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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
   FORM 10-K
 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2003 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 incorporation or organization)
    
    (I.R.S. Employer Identification Number)
 12405 Powerscourt DriveSt. Louis, Missouri 63131
    
    (314) 965-0555(Address of principal executive offices including zip code)
    
    (Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act Title of each class
    
    Name of each exchange on which registeredUnits 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. [   ] 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.




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ENSTAR INCOME PROGRAM II-2, L.P.
2003 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS PagePART IItem 1.
    
    Business
    
    
    3Item 2.
    
    Properties
    
    
    5Item 3.
    
    Legal Proceedings
    
    
    5Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    6PART IIItem 5.
    
    Market for the Registrant's Equity Securities and Related Security Holder Matters
    
    
    7Item 6.
    
    Selected Financial Data
    
    
    8Item 7.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    12Item 8.
    
    Financial Statements and Supplementary Data
    
    
    12Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    12Item 9A.
    
    Controls and Procedures
    
    
    12PART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    13Item 11.
    
    Executive Compensation
    
    
    15Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    
    16Item 13.
    
    Certain Relationships and Related Transactions
    
    
    17PART IVItem 14.
    
    Principal Accounting Fees and Services
    
    
    19Item 15
    
    Exhibits, Financial Statement Schedules, and Reports on Form 8-K
    
    
    19Signatures
    
    
    20
 This annual report on Form 10-K is for the year ended December 31, 2003. This
annual report modifies and supersedes documents filed prior to this annual
report. The Securities and Exchange Commission (SEC) allows us to

incorporate by reference information that we file with the SEC, which means
that we can disclose important information to you by referring you directly to
those documents. Information incorporated by reference is considered to be
part of this annual report. In addition, information that we file with the SEC
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.




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PART I ITEM 1. BUSINESS. Introduction Enstar Income Program II-2, L.P., a Georgia limited partnership (the
Partnership), was engaged in the ownership and operation of cable television
systems in and around the city of 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 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. On November 12, 1999, the Corporate General Partner became an
indirect controlled subsidiary of Charter Communications, Inc., also called
Charter, a large cable operator, serving approximately 6.54 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 Charter Plaza, 12405 Powerscourt Drive, St. Louis, MO
63131-0555 and their telephone number is (314) 965-0555. Charter has a website
accessible at http://www.charter.com. The Partnerships public filings are available from the Securities and Exchange
Commission at 1-800-SEC-0330 or at Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at www.sec.gov. Liquidation Basis Accounting and Sales of Cable Systems On April 10, 2002, pursuant to an asset purchase agreement dated August 29,
2001, the Partnership completed the sale of all of the Partnerships Illinois
cable television systems in and around Cisne, Farmersville, Flora, Noble,
Raymond, Salem and Xenia, Illinois to Rifkin Acquisition Partners, LLC (RAP)
and Charter Communications Entertainment I, LLC (CCE I), each an affiliate of
the Corporate General Partner and an indirect subsidiary of Charter, for a
total sale price of approximately $13.2 million (the Charter Sale). The
Charter Sale was 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 Charter Selling Partnerships) sold all of
their assets used in the operation of their respective Illinois cable
television systems to RAP, CCE I and another affiliate (also referred to as the
Purchasers) for a total cash sale price of $63.0 million. Each Charter
Selling Partnership received the same value per customer. In addition, the
Limited Partners of each of the Charter Selling Partnerships approved 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 Charter Selling Partnerships. After setting aside $2,000,000 to fund the Malden, Missouri headends working
capital needs and paying or providing for the payment of the expenses of the
Charter Sale, the Corporate General Partner made distributions of our allocable
share of the remaining net sale proceeds, in accordance with our partnership
agreement. We made an initial distribution of approximately $15,890,500 on or
about May 15, 2002, with a second distribution of $3,365,500 made on or about
September 24, 2002. On November 8, 2002, the Partnership entered into an asset purchase agreement
providing for the sale of the Malden, Missouri cable system to
Telecommunications Management, LLC (Telecommunications Management) for a total
sale price of approximately $1,702,500 (approximately $825 per customer
acquired). This sale was a part of a larger transaction in which the
Partnership and eight other affiliated partnerships (which, together with the
Partnership are collectively referred to as the Telecommunications Management
Selling Partnerships) sold all of their remaining assets used in the operation
of their respective cable systems to Telecommunications Management for a total
cash sale price of approximately $15,341,600 (before adjustments) (the
Telecommunications Management Sale). The Telecommunications Management Sale
was subject to the approval of a majority of the holders of the 3




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Partnerships units and approval of the holders of the other Telecommunications
Management Selling Partnerships. In addition, the transaction was subject to
certain closing conditions, including regulatory and franchise approvals. On February 6, 2003, the Partnership entered into a side letter amending the
asset purchase agreement providing for the sale of its remaining cable system
to Telecommunications Management. The February 6, 2003 side letter amended the
asset purchase agreement and deposit escrow agreement to extend the date of the
second installment of the deposit and the outside closing date each by 60 days.
On April 7, 2003, the second installment of the escrow deposit was due and was
not made. On April 24, 2003, the Partnership entered into another side letter amending
the asset purchase agreement providing for the sale of its remaining cable
system to Telecommunications Management. The April 24, 2003 side letter
amended the asset purchase agreement and deposit escrow agreement to extend the
date of the second installment of the deposit to May 15, 2003 and the outside
closing date to September 30, 2003. On June 6, 2003, the Partnership entered into a third side letter amending the
asset purchase agreement providing for the sale of its remaining cable system
to Telecommunications Management. The June 6, 2003 side letter amended the
asset purchase agreement to reduce the purchase price of the remaining cable
systems in the Selling Partnerships to approximately $14,487,200, subject to
closing sale price adjustments, of which approximately $1,651,200 related to
the cable system in the Partnership. In addition, $250,000 was deposited in
the Deposit Escrow Account concurrent with the execution of the side letter. Effective August 31, 2003, the Partnership completed the Telecommunications
Management Sale of its only remaining cable system for a total adjusted sales
price of approximately $1,267,000 (approximately $800 per customer acquired),
subject to post closing adjustments. The 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 were made, the Corporate General Partner believed that if the
Partnership would have made the comprehensive additional upgrades deemed
necessary to enable enhanced and competitive services available in the
marketplace, particularly in light of the high cost of two-way capability, the
Partnership would not have been able to 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 have been economically prudent. The Partnership finalized its proposed plan of liquidation in December 2002 in
connection with the filing of a proxy to obtain partner approval for the sale
of the Partnerships final cable system and the subsequent liquidation and
dissolution of the Partnership. In April 2003, the required number of votes
necessary to implement the plan of liquidation were obtained. As a result, the
Partnership changed its basis of accounting to the liquidation basis as of
December 31, 2002. The statements of operations, partnership capital and cash
flows for the years ended December 31, 2002 and 2001 have been presented on a
going concern basis comparable to prior periods and do not reflect the effects
of the change to the liquidation basis of accounting. Upon changing to
liquidation basis accounting, the Partnership recorded $22,200 of accrued costs
of liquidation in accounts payable and accrued liabilities representing an
estimate of the costs to be incurred after the sale of the final cable system
but prior to dissolution of the Partnership. Because reliable estimates of
future operating results or the ultimate realizable value of property, plant
and equipment could not be developed due to uncertainties surrounding the final
dissolution of the Partnership, no adjustments were recorded, prior to the sale
of the assets, to reflect assets at estimated realizable values or to reflect
estimates of future operating results. Accordingly, the assets in the
accompanying statement of net assets in liquidation as of December 31, 2002
have been stated at historical book values. Net assets in liquidation as of 4




