<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                           -----------------------
                                   FORM 10-K

          [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934
                 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

        [ ]  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 33-17174

                         ---------------------------
                     CENCOM CABLE INCOME PARTNERS II, L.P.
             (Exact Name of Registrant as Specified in its Charter)


                   Delaware                        43-1456575
         (State or Other Jurisdiction of           (I.R.S. Employer
         Incorporation or Organization)            Identification No.)

         12444 Powerscourt Drive Suite 400
         St. Louis, Missouri                       63131
         (Address of Principal Executive Offices)  (Zip Code)

      Registrant's telephone number, including area code:  (314) 965-0555
                         ---------------------------
       Securities registered pursuant to Section 12(b) of the Act:  None
                         ---------------------------
          Securities registered pursuant to Section 12(g) of the Act:
             Units of Limited Partnership Interests $1,000 per unit
                                (Title of Class)

     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 the Form 10-K or any
amendment to this Form 10-K.  [X]

                      DOCUMENTS INCORPORATED BY REFERENCE

 The following documents are incorporated into this Report by reference:  None




<PAGE>   2


                     CENCOM CABLE INCOME PARTNERS II, L.P.
                          1997 FORM 10-K ANNUAL REPORT

                               TABLE OF CONTENTS

                                     PART I

<TABLE>
<S>     <C>                                                                                     <C>
Item 1.  Business ............................................................................    3
Item 2.  Properties ..........................................................................   13
Item 3.  Legal Proceedings ...................................................................   13
Item 4.  Submission of Matters to a Vote of Security Holders .................................   14


                                    PART II

Item 5.  Market for Registrant's Common Equity and Related Shareholder Matters ...............   14
Item 6.  Selected Financial Data .............................................................   16
Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations .......................................................................   17
Item 8.  Financial Statements and Supplementary Data .........................................   20
Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial
         Disclosure ..........................................................................   21


                                    PART III

Item 10.  Directors and Executive Officers of the Registrant .................................   22
Item 11.  Executive Compensation .............................................................   22
Item 12.  Security Ownership of Certain Beneficial Owners and Management .....................   23
Item 13.  Certain Relationships and Related Transactions .....................................   23


                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K ....................   24
</TABLE>

                                     - 2 -



<PAGE>   3



                                     PART I

ITEM 1.  BUSINESS

GENERAL

Cencom Cable Income Partners II, L.P. (the "Partnership" or the "Registrant")
was formed as a Delaware limited partnership in 1987 pursuant to the terms of a
partnership agreement (the "Partnership Agreement"), to acquire, develop,
operate and ultimately sell cable television systems (the "Partnership Systems"
or the "Systems").  Cencom Properties II, Inc., a Delaware corporation, is the
general partner of the Registrant (the "General Partner") and acts as the
management company (the "Management Company") for the purpose of managing the
cable television systems.  The principal executive offices of the General
Partner and the Partnership are located at 12444 Powerscourt Drive, Suite 400,
St. Louis, Missouri 63131 and their telephone number is (314) 965-0555.

As of December 31, 1997, the Partnership owned and operated cable television
systems in communities located in northeast Missouri and southwest Texas, and
served approximately 13,400 basic subscribers who subscribed to approximately
5,200 premium service subscriptions.  The Partnership experienced a significant
decrease in basic subscribers and premium subscriptions from December 31, 1996
to December 31, 1997, due to the sale of certain of the Partnership's cable
television systems in March and April 1997, as described below.

The Partnership also has invested in limited partnership interests of Cencom
Partners, L.P. ("CPLP").  The Partnership is allocated 84.03% of the net income
or losses of CPLP, based on its ownership interests.  The Partnership owns only
Limited Partnership Units of CPLP and does not exercise significant influence
over CPLP's operations; therefore the Partnership's investment in CPLP is
accounted for using the equity method.


PARTIAL LIQUIDATION OF ASSETS

The Partnership's term expired on December 31, 1995 and during 1996 and 1997
both the Partnership and CPLP have been in the process of dissolution and
winding up through the sale of their respective assets.  In connection with the
dissolution of the Partnership's assets, the Partnership Systems were appraised
by independent appraisers and marketed for sale by an independent broker using
an auction process.  Furthermore, the systems that were sold to affiliates of
the General Partner were approved by a majority of the Partnership's limited
partners (the "Limited Partners") and were subject to the appraisal process
provided for in the Partnership Agreement.

As a result of the auction process, the General Partner sold the Partnership's
South Carolina System (the "South Carolina System" or the "Anderson County
System") which served approximately 20,800 basic subscribers (46.5% of the
Partnership's total basic subscribers) to an affiliate of the General Partner
for an aggregate purchase price of $36,700,000.  The sale of the Anderson
County System was consummated on April 7, 1997.  Also, certain of the Southeast
Texas Systems (Woodville, Jasper, Cleveland, Marlin, Madisonville and Buffalo
areas), which served approximately 10,300 basic subscribers (23.0% of the
Partnership's total basic subscribers) were sold to non-affiliates for an
aggregate purchase price of $15,250,000.  These sales of certain Southeast
Texas systems were consummated on March 31, 1997.  Proceeds from the sales of
the Texas Systems on March 31, 1997 and the South Carolina Systems on April 7,
1997 were used to reduce to zero the Partnership's outstanding indebtedness,
with the remaining funds of approximately $14.0 million placed in short-term
investments.

Bids submitted to date with respect to the Partnership's Northeast Missouri
Systems and the remainder of the Southeast Texas Systems were viewed by the
General Partner to be too low relative to the estimated fair market values
allocated to such Systems pursuant to the appraisal process.  Accordingly,
these bids were not accepted by the General Partner.  Although the General
Partner intends to liquidate the Partnership as expeditiously as possible, it
did not believe a sale or sales of the Northeast Missouri Systems or the
remainder of the Southeast Texas Systems at that time would have been in

                                     - 3 -



<PAGE>   4

the best interests of the Partnership or the Limited Partners.  The General
Partner intends to continue to operate the Partnership while it actively seeks
potential purchasers for these remaining systems.

Concurrent, with the liquidation of the Partnership's Systems, CPLP has been
liquidating its assets through sales of a portion of its systems.  The
liquidation was effected to satisfy the requirement by CPLP's senior bank
lenders that the CPLP credit facility be repaid in accordance with its terms.
The CPLP liquidation was also commenced to facilitate the liquidation of the
Partnership, which requires the liquidation of all of the Partnership's assets,
including its entire ownership interest in CPLP.  As with the Partnership, CPLP
also obtained an appraisal of its cable systems, marketed its systems for sale
through an independent broker using an auction process, and had the
Partnership's Limited Partners approve the sale of systems to be sold to
affiliates.

As a result of the auction process, on April 7, 1997, CPLP's general partner
sold CPLP's South Carolina and North Carolina Systems, then serving
approximately 29,900 basic subscribers (82.5% of CPLP's total basic
subscribers) for an aggregate price of $52,450,000 to affiliates of the
Partnership's General Partner.  The bids submitted for CPLP's remaining systems
in and around LaGrange, Texas were below the appraised fair market value and
have not been accepted by its general partner.  CPLP intends to continue to
operate its remaining systems until an acceptable bid is received.

Proceeds from CPLP's sale of certain of the cable television systems on April
7, 1997 enabled CPLP to reduce to zero the balance of its outstanding
indebtedness and retire its special limited partnership interests, with the
remaining funds of approximately $6.6 million placed in short-term investments.
During May 1997, CPLP made a distribution to its Limited Partners, of which
approximately $5.5 million was distributed to the Partnership.

During May 1997 the Partnership negotiated a new joint credit facility for both
the Partnership and CPLP.  The Partnership utilized proceeds from its new
credit facility, proceeds from its short-term investments and the distribution
that it received from CPLP for the  purpose of generating a distribution to the
Limited Partners.  During June 1997, the Partnership made an aggregate
distribution to the Limited Partners of approximately $28.5 million ($314 per
Unit).  From this aggregate distribution, certain amounts were withheld from
certain of the Limited Partners due to applicable state income taxes.  No
distribution was made by the Partnership to the General Partner.

It is the General Partner's intention to continue to market and sell the
Partnership's remaining assets, repay the balance of the Partnership's
outstanding obligations, terminate the Partnership and distribute all remaining
proceeds thereof (subject to a holdback for contingencies) as expeditiously as
possible, subject to the receipt of acceptable offers to purchase the remaining
Partnership assets.  At such time as all of the Partnership and the CPLP
systems are sold, and all available CPLP distributions are received by the
Partnership, the Partnership's outstanding obligations will be paid and the
Partnership will be terminated.  Upon its termination, the Partnership will
cease to be a public entity and will no longer be subject to the informational
reporting requirements of the Securities Exchange Act of 1934, as amended.


THE CABLE TELEVISION INDUSTRY

Most cable television systems offer a variety of channels and programming and
are distinguished from competitive technologies because they bring a hard wire
connection to each subscriber over a wide area.  In recent years, technological
improvements used in new construction or to upgrade existing plant of cable
television systems have improved signal quality as well as increased channel
capacity, which, in turn, has increased the potential number of programming
offerings available to subscribers.  See "Item 1.  Marketing, Programming and
Rates."

A cable television system consists of two principal operating components:  one
or more signal origination points called "headends" and a signal distribution
system.  It may also include program origination facilities.  Each headend
includes a tower, antennae or other receiving equipment at a location favorable
for receiving broadcast signals and one or more earth stations that receive
signals transmitted by satellite.  The headend facility also houses the
electronic equipment which amplifies, modifies and modulates the signals,
preparing them for passage over the system's network of cables.

The signal distribution system consists of amplifiers and trunk lines which
originate at the headend and carry the signal to various parts of the system,
smaller distribution cable and distribution amplifiers which carry the signal
to the immediate

                                     - 4 -



<PAGE>   5

vicinity of the subscriber and drop lines which carry the signal into the
subscriber's home.  In the past several years, manycable operators have
utilized fiber optic (in place of, or in combination with, coaxial) technology
to transmit signals through the primary trunk lines.


DESCRIPTION OF THE PARTNERSHIP SYSTEMS

The following table sets forth a summary of subscriber data (rounded to the
nearest hundred) of the Partnership's Systems as of the dates indicated:


<TABLE>
<CAPTION>
                                           As of December 31,
                                       -------------------------
                                        1997     1996      1995
                                       ------  -------    ------
<S>                                    <C>     <C>       <C>
Basic Subscribers:
    Northeast Missouri Systems          1,800      2,000   2,100
    Anderson County System                  -     20,800  20,200
    Southeast Texas Systems            11,600     21,900  22,200
                                      -------    ------- -------
                                       13,400     44,700  44,500
                                      =======    ======= =======

Premium Subscriptions:
    Northeast Missouri Systems            800        900   1,000
    Anderson County System                  -     10,400  11,100
    Southeast Texas Systems             4,400      7,600   8,400
                                      -------    ------- -------
                                        5,200     18,900  20,500
                                      =======    ======= =======
</TABLE>


The Northeast Missouri Systems

The Northeast Missouri Systems serve eight communities in the northeastern
section of Missouri.  As of December 31, 1997, these systems consisted of seven
headends having approximately 70 miles of activated distribution plant passing
approximately 4,100 homes.  The largest headend serves Canton and LaGrange,
Missouri.  As of December 31, 1997, Canton and LaGrange subscribers accounted
for approximately 46% of the Northeast Missouri Systems' basic subscribers.
The remaining six headends each serve less than 400 basic subscribers.  At
December 31, 1997, the Partnership employed two full-time equivalent persons in
connection with the operation of the Northeast Missouri Systems.

Anderson County System

The Anderson County System, which was sold by the Partnership on April 7, 1997,
served the cities of Pelzer, Travelers Rest, West Pelzer, Williamston and the
private development of Keowee Key, the Town of Salem, and portions of the
counties of Anderson, Greenville, Oconee and Pickens, all in South Carolina.
As of the date of sale, the Anderson County System consisted of four headends
and approximately 1,200 miles of activated distribution plant passing
approximately 28,700 homes, and employed approximately 26 persons full time in
connection with the operation of the Anderson County System.  The largest
communities served by the Anderson County System were unincorporated Anderson
and Greenville Counties, which accounted for approximately 47% and 24%,
respectively, of the basic subscribers served by the Anderson County System.

The Southeast Texas Systems

On March 31, 1997, the Partnership sold the cable television systems in the
Woodville, Jasper, Cleveland, Marlin, Madisonville and Buffalo areas, then
serving approximately 10,300 basic subscribers and employing approximately 17
full-time equivalent persons.

As of December 31, 1997, the remaining Southeast Texas Systems served
approximately 11,600 basic subscribers in the communities of Kingsville,
Angleton, Aqua Dolce, Driscoll, Belleville, Hempstead and Sealy.  These cable
television systems consisted of seven headends, of which Angleton and
Kingsville serve 36% and 46% of the basic subscribers,


                                     - 5 -



<PAGE>   6

respectively.  At December 31, 1997, the Partnership employed 20 full-time
equivalent persons in connection with the operation of these systems.

DESCRIPTION OF CPLP SYSTEMS

As described above, CPLP sold certain of its systems in 1997.  As of December
31, 1997, CPLP owned cable television systems that serve communities in and
around LaGrange, Texas, consisting of approximately 170 miles of activated
distribution plant which passed approximately 10,400 homes and served customers
subscribing to approximately 6,300 basic and 2,200 premium units.  The monthly
basic fees at December 31, 1997, were $11.25 for the basic service tier and
$16.22 for the expanded basic tier.  CPLP employed nine full-time equivalent
persons at December 31, 1997.


MARKETING, PROGRAMMING AND RATES

The Partnership's marketing program is based upon offering various packages of
cable services designed to appeal to different market segments.  The General
Partner performs and utilizes market research on selected systems, compares the
data to national research and tailors a marketing program for each individual
market.  The General Partner utilizes a coordinated array of marketing
techniques to attract and retain subscribers, including door-to-door
solicitation, telemarketing, media advertising and direct mail solicitations.
The Partnership implements in the Partnership Systems the marketing efforts
instituted by the General Partner to gain new subscribers and increase basic
and premium penetration in the communities served by the Systems.

Although services vary from system to system because of differences in channel
capacity, viewer interests and community demographics, each of the individual
Systems offers a "basic service tier," consisting of local television channels
(network and independent stations) available over-the-air, local public
channels and governmental and leased access channels.  The individual Systems
also offer an expanded basic tier of television stations relayed from distant
cities, specialized programming delivered via satellite and various
alpha-numeric channels providing information on news, time, weather and the
stock market.  In addition to these services, the Systems typically provide one
or more premium services purchased from independent suppliers and combined in
different formats to appeal to the various segments of the viewing audience,
such as Home Box Office, Cinemax, Showtime, The Movie Channel and the Disney
Channel.  A "premium service unit" is a single premium service for which a
subscriber must pay an additional monthly fee in order to receive the service.
Subscribers may subscribe for one or more premium service units.  The Systems
also receive revenues from the sale or monthly use of certain equipment (e.g.,
converters, wireless remote control devices, etc.) and from cable programming
guides, with some Systems offering enhanced audio services.  Certain of the
Systems also generate revenues from the sale of advertising spots on one or
more channels, from the distribution and sale of pay-per-view movies and
events, and from commissions resulting from subscribers participating in home
shopping.

Rates to subscribers vary from market to market and in accordance with the type
of service selected.  The Partnership Systems' monthly basic fees, at December
31, 1997, ranged from $8.75 to $15.60 for the basic service tier and $14.82 to
$17.99 for the expanded basic tier.  A one-time installation fee, which may be
partially waived during a promotional period, is charged to new subscribers.
The practices of the Registrant regarding rates are consistent with the current
practices in the industry.  See "Regulation and Legislation" for a discussion
of rate setting.


MANAGEMENT AGREEMENT

Since July 15, 1994, the Partnership Systems have been managed by the General
Partner, which assumed the rights and obligations of the former manager under
the Management Agreement effective March 31, 1988, by and between the
Partnership and the Management Company (the "Management Agreement").
Consequently, the Management Company has the exclusive right, authorization and
responsibility to manage the Partnership Systems.

                                     - 6 -

<PAGE>   7


The Management Agreement provides that the Management Company will receive for
its services a management fee equal to 5% of the annual gross operating revenues
of the Partnership.  Such fee is to be paid quarterly in arrears after the
Partnership pays quarterly distributions to the Limited Partners. Beginning in
1989, up to 50% of the management fee payment is subordinate to certain
quarterly distributions to the Limited Partners.  Unpaid management fees accrue
without interest.  During 1997, 1996, and 1995, the Registrant recorded
approximately $462,000, $905,000, and $852,000, respectively, of such management
fee expense although it ceased making such payments shortly thereafter.
Management fees of approximately $4,076,000, $3,614,000 and $2,709,000 were
included in Payables to General Partners and affiliates at December 31, 1997,
1996 and 1995, respectively.  Although the General Partner is currently entitled
to collect 50% of its management fees pursuant to the terms of the Management
Agreement, the General Partner has decided to voluntarily defer receipt of such
fees (approximately $1,442,000 as of December 31, 1997) until such time as the
Partnership's outstanding indebtedness is reduced through a combination of
repayment and refinancing of such indebtedness.

