect on the Partnership's liquidity and cash flows. The
Partnership continues to purchase insurance coverage in amounts its management
views as appropriate for all other property, liability, automobile, workers'
compensation and other types of insurable risks.

            In the states of Missouri and Illinois, customers have filed
punitive class action lawsuits on behalf of all persons residing in the states
who are or were customers of the Partnerships' cable television service, and who
have been charged a fee for delinquent payment of their cable bill. The actions
challenge the legality of the processing fee and seek declaratory judgment,
injunctive relief and unspecified damages. At present, the Partnership is not
able to project the outcome of the actions. All of the Partnership's basic
customers reside in Missouri and Illinois where the claims have been filed.

NOTE 5 - EMPLOYEE BENEFIT PLAN

            The Partnership participates in a cash or deferred profit sharing
plan (the "Profit Sharing Plan") sponsored by a subsidiary of the Corporate
General Partner, which covers substantially all of its employees. The Profit
Sharing Plan provides that each participant may elect to make a contribution in
an amount up to 15% of the participant's annual compensation which otherwise
would have been payable to the participant as salary. Prior to 1999, the
Partnership's contribution to the Profit Sharing Plan, as determined by
management, was discretionary but could not exceed 15% of the annual aggregate
compensation (as defined) paid to all participating employees. Effective January
1, 1999, the Profit Sharing Plan was amended, whereby the Partnership would make
an employer contribution equal to 100% of the first 3% and 50% of the next 2% of
the participants' contributions. A contribution of $1,200 was made during 1999.

NOTE 6 - TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES

            The Partnership has a management and service agreement with a wholly
owned subsidiary of the Corporate General Partner (the "Manager") for a monthly
management fee of 5% of gross receipts, as defined, from the operation of the
Partnership. Management fee expense was $196,400 in 1999.

            In addition to the monthly management fee, the Partnership
reimburses the Manager for direct expenses incurred on behalf of the Partnership
and for the Partnership's allocable share of operational costs associated with
services provided by the Manager. All cable television properties managed by the
Corporate General Partner and its subsidiaries are charged a proportionate share
of these expenses. Charter and its affiliates provide management services for
the Partnership. Such services were provided by FCLP and its affiliates prior to
November 12, 1999. Corporate office allocations and district office expenses are
charged to the properties served based primarily on the respective percentage of
basic customers or homes passed (dwelling units within a system) within the
designated service areas. Reimbursed expenses were $330,300 in 1999.


                                      F-23
<PAGE>

                        ENSTAR INCOME PROGRAM II-2, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1999

            The Partnership also receives certain system operating management
services from an affiliate of the Corporate General Partner in addition to the
Manager, due to the fact that there are no such employees directly employed by
the Partnership's cable systems. The Partnership reimburses the affiliate for
its allocable share of the affiliate's operational costs. The total amount
charged to the Partnership for these costs approximated $62,700 in 1999. No
management fee is payable to the affiliate by the Partnership and there is no
duplication of reimbursed expenses and costs paid to the Manager.

            Substantially all programming services have been purchased through
FCLP, and since November 12, 1999, have been purchased through Charter. FCLP
charged the Partnership for these costs based on an estimate of what the
Corporate General Partner could negotiate for such programming services for the
15 partnerships managed by the Corporate General Partner as a group. Charter
charges the Partnership for these costs based on its costs. Programming fee
expense was $935,200 in 1999. Programming fees are included in service costs in
the statement of operations.

            The cable system in one of the Partnership's franchise areas does
not have head-end equipment to receive and retransmit its cable television
signal. The system relies on another partnership managed by the Corporate
General Partner with systems located in neighboring communities to provide its
cable television signal. The Partnership is not charged a fee for this service.

NOTE 7 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

            During the year ended December 31, 1999, cash paid for interest
amounted to $18,400.


                                      F-24
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER      DESCRIPTION
------      -----------
<S>         <C>
2.1a        Asset Purchase Agreement, dated August 29, 2001, by and between
            Charter Communications Entertainment I, LLC, Interlink
            Communications Partners, LLC, and Rifkin Acquisitions Partners, LLC
            and Enstar Income Program II-1, L.P., Enstar Income Program II-2,
            L.P., Enstar Income Program IV-3, L.P., Enstar Income/Growth Program
            Six-A, L.P., Enstar IV/PBD Systems Venture, and Enstar Cable of
            Macoupin County. (Incorporated by reference to Exhibit A to
            Registrant's Definitive Proxy Statement on Schedule 14A as filed on
            February 7, 2002).

2.1b        Letter of Amendment, dated September 10, 2001, by and between
            Charter Communications Entertainment I, LLC, Interlink
            Communications Partners, LLC, and Rifkin Acquisitions Partners, LLC
            and Enstar Income Program II-1, L.P., Enstar Income Program II-2,
            L.P., Enstar Income Program IV-3, L.P., Enstar Income/Growth Program
            Six-A, L.P., Enstar IV/PBD Systems Venture, and Enstar Cable of
            Macoupin County. (Incorporated by reference to Exhibit B to
            Registrant's Definitive Proxy Statement on Schedule 14A as filed on
            February 7, 2002).

2.1c        Letter of Amendment, dated November 30, 2001, by and between Charter
            Communications Entertainment I, LLC, Interlink Communications
            Partners, LLC, and Rifkin Acquisitions Partners, LLC and Enstar
            Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar
            Income Program IV-3, L.P., Enstar Income/Growth Program Six-A, L.P.,
            Enstar IV/PBD Systems Venture, and Enstar Cable of Macoupin County.
            (Incorporated by reference to Exhibit C to Registrant's Definitive
            Proxy Statement on Schedule 14A as filed on February 7, 2002).

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

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

3.          Second Amended and Restated Agreement of Limited Partnership of
            Enstar Income Program II-2, L.P., dated as of August 1, 1988.
            (Incorporated by reference to the exhibits to the Registrant's
            Annual Report on Form 10-K, File No. 000-14505 for the fiscal year
            ended December 31, 1988.)

3.1         Amendment to Section 5.3.1 dated December 17, 1992. (Incorporated by
            reference to the exhibits to the Registrant's Current Report on Form
            8-K dated December 17, 1992.)
</TABLE>


                                       E-1
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER      DESCRIPTION
------      -----------
<S>         <C>
   10.1        Management Agreement between Enstar Income Program II-2 and
               Enstar Cable Corporation. (Incorporated by reference to the
               exhibits to the Registrant's Annual Report on Form 10-K, File
               No. 000-14505 for the fiscal year ended December 31, 1986.)

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

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

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

   10.5        Ordinance No. 1162 of the City of Pana, Illinois, authorizing an
               extension of a cable television franchise and authorizing and
               renewing an agreement between the City of Pana, Illinois, and
               Enstar Cable. Passed and approved February 8, 1993.
               (Incorporated by reference to the exhibits to the Registrant's
               Annual Report on Form 10-K, File No. 000-14505 for the fiscal
               year ended December 31,1992.)

   10.6        Franchise Agreement between the City of Pana, Illinois, and
               Enstar Communications Corporation and Enstar Income Program II-2.
               (Incorporated by reference to the exhibits to the Registrant's
               Quarterly Report on Form 10-Q, File No. 000-14505 for the quarter
               ended June 30, 1993.)

   10.7        Franchise Agreement and related documents thereto granting a
               non-exclusive community antenna television system franchise for
               the City of Jerseyville. (Incorporated by reference to the
               exhibits to the Registrant's Quarterly Report on Form 10-Q,
               File No. 000-14505 for the quarter ended June 30, 1994.)
               21.1 Subsidiaries: None

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


                                      E-2