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December 31, 2003 represent the estimated distributions to the Limited Partners
and the General Partners. Distributions ultimately made to the partners upon
liquidation will differ from the net assets in liquidation recorded in the
accompanying statement of net assets in liquidation as of December 31, 2003 as
a result of post closing adjustments to the sale proceeds received by the
Partnership and adjustments to accrued costs of liquidation. The Partnerships
accrued costs of liquidation were increased by $10,500 during the year ended
December 31, 2003. No assurance can be given as to the amount of final
distributions to be made to the partners. The Corporate General Partners intention is to terminate the Partnership as
expeditiously as possible in accordance with the Partnership Agreement. The
Partnership made an initial distribution payment of $3.4 million to the Limited
Partners in November 2003. A second and final liquidating distribution will
occur on or after October 2004 upon the release of the indemnity escrow and the
receipt of the remaining proceeds of such escrow if any. In order to reduce costs during the liquidation period, we submitted a request
for a no action letter on October 30, 2003 (the Letter) from the Division of
Corporation Finance (the Division) of the Securities and Exchange Commission
seeking to relieve us from filing annual and quarterly reports on Forms 10-K
and 10-Q under the Securities Exchange Act of 1934, as amended (the Exchange
Act). The Letter requested that the Division not recommend enforcement action
to the Commission against us for not filing these reports, subject to complying
with the requirements of the Letter. Our request currently is pending with the
Division and no relief has been granted. As such, we will continue to file
annual and quarterly reports on Forms 10-K and 10-Q under the Exchange Act
pending receipt of a favorable no action letter or until final dissolution of
the Partnership. However, in connection with the relief requested by the
Letter, we have undertaken not to consent to the admission of any transferee of
units as a limited partner in the Partnership, subject to the terms of our
partnership agreement, except for transfers for estate planning, gift and
intra-family transfer purposes. Following approval of the no action letter, we
will continue to provide financial statements to the Limited Partners in a
non-public presentation. Competition Prior to the Telecommunications Management Sale, we faced competition in the
areas of price, services and service reliability. Our key competitors included
Direct Broadcast Satellite, broadcast television, traditional overbuilds,
telephone companies and utilities, private cable and wireless distribution.
Following the Telecommunications Management Sale, we ceased operations and
therefore have no competition. Employees The various personnel required to operate our business up through the close of
the Telecommunications Management Sale were employed by the Corporate General
Partner, its subsidiary corporation, and Charter, the cost of which was charged
directly to the Partnership. Following the Telecommunications Management Sale,
we ceased operations and terminated the remaining employees of the Partnership. ITEM 2. PROPERTIES. All of our cable systems and the associated property leased or owned by them
were sold effective August 31, 2003. ITEM 3. LEGAL PROCEEDINGS. As disclosed in Charters annual report on Form 10-K for the year ended
December 31, 2003, the parent of the Corporate General Partner and the Manager
is the defendant in twenty-two class action and shareholder lawsuits and is the
subject of a grand jury investigation being conducted by the United States
Attorneys Office for the Eastern District of Missouri into certain of its
accounting and reporting practices, focusing on how Charter reported customer
numbers and its reporting of amounts received from digital set-top terminal
suppliers for advertising. The United States Attorneys Office has publicly
stated that Charter is not currently a target of the investigation. Charter
has also been advised by the United States Attorneys Office that no member of
its board of directors, including its Chief Executive Officer, is a target of
the investigation. On July 24, 2003, a federal grand jury charged four former
officers of Charter with conspiracy and mail and wire fraud, alleging improper
accounting and reporting practices focusing on revenue from digital set-top
terminal suppliers and inflated subscriber account numbers. On July 25, 2003,
one of the former officers who was indicted entered a guilty plea. Charter has
informed the Corporate General Partner that they are fully cooperating with the
investigation. 5




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Charter is unable to predict the outcome of the class action lawsuits and
government investigations at this time. An unfavorable outcome of these
matters could have a material adverse effect on Charters results of operations
and financial condition which could in turn have a material adverse effect on
the Partnership. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of security holders during the fourth
quarter of the year ended December 31, 2003. 6




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PART II ITEM 5. MARKET FOR THE REGISTRANTS EQUITY SECURITIES AND RELATED SECURITY HOLDER MATTERS. Restrictions on Admission as Limited Partner Our only remaining activities include settling our affairs in the normal course
of liquidation and our only remaining assets consist of temporary investments
in short-term securities and the right to receive certain escrowed amounts. In
addition, there has historically been only limited trading in our limited
partnership units and the units have never been listed or traded on a public
securities exchange or on any similar trading facility. Therefore, in order to
reduce costs during the liquidation period, we submitted a request for a no
action letter on October 30, 2003 (the Letter) from the Division of
Corporation Finance (the Division) of the Securities and Exchange Commission
seeking to relieve us from filing annual and quarterly reports on Forms 10-K
and 10-Q under the Securities Exchange Act of 1934, as amended (the Exchange
Act). The Letter requested that the Division not recommend enforcement action
to the Commission against us for not filing these reports, subject to complying
with the requirements of the Letter. Our request currently is pending with the
Division and no relief has been granted. As such, we will continue to file
annual and quarterly reports on Forms 10-K and 10-Q under the Exchange Act
pending receipt of a favorable no action letter or until final dissolution of
the Partnership. However, in connection with the relief requested by the
Letter, we have undertaken not to consent to the admission of any transferee of
units as a limited partner in the Partnership, subject to the terms of our
partnership agreement, except for transfers for estate planning, gift and
intra-family transfer purposes. Following approval of the no action letter, we
will continue to provide financial statements to the Limited Partners in a
non-public presentation. The approximate number of equity security holders of record was 619 as of
December 31, 2003. Distributions The amended Partnership Agreement generally provides that all cash
distributions (as defined) be distributed 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, distributions will be made in amounts equal to
the respective partners remaining capital account balances. 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. We began making periodic cash distributions to the Limited Partners from
operations during 1986 and continued through 1989. No distributions were made
during 2001 or 2000. Distributions related to the sale of cable system totaled
$19.3 million in 2002. In 2003, we distributed $3.4 million to our Limited
Partners from the proceeds received from the sale of our remaining cable
systems. 7




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The Corporate General Partners intention is to terminate the Partnership as
expeditiously as possible in accordance with its partnership agreement. A
second and final liquidating distribution will occur on or after October 2004
upon the release of the indemnity escrow and the receipt of the remaining
proceeds of such escrow if any. ITEM 6. SELECTED FINANCIAL DATA. The table below presents selected financial data of the Partnership for the
five years ended December 31, 2003. This data should be read in conjunction
with the Partnerships financial statements and related notes thereto 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. Year Ended December 31,2002 (1)
    
    2001
    
    2000
    
    1999OPERATIONS STATEMENT DATARevenues
    
    $
    1,672,900
    
    
    $
    3,856,100
    
    
    $
    3,916,300
    
    
    $
    3,928,800Operating expenses
    
    
    1,021,500
    
    
    
    2,370,400
    
    
    
    2,215,800
    
    
    
    2,308,000Depreciation and amortization
    
    
    193,700
    
    
    
    422,300
    
    
    
    503,400
    
    
    
    625,600Operating income
    
    $
    457,700
    
    
    $
    1,063,400
    
    
    $
    1,197,100
    
    
    $
    995,200Interest income, net
    
    
    129,400
    
    
    
    279,600
    
    
    
    375,500
    
    
    
    206,800Gain on sale of cable systems
    
    
    11,105,100
    
    
    
    
    
    
    
    
    
    
    
    Other expense
    
    
    
    
    
    
    (43,400
    )
    
    
    (26,700
    )
    
    
    Net income
    
    $
    11,692,200
    
    
    $
    1,299,600
    
    
    $
    1,545,900
    
    
    $
    1,202,000Distributions to partners
    
    $
    19,256,000
    
    
    $
    
    
    
    $
    
    
    
    $
    Per unit of limited partnership interest:Net income
    
    $
    387.39
    
    
    $
    43.06
    
    
    $
    51.22
    
    
    $
    39.83Distributions
    
    $
    638.00
    
    
    $
    
    
    
    $
    
    
    
    $
    OTHER OPERATING DATANet cash from operating activities
    
    $
    1,145,900
    
    
    $
    2,705,200
    
    
    $
    1,745,600
    
    
    $
    1,658,800Net cash from investing activities
    
    $
    12,897,700
    
    
    $
    (146,300
    )
    
    $
    (311,700
    )
    
    $
    (374,400
    )Net cash from financing activities
    
    $
    (19,256,000
    )
    
    $
    
    
    
    $
    
    
    
    $
    Capital expenditures
    
    $
    299,100
    
    
    $
    147,900
    
    
    $
    309,700
    
    
    $
    367,300
 As of December 31,2001
    
    2000
    
    1999BALANCE SHEET DATATotal assets
    
    $
    12,316,400
    
    
    $
    10,241,300
    
    
    $
    8,890,700General Partners capital
    
    $
    38,700
    
    
    $
    25,700
    
    
    $
    10,200Limited Partners capital
    
    $
    11,200,700
    
    
    $
    9,914,900
    
    
    $
    8,383,700
 8




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For the Year EndedDecember 31, 2003CHANGES IN NET ASSETS IN LIQUIDATION DATARevenues
    
    $
    604,100Interest income
    
    
    22,300Excess of net proceeds over net book value of cable systems
    
    
    535,000Total additions
    
    
    1,161,400Operating expenses
    
    
    404,700Capital expenditures
    
    
    16,600Distributions
    
    
    3,436,200Increase in
accrued costs of liquidation
    
    
    10,500Total deductions
    
    
    3,868,000Net decrease in net assets in liquidation
    
    $
    (2,706,600
    )
 As of December 31,2003
    
    2002NET ASSETS IN LIQUIDATION DATATotal assets
    
    $
    1,040,100
    
    
    $
    5,275,300Net assets in liquidation
    
    $
    946,800
    
    
    $
    3,653,400
  (1)
    