Pursuant to its terms, the Management Agreement was to expire on the earlier of
December 31, 1995, or upon the dissolution of the Partnership.  The General
Partner has agreed to extend the term of the Management Agreement through the
"winding-up" of the Partnership's business and affairs.

The Management Company manages all aspects of the daily operation of the
Partnership Systems including, but not limited to, providing the Registrant
with financial, marketing, engineering, technical and operational guidance;
negotiating programming and other contracts; reviewing, approving and
processing of accounting transactions; developing and maintaining
administrative records, Limited Partner investment and tax records, procedures
and reports; developing recommendations for, and negotiating the acquisition
and maintenance of, insurance coverage; reviewing and approving personnel and
other management policies and procedures; supervising the training of
management personnel; developing engineering strategies for the implementation
of technical improvements; reviewing and approving maintenance standards and
capital expenditures for plant and equipment; providing a centralized
purchasing agent to provide the benefit of quantity discounts; developing
compensation policies and maintaining individual personnel files with respect
to employees; assisting in the selection of, and consultation with, attorneys,
consultants and accountants; and providing in-house legal support and
negotiating financing on behalf of the Registrant.  In addition, the Management
Company is responsible for preparing and monitoring annual operating budgets,
Limited Partner correspondence, cash management, monthly financial statements
and such other reports as may be required by the Registrant.


COMPETITION

Cable television systems compete with other providers of television signals and
other sources of home entertainment.  The competitive environment has been
significantly affected both by technological developments as well as regulatory
changes enacted in the Telecommunications Act of 1996 ("1996 Telecom Act")
which were designed to enhance competition in the cable television and local
telephone markets (see "Regulation and Legislation" below).  Key competitors
today include:

Broadcast Television.  Cable television has long competed with broadcast
television, which consists of television signals that the viewer is able to
receive without charge using a traditional "off-air" antenna.  The extent of
such competition is dependent upon the quality and quantity of broadcast
signals available through "off-air" reception compared to the services provided
by the local cable system.  Accordingly, cable operators in rural areas, where
"off-air" reception is more limited, generally achieve higher penetration rates
than do operators in major metropolitan areas, where numerous, high quality
"off-air" signals are available.

DBS.  In recent years, direct broadcast satellite ("DBS") has emerged as
significant competition to cable television systems.  Earlier "direct-to-home"
satellite services required the subscriber to purchase a large and expensive
"dish" antenna, but newer medium and high powered alternatives now allow the
subscriber to receive video services directly via satellite using a relatively
small dish.  Moreover, video compression technology allows DBS providers to
offer more than 100 digital channels, thereby surpassing the typical cable
system.  DBS providers offer most of the same programming services as are
available through cable television, but also offer certain sports packages not
available through cable television systems.  Although a home satellite
subscription at one time required purchase or lease of an expensive satellite
dish, the cost and size of DBS has decreased dramatically for the consumer.
DBS does suffer certain significant operating disadvantages compared to cable
television, however, including the subscriber's inability to view different
programming on different


                                     - 7 -



<PAGE>   8

television sets, line-of-sight reception requirements, up-front costs
associated with the "dish" antenna, and the lack of local programming (unless
the subscriber also receives off-air signals and installs a rooftop antenna and
a special toggle switch).  DBS currently faces technical and legal obstacles to
providing local broadcast signals, although at least one DBS provider is
now attempting to do so in certain major markets, and legislation is now
pending that may remove the existing legal obstacle.

Traditional Overbuild.  Cable television franchises are not exclusive, so that
more than one cable television system may be built in the same area (known as
an "overbuild"), with potential loss of revenue to the operator of the original
system.  Overbuilds historically have been relatively rare, as constructing and
developing a cable television system is capital-intensive, and it is difficult
for the new operator to gain a marketing advantage over the incumbent operator.
Although a private competitor ordinarily would require a franchise from local
jurisdiction, municipalities themselves have sometimes built and operated their
own overbuild.

Telephone.  Federal cross-ownership restrictions historically limited entry by
local telephone companies into the cable television business.   The 1996
Telecom Act eliminated this cross-ownership restriction, making it possible for
companies with considerable resources to overbuild existing cable systems.
Several telephone companies have begun seeking cable television franchises from
local governmental authorities and constructing cable television systems.  The
entry of telephone companies as direct competitors is likely to continue and
could adversely affect the profitability and valuation of the Partnership's
systems.  The entry of electric utility companies into the cable television
business, as now authorized by the 1996 Telecom Act, could have a similar
adverse effect.

Private Cable.  Additional competition is posed by private cable television
systems, known as Satellite Master Antenna Television (SMATV), serving
multi-unit dwellings such as condominiums, apartment complex, and private
residential communities.  These private cable systems may enter into exclusive
agreements with apartment owners and homeowners associations, which may
preclude operators of franchised systems from serving residents of such private
complexes.  Private cable systems that do not cross public rights of way are
free from the federal, state and local regulatory requirements imposed on
franchised cable television operators.

Wireless Cable.  Cable television systems also compete with wireless program
distribution services such as multichannel, multipoint distribution service
("MMDS").  MMDS uses low-power microwave frequencies to transmit television
programming over-the-air to paying subscribers.  The FCC has recently taken a
series of actions, including the auctioning of additional spectrum for Local
Multipoint Distribution Services ("LMDS") that could enhance the ability of
wireless cable to compete with traditional cable systems.  Telephone companies
have acquired or invested in wireless companies, and may use traditional analog
MMDS systems or digital MMDS to provide services within their service areas in
lieu of wired delivery systems.  Enthusiasm for MMDS has waned in recent
months, however, as Bell Atlantic and NYNEX have suspended their joint
investment in a major MMDS company.  Nevertheless, BellSouth has launched a
digital MMDS system in the New Orleans and Atlanta markets and Pacific Bell has
launched a digital MMDS system in Los Angeles.

Cable television systems are also in competition, in various degrees with other
communications and entertainment media, including motion pictures and home
video cassette recorders.


REGULATION AND LEGISLATION.

The operation of a cable television system is extensively regulated by the
Federal Communications Commission ("FCC"), some state governments and most
local governments.  The 1996 Telecom Act has altered the regulatory structure
governing the nation's telecommunications providers.  It removes barriers to
competition in both the cable television market and the local telephone market.
Among other things, it also reduces the scope of cable rate regulation.

The 1996 Telecom Act requires the FCC to undertake a host of implementing
rulemakings, the final outcome of which cannot yet be determined.  Moreover,
Congress and the FCC have frequently revisited the subject of cable regulation.
Future legislative and regulatory changes could adversely affect the
Partnership's operations, and there has been a recent increase in calls in
Congress and at the FCC to maintain or even tighten cable regulation in absence
of widespread effective

                                     - 8 -



<PAGE>   9

competition.  This section briefly summarizes key laws and regulations
affecting the operation of the Partnership's cable systems and does not purport
to describe all present, proposed, or possible laws and regulations affecting
the Partnership.

Cable Rate Regulation.  The Cable Television Consumer Protection and
Competition Act of 1992 (the"1992 Cable Act") imposed an extensive rate
regulation regime on the cable television industry.  Under that regime, all
cable systems are subject to rate regulation, unless they face "effective
competition" in their local franchise area.  Federal law now defines "effective
competition" on a community-specific basis as requiring either low penetration
(less than 30%) by the incumbentcable operator, appreciable penetration (more
than 15%) by competing multichannel video providers ("MVPs"), or the presence
of a competing MVP affiliated with a local telephone company.

Although the FCC has established the underlying regulatory scheme, local
government units (commonly referred to as local franchising authorities or
"LFA's") are primarily responsible for administering the regulation of the
lowest level of cable -- the basic service tier ("BST"), which typically
contains local broadcast stations and public, educational, and government
("PEG") access channels.  Before an LFA begins BST rate regulation, it must
certify to the FCC that it will follow applicable federal rules, and many LFA's
have voluntarily declined to exercise this authority.  LFA's also have primary
responsibility for regulating cable equipment rates.  Under federal law,
charges for various types of cable equipment must be unbundled from each other
and from monthly charges for programming services.  The 1996 Telecom Act allow
operators to aggregate costs for broad categories of equipment across
geographic and functional lines.  This change should facilitate the
introduction of new technology.

The FCC itself directly administers rate regulation of any cable programming
service tiers ("CPST"), which typically contain satellite-delivered
programming.  Under the 1996 Telecom Act, the FCC can regulate CPST rates only
if an LFA first receives at least two rate complaints from local subscribers
and then files a formal complaint with the FCC.  When new CPST rate complaints
are filed, the FCC now considers only whether the incremental increase is
justified and will not reduce the previously established CPST rate.

Under the FCC's rate regulations, most cable systems were required to reduce
their BST and CPST rates in 1993 and 1994, and have since had their rate
increases governed by a complicated price cap scheme that allows for the
recovery of inflation and certain increased costs, as well as providing some
incentive for expanding channel carriage.  The FCC has modified its rate
adjustment regulations to allow for annual rate increases and to minimize
previous problems associated with regulatory lag.  Operators also have the
opportunity of bypassing this "benchmark" regulatory scheme in favor of
traditional "cost-of-service" regulation in cases where the latter methodology
appears favorable.  Premium cable services offered on a per-channel or
per-program basis remain unregulated, as do affirmatively marketed packages
consisting entirely of new programming product.  However, federal law requires
that the BST be offered to all cable subscribers and limits the ability of
operators to require purchase of any CPST before purchasing premium services
offered on a per-channel or per-program basis.

At December 31, 1997, only one of the 17 LFA's (covering approximately 30% of
the Systems' subscribers) that oversee the franchises under which the Systems
operate are certified to regulate basic tier rates.  The 1992 Cable Act permits
communities to certify and regulate rates at any time, so that it is possible
that additional localities served by the systems may choose to certify and
regulate rates in the future.

The FCC and Congress have provided various forms of rate relief for smaller
cable systems owned by smaller operators.  If requisite eligibility criteria
are satisfied, a cable operator may be allowed to rely on a vastly simplified
cost-of-service rate justification and/or may be allowed to avoid regulation of
CPST rates entirely.   Under FCC regulations, cable systems serving 15,000 or
fewer subscribers, which are owned by or affiliated with a cable company
serving in the aggregate no more than 400,0000 subscribers, can submit a
simplified cost-of-service filing under which the regulated rate (including
equipment charges) will be presumed reasonable if it equates to no more than
$1.24 per channel. Eligibility for this relief continues if the small cable
system is subsequently acquired by a larger cable operator, but is lost when
and if the individual system serves in excess of 15,000 subscribers. With
regards to cable systems owned by small operators, the 1996 Telecom Act
immediately deregulated the CPST rates of cable systems serving communities
with fewer than 50,000 subscribers, which are owned by or affiliated with
entities serving, in the aggregate, no more than one percent of the nation's
cable customers (approximately 617,000) and having no more than $250 million in
annual revenues.  The FCC's
                                     - 9 -



<PAGE>   10

rulemaking with regard to this issue is outstanding and Charter is unable to
determine whether or not it can or will benefit from this variety of
deregulation.

The 1996 Telecom Act sunsets FCC regulation of CPST rates for all systems
(regardless of size) on March 31, 1999.  However, certain cable critics have
called for the delay in that regulatory sunset and even urged more rigorous
rate regulation in the interim, including a limit on operators passing through
to their customers increased programming costs.  The 1996 Telecom Act also
relaxes existing uniform rate requirements by specifying that uniform rate
requirements do not apply where the operator faces "effective competition," and
by exempting bulk discounts to multiple dwelling units, although complains
about predatory pricing still may be made to the FCC.


Cable Entry Into Telecommunications.  The 1996 Telecom Act provides that no
state or local laws or regulations may prohibit or have the effect of
prohibiting any entity from providing any interstate or intrastate
telecommunications service.  States are authorized, however, to impose
"competitively neutral" requirements regarding universal service, public safety
and welfare, service quality, and consumer protection.  State and local
governments also retain their authority to manage the public rights-of-way and
may require reasonable, competitively neutral compensation for management of
the public rights-of-way when cable operators provide telecommunications
service.  The favorable pole attachment rates afforded cable operators under
federal law can be gradually increased by utility companies owning the poles
(beginning in 2001) if the operator provided telecommunications service, as
well as cable service, over its plant.  The FCC recently clarified that a cable
operator's favorable pole rates are not endangered by the provision of Internet
access.

Cable entry into telecommunications will be affected by the regulatory
landscape now being fashioned by the FCC and state regulators.  One critical
component of the 1996 Telecom Act to facilitate the entry of new
telecommunications providers (including cable operators) is the interconnection
obligation imposed on all telecommunications carriers.  In July 1997, the
Eighth Circuit Court of Appeals vacated certain aspects of the FCC's initial
interconnection order.  That decision is now pending before the Supreme Court.

Telephone Company Entry Into Cable Television.  The 1996 Telecom Act allows
telephone companies to compete directly with cable operators by repealing the
historic telephone company/cable cross-ownership ban.  Local exchange carriers
("LECs"), including the Bell Operating Companies, can now compete with cable
operators both inside and outside their telephone service areas.  Because of
their resources, LECs could be formidable competitors to traditional cable
operators, and certain LECs have begun offering cable service.  As described
above, the Partnership is now witnessing the beginning of LEC competition in
certain metropolitan areas in the southeastern U.S.

Under the 1996 Telecom Act, a LEC providing video programming to subscribers
will be regulated as a traditional cable operator (subject to local franchising
and federal regulatory requirements), unless the LEC elects to provide its
programming via an "open video system" ("OVS").  To qualify for OVS status, the
LEC must reserve two-thirds of the system's activated channels for unaffiliated
entities.

Although LECs and cable operators can now expand their offerings across
traditional service boundaries, the general prohibition remains on LEC buyouts
(i.e., any ownership interest exceeding 10 percent) of co-located cable
systems, cable operator buyouts of co-located LEC systems, and joint ventures
between cable operators and LEC in the same market.  The 1996 Telecom Act
provided a few limited exceptions to this buyout prohibition, including a
carefully circumscribed "rural exemption."  The 1996 Telecom Act also provides
the FCC with the limited authority to grant waivers of the buyout prohibition
(subject to LFA approval).

Electric Utility Entry Into Telecommunications/Cable Television.  The 1996
Telecom Act provides that registered utility holding companies and subsidiaries
may provide telecommunications services (including cable television)
notwithstanding the Public Utility Holding Company Act.  Electric utilities
must establish separate subsidiaries, known as "exempt telecommunications
companies" and must apply to the FCC for operating authority.  Like telephone
companies that have substantial resources at their disposal, electric utilities
could be formidable competitors to traditional cable systems.

Additional Ownership Restrictions.  The 1996 Telecom Act eliminates statutory
restrictions on broadcast/cable cross-ownership (including broadcast
network/cable restrictions), but leaves in place existing FCC regulations
prohibiting local cross-ownership between co-located television stations and
cable systems.  The 1996 Telecom Act also eliminates the three

                                   - 10 -



<PAGE>   11

years holding period required under the 1992 Cable Act's "anti-trafficking"
provision.  The 1996 Telecom Act leaves in place existing restrictions on cable
cross-ownership with SMATV and MMDS facilities, but lifts those restrictions
were the cable operator is subject to effective competition.  In January 1995,
however, the FCC adopted regulations which permit cable operators to own and
operate SMATV systems within their franchise area, provided that such operation
is consistent with local cable franchise requirements.

Pursuant to the 1992 Cable Act, the FCC adopted rules precluding a cable system
from devoting more than 40% of its activated channel capacity to the carriage
of affiliated national program services.  Although the 1992 Cable Act also
precluded any cable operator from serving more than 30% of all U.S. domestic
cable subscribers, this provision has been stayed pending further judicial
review and FCC rulemaking.

There are no federal restrictions on non-U.S. entities having an ownership
interest in cable television systems or the FCC licenses commonly employed by
such systems.  Section 310(b)(4) of the Communications Act of 1934, as amended,
does, however, prohibit foreign ownership of FCC broadcast and telephone
licenses, unless the FCC concludes that such foreign ownership is consistent
with the public interest.