    Comparability of the above information from year to year is affected by
the disposition of the Partnerships Illinois cable systems in and around
Hillsboro, Jerseyville, Nokomis and Pana, Illinois in April 2002. This
information excludes the effect of liquidation costs recorded on December
31, 2002. See Note 2 to our financial statements included with the annual
report. ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Introduction This report includes certain forward-looking statements regarding, among other
things, our future costs of liquidation, legal requirements and our estimated
future distributions. Such forward-looking statements involve risks and
uncertainties including, without limitation, the uncertainty of legislative and
regulatory changes and the costs required to liquidate the Partnership, as
discussed more fully elsewhere in this Report. The Partnership finalized its proposed plan of liquidation in December 2002 in
connection with the filing of a proxy to obtain partner approval for the sale
of the Partnerships final cable system and the subsequent liquidation and
dissolution of the Partnership. In April 2003, the required number of votes
necessary to implement the plan of liquidation were obtained. As a result, the
Partnership changed its basis of accounting to the liquidation basis as of
December 31, 2002. The statements of operations, partnership capital and cash
flows for the years ended December 31, 2002 and 2001 have been presented on a
going concern basis comparable to prior periods and do not reflect the effects
of the change to the liquidation basis of accounting. Upon changing to
liquidation basis accounting, the Partnership recorded $22,200 of accrued costs
of liquidation in accounts payable and accrued liabilities representing an
estimate of the costs to be incurred after the sale of the final cable system
but prior to dissolution of the Partnership. Because reliable estimates of
future operating results or the ultimate realizable value of property, plant
and equipment could not be developed due to uncertainties surrounding the final
dissolution of the Partnership, no adjustments were recorded, prior to the sale
of the assets, to reflect assets at estimated realizable values or to reflect
estimates of future operating results. Accordingly, the assets in the
accompanying statement of net assets in liquidation as of December 31, 2002
have been stated at historical book values. Net assets in liquidation as of
December 31, 2003 represent the estimated distributions to the Limited Partners
and the General Partners. Distributions ultimately made to the partners upon
liquidation will differ from the net assets in liquidation recorded in the
accompanying statement of net assets in liquidation as of December 31, 2003 as
a result of post closing 9




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adjustments to the sale proceeds received by the Partnership and adjustments to
accrued costs of liquidation. The Partnerships accrued costs of liquidation
were increased by $10,500 during the year ended December 31, 2003. No
assurance can be given as to the amount of final distributions to be made to
the partners. Critical Accounting Estimates As discussed above, the financial statements are presented on the liquidation
basis of accounting as of December 31, 2003 and 2002 and for the year ended
December 31, 2003. These financial statements include estimates regarding the
estimated costs to liquidate the partnership and the ultimate resolution of
various items accrued for in the financial statements as well as post closing
adjustments to sale proceeds received by the Partnership. No assurance can be
given as to the amount of final distributions to be made to the partners. Results of Operations We operated the properties through August 31, 2003 but had no operations for
the period subsequent to that date as a result of the Telecommunications
Management Sale. In addition, the Partnership changed to the liquidation basis
of accounting on December 31, 2002. Accordingly, no discussion of operating
results for the year ended December 31, 2003 compared to the year ended
December 31, 2002 has been provided as the periods are not comparable nor are
they presented on a comparable basis of accounting. Net assets in liquidation at December 31, 2003 were $946,800, consisting of
current assets of $1,040,100, offset by current liabilities of $93,300. The
net change in net assets in liquidation for year ended December 31, 2003 was a
decrease of $2,706,600, which was primarily due to distributions to partners of
$3,436,200 offset by $535,000 due to the excess of net proceeds over net book
value of cable systems. Year Ended December 31, 2002 Compared to Year Ended December 31, 2001 On April 10, 2002, we completed the sale of our Illinois cable systems in and
around Jerseyville, Nokomis and Pana, Illinois. Accordingly, results of
operations for the year ended December 31, 2002 are not comparable to the year
ended December 31, 2001. Results of operations for the year ended December 31,
2002 do not reflect adjustments recorded upon the change to liquidation basis
accounting. Revenues decreased $2,183,200 from $3,856,100 to $1,672,900, or 56.6%, for the
year ended December 31, 2002 as compared to 2001. The decrease is primarily
due to a decline in the number of basic and premium service customers as a
result of the sale of the Partnerships Illinois cable systems in April 2002.
As of December 31, 2002 and 2001, we had approximately 2,000 and 7,900 basic
service customers, respectively, and 300 and 1,200 premium service customers,
respectively. Service costs decreased $673,400 from $1,243,300 to $569,900, or 54.2%, for the
year ended December 31, 2002 as compared to 2001. Service costs represent
costs directly attributable to providing cable services to customers. The
decrease is primarily due to the sale of the Partnerships Illinois cable
systems in April 2002. General and administrative expenses decreased $224,500 from $431,500 to
$207,000, or 52.0%, for the year ended December 31, 2002 as compared to 2001.
The decrease is primarily due to the sale of the Partnerships Illinois cable
systems in April 2002. General partner management fees and reimbursed expenses decreased $451,000 from
$695,600 to $244,600, or 64.8%, for the year ended December 31, 2002 as
compared to 2001. These costs represent management fees and administrative
costs reimbursed to Charter by us based on Charters actual costs incurred.
Management fees are less due to a decrease in revenues as a result of the sale
of the Partnerships Illinois cable systems in April 2002. Depreciation and amortization expense decreased $228,600 from $422,300 to
$193,700, or 54.1%, for the year ended December 31, 2002 as compared to 2001
due to the sale of the Partnerships Illinois cable systems in April 2002. Due to the factors described above, operating income decreased $605,700 from
$1,063,400 to $457,700, or 57.0%, for the year ended December 31, 2002 as
compared to 2001. 10




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Interest income decreased $150,200 from $279,600 to $129,400, or 53.7%, for the
year ended December 31, 2002 as compared to 2001, primarily due to the decrease
in cash balances due to the distribution to the partners for the year ended
December 31, 2002 as compared to 2001 and a decrease in the interest rate on
cash balances available for investment. Gain on sale of cable systems totaled $11,105,100 for the year ended December
31, 2002. Gain on sale of cable systems represents the difference between the
sale proceeds and the net book value of investment. Other expense of $43,400 for the year ended December 31, 2001 represents legal
and proxy costs associated with the proposed sales of the Partnerships assets. Due to the factors described above, our net income increased $10,392,600 from
$1,299,600 to $11,692,200 for the year ended December 31, 2002 as compared to
2001. Liquidity and Capital Resources Cash and cash equivalents decreased $3,553,400 from $4,533,100 at December 31,
2002 to $979,700 at December 31, 2003. The decrease was attributable to
distributions of $3,436,200, repayments of $1,097,000 on the amounts due to
affiliates and remittance of $402,500 in withholding taxes related to the April
2002 sale of the Partnerships Illinois cable systems which had been recorded
in accounts payable and accrued expenses. The decrease was offset by
$1,267,000 of proceeds from the Telecommunications Management Sale. Amounts
due to affiliates at December 31, 2002 primarily represent accrued and unpaid
management fees and other allocated expenses accrued since the fourth quarter
of 2000. Cash and cash equivalents decreased $5,212,400 from $9,745,500 at
December 31, 2001 to $4,533,100 at December 31, 2002 as a result of
distributions to partners of $19,256,000 offset by net proceeds from the sale
of cable systems of $13,196,800 and $1,145,900 of cash provided by operating
activities. Capital expenditures, which are expensed as incurred in the year
ended December 31, 2003 were $16,600. Capital expenditures in the year ended
December 31, 2002 were $299,100. The Corporate General Partners intention is to terminate the Partnership as
expeditiously as possible, in accordance with its partnership agreement. The
Partnership made in initial distribution payment of $3.4 million to the Limited
Partners in November 2003. A second and final liquidating distribution will
occur on or after October 2004 upon the release of the indemnity escrow and the
receipt of the remaining proceeds of such escrow if any. Certain Trends and Uncertainties Charter and our Corporate General Partner have had communications and
correspondence with representatives of certain limited partners, and others,
concerning certain Enstar partnerships of which our Corporate General Partner
is also the Corporate General Partner. While we are not aware of any formal
litigation which has been filed relating to the communications and
correspondence, or the subject matter referred to therein, it is impossible to
predict what actions may be taken in the future or what loss contingencies may
result therefrom. As disclosed in Charters annual report on Form 10-K for the year ended
December 31, 2003, the parent of the Corporate General Partner and the Manager
is the defendant in twenty-two class action and shareholder lawsuits and is the
subject of a grand jury investigation being conducted by the United States
Attorneys Office for the Eastern District of Missouri into certain of its
accounting and reporting practices, focusing on how Charter reported customer
numbers and its reporting of amounts received from digital set-top terminal
suppliers for advertising. The United States Attorneys Office has publicly
stated that Charter is not currently a target of the investigation. Charter
has also been advised by the United States Attorneys Office that no member of
its board of directors, including its Chief Executive Officer, is a target of
the investigation. On July 24, 2003, a federal grand jury charged four former
officers of Charter with conspiracy and mail and wire fraud, alleging improper
accounting and reporting practices focusing on revenue from digital set-top
terminal suppliers and inflated subscriber account numbers. On July 25, 2003,
one of the former officers who was indicted entered a guilty plea. Charter has
informed the Corporate General Partner that they are fully cooperating with the
investigation. 11