Must Carry/Retransmission Consent.  The 1992 Cable Act contains broadcast
signal carriage requirements that, among other things, allow local commercial
television broadcast stations to elect once every three years between requiring
a cable system to carry the station ("must carry") or negotiating for payments
for granting permission to the cable operator to carry the station
("retransmission consent").  Less popular stations typically elect "must
carry," and more popular stations (such as those affiliated with a national
network) typically elect "retransmission consent."  Must carry requests can
dilute the appeal of a cable systems' programming offerings because a cable
system with limited channel capacity may be required to forego carriage of
channels desired by customers because available channel positions pre-empted by
stations electing must carry.  Retransmission consent demands may require
substantial payments or other concessions.  Either option has a potentially
adverse affect on the Partnership's business.  The burden associated with "must
carry" may increase substantially if broadcasters proceed with planned
conversion to digital transmission and the FCC determines that cable systems
must carry all analogue and digital broadcasts in their entirety.  A rulemaking
is expected to be initiated at the FCC shortly.

Access Channels.  LFA's can include franchise provisions requiring cable
operators to set aside certain channels for public, educational and
governmental access programming.  Federal law also requires cable systems to
designate a portion of their channel capacity (up to 15% in some cases) for
commercial leased access by unaffiliated third parties.  The FCC has adopted
rules regulating the terms, conditions and maximum rates a cable operator may
charge for use of the designated channel capacity, but use of commercial leased
access channels has been relatively limited.  The FCC released revised rules in
February 1997 mandating a modest rate reduction.  The reduction sparked some
increase in part-time use, but did not make commercial leased access
substantially more attractive to third party programmers.  Certain of those
programmers have now appealed the revised rules to the District of Columbia
Court of Appeals.  Should the Court and the FCC ultimately determine that an
additional reduction in access rates is required, cable operators could lose
programming control of a substantial number of cable channels.

Access to Programming.  To spur the development of independent cable
programmers and competition to incumbent cable operators, the 1992 Cable Act
imposed restrictions on the dealings between cable operators and cable
programmers.  Of special significance from a competitive business posture, the
1992 Cable Act precludes video programmers affiliated with cable companies from
favoring cable operators over competitors and requires such programmers to sell
their programming to other multichannel video distributors.  This provision
limits the ability of vertically integrated cable programmers to offer
exclusive programming arrangements to cable companies.  Recently, there has
been increased interest in further restricting the marketing practices of cable
programmers, including subjecting programmers who are not affiliated with cable
operators to all of the existing program access requirements.

Inside Wiring.  The FCC recently determined that an incumbent cable operator
can be required by the owner of a multiple dwelling unit ("MDU") complex to
remove, abandon, or sell the "home run" wiring initially installed by the cable
operator.  In addition, the FCC is reviewing the enforceability of contracts to
provide exclusive video service within an MDU complex.  The FCC has proposed
abrogating all such contracts held by incumbent cable operators, but allowing
such contracts when held by new entrants.  These changes, and others now being
considered by the FCC, would, if implemented,

                                   - 11 -



<PAGE>   12

make it easier for an MDU complex owner to terminate service from an incumbent
cable operator in favor of a new entrant and make the already competitive MDU
sector even more challenging for incumbent cable operators.

Other FCC Regulations.  In addition to the FCC regulations noted above, there
are other FCC regulations covering such areas as equal employment opportunity,
subscriber privacy, programming practices (including, among other things,
syndicated program exclusivity, network program nonduplication, local sports
blackouts, indecent programming, lottery programming, political
programming,sponsorship identification, and children's programming
advertisements), registration of cable systems and facilities licensing,
maintenance of various records and public inspection files, aeronautical
frequency usage, lockbox availability, antenna structure notification, tower
marking and lighting, consumer protection and customer service standards,
technical standards, and consumer electronics equipment capability.  The FCC is
currently considering whether cable customers must be allowed to purchase cable
converters from third party vendors.  If the FCC concludes that such
distribution is required, and does not make appropriate allowances for signal
piracy concerns, it may become more difficult for cable operators to combat
theft of service.  Federal requirements governing Emergency Alert Systems and
Closed Captioning adopted in 1997 will impose additional costs on the operation
of cable systems.  The FCC has the authority to enforce its regulations through
the imposition of substantial fines, the issuance of cease and desist orders
and/or the imposition of other administrative sanctions, such as the revocation
of FCC licenses needed to operate certain transmission facilities used in
connection with cable operations.

Copyright.  Cable television systems are subject to federal copyright licensing
covering carriage of television and radio broadcast signals. In exchange for
filing certain reports and contributing a percentage of their revenues to a
federal copyright royalty pool (that varies depending on the size of the system
and the number of distant broadcast television signals carried), cable
operators can obtain blanket permission to retransmit copyrighted material on
broadcast signals.  The possible modification or elimination of this compulsory
copyright license is the subject of continuing legislative review and could
adverse affect the Partnership's ability to obtain desired broadcast
programming.  In addition, pursuant to an industry-wide arrangement in effect
through 1996, cable operators paid music licensing fees to BMI.  The cable
industry also expects to enter into a separate adjudicated rate arrangement
with ASCAP, and expects to negotiate an extension of the BMI arrangement.
Copyright clearances for nonbroadcast programming services are arranged through
private negotiations.

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

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

Federal law contains renewal procedures designed to protect incumbent
franchisees against arbitrary denials of renewal.  Even if a franchise is
renewed, the franchise authority may seek to impose new and more onerous
requirements such as significant upgrades in facilities and service or
increased franchise fees as a condition of renewal.  Similarly, if a franchise
authority's consent is required for the purchase or sale of a cable system or
franchise, such authority may attempt to impose more burdensome or onerous
franchise requirements in connection with a request for consent.  Historically,
franchises have been renewed for cable operators that have provided
satisfactory services and have complied with the terms of their franchise.

The Systems operate pursuant to an aggregate of 18 non-exclusive franchises,
permits or similar authorizations issued by governmental authorities. Under the
terms of most of the franchises, a franchise fee of up to five percent (5%) of
the gross

                                     - 12 -



<PAGE>   13



revenues derived by a cable system from the provision of cable television
services is payable to the franchising authority. Currently, 7 of the these
franchises, serving approximately 12% of the Partnership's subscribers in
the aggregate, were within a three-year window period for renewal.


EMPLOYEES

As of December 31, 1997, the Registrant employed a total of approximately 22
full-time equivalent persons in the operation of its cable television systems.
None of the employees are represented by a union.  The Registrant has never
experienced a work stoppage.  The Registrant believes its employee relations
are generally good.


OTHER MATTERS

The Partnership owns and operates cable television systems and does not engage
in any other identifiable industry segments.  The Partnership does not believe
that changes of a seasonal nature are material to the cable television
business.  The Partnership has not expended material amounts during the last
two years on research and development activities.  As the Partnership is a
service-related organization, little or no raw materials are utilized by the
Partnership.  The necessary hardware, coaxial cable and electronics required
for construction of new cable plant are available from a variety of vendors and
are generally available in ample supply.  There is no one customer or
affiliated group of customers to whom sales are made in amounts which exceed
ten percent (10%) of the Partnership's revenues.  The Partnership believes it
is not affected by inflation except to the extent that the economy in general
is affected thereby.

ITEM 2.  PROPERTIES

The Registrant's principal physical assets consist of the components of each of
its cable television systems, which include a central receiving apparatus,
distribution cables and local business offices.  The receiving apparatus is
comprised of a tower and antennas for reception of over-the-air broadcast
television signals and one or more earth stations for reception of satellite
signals.  Located near these receiving devices is a building that houses
associated electronic gear and processing equipment.  The Registrant owns the
receiving and distribution equipment of each system and owns or leases small
parcels of real property for the receiving sites.

Cable is either buried in trenches or is attached to utility poles pursuant to
license agreements with the owners of the poles.  As is typical in the cable
television industry, the Partnership maintains insurance on its above-ground
plant, but not for its underground plant.  The Registrant owns or leases the
local business office of each system from which it dispatches service
employees, monitors the technical quality of the system, handles customer
service and billing inquiries and administers marketing programs.  The office
facilities of some systems include certain equipment for program production, as
required under certain of the Partnership's franchises.

The Registrant believes that its properties are generally in good condition and
fully utilized.  The Systems currently operate at between 220 and 330
megahertz, whereas the General Partner believes the standard in the cable
television industry for cable television systems similar to those operated by
the Partnership to generally be a minimum of 450 megahertz.  The physical
components of the Systems require maintenance and periodic upgrading to keep
pace with technological advances.

ITEM 3.  LEGAL PROCEEDINGS

On April 15, 1997, a petition was filed, and two amended petitions were
subsequently filed in the Circuit Court of Jackson County, Missouri, by
plaintiffs who are limited partners of the Partnership against the
Partnership's General Partner (Cencom Properties II, Inc.); Cencom Partners,
Inc. ("Cencom Partners"), the general partner of CPLP; the brokerage firms


                                     - 13 -



<PAGE>   14

involved in the original sale of the limited partnership units; and Cencom
Cable Entertainment, Inc. ("Cencom Cable").  Cencom Cable provided management
services to both the Partnership and CPLP and also owned all of the stock of
the general partners of each of these partnerships prior to mid-1994.  The
plaintiffs originally alleged that the defendants breached fiduciary duties and
the terms of the Partnership Agreement in connection with the investment in
CPLP, the management of the Partnership's assets and the sale of certain
Partnership assets and dismissed without prejudice the brokerage defendants and
the fraud allegations in the sale of the units.  The plaintiffs seek recovery
of the consideration paid for their partnership units, restitution of all
profits received by the defendants in connection with the management of the
Partnership and punitive damages.

On June 10, 1997, a purported class action was filed in Delaware Chancery Court
under the name Wallace, et. al. v. Wood et al, Case No. 15731, on behalf of the
limited partners of the Partnership against Cencom Properties II, Cencom Cable,
Charter Communications, Inc. ("Charter"), the ultimate parent of Cencom
Partners and Cencom Properties II, certain other affiliates of Charter, certain
individuals, including officers of Charter or Cencom Properties II and certain
other unaffiliated parties.  The plaintiffs allege that the defendants breached
fiduciary duties and the terms of the Partnership Agreement in connection with
the investment in CPLP, the management of the Partnership's assets and the sale
of certain partnership  assets.  In November 1997, the plaintiffs amended their
complaint to restate their allegations as a shareholder's derivative claim.  As
of December 31, 1997, the damages claimed by the plaintiffs are unspecified.

The Partnership is not a named defendant in the Jackson County litigation and
is a nominal defendant in the Delaware litigation.

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

On March 6, 1997, a Disclosure Statement and related consent materials was
mailed to the Limited Partners in connection with the solicitation by the
General Partner for the written consents of the Limited Partners for the
proposed sales of the South Carolina Systems and for the sale of three of the
four systems owned by CPLP to an affiliate of the General Partner.  The written
votes of the Limited Partners were received on April 7, 1997.  Of the 90,915
outstanding LP Units, 49,194 LP Units (representing 93.7% of the LP Units voted
and 54.1% of all LP Units outstanding) voted in favor of the proposed sales
transactions.  In addition, 3,328 LP Units (6.3% of the LP Units voted) voted
against or abstained from voting.

No matters were submitted to a vote of security holders during the fourth
quarter of 1997.


                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

As of December 31, 1997, there were approximately 7,400 holders of 90,915
Limited Partnership Units of the Partnership (the "Units" or the "LP Units").
There is a very limited trading market for the Units and all transfers are
subject to approval of the General Partner.

Pursuant to the terms of the Partnership Agreement, the Partnership is required
to distribute all cash available for distribution to the Limited Partners
within 60 days after the end of each calendar quarter and, with respect to
certain available refinancing proceeds and certain available sales proceeds, as
soon as possible following completion of the relevant transaction.  The
Partnership suspended regular quarterly distributions to Limited Partners in
the fourth quarter of 1993 to provide the Partnership with greater financial
flexibility in meeting its debt covenants and in making capital expenditures.
In June 1997, following the Partnership's sale of assets and refinancing of its
credit facility, the Partnership made a special distribution of $314 per
Limited Partnership Unit.  From this aggregate distribution, certain amounts
were withheld from certain of the Limited Partners due to applicable state
income taxes.  Distributions in arrears will be distributed in accordance with
the Partnership Agreement.


                                     - 14 -



<PAGE>   15

During January 1995, Charter acquired 1,746 Units of the Partnership as part of
a negotiated transaction for a sale of securities and assets.  As of December
31, 1997, Charter held 1,746 Units of the Partnership, representing
approximately 1.9% of the total outstanding limited partnership interests of
the Partnership.

In August 1996, Charter received a letter from Gale Island LLC ("Gale"), a
third party unaffiliated with the Partnership, the General Partner or any of
their affiliates, offering to purchase up to 4.9% of the total outstanding
limited partnership interests in the Partnership.  As of December 31, 1996,
Gale had purchased 1,786 LP Units pursuant to its offer.  During 1997, Gale
continued to purchase limited partnership interests of the Partnership as a
result of their initial tender offer and a subsequent tender offer during 1997.
As of December 31, 1997, Gale had purchased 2,115 LP Units pursuant to their
offers, representing approximately 2.3% of the total outstanding limited
partnership interests of the Partnership.

In September 1996, the Limited Partners received a letter from Madison
Partnership Liquidity Investors V, LLC ("Madison"), a third party unaffiliated
with the Partnership, the General Partner or any of their affiliates, offering
to purchase up to 4.9% of the total outstanding limited partnership interests
in  the Partnership.  As of December 31, 1996,  Madison had purchased 671 LP
Units pursuant to its offer.  During 1997, Madison continued to purchase
limited partnership interests of the Partnership as a result of their initial
tender offer and a subsequent tender offer during 1997. As of December 31,
1997, Madison had purchased 3,100 LP Units pursuant to their offers,
representing approximately 3.4% of the total outstanding limited partnership
interests of the Partnership.



                                   - 15 -



<PAGE>   16



ITEM 6.  SELECTED FINANCIAL DATA

The following selected financial data has been derived from the audited
financial statements of the Partnership and should be read in conjunction with
the financial statements and notes thereto included pursuant to Item 8 of this
Form 10-K.



<TABLE>
<CAPTION>
                                                             AS OF AND FOR THE YEAR ENDED DECEMBER 31,
                                  -------------------------------------------------------------------------------------
                                      1997                1996            1995             1994             1993
                                  --------------  ---------------  ---------------  ---------------  ------------------
<S>                                <C>                <C>              <C>              <C>              <C>
STATEMENT OF OPERATIONS DATA:
Service Revenues................   $  9,246,156       $  18,155,382     $ 17,046,419     $ 16,257,928     $ 16,124,256
Net income (loss)...............     44,548,950          (1,447,153)      (2,292,563)      (5,256,210)      (8,653,943)
Net income (loss) per LP Unit...         458.90              (15.76)          (24.96)          (57.24)          (94.24)
Cash distributions per LP Unit..         314.00                  --               --               --            60.00

BALANCE SHEET DATA:
Total assets....................      7,029,589          20,845,510       24,960,260       30,517,928       34,825,726
Long-term obligations,
 including current maturities...      4,600,000          36,700,000       40,400,000       44,700,000       44,700,000
Partners' (deficit) capital.....     (5,826,367)        (21,828,007)     (20,380,854)     (18,088,291)     (12,832,081)

MISCELLANEOUS DATA:
Ratio of earnings to fixed
charges(1)......................           1.14                  --               --               --               --
Book value per LP Unit..........        ($64.09)           ($240.09)        ($224.17)        ($198.96)        ($141.14)
</TABLE>
---------------
(1) Ratio of earnings to fixed charges is calculated using income from
continuing operations adding back fixed charges; fixed charges include interest
expense and amortization expense for debt issuance costs.  Earnings for the
years ended December 31, 1996, 1995, 1994 and 1993 were insufficient to cover
the fixed charges by $1,447,153, $2,292,563, $5,256,210 and $8,653,943,
respectively.  As a result of such insufficiencies, these ratios are not
presented above.