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Charter is unable to predict the outcome of the class action lawsuits and
government investigations at this time. An unfavorable outcome of these
matters could have a material adverse effect on Charters results of operations
and financial condition which could in turn have a material adverse effect on
us. ITEM 7A. 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 our Current Report on Form 8-K, dated June 14, 2002. ITEM 9A. CONTROLS AND PROCEDURES. As of the end of the period covered by this report, our Corporate General
Partner, including our Chief Administrative Officer and Principal Financial
Officer, evaluated the effectiveness of the design and operation of our
disclosure controls and procedures with respect to the information generated
for use in this annual report. The evaluation was based in part upon reports
and affidavits provided by a number of executives of the Corporate General
Partner. Based upon, and as of the date of that evaluation, our Chief
Administrative Officer and Principal Financial Officer concluded that the
disclosure controls and procedures were effective to provide reasonable
assurances that information required to be disclosed in the reports we file or
submit under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the Commissions
rules and forms. There was no change in our internal control over financial reporting during
2003 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting. In designing and evaluating the disclosure controls and procedures, our
management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance of
achieving the desired control objectives and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures. Based upon the above evaluation, we believe
that our controls do provide such reasonable assurances. 12




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PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. The Corporate General Partner of the Partnership may be considered for certain
purposes, the functional equivalent of directors and executive officers. The
Corporate General Partner is Enstar Communications Corporation. The directors and executive officers of the Corporate General Partner as of
December 31, 2003, all of whom have their principal employment in a comparable
position with Charter (except Paul Allen who is a director of Charter and not
the Corporate General Partner), are named below: NAME
    
    POSITIONPaul G. Allen
    
    Chairman of the Board of Directors of CharterCarl E. Vogel
    
    President and Chief Executive OfficerMargaret Maggie
A. Bellville
    
    Executive Vice President - Chief Operating OfficerDerek Chang
    
    Executive Vice President of Finance and StrategyThomas A. Cullen
    
    Senior Vice President of Advanced Services and Business DevelopmentWayne H. Davis
    
    Senior Vice President, Engineering and Technical OperationsMichael P. Huseby
    
    Executive Vice President  Chief Financial OfficerMichael J. Lovett
    
    Senior Vice President, Operations SupportPaul E. Martin
    
    Senior Vice President and Corporate Controller (Principal
Financial Officer and Principal Accounting Officer)Steven A. Schumm
    
    Director of the Corporate General Partner, Executive Vice
President - Chief Administrative OfficerCurtis S. Shaw
    
    Executive Vice President, General Counsel and Secretary
 Except for executive officers who joined Charter after November 1999, all
executive officers were appointed to their position with the Corporate General
Partner following Charters acquisition of control of the Corporate General
Partner in November 1999, have been employees of Charter since November 1999,
and prior to November 1999, were employees of Charter Investment, Inc., an
affiliate of Charter and the Corporate General Partner. Paul G. Allen, 50, has been Chairman of the board of directors of Charter since
July 1999, and Chairman of the board of directors of Charter Investment, Inc.
(a predecessor to, and currently an affiliate of, Charter) since December 1998.
Mr. Allen, co-founder of Microsoft Corporation, has been a private investor
for more than 15 years, with interests in over 50 technology,
telecommunications, content and biotech companies. Mr. Allens investments
include Vulcan Inc., Vulcan Productions, Inc., the Portland Trail Blazers NBA
and Seattle Seahawks NFL franchises, and investments in TechTV, Inc.,
DreamWorks LLC, and Oxygen Media. In addition, he is a director of TechTV,
Inc., Vulcan Programming Inc., Vulcan Ventures, Vulcan Inc. (f/k/a Vulcan
Northwest), Vulcan Cable III, Inc. and numerous privately held companies. Carl E. Vogel, 46, has been a director, President and Chief Executive Officer
of Charter since October 2001. Mr. Vogel has more than 20 years experience in
telecommunications and the subscription television business. Prior to joining
Charter, he was a Senior Vice President of Liberty Media Corp. from November
1999 until October 2001, and Chief Executive Officer of Liberty Satellite and
Technology, a distributor of Internet data and other content via satellite,
from April 2000 until October 2001. 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 for managing
operations of all of AT&Ts cable broadband properties from June 1999 until
November 1999. From June 1998 to June 1999, when the business of Primestar
Inc. was sold, Mr. Vogel served as Chairman and 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 and member of the
Executive Committee of the National Cable & Telecommunications Association,
CableLabs and Digeo, Inc. and serves as a director of Women in Cable and
Telecommunications. Mr. Vogel holds a B.S. degree in Finance and Accounting
from St. Norbert College. His employment agreement provides that he will serve
on the board of directors of Charter. 13




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Margaret Maggie A. Bellville, 50, Executive Vice President and Chief
Operating Officer. Before joining Charter in December, 2002, Ms. Bellville was
President and Chief Executive Officer of Incanta Inc., a technology-based
streaming content company from 2001 to 2002. Incanta Inc. filed for bankruptcy
in April 2002. Prior to that, she worked for six years at Cox Communications,
beginning in 1995 as Vice President of Operations, she advanced to Executive
Vice President of Operations. Ms. Bellville joined Cox from Century
Communications, where she served as Senior Vice President. Before that, Ms.
Bellville served seven years with GTE Wireless in a variety of management and
executive-level roles. A graduate of the State University of New York in
Binghamton, Ms. Bellville is also a graduate of Harvard Business Schools
Advanced Management Program. She currently serves on the Cable and Television
Association for Marketing Education Foundation. Derek Chang, 36, Executive Vice President of Finance and Strategy. Prior to
joining Charter, Mr. Chang was Executive Vice President of the Yankees
Entertainment and Sports (YES) Network, a regional sports programming network
in New York where he headed corporate development and financing activities from
the companys inception in 2001 until January 2003. Prior to joining YES, he
was the Chief Financial Officer and Co-Chief Operating Officer of GlobalCenter,
the web hosting subsidiary of Global Crossing. Mr. Chang worked for TCI
Communications/AT&T Broadband in Denver from 1997 to 2000, ultimately as
Executive Vice President of Corporate Development, where he directed mergers
and acquisitions activities and managed a multibillion dollar portfolio of
cable joint ventures. He was with InterMedia Partners in San Francisco from
1994 to 1997 where he held a number of positions and was ultimately Treasurer.
Mr. Chang received a B.A. degree from Yale University and an M.B.A. from the
Stanford University Graduate School of Business. Thomas A. Cullen, 44, Senior Vice President of Advanced Services and Business
Development. From January 2001 to October 2002, Mr. Cullen was General Partner
of Lone Tree Capital, a private equity partnership focused on investment
opportunities in the technology and communications sector. From March 1997 to
June 2000, Mr. Cullen was President of MediaOne Ventures. Prior to that, Mr.
Cullen served in several capacities with MediaOne Internet Services including
Vice President from April 1998 to June 2000 and Vice President of Business
Development from September 1995 to March 1997. Mr. Cullen is a member of the
board of directors of SportsLine USA, and a member of the Colorado State
University Global Leadership Council. Mr. Cullen is a graduate of Northern
Arizona University with a B.S. degree in Business Administration. He earned a
Master of Business Administration from the University of Colorado, and he
participated in a University of Pennsylvania, Wharton School Executive Program. Wayne H. Davis,50, Senior Vice President, Engineering and Technical
Operations. Prior to becoming Senior Vice President, Engineering and Technical
Operations, Mr. Davis was Assistant to the President/Vice President of
Management Services since July 2002 and prior to that, he was Vice President of
Engineering/Operations for Charters National Region from December 2001.
Before joining Charter Mr. Davis held the position of Vice President of
Engineering for Comcast Corporation, Inc. Prior to that, the held various
engineering positions including Vice President of Engineering for Jones
Intercable Inc. He began his career in the cable industry in 1980. He
attended the State University of New York at Albany. Mr. Davis serves as an
advisory board member of Cedar Point Communications, and as a board member of
@Security Broadband Corp., a company in which Charter owns an equity investment
interest. Mr. Davis is also a member of the Society of Cable
Telecommunications Engineers. Michael P. Huseby,49, Executive Vice President and Chief Financial Officer.
Mr. Huseby was Executive Vice President of Finance and Administration and Chief
Financial Officer of AT&T Broadband from 1999 until its merger with Comcast in
2002. Prior to joining Charter in January 2004, he served as a consultant to
Comcast and to Charter as President and founder of MPH Associates Inc., a
privately held management and information technology firm providing consulting
services to broadband industry clients. For ten years prior to joining AT&T,
Mr. Huseby was a partner in the professional services firm of Andersen
Worldwide. Mr. Huseby graduated from the University of Colorado at Boulder
with a degree in Business Administration. Michael J, Lovett,42, Senior Vice President, Operations Support. Mr. Lovett
joined Charter in August of 2003. Prior to joining Charter, Mr. Lovett was
Chief Operating Officer of Voyant Technologies, Inc., a voice conferencing
hardware/software solutions provider, from December 2001 to August 2003. From
November 2000 to December 2001, he was Executive Vice President of Operations
for OneSource, Inc., a startup delivering management/monitoring of firewalls
and virtual private networks. Prior to that, Mr. Lovett was Regional Vice
President at AT&T from June 1999 to November 2000 where he was responsible for
operations. Mr. Lovett was Senior Vice President at Jones Intercable from
October 1989 to June 1999 where he was responsible for operations 14