                                    - 16 -



<PAGE>   17


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

RESULTS OF OPERATIONS

GENERAL INFORMATION

The following table summarizes the amounts and the percentage of total revenues
for certain items for the periods indicated:


<TABLE>
<CAPTION>
                                                    FOR THE YEAR ENDED DECEMBER 31,
                             --------------------------------------------------------------------
                                        1997               1996                     1995
                             --------------------  -----------------------  ---------------------
                                 Amt.         %          Amt.         %         Amt.        %
                             ------------  ------  -------------   -------- -----------  -------
<S>                          <C>           <C>     <C>             <C>      <C>           <C>
Service Revenues:
   Basic Service             $ 6,916,999     74.8  $ 13,485,981       74.3  $ 12,595,495     73.9
   Premium Service             1,070,210     11.6     2,241,316       12.3     2,275,021     13.3
   Other Services              1,258,947     13.6     2,428,085       13.4     2,175,903     12.8
                             -----------   ------  ------------     ------  ------------   ------

                               9,246,156    100.0    18,155,382      100.0    17,046,419    100.0
                             -----------   ------  ------------     ------  ------------   ------

Operating Expenses:
   Operating, General and
     Administrative            5,674,812     61.4    10,572,015       58.2     9,804,576     57.5
   Depreciation and
     Amortization              2,278,705     24.6     6,235,182       34.4     6,204,807     36.4
                             -----------   ------  ------------     ------  ------------   ------

                               7,953,517     86.0    16,807,197       92.6    16,009,383     93.9
                             -----------   ------  ------------     ------  ------------   ------

Income from Operations         1,292,639     14.0     1,348,185        7.4     1,037,036      6.1
                             -----------   ------  ------------     ------  ------------   ------

Other Income (Expenses):
   Interest Income               216,190      2.3        39,909        0.2       117,613       .7
   Interest Expense           (1,323,920)   (14.3)   (2,835,247)     (15.6)   (3,447,212)   (20.2)
   Equity in income of
     unconsolidated limited
     partnership               8,133,748     88.0            --         --            --       --

   Gain on sale of cable
     television systems       36,230,293    391.8            --         --            --       --
                             -----------   ------  ------------     ------  ------------   ------

                              43,256,311    467.8    (2,795,338)     (15.4)   (3,329,599)   (19.5)
                             -----------   ------  ------------     ------  ------------   ------

Net income (loss)            $44,548,950    481.8   ($1,447,153)      (8.0)  ($2,292,563)   (13.4)
                             ===========   ======  ============     ======  ============   ======
</TABLE>



Operating results of the Registrant's investment in CPLP are not consolidated
as the Registrant owns only limited partnership units of CPLP and does not
exercise significant influence over CPLP's operations.  The Registrant's
investment in CPLP is accounted for under the equity method and losses in
excess of its investment are not recorded.  The amount of unrecorded losses in
excess of the equity investment were approximately $4.0 million and $4.9
million for the years ended December 31, 1996 and 1995, respectively.  As of
December 31, 1996, the cumulative unrecorded losses in excess of investment
were approximately $14.9 million.  For the year ended December 31, 1997, the
Partnership recorded income from its investment in CPLP totaling approximately
$8.1 million net of previously unrecorded losses.  Also, in May 1997, the
Partnership received a cash distribution from CPLP in the amount of $5.5
million.


                                     - 17 -



<PAGE>   18

COMPARISON OF YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995.


Revenues

Partnership revenues increased 6.5% from $17.0 million in 1995 to $18.2 million
in 1996.  This increase was due to a slight increase in the number of basic
subscribers and retail rate increases for basic and ancillary services.
Partnership revenues decreased 49.1% from $18.2 million in 1996 to $9.2 million
in 1997, primarily as a result of the decrease in subscribers following the
sale of the Anderson County System on April 7, 1997 and the sales of
approximately 47% of the Southeast Texas Systems on March 31, 1997.  Overall,
revenue per basic subscriber (as determined for the fourth quarter of each
fiscal year) has increased from $31.00 for 1995 to $34.56 for 1996 to $36.11
for 1997.

The Partnership has experienced a continual decline in the ratio of premium
subscriptions per basic subscriber.  The ratio of premium subscriptions per
basic subscriber has decreased from .46 at December 31, 1995 to .42 at December
31, 1996 to .39 at December 31, 1997.  While premium subscription revenue will
continue to remain an important revenue source of the Partnership, this ratio
may continue to decline in future periods.  To offset this decline, the
Partnership markets premium services to customers in a packaged format,
providing subscribers a discount from the combined individual retail rates of
these services.


Operating Expenses

Operating, general and administrative expenses increased 7.8% from $9.8 million
in 1995 to $10.6 million in 1996.  The most significant increase related to
programming costs, which increased 11.1% from $3.1 million in 1995 to $3.5
million in 1996.  Programming increases were related to subscriber growth,
increases in the number of channels offered, and an industry-wide increase in
costs from programming distributors.

Operating, general and administrative expenses decreased 46.3% from $10.6
million in 1996 to $5.7 million in 1997.  This decrease was primarily a result
of the elimination of costs associated with the Anderson County System and
certain of the Southwest Texas Systems which were sold April 7, 1997 and March
31, 1997, respectively.  Overall, operating, general and administrative costs
have increased as a percent of revenue from 57.5% in 1995 to 58.2% in 1996 to
61.4% in 1997.  In addition to programming cost increases, the Partnership has
experienced increases in copyright expense, property tax expense and
liquidation costs.

Depreciation and amortization, in terms of percent of revenues, decreased
during the 1995-1997 period.  The decrease is primarily the result of the
completion of amortization for certain franchises and deferred costs.


Other Income and Expenses

Interest expense decreased by approximately $612,000 in 1996 versus 1995 as a
result of a lower weighted average of outstanding borrowings and a lower
weighted average interest rate in 1996.  The weighted average interest rates
and outstanding borrowings from 1996 and 1995 were 7.3% and 8.0% and $38.9
million and $43.2 million respectively.  Interest expense decreased from
$2,835,000 in 1996 to $1,324,000 in 1997 as a result of a lower weighted
average outstanding balance due to the reduction of indebtedness from the
proceeds of the sale of cable television systems.

Because the Partnership accounts for its investment in CPLP under the equity
method, allocated losses from CPLP in excess of the Partnership's investment in
CPLP are not recorded.  During 1996 and 1995 the unrecorded losses in excess of
investment were $4.0 million and $4.9 million, respectively.  During 1997, the
sale of certain cable television systems by CPLP resulted in the recognition by
the Partnership of equity in income of $8.1 million from this unconsolidated
limited partnership, net of previously unrecorded losses, which as of December
31, 1996 were approximately $14.9 million.

During 1997 the Partnership recorded a gain of approximately $36.2 million
related to the sales of certain of its cable television systems.



                                     - 18 -



<PAGE>   19

Net Loss

Net loss was reduced by 36.9% for the year ended December 31, 1996 compared to
the year ended December 31, 1995.  This decrease was due primarily to an
increase in income from operations and reduced interest expense.  In 1997, the
Partnership has net income of $44.5 million primarily as a result of the $36.2
million gain on sale of cable television systems and the recognition of $8.1
million of equity in the income of CPLP, an unconsolidated limited partnership.


LIQUIDITY AND CAPITAL RESOURCES

The Partnership's initial capital resources have included the aggregate of
approximately $81.6 million (net of related expenses) raised through the sale
of LP Units and approximately $918,000 in General Partner contributions of cash
and notes.  These sources of capital were used to fund the purchase of the
Partnership Systems and have since been supplemented with borrowings to finance
capital expenditures.

On May 23, 1997, the Partnership terminated its existing secured revolving line
of credit agreement and entered into a new bank credit agreement (the "Credit
Agreement") for borrowings up to $8,500,000.  The Credit Agreement also
provides for borrowings up to $7,500,000 by CPLP, with each partnership held
jointly and severally liable in the event of default.  At December 31, 1997,
CCIP II had $4,600,000 of indebtedness outstanding under the Credit Agreement
and CPLP had $-0- of indebtedness outstanding under the Credit Agreement.  The
debt bears interest at rates, at the Partnership's option, based on the higher
of the prime rate of the Canadian Imperial Bank of Commerce (the agent bank) or
the Federal Funds Rate plus  1/2 of 1%, or the LIBOR plus applicable margins
based upon the Partnership's leverage ratio at the time of the borrowings.  At
December 31, 1997, the interest rate on this outstanding indebtedness was
7.72%.

Borrowings under the Credit Agreement are subject to certain financial and
nonfinancial covenants and restrictions, including the maintenance of a ratio
of total debt to annualized operating cash flow of 4.0 to 1.0 at December 31,
1997.  A quarterly commitment fee of 0.375% per annum is payable on the unused
portion of the Credit Agreement.  Commencing March 31, 1999, and at the end of
each calendar quarter thereafter, the borrowing capacity shall be reduced by
$800,000.  Quarterly reductions will continue until March 31, 2002, at which
time the borrowing capacity shall be reduced by $1,600,000, quarterly until
December 31, 2002.

The Partnership made capital expenditures of approximately $1,240,000,
$2,108,000 and $3,001,000 during 1997, 1996 and 1995, respectively, in
connection with the improvement and upgrading of the Partnership Systems.

Pursuant to the terms of the Partnership Agreement, the Partnership is required
to distribute all cash available for distribution to the Partners within 60
days after the end of each calendar quarter and, with respect to certain
available refinancing proceeds and certain available sales proceeds, as soon as
possible following completion of the relevant transaction.  However, the
Partnership suspended distributions to Limited Partners in the fourth quarter
of 1993 to provide greater financial flexibility in meeting its debt covenants
and in making capital expenditures necessary to maintain the Partnership's
assets, and no additional distributions were made until a special distribution
in June 1997 following the sale of assets.

On March 31, 1997, the Partnership consummated the sale of certain of the cable
television systems located in Texas in two separate asset sale transactions
with unaffiliated third parties.  The sales price was approximately $15.3
million, after initial closing adjustments and the aggregate amount of $750,000
was deposited into indemnification escrow accounts.  These funds will be
released to the Partnership in April 1998 upon mutual satisfaction of the
seller's representation and warranties related to the assets that were sold.

On April 7, 1997, the Partnership consummated the sale of certain cable
television systems serving Anderson County, South Carolina, to an affiliate of
the General Partner for approximately $36.7 million.




                                     - 19 -



<PAGE>   20

Proceeds from the sales of the Texas systems on March 31, 1997 and the Anderson
County systems on April 7, 1997, were used to reduce to zero the balance of
outstanding indebtedness, with the remaining funds of approximately $14.0
million placed in short-term investments.

Proceeds from the sale of certain cable television systems owned by CPLP on
April 7, 1997, to affiliates of the General Partner enabled CPLP to reduce the
balance of its outstanding indebtedness to zero and retire its special limited
partnership interests, with the remaining funds of approximately $6.6 million
placed in short-term investments.  During May 1997, CPLP distributed $5.5
million to the Partnership.

The Partnership utilized its short-term investments, the distribution received
from CPLP and funds available under the Credit Agreement for the purpose of
making a distribution to the Limited Partners.  During June 1997, the
Partnership made a distribution of $314 per LP Unit for a total distribution of
approximately $28.5 million.  From this aggregate distribution, certain amounts
were withheld from certain of the Limited Partners due to applicable state
income taxes.  No distribution was made by the Partnership to the General
Partner.

The General Partner continues to seek potential purchasers for the remaining
Northeast Missouri and Texas systems.  The General Partner continues to operate
these remaining cable television systems until such time as these systems are
sold.

CPLP intends to continue to operate its remaining systems until an acceptable
bid is received.  Any future sale of CPLP's remaining cable television systems
will be utilized to satisfy any indebtedness and obligations, with the
remaining proceeds to be distributed in accordance with the CPLP partnership
agreement.  The Partnership maintains an 84.03% ownership interest in CPLP.

After the remaining Partnership assets, including the Partnership's investment
in CPLP, have been sold or liquidated for cash, the General Partner will repay
the balance of the Partnership's outstanding obligations, expenses and other
liabilities and distribute any remaining cash (subject to holdback for
contingencies) to the Limited Partners of the Partnership, at which time the
Partnership's existence will terminate.


YEAR 2000 IMPACT

During the fiscal year ended December 31, 1997, the Company began a process to
identify and address issues surrounding the Year 2000 and its impact on the
Company's operations.  The issue surrounding the Year 2000 is whether the
computer systems, software and all equipment using a computer chip will
properly recognize date sensitive information when the year changes to 2000, or
"00".  Computerized systems that do not properly recognize such information
could generate erroneous data or cause a system to fail.  This issue impacts
the Company as to its owned or licensed computer systems and equipment used in
connection with internal operations, including systems, software and equipment
supplied by vendors and third party service providers.  The Company may also be
affected by virtue of its external dealings with third parties in the regular
course of business.  As management of the Company has not completed its initial
assessment of the impact the Year 2000 may have on the Company's operations, it
cannot estimate the costs associated with ensuring the Company's operations are
Year 2000 compliant.  The Company is in the initial phases of determining the
impact of the Year 2000, and management anticipates completion of the project
by December 1998, allowing adequate time for testing.  However, there can be no
assurance that the Company's operations nor the computer systems of other
companies with whom the Company conducts business will be Year 2000 compliant
prior to December 31, 1999.  If such modifications and conversions are not
completed timely, the Year 2000 problem may have a material impact on the
operations of the Company.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

SEE INDEX TO FINANCIAL STATEMENTS AND SCHEDULES ON PAGE F-1.



                                     - 20 -



<PAGE>   21

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

During the fiscal year ended December 31, 1997, the Registrant was not involved
in any disagreements with its independent certified public accountants on
accounting principles or practices or on financial disclosure.



                                    - 21 -



<PAGE>   22


                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


The Partnership has no officers or directors.  The General Partner manages and
controls substantially all of the Partnership's affairs and has general
responsibility and ultimate authority in all matters affecting the
Partnership's business.  In addition, the General Partner is responsible for
operating and managing the Partnership's cable television systems.

Set forth below is the present principal occupation or employment and
employment history of the executive officers and directors of the General
Partner:



 NAME             AGE             POSITION WITH GENERAL PARTNER

Howard L. Wood     58   President, Chief Executive Officer and
                           Director
Barry L. Babcock   51   Executive Vice President, Chief
                           Operating Officer and Director
Jerald L. Kent     41   Executive Vice President, Chief
                           Financial Officer and Director

Mr. Wood has been affiliated with Charter since 1993, now holding the position
of Chairman of the Management Committee of Charter, and has served as President
of the General Partner since 1994.  Mr. Wood also co-founded Charter
Communications Group ("CCG") in 1992.  Prior to that time, he was associated
with Cencom Cable Associates, Inc. ("CCA"), which he joined in July 1987 as
Director; at CCA he held the position of President, Chief Executive Officer and
Director from January 1, 1989 to November 1992.  Mr. Wood also serves on the
Board of Directors of CCA Holdings Corp., CCA Acquisition Corp. and Cencom
Cable Entertainment, Inc.

Mr. Babcock has been affiliated with Charter since 1993 and now holds the
position of Chairman, and has served as Executive Vice President of the General
Partner since 1994.  Mr. Babcock also co-founded CCG in 1992.  Prior to that
time, he was associated with CCA as the Executive Vice President of CCA from
February 1986 to November 1992, and as Chief Operating Officer of CCA from May
1986 to November 1992.  Mr. Babcock currently serves as Chairman of the Board
of Directors of the Cable Telecommunications Association (CATA) and also serves
on the Board of Directors of the National Cable Television Association (NCTA),
Mercantile Bank-St. Louis, and Cencom Cable Entertainment, Inc.

Mr. Kent has been affiliated with Charter since 1993 and now holds the position
of President, and has served as Executive Vice President of the General Partner
since 1994.  Mr. Kent also co-founded CCG in 1992.  Prior to that time, he was
associated with CCA as Executive Vice President and Chief Financial Officer of
CCA from 1987 through November 1992.  Mr. Kent also serves on the Board of
Directors of CCA Holdings Corp., CCA Acquisition Corp. and Cencom Cable
Entertainment, Inc.

ITEM 11.  EXECUTIVE COMPENSATION

The General Partner does not currently pay any remuneration to any of its
officers or directors.  See Item 13 herein.


                                     - 22 -



<PAGE>   23


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of December 31, 1997, no Limited Partner was known to the General Partner to
be the beneficial owner of more than five percent (5%) of the outstanding LP
Units issued by the Partnership.  Charter owns 1,746 LP Units, constituting
approximately 1.9% of the LP Units.  Charter has no right to acquire additional
LP Units.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See Item 1 - "Partial Liquidation of Assets"

See Item 1 - "Management Agreement"

The Registrant may be subject to various conflicts of interest arising out of
the relationships among it, the Management Company, their respective
affiliates, officers and directors (such persons shall hereinafter be
collectively referred to as the "Affiliates").

Affiliates have engaged and, in the future, will engage in other business
activities related to the cable television industry that may be in competition
with the business of the Registrant.  Such activities may include the
acquisition of cable television systems.  The Affiliates have no obligation to
offer to the Registrant the opportunity to participate in any other
transactions in which they participate.

The officers and directors of the Management Company will manage the
Partnership Systems, as well as other cable television systems currently owned
or later acquired by certain of its Affiliates.  Conflicts of interest may
arise in managing the operations of more than one entity with respect to the
allocation of the Management Company's and its Affiliates' time, personnel, and
other resources among the Registrant.  The Management Company will resolve such
conflicts in a manner deemed in its reasonable judgment to be fair and
appropriate.


                                     - 23 -



<PAGE>   24


                                    PART IV

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

(a)   1.  Financial Statements:
          See Index to Financial Statements and Schedules on page F-1 of this
          Report.


      2.  Financial Statement Schedules:
          See Index to Financial Statements and Schedules on page F-1 of this
          Report.

      3.  Exhibits:
          See Index on Page E-1 of this Report.

(b)   Reports on Form 8-K:

      No reports on Form 8-K were filed during the fourth quarter of 1997.


                                    - 24 -



<PAGE>   25


                                   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, thereto duly authorized.

                                CENCOM CABLE INCOME PARTNERS II, L.P.


                                By:  Cencom Properties II, Inc.
                                     General Partner


                                By:  /s/ Howard L. Wood
                                   -------------------------------
                                   Howard L. Wood, President



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 (as to the General Partner) and on the date
indicated.

<TABLE>
<CAPTION>

Signature and Title                                               Date
-------------------                                               ----
<S>                                                               <C>

By:          /s/   Howard L. Wood                                 March 27, 1998
     -------------------------------------------------
     Howard L. Wood
     President, Chief Executive Officer and Director
     (Principal Executive Officer)


By:          /s/  Barry L. Babcock                                March 27, 1998
     -------------------------------------------------
     Barry L. Babcock
     Executive Vice President, Chief Operating Officer
     and Director
     (Principal Operating Officer)


By:          /s/  Jerald L. Kent                                  March 27, 1998
     -------------------------------------------------
     Jerald L. Kent
     Executive Vice President, Chief Financial Officer
     and Director
     (Principal Financial Officer and Principal
     Accounting Officer)

</TABLE>
                                      S-1




<PAGE>   26


                     CENCOM CABLE INCOME PARTNERS II, L.P.

                  INDEX TO FINANCIAL STATEMENTS AND SCHEDULES



<TABLE>
<CAPTION>                                                                                                   Page
                                                                                                            ----
<S>                                                                                                         <C>
REGISTRANT'S FINANCIAL STATEMENTS:
  Report of Independent Public Accountants                                                                  F-2
  Balance Sheets as of December  31, 1997 and 1996                                                          F-3
  Statements of Operations for the years ended December 31, 1997, 1996 and 1995                             F-4
  Statements of Partners' Capital (Deficit) for the years ended December 31, 1997, 1996 and 1995            F-5
  Statements of Cash Flows for the years ended December 31, 1997, 1996 and 1995                             F-6
  Notes to Financial Statements                                                                             F-7

REGISTRANT'S FINANCIAL STATEMENT SCHEDULES:
  None required

FINANCIAL STATEMENTS OF CENCOM PARTNERS, L.P.:
  Report of Independent Public Accountants                                                                  F-17
  Balance Sheets as of December 31, 1997 and 1996                                                           F-18
  Statements of Operations for the years ended December 31, 1997, 1996 and 1995                             F-19
  Statements of Partners' Capital (Deficit) for the years ended December 31, 1997, 1996 and 1995            F-20
  Statements of Cash Flows for the years ended December 31, 1997, 1996 and 1995                             F-21
  Notes to Financial Statements                                                                             F-22

CENCOM PARTNERS, L.P. FINANCIAL STATEMENT SCHEDULES:
  None required
</TABLE>



                                      F-1

<PAGE>   27
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To Cencom Cable Income Partners II, L.P.:


We have audited the accompanying balance sheets of Cencom Cable Income Partners
II, L.P. (a Delaware limited partnership) as of December 31, 1997 and 1996, and
the related statements of operations, partners' capital (deficit) and cash
flows for each of the three years in the period ended December 31, 1997.  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 generally accepted auditing
standards.  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 discussed in Note 2, the Partnership Agreement of Cencom Cable Income
Partners II, L.P. provides for the dissolution of the Partnership on or before
December 31, 1995.  The General Partner is in the process of a complete and
orderly dissolution of the Partnership.  Upon dissolution, the General Partner
or other authorized liquidating agent is required to liquidate the
Partnership's assets and distribute the proceeds thereof in accordance with the
provisions of the Partnership Agreement.  Proceeds ultimately received upon
liquidation could differ substantially from the amounts recorded in the
accompanying financial statements.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cencom Cable Income Partners
II, L.P. as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1997, in conformity with generally accepted accounting principles.



/s/ Arthur Andersen LLP

ARTHUR ANDERSEN LLP

St. Louis, Missouri,
 February 6, 1998

                                     F-2
<PAGE>   28


                     CENCOM CABLE INCOME PARTNERS II, L.P.


                  BALANCE SHEETS - DECEMBER 31, 1997 AND 1996


<TABLE>
<CAPTION>
                                                                                                1997            1996
                                                                                            -----------     ------------
                                      ASSETS
                                      ------
<S>                                                                                     <C>              <C>
CURRENT ASSETS:
  Cash and cash equivalents                                                               $    220,104      $    531,285
  Accounts receivable, net of allowance for doubtful accounts of $17,990 and
     $34,763, respectively                                                                      98,685           222,708
  Prepaid expenses and other                                                                    29,458            78,705
                                                                                          ------------      ------------
Total current assets                                                                           348,247           832,698

PROPERTY, PLANT AND EQUIPMENT, net                                                           3,003,525        18,938,808
FRANCHISE COSTS, net of accumulated amortization of $1,262,965 and
$22,383,464, respectively                                                                       33,402           724,004

DEBT ISSUANCE COSTS, net of accumulated amortization of $30,411 and
     $-0-, respectively                                                                        260,667           350,000

INVESTMENT IN UNCONSOLIDATED LIMITED PARTNERSHIP                                             2,633,748                 -

RESTRICTED FUNDS HELD IN ESCROW                                                                750,000                 -
                                                                                          ------------      ------------
                                                                                          $  7,029,589     $  20,845,510
                                                                                          ============     =============


                    LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
                    ------------------------------------------
CURRENT LIABILITIES:
  Current maturities of long-term debt                                                    $          -       $36,700,000
  Accounts payable and accrued expenses                                                      3,084,357         2,397,674
  Payables to General Partner and affiliates                                                 5,141,521         3,532,580
  Subscriber deposits                                                                           11,542            18,460
                                                                                          ------------       -----------
Total current liabilities                                                                    8,237,420        42,648,714
                                                                                          ------------       -----------
DEFERRED REVENUE                                                                                18,536            24,803
                                                                                          ------------       -----------
LONG-TERM DEBT                                                                               4,600,000                 -
                                                                                          ------------       -----------
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL (DEFICIT):
  General Partner                                                                                    -        (2,828,374)
  Limited Partners (250,000 units authorized; 90,915 units issued and
    outstanding)                                                                            (5,367,200)      (18,540,466)
Note receivable from General Partner                                                          (459,167)         (459,167)
                                                                                          ------------        -----------
Total Partners' capital (deficit)                                                           (5,826,367)      (21,828,007)
                                                                                          ------------      ------------
                                                                                          $  7,029,589      $ 20,845,510
                                                                                          ============      ============
</TABLE>

      The accompanying notes are an integral part of these balance sheets.




                                     F-3
<PAGE>   29





                     CENCOM CABLE INCOME PARTNERS II, L.P.


                            STATEMENTS OF OPERATIONS


              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



<TABLE>
<CAPTION>
                                                               1997              1996              1995
                                                        ----------------  ----------------  ----------------
<S>                                                     <C>               <C>               <C>
SERVICE REVENUES:
  Basic service                                               $6,916,999       $13,485,981       $12,595,495
  Premium service                                              1,070,210         2,241,316         2,275,021
  Other                                                        1,258,947         2,428,085         2,175,903
                                                        ----------------  ----------------  ----------------
                                                               9,246,156        18,155,382        17,046,419
                                                        ----------------  ----------------  ----------------
OPERATING EXPENSES:
  Operating costs                                              3,886,725         7,864,914         7,233,700
  General and administrative                                     991,383         1,560,430         1,619,143
  Liquidation costs                                              334,655           241,600            99,414
  Depreciation and amortization                                2,278,705         6,235,182         6,204,807
  Management fees - related party                                462,049           905,071           852,319
                                                        ----------------  ----------------  ----------------
                                                               7,953,517        16,807,197        16,009,383
                                                        ----------------  ----------------  ----------------
         Income from operations                                1,292,639         1,348,185         1,037,036
                                                        ----------------  ----------------  ----------------
OTHER INCOME (EXPENSE):
  Interest income                                                216,190            39,909           117,613
  Interest expense                                            (1,323,920)       (2,835,247)       (3,447,212)
  Equity in income of unconsolidated limited partnership       8,133,748                 -                 -
  Gain on sale of cable television systems                    36,230,293                 -                 -
                                                        ----------------  ----------------   ---------------
                                                              43,256,311        (2,795,338)       (3,329,599)
                                                        ----------------  ----------------   ---------------
         Net income (loss)                                   $44,548,950       $(1,447,153)      $(2,292,563)
                                                        ================  ================   ===============
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT                   $458.90           $(15.76)          $(24.96)
                                                        ================  ================   ===============
</TABLE>

        The accompanying notes are an integral part of these statements.








                                     F-4
<PAGE>   30









                     CENCOM CABLE INCOME PARTNERS II, L.P.


                   STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)

              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995




<TABLE>
<CAPTION>
                                                                                                Note
                                                                                             Receivable
                                                                                                From
                                                              General          Limited        General
                                                              Partner          Partners       Partner             Total
                                                             ------------  ----------------  ------------  ----------------
<S>                                                          <C>             <C>               <C>            <C>
BALANCE, December 31, 1994                                   $(2,790,976)     $(14,838,148)    $ (459,167)   $ (18,088,291)

 Net loss                                                        (22,926)       (2,269,637)             -       (2,292,563)
                                                             -----------      ------------     ----------    -------------
BALANCE, December 31, 1995                                    (2,813,902)      (17,107,785)      (459,167)     (20,380,854)

 Net loss                                                        (14,472)       (1,432,681)             -       (1,447,153)
                                                             -----------      ------------     ----------    -------------
BALANCE, December 31, 1996                                    (2,828,374)      (18,540,466)      (459,167)     (21,828,007)

 Net income                                                    2,828,374         41,720,576             -       44,548,950

 Distributions                                                         -       (28,547,310)             -      (28,547,310)
                                                             -----------      ------------     ----------     ------------
BALANCE, December 31, 1997                                   $         -      $ (5,376,200)    $ (459,167)    $ (5,826,367)
                                                             ===========      ============     ==========     ============
</TABLE>

        The accompanying notes are an integral part of these statements.





                                     F-5
<PAGE>   31

                     CENCOM CABLE INCOME PARTNERS II, L.P.


                            STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



<TABLE>
<CAPTION>
                                                                                         1997            1996            1995
                                                                             ----------------  --------------  --------------
<S>                                                                          <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                               $44,548,950    $ (1,447,153)    $(2,292,563)
  Adjustments to reconcile net income (loss) to net cash
   provided by operating activities-
  Depreciation and amortization                                                     2,278,705       6,235,182       6,204,807
  Amortization of debt issuance costs                                                 380,411               -               -
  Equity in income of unconsolidated limited partnership                           (8,133,748)              -               -
  Gain on sale of cable television systems                                        (36,230,293)              -               -
  Changes in assets and liabilities-
   Accounts receivable, net                                                          (207,812)        (31,740)         35,000
   Prepaid expenses and other                                                         (29,421)         71,218          14,236
   Accounts payable and accrued expenses                                            1,428,145         236,758         131,161
   Payables to General Partner and affiliates                                       1,608,941         800,961         876,180
   Subscriber deposits                                                                 (1,225)         (2,215)           (350)
   Deferred revenue                                                                    (2,761)         (3,101)         27,904
                                                                             ----------------  --------------  --------------
    Net cash provided by operating activities                                       5,639,892       5,859,910       4,996,375
                                                                             ----------------  --------------  --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property, plant and equipment                                      (1,239,907)     (2,108,233)     (3,000,860)
   Proceeds from sale of cable television systems, net of cash
     sold                                                                          51,477,222               -               -
   Distribution from investment in unconsolidated limited
     partnership                                                                    5,500,000               -               -
   Restricted funds held in escrow                                                   (750,000)              -               -
                                                                             ----------------  --------------  --------------
     Net cash provided by (used in) investing activities                           54,987,315      (2,108,233)     (3,000,860)
                                                                             ----------------  --------------  --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Cash distributions to Limited Partners                                           (26,330,542)              -               -
 Income taxes withheld related to distribution                                     (2,216,768)              -               -
 Borrowings under revolving line of credit                                          6,125,000         200,000               -
 Payments of revolving line of credit                                             (38,225,000)     (3,900,000)     (4,300,000)
 Payments of debt issuance costs                                                     (291,078)       (456,250)              -
                                                                             ----------------  --------------  --------------
Net cash used in financing activities                                             (60,938,388)     (4,156,250)     (4,300,000)
                                                                             ----------------  --------------  --------------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                            (311,181)       (404,573)     (2,304,485)

CASH AND CASH EQUIVALENTS, beginning of year                                          531,285         935,858       3,240,343
                                                                             ----------------  --------------  --------------
CASH AND CASH EQUIVALENTS, end of year                                               $220,104        $531,285        $935,858
                                                                             ================  ==============  ==============
CASH PAID FOR INTEREST                                                               $932,499      $2,868,914      $3,645,205
                                                                             ================  ==============  ==============
</TABLE>

        The accompanying notes are an integral part of these statements.





                                     F-6
<PAGE>   32



                     CENCOM CABLE INCOME PARTNERS II, L.P.


                         NOTES TO FINANCIAL STATEMENTS

                        DECEMBER 31, 1997, 1996 AND 1995


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

Cencom Cable Income Partners II, L.P. (the "Partnership"), was formed on August
13, 1987, for the purpose of acquiring and operating existing cable television
systems.  CC II Holdings, Inc. (CC II Holdings) acquired the common stock of
Cencom Properties II, Inc. (Cencom Properties II or the "General Partner") from
Cencom Cable Associates, Inc. (presently doing business as Cencom Cable
Entertainment, Inc. and referred to as "Cencom Cable Associates" herein) in
September 1994.  CC II Holdings is a wholly owned subsidiary of Charter
Communications, Inc. (Charter).  The Partnership was to be dissolved no later
than December 31, 1995, as provided in the partnership agreement (the
"Partnership Agreement").  As of December 31, 1996, the Partnership is in the
process of a complete and orderly dissolution of the Partnership (see Note 2).

As of December 31, 1997, the Partnership provided cable television service to
approximately 18 franchises serving approximately 13,400 basic subscribers in
northeast Missouri and Texas.

Cash Equivalents

Cash equivalents consist primarily of repurchase agreements with original
maturities of 90 days or less.  These investments are carried at cost, which
approximates market value.

Revenue Recognition

Cable service revenues are recognized in the period when the related services
are provided.

Installation revenues are recognized to the extent of direct selling costs
incurred.  The remainder, if any, is deferred and amortized to income over the
average estimated period that customers are expected to remain connected to the
cable television system.

Fees collected from programmers to guarantee carriage are deferred and
amortized to income over the life of the contracts.  Franchise fees collected
from cable subscribers and paid to local franchises are reported as revenues.

Depreciation and Amortization

The Partnership provides depreciation using the composite method of
depreciation on a straight-line basis over the estimated useful lives of the
related property, plant and equipment as follows:


                   Trunk and distribution systems    10 years
                   Subscriber installations          10 years
                   Buildings and headends          9-20 years
                   Converters                       3-5 years
                   Vehicles and equipment           4-8 years
                   Office equipment                5-10 years




                                     F-7


<PAGE>   33



Franchise costs are being amortized using the straight-line method over the
term of the individual franchise agreements.  Debt issuance costs are being
amortized over the term of the debt.

During 1995, the Partnership adopted Statement of Financial Accounting
Standards (SFAS) No. 121 entitled, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." In accordance with SFAS
No. 121, the Partnership periodically reviews the carrying value of its
long-lived assets, identifiable intangibles and franchise costs in relation to
historical financial results, current business conditions and trends (including
the impact of existing legislation and regulation) to identify potential
situations in which the carrying value of such assets may not be recoverable.
If a review indicates that the carrying value of such assets may not be
recoverable, the carrying value of such assets in excess of their fair value
would be recorded as a reduction of the assets' cost as if a permanent
impairment has occurred.  No impairments have occurred and no adjustments to
the financial statements of the Partnership have been recorded related to SFAS
No. 121.

Investment in Unconsolidated Limited Partnership

The Partnership owns Limited Partnership units of Cencom Partners, L.P. (CPLP)
which provide the Partnership an 84.03% ownership interest in CPLP.  The
Partnership accounts for its investment in CPLP using the equity method (see
Note 4).

Liquidation Costs

Certain liquidation costs which are not directly attributed to the Partnership
(i.e., accounting, legal, etc.) have been allocated between the Partnership and
CPLP based upon the number of total basic subscribers prior to the sale of any
systems.

Income Taxes

Income taxes are the responsibility of the partners and as such are not
provided for in the accompanying financial statements.