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in nine states. Mr. Lovett began his career in cable television at Centel
Corporation where he held a number of positions. Paul E. Martin, 43, Senior Vice President, Corporate Controller, Principal
Financial Officer and Principal Accounting Officer. Prior to his promotion to
his current position in April 2002, Mr. Martin was Vice President and Corporate
Controller of Charter from March 2000. 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 received a B.S. degree with honors in
Accounting from the University of Missouri  St. Louis. Steven A. Schumm, 51, Executive Vice President and Chief Administrative
Officer. Prior to joining Charter Investment, Inc. in 1998, Mr. Schumm was a
partner of Ernst & Young LLP for 14 years where he was Managing Partner of
Ernst & Youngs St. Louis office and a member of the Ernst & Young National Tax
Committee. Mr. Schumm joined Ernst & Young in 1974 and served in a variety of
capacities during his years with the firm. Mr. Schumm earned a B.S. degree in
Business Administration from Saint Louis University. Mr. Schumm served as
Interim Chief Financial Officer of Charter from December 2002 to January 2004. Curtis S. Shaw, 55, Executive Vice President, General Counsel and Secretary.
Mr. Shaw was promoted to Executive Vice President in October 2003. Prior to
joining Charter Investment as Senior Vice President, General Counsel and
Secretary in 1997, Mr. Shaw served as corporate counsel to NYNEX from 1988
through 1996. 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 with honors in Economics from Trinity College and a J.D. degree from
Columbia University School of Law. 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. Officers are appointed by and serve at the discretion of the
directors of the Corporate General Partner. Code of Ethics In January, 2003, we adopted a Code of Conduct that is a Code of Ethics within
the meaning of federal securities regulations for our employees, including all
executive officers, and established a hotline and website for reporting alleged
violations of the code of conduct, established procedures for processing
complaints and implemented educational programs to inform our employees
regarding the Code of Conduct. A copy of our Code of Conduct is incorporated
by reference as Exhibit 14.1 to this annual report. ITEM 11. EXECUTIVE COMPENSATION. Management Fee The Partnership has a management agreement (the 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 day-to-day 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. 15




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For the fiscal year ended December 31, 2003, Enstar Cable charged us management
fees of approximately $30,200. We also reimbursed Enstar Cable, Charter and its
affiliates approximately $48,200 for system operating management services and
direct expenses. In addition, programming services were purchased through
Charter. Charter charged us approximately $146,400 for these programming
services for fiscal year 2003. Charter as manager of the Corporate General Partner has adopted a code of
conduct which covers all employees, including all executive officers, and
includes conflict of interest provisions and standards for honest and ethical
conduct, a copy of which is attached as Exhibit 14.1 to this annual report. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. As of December 31, 2003, the only persons known by us to own beneficially or
that may be deemed to own beneficially more than 5% of the units were: Amount and Nature of Beneficial OwnershipName and Address of Beneficial Owner
    
    Sole Voting and
    
    Shared Voting and
    
    Percent ofand Address
    
    Dispositive Power
    
    Dispositive Power
    
    ClassMadison Avenue Investment
Partners, LLC
P.O. Box 7533
Incline Village, NV 89452
    
    
    0
    
    
    
    1,4841
    
    
    
    5.0
    %The Harmony Group II, LLC
P.O. Box 7533
Incline Village, NV 89452
    
    
    0
    
    
    
    2,4112
    
    
    
    8.1
    %Bryan E. Gordon
P.O. Box 7533
Incline Village, NV 89452
    
    
    0
    
    
    
    2,4113
    
    
    
    8.1
    %Everest Cable Investors, LLC
155 N. Lake Avenue, Suite 1000
Pasadena, CA 91101
    
    
    0
    
    
    
    2,6264
    
    
    
    8.8
    %Stephen Feinberg
450 Park Avenue, 28th Floor
New York, NY 10022
    
    
    0
    
    
    
    2,6265
    
    
    
    8.8
    %W. Robert Kohorst
155 N. Lake Avenue, Suite 1000
Pasadena, CA 91101
    
    
    0
    
    
    
    2,6266
    
    
    
    8.8
    %
   1
 2 Based on a Schedule 13G filed February 13, 2003. The Harmony Group II, LLC
(Harmony) is the controlling member of Madison. 3 Based on a Schedule 13G filed February 13, 2003. Mr. Gordon is the managing
director of Harmony. 4 Amount and percent of beneficial ownership listed are based on information
received from the Partnerships transfer agent, Gemisys Financial Services. A
Schedule 13G filed January 21, 2003 also reflect this ownership interest. The
members of Everest Cable Investors, LLC include Blackacre Everest, LLC
(Blackacre Everest), Everest Partners, LLC (Everest Partners) and Everest
Properties II, LLC (Everest Properties II). Pursuant to the Operating
Agreement of Everest, the consents of Blackacre Everest, Everest Partners and
Everest Properties II are required to vote or dispose of the units held by
Everest. 16




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5 Based on a Schedule 13G filed January 21,
2003. Mr. Feinberg is the co-president of Blackacre Capital Management Corp., which is the general
partner of Blackacre Capital Group, L.P., which is the managing member of
Blackacre Everest, which possesses sole power to determine whether consent by
Blackacre Everest, will be given or withheld. Messrs. Kohorst and Feinberg
possess shared power to determine whether consent by Everest Partners will be
given or withheld. 6 Based on a Schedule 13G filed January 21, 2003.
Messrs. Kohorst and Feinberg possess shared power to determine whether consent
by Everest Partners will be given or withheld. Mr. Kohorst possesses sole power
to determine whether consent by Everest Properties II will be given or
withheld. The Corporate General Partner is a wholly-owned subsidiary of Charter
Communications Holding Company, LLC. As of December 31, 2003, the common
membership units of Charter Communications Holding Company, LLC are owned 46%
by Charter, 19% by Vulcan Cable III Inc., and 35% by Charter Investment, Inc.
(assuming conversion of all convertible securities). Charter controls 100% of
the voting power of Charter Communications Holding Company LLC. Paul G. Allen
owns approximately 10% of the outstanding capital stock of Charter and controls
approximately 92.8% 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 (ECC) from Falcon Holding Group, L.P. (Falcon) and assumed the
management services operations previously provided by affiliates of Falcon.
Charter now manages the operations of the partnerships of which ECC 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 between the Partnership and Enstar Cable
Corporation, a subsidiary of the Corporate General Partner, Enstar Cable
Corporation 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
Corporation 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
Corporation has engaged Charter Communications Holding Company, LLC, an
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 Corporation, 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. 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, 2003,
service costs directly attributable to providing cable services to customers
which were incurred by Charter and reimbursed by the Partnership, were $48,200.
In addition, programming services were purchased through Charter. Charter
charged us approximately $146,400 for these programming services for fiscal
year 2003. 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 17




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employment with Charter, and, as a result, are involved in the management of
other cable ventures. Charter may 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. Fiduciary Responsibility and Indemnification of the General Partners 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 other persons determined by the
Corporate General Partner against liabilities which they may incur with respect
to claims made against them for wrongful or allegedly wrongful acts, including
errors, misstatements, misleading statements, omissions, neglect or breaches of
duty. 18