Net Income (Loss) Per Limited Partnership Unit

The net income (loss) per Limited Partnership unit has been calculated based on
90,915 weighted average Limited Partnership units outstanding each year.

Use of Estimates

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

2. LIQUIDATION, DISTRIBUTIONS AND ALLOCATIONS:

Distributions and Allocations

Profits and losses are generally allocated in proportion to the partners'
capital contributions.  The Partnership is required to distribute all cash
available for distribution.  Distributions are made within 60 days after the
end of each calendar quarter.  The Limited Partners receive 100% of all cash
available for distribution until they receive a cumulative 11% per annum
preference return on their adjusted capital contributions.  After the Limited
Partners have received the 11% preferred return, the General Partner will




                                     F-8
<PAGE>   34



receive 11% per annum on its capital contribution.  Thereafter, the Limited
Partners will receive 99% and the General Partner will receive 1% of all
additional cash available for distribution.  During the fourth quarter of 1993,
the Partnership suspended distributions to Limited Partners to meet its debt
covenants and allow for necessary capital expenditures.  No distributions were
made in 1996 and 1995.

Liquidation of the Partnership and CPLP

The General Partner distributed a disclosure statement to the Limited Partners
on March 6, 1997, which described various transactions and requested consent
for certain proposed sales of cable television systems by the Partnership and
CPLP to affiliates of the General Partner.  CPLP is seeking to dispose of its
assets to facilitate the liquidation of the Partnership.  A majority of the
Limited Partners gave their consent for the sale of certain cable television
systems to affiliates of the General Partner.  Following receipt of the Limited
Partners' consent, the Partnership and CPLP consummated the transactions with
the affiliates of the General Partner, in accordance with the disclosure
statement.

On March 31, 1997, the Partnership consummated the sale of certain of the cable
television systems located in Texas in two separate asset sale transactions
with unaffiliated third parties.  The sales price was approximately $15.3
million, after initial closing adjustments, for the sale of approximately
10,400 basic subscribers, in the aggregate.  Pursuant to the asset sale
transactions with the unaffiliated third parties, the aggregate amount of
$750,000 was deposited into indemnification escrow accounts.  These funds will
be released to the Partnership upon mutual satisfaction of the seller's
representation and warranties related to the assets that were sold.

On April 7, 1997, the Partnership consummated the sale of certain cable
television systems serving Anderson County, South Carolina, to an affiliate of
Charter for approximately $36.7 million.

Proceeds from the sales of the Texas systems on March 31, 1997, and the South
Carolina systems on April 7, 1997, were used to reduce to zero the balance of
outstanding indebtedness, with the remaining funds of approximately $14.0
million placed in short-term investments.

Proceeds from the sale of certain cable television systems owned by CPLP on
April 7, 1997, to affiliates of the General Partner enabled CPLP to reduce the
balance of its outstanding indebtedness to zero and retire its special limited
partnership interests, with the remaining funds of approximately $6.6 million
placed in short-term investments.  During May 1997, CPLP distributed $5.5
million to the Partnership.

The Partnership utilized its short-term investments, the distribution received
from CPLP and funds available under its new credit facility (see Note 6) for
the purpose of making a distribution to the Limited Partners.  During June
1997, the Partnership made a total distribution to the Limited Partners of $314
per unit, less $2.2 million withheld for state income taxes for a total net
cash distribution of approximately $26.3 million.  No distribution was made by
the Partnership to the General Partner.

Bids submitted to date with respect to the Northeast Missouri systems and the
remainder of the Texas systems were considered too low relative to the
appraised fair market values of such systems established pursuant to the
appraisal process.  Thus, these bids have not been accepted by the General
Partners.  The General Partner continues to seek potential purchasers for these
remaining systems.  The bids submitted for CPLP's Texas Systems were also below
the appraised fair market value and have not been accepted.  CCIP II and CPLP
intend to continue to operate their remaining systems until acceptable bids are
received.

Following CPLP's sales of its remaining systems, it will use the available sale
proceeds to pay outstanding indebtedness and expenses (including the payment of
accrued and unpaid management fees to its General Partner and repayment of its
senior bank credit facility), with any remaining proceeds to be distributed in
accordance with the terms of CPLP's partnership agreement, which will include
distributions to the Partnership in its capacity as a Limited Partner of CPLP.





                                     F-9
<PAGE>   35



Upon dissolution, the General Partner or other liquidating agent is required to
liquidate partnership assets and to distribute all available proceeds as soon
as practicable after their receipt by the Partnership.  After payment of the
Partnership's liabilities, these sales proceeds will be distributed as set
forth in the Partnership Agreement.

Upon finalization of a complete plan of liquidation and the determination of
net proceeds (in accordance with that prescribed in the Partnership Agreement)
from sales of all assets, the Partnership will change its basis of accounting
from the going-concern basis to the liquidation basis.  Under the liquidation
basis of accounting, assets are recorded at their realizable values and
liabilities are recorded at their estimated settlement amounts.

3. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment is stated at cost and consists of the following
at December 31:


<TABLE>
<CAPTION>
                                        1997              1996
                                 ----------------  ----------------
<S>                              <C>               <C>
Trunk and distribution systems         $6,434,524       $33,744,552
Subscriber installations                2,520,807         9,407,182
Land, buildings and headends            2,068,982         5,559,636
Converters                              1,349,536         3,902,610
Vehicles and equipment                    797,913         2,000,543
Office equipment                          366,338           783,785
                                 ----------------  ----------------
                                       13,538,100        55,398,308

Less-  Accumulated depreciation       (10,534,575)      (36,459,500)
                                 ----------------  ----------------
                                       $3,003,525       $18,938,808
                                 ================  ================
</TABLE>

4. INVESTMENT IN UNCONSOLIDATED LIMITED PARTNERSHIP:

The Partnership has invested approximately $25.0 million in CPLP.  CPLP
utilized these funds to purchase cable television systems in North Carolina,
South Carolina and Texas.  The Partnership's equity contribution consisted of
the balance of funds which had previously been restricted for investment in
cable television systems, plus approximately $18.1 million of allowable
borrowings as specified by the Partnership Agreement.  The Partnership is
allocated 84.03% (based on ownership interest) of CPLP's net income or losses
and accounts for its investment in CPLP under the equity method.  Losses in
excess of its investment in CPLP are not recorded.  For the year ended December
31, 1997, the Partnership recorded income from its investment in CPLP totaling
approximately $8.1 million net of previously unrecorded losses of approximately
$15.8 million.  Also, during May 1997, the Partnership received a cash
distribution from CPLP in the amount of $5.5 million.




                                     F-10
<PAGE>   36



Summary financial information of CPLP as of December 31, 1997 and 1996, and for
each of the three years in the period ended December 31, 1997, which is not
consolidated with the operating results of the Partnership, is as follows:


<TABLE>
<CAPTION>
                                                                                          1997              1996
                                                                                --------------  ----------------
<S>                                                                             <C>             <C>
Current assets                                                                      $1,166,130        $1,058,448
Noncurrent assets - primarily investment in cable television
  properties                                                                         2,448,493        22,972,191
                                                                                --------------  ----------------
               Total assets                                                         $3,614,623       $24,030,639
                                                                                ==============  ================
Current liabilities, including current maturities of long-term debt
  of $-0- and $34,957,500, respectively                                               $442,052       $39,727,149
Deferred revenue                                                                        38,279           174,791
Partners' capital (deficit)                                                          3,134,292       (15,871,301)
                                                                                --------------  ----------------
               Total liabilities and partners' capital (deficit)                    $3,614,623       $24,030,639
                                                                                ==============  ================


                                                                      1997                1996              1995
                                                         -----------------      --------------  ----------------
Service revenues                                         $       5,708,441      $   13,748,224  $     12,855,563
                                                         =================      ==============  ================
Loss from operations                                     $        (144,178)     $   (1,776,152) $     (3,020,280)
                                                         =================      ==============  ================
Gain on sale of cable television systems                       $32,614,346      $            -  $              -
                                                         =================      ==============  ================
Net income (loss)                                              $31,598,553      $   (4,756,897) $     (5,835,749)
                                                         =================      ==============  ================
</TABLE>

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following at December 31:


<TABLE>
<CAPTION>
                                                                                       1997                     1996
                                                                                 --------------            --------------
                 <S>                                                             <C>                       <C>
                 Debt issuance costs                                             $            -            $      350,000
                 Capital expenditures                                                    17,634                   128,786
                 Accrued liquidation costs                                               25,264                   162,000
                 Accrued salaries and related benefits                                   52,011                   158,372
                 Professional fees                                                       63,457                   257,636
                 Property taxes                                                          68,489                   358,786
                 Franchise fees                                                         123,226                   368,602
                 Programming expenses                                                   176,609                   369,137
                 Accrued withholdings tax                                             2,216,768                         -
                 Other                                                                  340,899                   244,355
                                                                                 --------------            --------------
                                                                                 $    3,084,357            $    2,397,674
                                                                                 ==============            ==============
</TABLE>




                                     F-11
<PAGE>   37

6. LONG-TERM DEBT:

Prior to May 23, 1997, the Partnership maintained a secured revolving line of
credit agreement (the "Old Credit Agreement") with a consortium of banks for
borrowings up to $65,000,000.  On December 31, 1996, the Partnership and the
banks amended the Old Credit Agreement to extend the maturity date to June 30,
1997.  The Partnership paid $350,000 in amendment fees in connection with this
amendment which were recorded as debt issuance costs.  Loans under the Old
Credit Agreement bore interest, with the base rate being at the partnership's
election, at the Toronto Dominion's (the agent bank) prime rate of interest,
Eurodollar or certificates of deposit rate, plus a certain spread.  The
applicable spreads were based on the ratio of debt to annualized operating cash
flow.  At December 31, 1996, the interest rates ranged from 6.81% to 8.50%.
The weighted average interest rates and borrowings for the period from January
1, 1997, to May 23, 1997, and for the years ended December 31, 1996 and 1995
were 7.14%, 7.29% and 7.99%, and approximately $24,108,000, $38,889,000 and
$43,163,000, respectively.  Borrowings under the Old Credit Agreement were
subject to certain financial and nonfinancial covenants and restrictions, the
most restrictive of which required the maintenance of a ratio of debt to
annualized operating cash flow, as defined, not to exceed 4.5 to 1 at December
31, 1996.  Borrowings under the Old Credit Agreement were collateralized by the
assets of the Partnership.  A quarterly commitment fee of 0.375% per annum was
payable on the unused portion of the Old Credit Agreement.  As this debt
instrument bore interest at current market rates, its carrying amount
approximated fair market value at December 31, 1996.

On May 23, 1997, the Partnership terminated its existing secured revolving line
of credit agreement and entered into a new credit agreement (the "Credit
Agreement") with a bank for borrowings up to $8,500,000.  The Credit Agreement
also provides for borrowings up to $7,500,000 by CPLP, with each partnership
held jointly and severally liable in the event of default.  At December 31,
1997, CCIP II had $4,600,000 of indebtedness outstanding under the Credit
Agreement and CPLP had $-0- of indebtedness outstanding under the Credit
Agreement.  The debt bears interest at rates, at the Partnership's option,
based on the higher of the prime rate of the Canadian Imperial Bank of Commerce
(the agent bank) or the Federal Funds Rate plus .5%, or the LIBOR plus
applicable margins based upon the Partnership's leverage ratio at the time of
the borrowings.  At December 31, 1997, the interest rate on this outstanding
indebtedness was 7.72%.  The weighted average interest rate and borrowings by
CCIP II for the period from May 23, 1997, to December 31, 1997, related to the
Credit Agreement were 8.89% and approximately $4,509,000, respectively.  As
this debt instrument bears interest at current market rates, its carrying
amount approximates fair market value at December 31, 1997.

Borrowings under the Credit Agreement are subject to certain financial and
nonfinancial covenants and restrictions, the most restrictive requires the
maintenance of a ratio of total debt to annualized operating cash flow of 4.0
to 1.0 at December 31, 1997.  A quarterly commitment fee of 0.375% per annum is
payable on the unused portion of the Credit Agreement.  Commencing March 31,
1999, and at the end of each calendar quarter thereafter, the borrowing
capacity shall be reduced by $800,000.  Quarterly reductions will continue
until March 31, 2002, at which time the borrowing capacity shall be reduced by
$1,600,000, quarterly until December 31, 2002.

7. RELATED-PARTY TRANSACTIONS:

During 1994, Cencom Cable Associates assigned management services under
contract with the Partnership to the General Partner.  The management service
contract provides for the payment of fees equal to 5% of the Partnership's
annual gross operating revenue.  Expenses recorded under this contract by the
Partnership during 1997, 1996 and 1995 were $462,049, $905,071 and $852,319,
respectively.  Up to 50% of the management fee payment is subordinated to
certain quarterly distributions to the Limited Partners.  Since assumption of
the responsibilities under the contract, the General Partner has elected to
defer payment of all such management fees.  Management fees of $4,076,307 and
$3,614,258 have been deferred and are included in Payables to General Partner
and Affiliates at December 31, 1997 and 1996, respectively.  In addition to the
management fees, the Partnership reimburses the General Partner for expenses
incurred on behalf of the Partnership for performance of services under the
contract.






                                     F-12
<PAGE>   38

Payables to General Partner and Affiliates at December 31, 1997, include a
$1,050,000 noninterest bearing payable to CPLP.

The Partnership has a noninterest-bearing promissory note receivable due on
demand from the General Partner which represents one-half of its required
capital contribution.

The Partnership and all entities affiliated with Charter collectively utilize a
combination of insurance coverage and self-insurance programs for medical,
dental and workers' compensation claims.  The Partnership is allocated charges
monthly based upon its total number of employees, historical claims and medical
cost trend rates.  Management considers this allocation to be reasonable for
the operations of the Partnership.  During 1997, 1996 and 1995, the Partnership
expensed approximately $89,300, $150,700 and $143,300, respectively, relating
to insurance allocations.

Affiliated entities maintain several regional offices.  The regional offices
perform certain operational services on behalf of the Partnership and other
affiliated entities.  The cost of these services is allocated to the
Partnership based on its number of subscribers.  Management considers this
allocation to be reasonable for the operations of the Partnership.  During
1997, 1996 and 1995, the Partnership expensed approximately $112,000, $189,000
and $175,000, respectively, relating to this allocation.

8. COMMITMENTS AND CONTINGENCIES:

Leases

The Partnership leases certain facilities and equipment under noncancelable
operating leases.  Rent expense incurred under these leases during 1997, 1996
and 1995 was approximately $67,000, $99,200 and $96,000, respectively.

Future minimum lease payments are as follows:


       1998        $40,400
       1999         39,900
       2000         37,800
       2001         36,700
       2002         31,200
       Thereafter   56,100

The Partnership rents utility poles in its operations.  Generally, pole rental
agreements are short term, but the Partnership anticipates that such rentals
will continue to recur.  Rent expense for pole attachments during 1997, 1996
and 1995 was approximately $151,000, $317,000 and $227,000, respectively.

Litigation

On April 15, 1997, a petition was filed, and two amended petitions were
subsequently filed in the Circuit Court of Jackson County, Missouri, by
plaintiffs who are limited partners of the Partnership against Cencom
Properties II, Cencom Partners, Inc. (Cencom Partners), the general partner of
CPLP, the brokerage firms involved in the original sale of the limited
partnership units and Cencom Cable Entertainment, Inc. (Cencom Cable).  Cencom
Cable provided management services to both the Partnership and CPLP and also
owned all of the stock of the general partners of each of these partnerships
prior to mid-1994.  The plaintiffs originally alleged that the defendants
breached fiduciary duties, committed fraud and made various misrepresentations
in the marketing and sale of CCIP II limited partnership units and in the
management of CCIP II.  By an agreement between the parties, the brokerage
defendants and the fraud allegations in the sale of the units were dismissed
without prejudice.  The plaintiffs seek recovery of the consideration paid for
their partnership units, restitution of all profits received by the defendants
in connection with the management of the Partnership and punitive damages.





                                     F-13
<PAGE>   39


On June 10, 1997, a purported class action was filed in Delaware Chancery Court
under the name Wallace, Matthews, Lerner and Roberts v. Wood et al, Case No.
15731, on behalf of the limited partners of the Partnership against Cencom
Properties II, Cencom Cable, Charter, parent of Cencom Partners and Cencom
Properties II, certain other affiliates of Charter, certain individuals,
including officers of Charter or Cencom Properties II and certain other
unaffiliated parties.  The plaintiffs allege that the defendants breached
fiduciary duties and the terms of the Partnership Agreement in connection with
the investment in CPLP, the management of the Partnership's assets and the sale
of certain partnership assets.  In November 1997, the plaintiffs amended their
complaint to restate their allegations as a shareholder's derivative claim.  As
of December 31, 1997, the damages claimed by the plaintiffs are unspecified.

The Partnership has not been named as a defendant in the above actions.

The Partnership is a party to lawsuits which are generally incidental to its
business.  In the opinion of management, after consulting with legal counsel,
the outcome of these lawsuits will not have a material adverse effect on the
Partnership's financial position or results of operations.

9. RATE REGULATION IN THE CABLE TELEVISION INDUSTRY:

The cable television industry is subject to extensive regulation at the
federal, local and, in some instances, state levels.  In addition, recent
legislative and regulatory changes and additional regulatory proposals under
consideration may materially affect the cable television industry.

Congress enacted the Cable Television Consumer Protection and Competition Act
of 1992 (the "1992 Cable Act"), which became effective on December 4, 1992.
The 1992 Cable Act generally allows for a greater degree of regulation of the
cable television industry.  Under the 1992 Cable Act's definition of effective
competition, nearly all cable systems in the United States are subject to rate
regulation of basic cable services, provided that the local franchising
authority becomes certified to regulate basic service units.  The 1992 Cable
Act and the Federal Communications Commission's (FCC) rules implementing the
1992 Cable Act have generally increased the administrative and operational
expenses of cable television systems and have resulted in additional regulatory
oversight by the FCC and local franchise authorities.

While management believes that the Partnership has complied in all material
respects with the rate provisions of the 1992 Cable Act, in jurisdictions that
have not yet chosen to certify, refunds covering a one-year period on basic
services may be ordered upon future certification if the Partnership is unable
to justify its rates through a benchmark or cost-of-service filing or small
system cost-of-service filing pursuant to FCC rules.  Management is unable to
estimate at this time the amount of refunds, if any, that may be payable by the
Partnership in the event certain of its rates are successfully challenged by
franchising authorities or found to be unreasonable by the FCC.  Management
does not believe that the amount of any such refunds would have a material
adverse effect on the financial position or results of operations of the
Partnership.

The 1992 Cable Act modified the franchise renewal process to make it easier for
a franchising authority to deny renewal.  Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement.  Although management
believes that the Partnership has generally met the terms of its franchise
agreements and has provided quality levels of service and anticipates the
Partnership's future franchise renewal prospects generally will be favorable,
there can be no assurance that any such franchises will be renewed or, if
renewed, that the franchising authority will not impose more onerous
requirements on the Partnership than previously existed.

During 1996, Congress passed and the President signed into law the
Telecommunications Act of 1996 (the "Telecommunications Act") which alters
federal, state, and local laws and regulations pertaining to cable television,
telecommunications, and other services.  Under the Telecommunications Act,
telephone companies can compete directly with cable operators in the provision
of video programming.




                                     F-14
<PAGE>   40



Certain provisions of the Telecommunications Act could materially affect the
growth and operation of the cable television industry and the cable services
provided by the Partnership.  Although the new legislation may substantially
lessen regulatory burdens, the cable television industry may be subject to
additional competition as a result thereof.  There are numerous rule-makings to
be undertaken by the FCC which will interpret and implement the
Telecommunications Act's provisions.  In addition, certain provisions of the
Telecommunications Act (such as the deregulation of cable programming rates)
are not immediately effective.  Further, certain of the Telecommunications
Act's provisions have been and are likely to be subject to judicial challenges.
Management is unable at this time to predict the outcome of such rule-makings
or litigation or the substantive effect of the new legislation and the
rule-makings on the financial position or results of operations of the
Partnership.

10. 401(k) PLAN:

The Partnership's employees may participate in the Charter Communications, Inc.
401(k) Plan (the "Plan").  All employees who have attained age 21 and completed
two months of employment are eligible to participate in the Plan.  The Plan is
a tax-qualified retirement savings plan to which employees may elect to make
pretax contributions up to the lesser of 10% of their compensation or dollar
thresholds established under the Internal Revenue Code.  The Partnership
contributes an amount equal to 50% of the first 5% contributed by each
employee.  During 1997, 1996 and 1995,  the Partnership contributed
approximately $13,100, $26,200 and $26,500, respectively.

11. NET INCOME (LOSS) FOR INCOME TAX PURPOSES:

The following reconciliation summarizes the differences between the
Partnership's net in income (loss) for financial reporting purposes and net
income (loss) for federal income tax purposes for the years ended December 31:


<TABLE>
<CAPTION>
                                                             1997             1996             1995
                                                        ----------------  ---------------  ---------------
<S>                                                     <C>               <C>              <C>
Net income (loss) for financial
  reporting purposes                                        $44,548,950     $(1,447,153)     $(2,292,563)
Depreciation differences between
  financial reporting and tax reporting                         754,902       1,728,352          751,650
Equity in income (loss) of unconsolidated
  Limited Partnership differences between
  financial reporting and tax reporting                      14,365,012      (2,853,381)      (3,417,920)
Differences in expenses recorded for financial                 (493,029)        224,167         (364,558)
  reporting and for tax reporting
Differences in revenue reported for financial
  reporting and tax reporting                                    (6,267)         (3,100)          27,904

Difference in gain on sale of cable
  television systems recorded for
  financial reporting and tax reporting                       5,933,357               -                -
Other                                                             2,392           4,144           45,361
                                                       ----------------  --------------   --------------
Net income (loss) for federal income
  tax purposes                                              $65,105,317     $(2,346,971)     $(5,250,126)
                                                       ================  ==============   ==============
Net income (loss) per Limited Partnership
  unit for federal income tax purposes                          $695.44         $(25.82)         $(57.17)
                                                       ================  ==============   ==============
</TABLE>



                                     F-15
<PAGE>   41


The following summarizes the Partnership's financial reporting basis of net
assets (in excess of) less than its income tax reporting basis as of December
31:


<TABLE>
<CAPTION>
                                                       1997              1996
                                                  --------------  ----------------
<S>                                               <C>             <C>
Accounts receivable                                      $17,990           $34,763
Accrued expenses                                         401,613           877,869
Franchises and other assets                            4,107,755                 -
Deferred revenue                                          18,536            24,803
Investment in unconsolidated Limited Partnership       2,647,162                 -
                                                  --------------  ----------------
                                                      $7,193,056          $937,435
                                                  ==============  ================
Property, plant and equipment                        $(1,056,336)     $(12,250,944)
Investment in unconsolidated Limited Partnership               -        (3,178,842)
                                                  --------------  ----------------
                                                     $(1,056,336)     $(15,429,786)
                                                  ==============  ================
</TABLE>




                                     F-16
<PAGE>   42

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To Cencom Partners, L.P.:


We have audited the accompanying balance sheets of Cencom Partners, L.P. (a
Delaware limited partnership) as of December 31, 1997 and 1996, and the related
statements of operations, partners' capital (deficit) and cash flows for each
of the three years in the period ended December 31, 1997.  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 generally accepted auditing
standards.  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 discussed in Note 2, Cencom Cable Income Partners II, L.P., an affiliate who
owns 84.03% of the Limited Partner units of Cencom Partners, L.P., is in the
process of dissolving its partnership.  In connection with this process, the
assets of Cencom Partners, L.P. will be liquidated, in accordance with the
provisions of the Partnership Agreement.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cencom Partners, L.P. as of
December 31, 1997 and 1996, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1997, in
conformity with generally accepted accounting principles.



/s/ Arthur Andersen LLP



St. Louis, Missouri,
   February 6, 1998




                                     F-17
<PAGE>   43


                             CENCOM PARTNERS, L.P.


                  BALANCE SHEETS - DECEMBER 31, 1997 AND 1996



<TABLE>
<CAPTION>
                                                                            1997              1996
                                                                 ---------------  ----------------
<S>                                                              <C>              <C>
                                              ASSETS
                                              ------
CURRENT ASSETS:
Cash and cash equivalents                                             $   82,589       $   543,299
Accounts receivable, net of allowance for doubtful accounts of
  $5,166 and $25,788, respectively                                        28,747           172,642
Receivable from affiliate                                              1,050,000                 -
Insurance receivables                                                          -           313,290
Prepaid expenses and other                                                 4,794            29,217
                                                                 ---------------  ----------------
     Total current assets                                              1,166,130         1,058,448
                                                                 ---------------  ----------------
PROPERTY, PLANT AND EQUIPMENT, net                                     1,812,830        16,895,746
FRANCHISE COSTS, net of accumulated amortization of $3,879,748
  and $21,960,618, respectively                                          635,663         5,148,026
SUBSCRIBER LISTS, net of accumulated amortization of
  $4,856,621 and $9,472,652, respectively                                      -           728,619
DEBT ISSUANCE COSTS, net of accumulated amortization of $-0-
  and $-0-, respectively                                                       -           199,800
                                                                 ---------------  ----------------
                                                                      $3,614,623       $24,030,639
                                                                 ===============  ================
                           LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
                           -------------------------------------------
CURRENT LIABILITIES:
  Current maturities of long-term debt                                $        -       $34,957,500
  Accounts payable and accrued expenses                                  383,667         1,358,434
  Payables to General Partner and affiliates                              58,385         3,358,684
  Subscriber deposits                                                          -            52,531
                                                                 ---------------  ----------------
     Total current liabilities                                           442,052        39,727,149
                                                                 ---------------  ----------------
DEFERRED REVENUE                                                          38,279           174,791
                                                                 ---------------  ----------------
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL (DEFICIT):
  General Partner                                                         47,580          (268,880)
  Limited Partners (293 units authorized, issued and outstanding)      3,086,712       (17,602,421)
  Special Limited Partner (0 and 20 units authorized, issued and
    outstanding, respectively)                                                 -         2,000,000
                                                                 ---------------  ----------------
Total Partners' capital (deficit)                                      3,134,292       (15,871,301)
                                                                 ---------------  ----------------
                                                                      $3,614,623       $24,030,639
                                                                 ===============  ================
</TABLE>

      The accompanying notes are an integral part of these balance sheets.







                                    F-18
<PAGE>   44






                             CENCOM PARTNERS, L.P.


                            STATEMENTS OF OPERATIONS

              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



<TABLE>
<CAPTION>
                                                      1997              1996              1995
                                                ----------------  ----------------  ----------------
<S>                                             <C>               <C>               <C>
SERVICE REVENUES:
Basic service                                         $4,307,785       $10,176,306        $9,418,509
Premium service                                          682,207         1,792,082         1,828,882
Other                                                    718,449         1,779,836         1,608,172
                                                ----------------  ----------------  ----------------
                                                       5,708,441        13,748,224        12,855,563
                                                ----------------  ----------------  ----------------
OPERATING EXPENSES:
Operating costs                                        2,371,549         5,841,053         5,394,026
General and administrative                               573,819         1,187,267         1,141,985
Liquidation costs                                        198,418           243,154           115,910
Depreciation and amortization                          2,423,543         7,565,531         8,581,137
Management fees - related party                          285,290           687,371           642,785
                                                ----------------  ----------------  ----------------
                                                       5,852,619        15,524,376        15,875,843
                                                ----------------  ----------------  ----------------
Loss from operations                                    (144,178)       (1,776,152)       (3,020,280)
                                                ----------------  ----------------  ----------------
OTHER INCOME (EXPENSE):
Interest income                                           64,043            37,089            29,469
Interest expense                                        (973,769)       (2,634,834)       (2,844,938)
Loss from Hurricane Fran                                       -          (383,000)                -
Gain on sale of cable television systems              32,614,343                 -                 -
Other, net                                                38,114                 -                 -
                                                ----------------  ----------------  ----------------
                                                      31,742,731        (2,980,745)       (2,815,469)
                                                ----------------  ----------------  ----------------
Net income (loss)                                    $31,598,553       $(4,756,897)      $(5,835,749)
                                                ================  ================  ================
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT           $92,613          $(15,990)         $(19,616)
                                                ================  ================  ================
</TABLE>

        The accompanying notes are an integral part of these statements.








                                    F-19
<PAGE>   45



                             CENCOM PARTNERS, L.P.


                   STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)

              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995




<TABLE>
<CAPTION>
                                                                Special
                                General        Limited          Limited
                                Partner        Partners         Partner           Total
                            ------------  ----------------  --------------  ----------------
<S>                         <C>           <C>               <C>             <C>
BALANCE, December 31, 1994    $(108,931)      $(7,169,724)      $2,000,000      $(5,278,655)

Net loss                        (88,120)       (5,747,629)               -       (5,835,749)
                            ------------  ----------------  --------------  ----------------
BALANCE, December 31, 1995     (197,051)      (12,917,353)       2,000,000      (11,114,404)

Net loss                        (71,829)       (4,685,068)               -       (4,756,897)
                            ------------  ----------------  --------------  ----------------
BALANCE, December 31, 1996     (268,880)      (17,602,421)       2,000,000      (15,871,301)

Net income                       415,294        27,135,580       4,047,679        31,598,553

Distributions                   (98,834)       (6,446,447)     (6,047,679)      (12,592,960)
                            ------------  ----------------  --------------  ----------------
BALANCE, December 31, 1997  $     47,580  $      3,086,712  $            -  $      3,134,292
                            ============  ================  ==============  ================
</TABLE>

        The accompanying notes are an integral part of these statements.






                                    F-20
<PAGE>   46



                             CENCOM PARTNERS, L.P.


                            STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



<TABLE>
<CAPTION>
                                                                         1997            1996            1995
                                                                  ----------------  --------------  --------------
<S>                                                               <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                 $     31,598,553  $  (4,756,897)  $  (5,835,749)
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities-
Depreciation and amortization                                            2,423,543       7,565,531       8,581,137
Amortization of debt issuance costs                                        199,800               -               -
Gain on sale of cable television systems                              (32,614,343)               -               -
Changes in assets and liabilities-
Accounts receivable, net                                                 (286,807)        (32,101)          69,822
Insurance receivables                                                      313,290       (313,290)               -
Receivable from affiliate                                              (1,050,000)               -               -
Prepaid expenses and other                                                (21,913)          77,636          15,235
Accounts payable and accrued expenses                                    (244,574)       (277,439)         164,801
Payables to General Partner and affiliates                             (3,300,299)         615,459       1,177,072
Subscriber deposits                                                         38,850        (11,905)         (5,876)
Deferred revenue                                                           (7,765)        (21,849)         196,640
                                                                  ----------------  --------------  --------------
Net cash provided by (used in) operating activities                    (2,951,665)       2,845,145       4,363,082
                                                                  ----------------  --------------  --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment                             (1,972,836)     (2,427,274)     (1,973,566)
Proceeds from sale of cable television systems, net of cash sold        52,014,251              -               -
                                                                  ----------------  --------------  --------------
Net cash provided by (used in) investing activities                     50,041,415     (2,427,274)     (1,973,566)
                                                                  ----------------  --------------  --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners                                        (12,592,960)              -               -
Payments of long-term debt                                            (34,957,500)              -      (2,381,850)
Debt issuance costs                                                             -        (287,104)        (67,562)
                                                                  ----------------  --------------  --------------
Net cash used in financing activities                                 (47,550,460)       (287,104)     (2,449,412)
                                                                  ----------------  --------------  --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                     (460,710)         130,767        (59,896)
CASH AND CASH EQUIVALENTS, beginning of year                               543,299         412,532         472,428
                                                                  ----------------  --------------  --------------
CASH AND CASH EQUIVALENTS, end of year                            $         82,589  $      543,299  $      412,532
                                                                  ================  ==============  ==============
CASH PAID FOR INTEREST                                            $        766,668  $    2,981,421  $    2,653,014
                                                                  ================  ==============  ==============
</TABLE>

        The accompanying notes are an integral part of these statements.





                                    F-21
<PAGE>   47


                             CENCOM PARTNERS, L.P.


                         NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Basis of Presentation

Cencom Partners, L.P. (the "Partnership") was formed on January 30, 1990, for
the purpose of acquiring and operating existing cable television systems.  The
Partnership commenced operations effective March 1990, through the acquisition
of a cable television system in South Carolina.  The Partnership will terminate
no later than June 30, 2001, as provided in the partnership agreement (the
"Partnership Agreement") (see Note 2).  CC III Holdings, Inc. (CC III Holdings)
acquired the common stock of Cencom Properties, Inc. (Cencom Properties or the
"General Partner") from Cencom Cable Associates, Inc. (presently doing business
as Cencom Cable Entertainment, Inc. and referred to as "Cencom Cable
Associates" herein) in September 1994.  The General Partner owns 1.51% of total
partner units.  CC III Holdings is a wholly owned subsidiary of Charter
Communications, Inc. (Charter).  Cencom Cable Income Partners II, L.P. (CCIP
II), an affiliate, owns 84.03% of total partner units with the remaining 14.46%
owned by Charter.

As of December 31, 1997, the Partnership provided cable television service to
approximately five franchises serving approximately 13,400 basic subscribers in
Texas.