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PART IV ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. Audit Fees During the years ended December 31, 2003 and 2002, we paid KPMG LLP (KPMG)
aggregate fees and related expenses for the audit of our financial statements
for the year and for the reviews of our interim financial statements of
approximately $21,100 and $36,100, respectively. The Sole Director of our Corporate General Partner functions as our Audit
Committee. As such, the Sole Director appoints, retains, compensates and
oversees the registered public accountants and approves in advance all fees and
terms for the audit engagement and non-audit engagements where non-audit
services are not prohibited by Section 10A of the Securities Exchange Act of
1934, as amended with registered public accountants. The Sole Director
approved 100% of the KPMG fees for the years ended December 31, 2003 and 2002.
Each year, including 2003, with respect to the proposed audit engagement, the
Sole Director reviews the proposed risk assessment process in establishing the
scope of examination and the reports to be rendered. The Sole Director oversees the work of the registered public accounting firm
(including resolution of disagreements between management and the public
accounting firm regarding financial reporting) for the purpose of preparing or
issuing an audit report or performing other audit, review or attest services.
The registered public accounting firm reports directly to the Sole Director in
its Audit Committee function. In performing this function, the Sole Director
undertakes those tasks and responsibilities that, in its judgment, most
effectively contribute to and implement the purposes of an audit committee. ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) The following documents are filed as part of this annual report:  1.
    
    Financial StatementsReference is made to the Index to Financial Statements on page F-1.2.
    
    Financial Statement SchedulesReference is made to the Index to Financial Statements on page F-1.3.
    
    ExhibitsReference is made to the Exhibits Index on Page E-1. (b) Reports on Form 8-K With respect to any information furnished under Item 9 of any Report on
Form 8-K listed below, the reference to such report in this Item 15(b) is
not intended to, and shall not, cause such information to be deemed
filed under the Exchange Act. On February 14, 2003d into a side letter amending an asset purchase
agreement. On April 25, 2003 the registrant filed a current report on Form 8-K dated
April 24, 2003 to announce it had entered into a side letter amending an
asset purchase agreement. On June 9, 2003 the registrant filed a current report on Form 8-K dated
November 8, 2002 to announce it had entered into a side letter amending
an asset purchase agreement. On September 16, 2003 the registrant filed a current report on Form 8-K
dated September 11, 2003 to announce the close of the asset purchase
agreement dated November 8, 2002. 19




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##### 



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 PartnerDated:
April 14, 2004
    
    By: /s/ Steven A. Schumm

Steven A. SchummDirector, Executive Vice President and
Chief Administrative Officer
 Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. Dated: April 14, 2004
    
    By: /s/ Steven A. Schumm

Steven A. Schumm
Director, Executive Vice President and
Chief Administrative Officer
(Principal Executive Officer) *Dated: April 14, 2004
    
    By: /s/ Paul E. Martin

Paul E. Martin
Senior 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. 20




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INDEX TO FINANCIAL STATEMENTS PAGEIndependent Auditors Report
    
    
    F-2Report of Independent Public Accountants
    
    
    F-3Statements of Net Assets in Liquidation as of December 31, 2003 and 2002
    
    
    F-4Statement of Changes in Net Assets in Liquidation for the year ended December 31, 2003
    
    
    F-5Statements of Operations for the years ended December 31, 2002 and 2001
    
    
    F-6Statements of Partnership Capital (Deficit) for the years ended December 31, 2002 and 2001
    
    
    F-7Statements of Cash Flows for the years ended December 31, 2002 and 2001
    
    
    F-8Notes to Financial Statements
    
    
    F-9
 All financial statement schedules have been omitted because they are either not
required, not applicable or the information has otherwise been supplied.




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INDEPENDENT AUDITORS REPORT To the Partners of
Enstar Income Program II-2, L.P.: We have audited the accompanying statements of net assets in liquidation as of
December 31, 2003 and 2002 and statement of changes in net assets in
liquidation for the year ended December 31, 2003 of Enstar Income Program II-2,
L.P. (a Georgia limited partnership) (see Note 2). We have also audited the
statements of operations, partnership capital (deficit) and cash flows for the
year ended December 31, 2002. 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. The 2001
financial statements were audited by other auditors who have ceased operations.
Those auditors expressed an unqualified opinion on those financial statements
in their report dated March 29, 2002. We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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. As described in Note 2 to the financial statements, the partners of Enstar
Income Program II-2, L.P. have approved a plan of liquidation. Accordingly,
the Partnership has changed its basis of accounting from the going concern
basis to a liquidation basis as of December 31, 2002. In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in liquidation of Enstar Income Program
II-2, L.P. as of December 31, 2003 and 2002, the changes in its net assets in
liquidation for the year ended December 31, 2003, and the results of its
operations and its cash flows for the year ended December 31, 2002 in
conformity with accounting principles generally accepted in the United States
of America applied on the bases described in the preceding paragraph. /s/ KPMG LLP St. Louis, Missouri
April 12, 2004 F-2




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THIS IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP AND HAS NOT
BEEN REISSUED BY ARTHUR ANDERSEN LLP 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-3




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##### 



ENSTAR INCOME PROGRAM II-2, L.P. STATEMENTS OF NET ASSETS IN LIQUIDATION
(See Note 2) AS OF DECEMBER 31, 2003 AND 2002 2003
    
    2002ASSETS:Cash and cash equivalents
    
    $
    979,700
    
    
    $
    4,533,100Accounts receivable, net
    
    
    
    
    
    
    13,400Prepaid expenses
    
    
    
    
    
    
    8,300Property, plant and equipment
    
    
    
    
    
    
    720,500Due from affiliates
    
    
    3,400
    
    
    
    Escrow deposits
    
    
    57,000
    
    
    
    Total assets
    
    
    1,040,100
    
    
    
    5,275,300LIABILITIES:Accounts payable and accrued expenses
    
    
    21,300
    
    
    
    500,700Due to purchaser
    
    
    72,000
    
    
    
    Due to affiliates
    
    
    
    
    
    
    1,121,200Total liabilities
    
    
    93,300
    
    
    
    1,621,900NET ASSETS IN LIQUIDATION:General Partners
    
    
    4,900
    
    
    
    (37,200
    )Limited Partners
    
    
    941,900
    
    
    
    3,690,600$
    946,800
    
    
    $
    3,653,400
 See accompanying notes to financial statements. F-4




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##### 



ENSTAR INCOME PROGRAM II-2, L.P. STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
(See Note 2) YEAR ENDED DECEMBER 31, 2003 Additions:Revenues
    
    $
    604,100Interest income
    
    
    22,300Excess of net proceeds over net book value of cable systems
    
    
    535,000Total additions
    
    
    1,161,400Deductions:Service costs
    
    
    251,300General and administrative expenses
    
    
    75,000General partner and management fees and reimbursed expenses
    
    
    78,400Capital expenditures
    
    
    16,600Increase in accrued costs of liquidation
    
    
    10,500Distributions
    
    
    3,436,200Total deductions
    
    
    3,868,000Net decrease in net assets in liquidation
    
    
    (2,706,600
    )NET ASSETS IN LIQUIDATION, beginning of period
    
    
    3,653,400NET ASSETS IN LIQUIDATION, end of period
    
    $
    946,800
 See accompanying notes to financial statements. F-5




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ENSTAR INCOME PROGRAM II-2, L.P. STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001 2002
    
    2001(see Note 2)REVENUES
    
    $
    1,672,900
    
    
    $
    3,856,100OPERATING EXPENSES:Service costs
    
    
    569,900
    
    
    
    1,243,300General and administrative expenses
    
    
    207,000
    
    
    
    431,500General partner management fees and reimbursed expenses
    
    
    244,600
    
    
    
    695,600Depreciation and amortization
    
    
    193,700
    
    
    
    422,3001,215,200
    
    
    
    2,792,700Operating income
    
    
    457,700
    
    
    
    1,063,400OTHER INCOME (EXPENSE):Interest income
    
    
    129,400
    
    
    
    279,600Gain on sale of cable systems
    
    
    11,105,100
    
    
    
    Other expense
    
    
    
    
    
    
    (43,400
    )11,234,500
    
    
    
    236,200NET INCOME
    
    $
    11,692,200
    
    
    $
    1,299,600NET INCOME ALLOCATED TO GENERAL PARTNERS
    
    $
    116,900
    
    
    $
    13,000NET INCOME ALLOCATED TO LIMITED PARTNERS
    
    $
    11,575,300
    
    
    $
    1,286,600NET INCOME PER UNIT OF LIMITED PARTNERSHIP INTEREST
    
    $
    387.39
    
    
    $
    43.06WEIGHTED AVERAGE LIMITED PARTNERSHIP UNITS OUTSTANDING
DURING THE YEAR
    
    
    29,880
    
    
    
    29,880
 See accompanying notes to financial statements. F-6




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##### 



ENSTAR INCOME PROGRAM II-2, L.P. STATEMENTS OF PARTNERSHIP CAPITAL (DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001 GENERAL
    
    LIMITEDPARTNERS
    
    PARTNERS
    
    TOTALPARTNERSHIP CAPITAL, January 1, 2001
    
    $
    25,700
    
    
    $
    9,914,100
    
    
    $
    9,939,800Net income
    
    
    13,000
    
    
    
    1,286,600
    
    
    
    1,299,600PARTNERSHIP CAPITAL, December 31, 2001
    
    
    38,700
    
    
    
    11,200,700
    
    
    
    11,239,400Net income
    
    
    116,900
    
    
    
    11,575,300
    
    
    
    11,692,200Distributions
    
    
    (192,600
    )
    
    
    (19,063,400
    )
    
    
    (19,256,000
    )PARTNERSHIP CAPITAL (DEFICIT), December 31, 2002
    
    
    (37,000
    )
    
    
    3,712,600
    
    
    
    3,675,600Effects of change to liquidation basis (see Note 2)
    
    
    (200
    )
    
    
    (22,000
    )
    
    
    (22,200
    )NET ASSETS IN LIQUIDATION, December 31, 2002
    
    
    (37,200
    )
    
    
    3,690,600
    
    
    
    3,653,400
 See accompanying notes to financial statements. F-7




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ENSTAR INCOME PROGRAM II-2, L.P. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001 2002
    
    2001(see Note 2)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    11,692,200
    
    
    $
    1,299,600Adjustments to reconcile net income to net cash from operating activities:Depreciation and amortization
    
    
    193,700
    
    
    
    422,300Gain on sale of cable systems
    
    
    (11,105,100
    )
    
    
    Changes in:Accounts receivable, prepaid expenses and other assets
    
    
    74,700
    
    
    
    207,800Accounts payable, accrued expenses and due to affiliates
    
    
    290,400
    
    
    
    775,500Net cash from operating activities
    
    
    1,145,900
    
    
    
    2,705,200CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (299,100
    )
    
    
    (147,900
    )Proceeds from sale of cable systems, net
    
    
    13,196,800
    
    
    
    Change in intangible assets
    
    
    
    
    
    
    1,600Net cash from investing activities
    
    
    12,897,700
    
    
    
    (146,300
    )CASH FLOWS FROM FINANCING ACTIVITIES:Distributions
    
    
    (19,256,000
    )
    
    
    Net cash from financing activities
    
    
    (19,256,000
    )
    
    
    Net increase (decrease) in cash
    
    
    (5,212,400
    )
    
    
    2,558,900CASH, beginning of year
    
    
    9,745,500
    
    
    
    7,186,600CASH, end of year
    
    $
    4,533,100
    
    
    $
    9,745,500
 See accompanying notes to financial statements. F-8




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ENSTAR INCOME PROGRAM II-2, L.P. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002 AND 2001 1. ORGANIZATION Enstar Income Program II-2, L.P. (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 provided 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. On November 12, 1999, Charter Communications Holding 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 a large cable operator, serving approximately 6.54
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 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. Reclassifications.Certain 2002 and 2001 amounts have been reclassified to
conform with the 2003 presentation. 2. LIQUIDATION BASIS ACCOUNTING AND SALES OF CABLE SYSTEMS On April 10, 2002, pursuant to an asset purchase agreement dated August 29,
2001, the Partnership completed 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 $13.2 million (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) sold
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 $63.0 million. Each
Selling Partnership received the same value per customer. In addition, the
Limited Partners of each of the Selling Partnerships approved 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 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 were 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, F-9




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ENSTAR INCOME PROGRAM II-2, L.P. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002 AND 2001 the Partnership would not have been able to 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 have been economically prudent. After setting aside $2,000,000 to fund the Malden, Missouri headends working
capital needs and paying or providing for the payment of the expenses of the
Charter Sale, the Corporate General Partner made distributions of the allocable
share of the remaining net sale proceeds, in accordance with the Partnership
Agreement. The Partnership made an initial distribution of approximately
$15,890,500 on or about May 15, 2002, with a second distribution of $3,365,500
made on or about September 24, 2002. On November 8, 2002, the Partnership entered into an asset purchase agreement
providing for the sale of the Malden, Missouri cable system to
Telecommunications Management, LLC (Telecommunications Management) for a total
sale price of approximately $1,702,500 (approximately $825 per customer
acquired). This sale was a part of a larger transaction in which the
Partnership and eight other affiliated partnerships (which, together with the
Partnership are collectively referred to as the Telecommunications Management
Selling Partnerships) sold all of their remaining assets used in the operation
of their respective cable systems to Telecommunications Management for a total
cash sale price of approximately $15,341,600 (before adjustments) (the
Telecommunications Management Sale). The Telecommunications Management Sale
was subject to the approval of a majority of the holders of the Partnerships
units and approval of the holders of the other Telecommunications Management
Selling Partnerships. In addition, the transaction was subject to certain
closing conditions, including regulatory and franchise approvals. On February 6, 2003, the Partnership entered into a side letter amending the
asset purchase agreement providing for the sale of its remaining cable system
to Telecommunications Management. The February 6, 2003 side letter amended the
asset purchase agreement and deposit escrow agreement to extend the date of the
second installment of the deposit and the outside closing date each by 60 days.
On April 7, 2003, the second installment of the escrow deposit was due and was
not made. On April 24, 2003, the Partnership entered into another side letter amending
the asset purchase agreement providing for the sale of its remaining cable
system to Telecommunications Management. The April 24, 2003 side letter
amended the asset purchase agreement and deposit escrow agreement to extend the
date of the second installment of the deposit to May 15, 2003 and the outside
closing date to September 30, 2003. On June 6, 2003, the Partnership entered into a third side letter amending the
asset purchase agreement providing for the sale of its remaining cable system
to Telecommunications Management. The June 6, 2003 side letter amended the
asset purchase agreement to reduce the purchase price of the remaining cable
systems in the Selling Partnerships to approximately $14,487,200, subject to
closing sale price adjustments, of which approximately $1,651,200 related to
the cable systems in the Partnership. In addition, $250,000 was deposited in
the Deposit Escrow Account concurrent with the execution of the side letter. Effective August 31, 2003, the Partnership completed the Telecommunications
Management Sale of its only remaining cable system for a total adjusted sales
price of approximately $1,267,000 (approximately $800 per customer acquired),
subject to post closing adjustments. The Partnership finalized its proposed plan of liquidation in December 2002 in
connection with the filing of a proxy to obtain partner approval for the sale
of the Partnerships final cable system and the subsequent liquidation and
dissolution of the Partnership. In April 2003, the required number of votes
necessary to implement the plan of liquidation were obtained. As a result, the
Partnership changed its basis of accounting to the liquidation basis as of
December 31, 2002. The statements of operations, partnership capital and cash
flows for the years ended December 31, 2002 and 2001 have been presented on a
going concern basis comparable to prior periods and do not reflect the effects
of the change to the liquidation basis of accounting. Upon changing to
liquidation basis accounting, the Partnership recorded $22,200 of accrued costs
of liquidation in accounts payable and accrued liabilities representing an
estimate of the costs to be incurred after the sale of the final cable system
but prior to dissolution of the Partnership. Because reliable estimates of
future operating results or the ultimate realizable value of property, plant
and equipment could not be developed due to uncertainties surrounding the final
dissolution of the Partnership, no adjustments were recorded, prior to the sale
of the assets, to reflect assets at estimated realizable values or to reflect F-10




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ENSTAR INCOME PROGRAM II-2, L.P. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002 AND 2001 estimates of future operating results. Accordingly, the assets in the
accompanying statement of net assets in liquidation as of December 31, 2002
have been stated at historical book values. Net assets in liquidation as of
December 31, 2003 represent the estimated distributions to the Limited Partners
and the General Partners. Distributions ultimately made to the partners upon
liquidation will differ from the net assets in liquidation recorded in the
accompanying statement of net assets in liquidation as of December 31, 2003 as
a result of post closing adjustments to the sale proceeds received by the
Partnership and adjustments to accrued costs of liquidation. The Partnerships
accrued costs of liquidation were increased by $10,500 during the year ended
December 31, 2003. No assurance can be given as to the amount of final
distributions to be made to the partners. The Corporate General Partners intention is to terminate the Partnership as
expeditiously as possible in accordance with the Partnership Agreement. The
Partnership made an initial distribution payment of $3.4 million to the Limited
Partners in November 2003. A second and final liquidating distribution will
occur on or after October 2004 upon the release of the indemnity escrow and the
receipt of the remaining proceeds of such escrow if any. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Liquidation Accounting As discussed in Note 2, the financial statements as of December 31, 2003 and
December 31, 2002 are presented on a liquidation basis of accounting.
Accordingly, the financial information in the statement of changes in net
assets in liquidation for the year ended December 31, 2003 is presented on a
different basis of accounting than the financial statements for the years ended
December 31, 2002 and 2001, which were prepared on the historical cost basis of
accounting. As a result, depreciation and amortization ceased upon conversion
to liquidation accounting and capital expenditures are expensed as incurred. Cash Equivalents The Partnership considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. These investments
are carried at cost which approximates market value. Property, Plant and Equipment Costs associated with initial customer installations and the additions of
network equipment are capitalized. The costs of disconnecting service at a
customers dwelling or reconnecting service to a previously installed dwelling
are charged to operating expense in the period incurred. Costs for repairs and
maintenance are charged to operating expense as incurred, while equipment
replacement and betterments, including replacement of drops, are capitalized. Cable distribution systems
    
    5-15 yearsVehicles
    
    3 yearsFurniture and equipment
    
    5-7 yearsLeasehold improvements
    
    Shorter of life of lease or useful life of asset
 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 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. Amortization expense
related to franchises for the years ended December 31, 2002 and 2001 was $1,800
and $5,600, respectively. F-11




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##### 



ENSTAR INCOME PROGRAM II-2, L.P. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002 AND 2001 Long-Lived Assets Prior to the sale of its remaining cable systems, the Partnership reviewed 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 were recognized as
services were provided. Advertising revenues were recognized when commercials
were broadcast. Installation revenues were recognized to the extent of direct
selling costs incurred. The remainder, if any, was deferred and amortized to
income over the estimated average period that customers are expected to remain
connected to the cable system. As of December 31, 2002 and 2001, 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, 2003, 2002 and 2001, the book basis of the Partnerships net assets
exceeded its tax basis by approximately $20,300, $296,500 and $1,342,000,
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 the Partnerships net
income for the years ended December 31, 2003 and 2002, in the financial
statements is approximately $221,100 and $1,004,200, respectively, less than
tax income primarily as a result of differences between tax gain on sale of
cable systems versus book gain on sale of cable systems caused principally by
book and tax basis differences on the assets sold. The net effect of these
accounting differences for the year ended December 31, 2001 is approximately
$103,600 more than tax income or loss for the same period, 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. 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. These estimates include useful lives of property,
plant and equipment, valuation of long-lived assets and allocated operating
costs. Actual results could differ from those estimates. F-12




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ENSTAR INCOME PROGRAM II-2, L.P. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002 AND 2001 4. PARTNERSHIP MATTERS The amended Partnership Agreement generally provides that all cash
distributions (as defined) be distributed 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, distributions will be made in amounts equal to
the respective partners remaining capital account balances. 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. 5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following as of December 31, 2002.
All remaining property, plant and equipment was sold in 2003. Cable distribution systems
    
    $
    3,371,900Land and improvements
    
    
    Vehicles, furniture and equipment
    
    
    156,2003,528,100Less: accumulated depreciation
    
    
    (2,807,600
    )$
    720,500
 Depreciation expense for the years ended December 31, 2002 and 2001 was
$191,900 and $416,500, respectively. 6. COMMITMENTS AND CONTINGENCIES 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 net assets in
liquidation. 7. EMPLOYEE BENEFIT PLAN The Partnership participated in a cash or deferred profit sharing plan (the
Profit Sharing Plan) sponsored by a subsidiary of the Corporate General
Partner, which covered substantially all of its employees. The Profit Sharing
Plan provided that each participant may elect to make a contribution in an
amount up to 15% of the participants F-13




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ENSTAR INCOME PROGRAM II-2, L.P. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002 AND 2001 annual compensation which otherwise would have been payable to the participant
as salary. The Partnership made an employer contribution equal to 100% of the
first 3% and 50% of the next 2% of the participants contributions. The Profit
Sharing Plan was merged into the Charter Communications Inc. 401(k) Plan on
November 1, 2002. Employees that qualified for participation could contribute
up to 50% of their salary, on a pre-tax basis, subject to a maximum
contribution limit as determined by the Internal Revenue Service. The
Partnership matched 50% of the first 5% of participant contributions.
Contributions of approximately $0, $600 and $600 were made during 2003, 2002
and 2001, respectively. 8. 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 to Enstar Cable excluding
revenues from the sale of cable television systems or franchises. Management
fee expense approximated $30,200, $83,600 and $192,800 for the years ended
December 31, 2003, 2002 and 2001, respectively. Management fees are
non-interest bearing. In addition to the monthly management fee, the Partnership reimburses Enstar
Cable for direct expenses incurred on behalf of the Partnership, and for the
Partnerships allocable share of operational costs associated with services
provided by Enstar Cable. 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 services and direct
expenses approximated $48,200, $161,000 and $502,800 for the years ended
December 31, 2003, 2002 and 2001, respectively. Substantially all programming services were purchased through Charter. Charter
charges the Partnership for these costs based on its costs. The Partnership
recorded programming fee expense of $146,400, $184,100 and $843,300 for the
years ended December 31, 2002, 2001 and 2000, respectively. Programming fees
are included in service costs in the accompanying statements of operations and
statement of changes in net assets in liquidation. As disclosed in Charters annual report on Form 10-K for the year ended
December 31, 2003, the parent of the Corporate General Partner and the Manager
is the defendant in twenty-two class action and shareholder lawsuits and is the
subject of a grand jury investigation being conducted by the United States
Attorneys Office for the Eastern District of Missouri into certain of its
accounting and reporting practices, focusing on how Charter reported customer
numbers and its reporting of amounts received from digital set-top terminal
suppliers for advertising. The United States Attorneys Office has publicly
stated that Charter is not currently a target of the investigation. Charter
has also been advised by the United States Attorneys Office that no member of
its board of directors, including its Chief Executive Officer, is a target of
the investigation. On July 24, 2003, a federal grand jury charged four former
officers of Charter with conspiracy and mail and wire fraud, alleging improper
accounting and reporting practices focusing on revenue from digital set-top
terminal suppliers and inflated subscriber account numbers. On July 25, 2003,
one of the former officers who was indicted entered a guilty plea. Charter has
informed the Corporate General Partner that they are fully cooperating with the
investigation. Charter is unable to predict the outcome of the class action lawsuits and
government investigations at this time. An unfavorable outcome of these
matters could have a material adverse effect on Charters results of operations
and financial condition which could in turn have a material adverse effect on
the Partnership. F-14




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EXHIBIT INDEX EXHIBITNUMBER
    
    DESCRIPTION2.1a
    
    
    
    Asset Purchase Agreement, dated November 8, 2002, by and among Telecommunications
Management, LLC and Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar
Income Program 1984-1, L.P., Enstar Income/Growth Program Six-A, L.P., Enstar VII, L.P., Enstar
VIII, L.P., Enstar X, L.P., Enstar XI, L.P., Enstar IV/PBD Systems Venture and Enstar Cable of
Cumberland Valley (Incorporated by reference to Exhibit 2.1 to the quarterly report on Form 10-Q of
Enstar Income Program II-2, L.P. filed on November 12, 2002 (File No. 000-14505)).2.1b
    
    
    
    Letter of Amendment, dated as of February 6, 2003, between Enstar Income Program II-2, L.P., Enstar
Income Program IV-3, L.P., Enstar Income Program 1984-1, L.P., Enstar Income/Growth Program
Six-A, L.P., Enstar Vii, L.P., Enstar VIII. L.P., Enstar X, L.P., Enstar XI, L.P., Enstar IV/PBD
Systems Venture and Enstar Cable of Cumberland Valley and Telecommunications Management,
LLC. (Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K of Enstar
Income/Growth Program Five-A, L.P. filed on February 14, 2003 (File No. 000-16779)).2.2a
    
    
    
    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).2.2b
    
    
    
    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).2.2c
    
    
    
    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).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.)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.)
 E-1




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EXHIBITNUMBER
    
    DESCRIPTION10.4
    
    
    
    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: None14.1
    
    
    
    Code of Conduct adopted January 28, 2003. (Incorporated by reference to the exhibits to the
Registrants annual report on Form 10-K, File No. 000-13333 for the fiscal year ended
December 31, 2002.)31.1
    
    
    
    Certificate of Chief Administrative Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the
Securities Exchange Act of 1934. *31.2
    
    
    
    Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the Securities
Exchange Act of 1934. *32.1
    
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 (Chief Administrative Officer). *32.2
    
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 (Principal Financial Officer). **
    
    
    
    filed herewith
 E-2