Cash Equivalents

Cash equivalents consist primarily of repurchase agreements with original
maturities of 90 days or less.  These investments are carried at cost, which
approximates market value.

Revenue Recognition

Cable service revenues are recognized when the related services are provided.

Installation revenues are recognized to the extent of direct selling costs
incurred.  The remainder, if any, is deferred and amortized to income over the
average estimated period that customers are expected to remain connected to the
cable television system.

Fees allocated from programmers to guarantee carriage are deferred and
amortized to income over the life of the contracts.  Franchise fees collected
from cable subscribers and paid to local franchises are reported as revenues.

Depreciation and Amortization

The Partnership provides depreciation using the composite method on a
straight-line basis over the estimated useful lives of the related property,
plant and equipment as follows:


                   Trunk and distribution systems    10 years
                   Subscriber installations          10 years
                   Buildings and headends          9-20 years
                   Converters                       3-5 years
                   Vehicles and equipment           4-8 years
                   Office equipment                5-10 years




                                    F-22
<PAGE>   48





Franchise costs are being amortized using the straight-line method over the
term of the individual franchise agreements.  Subscriber lists were amortized
using the straight-line method over seven years.  Debt issuance costs were
amortized over the term of the debt.

During 1995, the Partnership adopted Statement of Financial Accounting
Standards (SFAS) No. 121 entitled, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of."  In accordance with SFAS
No. 121, the Partnership periodically reviews the carrying value of its
long-lived assets, identifiable intangibles and franchise costs in relation to
historical financial results, current business conditions and trends (including
the impact of existing legislation and regulation) to identify potential
situations in which the carrying value of such assets may not be recoverable.
If a review indicates that the carrying value of such assets may not be
recoverable, the carrying value of such assets in excess of their fair value
would be recorded as a reduction of the assets' cost as if a permanent
impairment has occurred.  No impairments have occurred and no adjustments to
the financial statements of the Partnership have been recorded related to SFAS
No. 121.

Liquidation Costs

Certain liquidation costs which are not directly attributed to the Partnership
(i.e., accounting, legal, etc.) have been allocated between the Partnership and
CCIP II based upon the number of total basic subscribers prior to the sale of
any systems.

Income Taxes

Income taxes are the responsibility of the partners and as such are not
provided in the accompanying financial statements.

Net Income (Loss) Per Limited Partnership Unit

The net income (loss) per Limited Partnership unit has been calculated based on
293 weighted average Limited Partnership units outstanding in each year.  In
accordance with the Partnership Agreement, no losses have been allocated to the
Special Limited Partner units.

Use of Estimates

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

2. LIQUIDATION, DISTRIBUTIONS AND ALLOCATIONS:

The Partnership is comprised of the General Partner and 293 Limited Partnership
units.  Under terms of the Partnership Agreement, allocation of Partnership
profits is as follows:  (i) to partners with deficit capital balances, until
such deficits are reduced to zero; (ii) to the Special Limited Partner, until
its account has been allocated all unrecovered preference return amounts, as
defined in the Partnership Agreement; and (iii) to the General Partner and
Limited Partners in proportion to their capital contributions.





                                    F-23
<PAGE>   49



Partnership losses are allocated among the General Partner and Limited Partners
in proportion to their capital contributions.  Any distributions made by the
Partnership are to be made as follows:  (i) to all partners to the extent of
any tax liabilities; (ii) to the Special Limited Partner to the extent of any
unpaid preference returns as defined in the Partnership Agreement; and (iii) to
the General Partner and Limited Partners in proportion to their capital
contributions.  The Special Limited Partner's preference return is equal to its
adjusted capital balance, as defined, plus an amount equal to 15% per annum,
compounded quarterly, on such amount through June 30, 1993.  Thereafter, the
preference return shall increase to 18% per annum, compounded quarterly in
accordance with the Partnership Agreement.  During 1997, the Special Limited
Partner units were redeemed at their accreted value.

Liquidation of the Partnership

CCIP II's partnership agreement provides for the dissolution of CCIP II on or
before December 31, 1995.  The general partner of CCIP II is in the process of
a complete and orderly dissolution of CCIP II.

Concurrent with the disposition of CCIP II's assets, including its entire
ownership interest in the Partnership, the Partnership has sought to dispose of
its assets through the sale of its cable television systems to facilitate the
liquidation of CCIP II.  Additionally, the asset sale was being effected to
satisfy the requirements by the Partnership's senior bank lenders that the old
credit facility be repaid.

To dispose of the assets of the Partnership, the General Partner obtained
appraisals as of March 31, 1995, from Daniels & Associates ("Daniels") and
Western Cablesystems, Inc., who jointly reached a valuation of $60,900,000 for
all of the Partnership systems.  Thereafter, Daniels was retained to market the
Partnership systems using an auction process.  As a result of the auction
process, the General Partner executed sale agreements with two affiliated
entities of CCIP II for the Partnership's South Carolina and North Carolina
Systems for an aggregate price of $52,450,000.  The accepted bids represented
approximately 83% of the Partnership's basic subscribers as of December 31,
1996.  The bids submitted for the Partnership's Texas Systems were below the
appraised fair market value and have not been accepted.  The Partnership
intends to continue to operate its Texas Systems until an acceptable bid is
received.

Following the above sales, the Partnership used the available sale proceeds to
pay outstanding indebtedness and expenses (including the payment of accrued and
unpaid management fees, which were $3,087,053 as of the date of the sales, to
the General Partner and repayment of its senior bank credit facility), with the
remaining proceeds distributed in accordance with the terms of the Partnership
Agreement, which included distributions of $7,092,960 to Charter in its
capacity as parent of the General Partner, the Special Limited Partner and a
Limited Partner, and distributions of $5,500,000 to CCIP II in its capacity as
a Limited Partner of the Partnership.

Upon finalization of a plan of liquidation and the determination of sales
price, the Partnership will change its basis of accounting from the
going-concern basis to the liquidation basis.  Under the liquidation basis of
accounting, assets are recorded at their estimated realizable values and
liabilities are recorded at their estimated settlement amounts.


                                    F-24

<PAGE>   50


3. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment is stated at cost and consists of the following
at December 31:


<TABLE>
<CAPTION>
                                       1997            1996
                                 --------------  ----------------
<S>                              <C>             <C>
Trunk and distribution systems       $2,351,018       $21,851,645
Subscriber installations                864,879         7,455,295
Land, buildings and headends          1,158,285         3,704,136
Converters                              288,212         2,748,418
Vehicles and equipment                  227,151           917,817
Office equipment                         92,775           431,770
                                 --------------  ----------------
                                      4,982,320        37,109,081
Less-  Accumulated depreciation      (3,169,490)      (20,213,335)
                                 --------------  ----------------
                                     $1,812,830       $16,895,746
                                 ==============  ================
</TABLE>

4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following at December 31:


<TABLE>
<CAPTION>
                                   1997           1996
                               ------------  --------------
<S>                            <C>           <C>
Property taxes                       $5,559         $69,338
Salaries and related benefits        17,518          76,122
Capital expenditures                 23,034         296,922
Franchise fees                       37,766         260,464
Professional fees                    47,929         174,000
Programming expenses                 99,192         281,477
Other                               152,669         200,111
                               ------------  --------------
                                   $383,667      $1,358,434
                               ============  ==============
</TABLE>

5. LONG-TERM DEBT:

Prior to May 23, 1997, the Partnership maintained a credit agreement (the "Old
Credit Agreement") in the form of a term loan with a consortium of banks.  At
December 31, 1996, $34,957,500 was outstanding related to the Old Credit
Agreement.  There was no additional available borrowings for the Partnership in
excess of the balance outstanding.  Loans under the Old Credit Agreement bore
interest, with the base rate being at the Partnership's election, at the
Toronto Dominion's (the agent bank) prime rate of interest, Eurodollar or
certificates of deposit rate, plus a certain spread.  At December 31, 1996, the
interest rate was 7.31%.  The weighted average interest rate and borrowings for
the period from January 1, 1997, to May 23, 1997, and for the years ended
December 31, 1996 and 1995 were 8.25%, 7.54% and 7.81% and approximately
$23,712,000, $34,957,000 and $36,439,000, respectively.  Borrowings under the
Old Credit Agreement were subject to certain financial and nonfinancial
covenants and restrictions, the most restrictive of which required maintenance
of a ratio of debt to annualized operating cash flow, as defined, not to exceed
5.25 to 1 at December 31, 1996.  At December 31, 1995, the Partnership was not
in compliance with its capital expenditure covenant contained in the Old Credit
Agreement.  Pursuant to an amendment to the Old Credit Agreement, dated March
1996, the Partnership received a waiver for such noncompliance.  In addition,
the



                                    F-25
<PAGE>   51



amendment changed the maturity date for all principal amounts and other
obligations then outstanding to be due and payable on December 31, 1996.
Amendment fees of $87,304 were paid related to this amendment and were expensed
during the year.  On December 31, 1996, the Partnership and the banks amended
the Old Credit Agreement to extend the maturity date to June 30, 1997.
Additional amendment fees of $199,800 were paid in connection with this
amendment and were recorded as debt issuance costs.  During the year ended
December 31, 1996, the Partnership incurred costs totaling $287,104 relating to
the amendment of certain covenants contained in the Old Credit Agreement.
Borrowings under the Old Credit Agreement were collateralized by the assets of
the Partnership.  As this debt instrument bore interest at current market
rates, its carrying amount approximated fair market value at December 31, 1996.

On May 23, 1997, the Partnership terminated its existing Old Credit Agreement
and entered into a new credit agreement (the "Credit Agreement") with a bank
for borrowings up to $7,500,000.  The Credit Agreement also provides for
borrowings up to $8,500,000 by CCIP II, with each partner held jointly and
severally liable in the event of default.  At December 31, 1997, the
Partnership had $-0- of indebtedness outstanding under the Credit Agreement.
The debt bears interest at rates, at the Partnership's option, based on the
higher of the prime rate of the Canadian Imperial Bank of Commerce (the agent
bank) or the Federal Funds Rate plus .5%, or the LIBOR plus applicable margins
based upon the Partnership's leverage ratio at the time of the borrowings.

Borrowings under the Credit Agreement are subject to certain financial and
nonfinancial covenants and restrictions, the most restrictive requires the
maintenance of a ratio of total debt to annualized operating cash flow of 4.0
to 1.0 at December 31, 1997.  A quarterly commitment fee of 0.375% per annum is
payable on the unused portion of the Credit Agreement.  Commencing March 31,
1999, and at the end of each calendar quarter thereafter, the borrowing
capacity shall be reduced by $800,000.  Quarterly reductions will continue
until March 31, 2002, at which time the borrowing capacity shall be reduced by
$1,600,000, quarterly until December 31, 2002.

6. RELATED-PARTY TRANSACTIONS:

During 1994, Cencom Cable Associates assigned management services under
contract with the Partnership to the General Partner.  The management service
provides for the payment of fees equal to 5% of the Partnership's gross
operating revenues.  The Partnership was allowed to defer 60% of all such fees
through December 31, 1995.  Since the assumption of the responsibilities under
the contract, the General Partner deferred payment of all management fees until
the debt outstanding under the Old Credit Agreement was repaid.  At which time,
all deferred management fees were paid.  Currently, the General Partner
continues to defer payment of all management fees.  Expenses recognized by the
Partnership under this contract during 1997, 1996 and 1995 were $285,290,
$687,371 and $642,785, respectively.  Management fees payable of $94,442 and
$2,896,163 are included in Payables to General Partner and Affiliates at
December 31, 1997 and 1996, respectively.  In addition to the management fees,
the Partnership reimburses the General Partner for expenses incurred on behalf
of the Partnership for performance of services under the contract.

As of December 31, 1996, Payables to General Partner and Affiliates included
$500,000 related to a refundable deposit toward the purchase of the South
Carolina Systems by Charter Communications II, L.P. (CC-II), an affiliate of
the Partnership.  The amount was applied to CC-II's purchase of the South
Carolina Systems.

As of December 31, 1997, Receivable from Affiliate is comprised solely of a
noninterest receivable from CCIP II.




                                    F-26
<PAGE>   52



The Partnership and all entities affiliated with Charter collectively utilize a
combination of insurance coverage and self-insurance programs for medical,
dental and workers' compensation claims.  The Partnership is allocated charges
monthly based upon its total number of employees, historical claims and medical
cost trend rates.  During 1997, 1996 and 1995, the Partnership expensed
approximately $59,300, $144,600 and $149,400, respectively, relating to
insurance allocations.

Affiliated entities maintain several regional offices.  The regional offices
perform certain operational services on behalf of the Partnership and other
affiliated entities.  Generally, the costs of these services are allocated to
the Partnership based on the number of subscribers.  During 1997, 1996 and
1995, certain costs which should have been allocated to the Partnership were
borne by Charter on behalf of the Partnership.  Charter is not obligated to
make such payments in the future.  The amount of the costs which were paid by
Charter during 1997, 1996 and 1995 was approximately $22,000, $122,000 and
$125,000, respectively.

7. COMMITMENTS AND CONTINGENCIES:

Leases

The Partnership leases certain facilities and equipment under noncancelable
operating leases.  Rent expense incurred under these leases during 1997, 1996
and 1995 was approximately $21,000, $64,000 and $64,000, respectively.

Future minimum lease payments are as follows:

<TABLE>
<S>                                           <C>
1998                                            $4,000
1999                                             3,800
2000                                             3,800
2001                                             3,800
2002                                             4,000
Thereafter                                      28,900
</TABLE>

The Partnership rents utility poles in its operations.  Generally, pole rental
agreements are short term, but the Partnership anticipates that such rentals
will recur.  Rent expense for pole attachments during 1997, 1996 and 1995 was
approximately $75,000, $220,000 and $153,000, respectively.

Litigation

On April 15, 1997, a petition was filed, and two amended petitions were
subsequently filed in the Circuit Court of Jackson County, Missouri, by
plaintiffs who are limited partners of CCIP II against Cencom Properties II,
Inc. (Cencom Properties II), the general partner of CCIP II, the General
Partner, the brokerage firms involved in the original sale of CCIP II's limited
partnership units and Cencom Cable Entertainment Inc. (Cencom Cable).  Cencom
Cable provided management services to both the Partnership and CCIP II and also
owned all of the stock of the general partners of each of these partnerships
prior to mid-1994.  The plaintiffs originally alleged that the defendants
breached fiduciary duties, committed fraud and made various misrepresentations
in the marketing and sale of CCIP II limited partnership units and in the
management of CCIP II.  By an agreement between the parties, the brokerage
defendants and the fraud allegations in the sale of the units were dismissed
without prejudice.  The plaintiffs seek recovery of the consideration paid for
their partnership units, restitution of all profits received by the defendants
in connection with the management of CCIP II and punitive damages.





                                    F-27
<PAGE>   53



On June 10, 1997, a purported class action was filed in Delaware Chancery Court
under the name Wallace, Matthews, Lerner and Roberts v. Wood et al, Case No.
15731, on behalf of the limited partners of CCIP II against Cencom Properties
II, Cencom Cable, Charter, parent of the General Partner and Cencom Properties
II, certain other affiliates of Charter, certain individuals, including
officers of Charter or Cencom Properties II and certain other unaffiliated
parties.  The plaintiffs allege that the defendants breached fiduciary duties
and the terms of CCIP II's partnership agreement in connection with the
investment in the Partnership, the management of CCIP II's assets and the sale
of certain CCIP II's assets.  In November 1997, the plaintiffs amended their
complaint to restate their allegations as a shareholder's derivative claim.
The damages claimed by the plaintiffs are unspecified.

The Partnership has not been named as a defendant in the above actions.

The Partnership is a party to lawsuits which are generally incidental to its
business.  In the opinion of management, after consulting with legal counsel,
the outcome of these lawsuits will not have a material adverse effect on the
Partnership's financial position or results of operations.

8. RATE REGULATION IN THE CABLE TELEVISION INDUSTRY:

The cable television industry is subject to extensive regulation at the
federal, local and, in some instances, state levels.  In addition, recent
legislative and regulatory changes and additional regulatory proposals under
consideration may materially affect the cable television industry.

Congress enacted the Cable Television Consumer Protection and Competition Act
of 1992 (the "1992 Cable Act"), which became effective on December 4, 1992.
The 1992 Cable Act generally allows for a greater degree of regulation of the
cable television industry.  Under the 1992 Cable Act's definition of effective
competition, nearly all cable systems in the United States are subject to rate
regulation of basic cable services, provided the local franchising authority
becomes certified to regulate basic service rates.  The 1992 Cable Act and the
Federal Communications Commission's (FCC) rules implementing the 1992 Cable Act
have generally increased the administrative and operational expenses of cable
television systems and have resulted in additional regulatory oversight by the
FCC and local franchise authorities.

While management believes that the Partnership has complied in all material
respects with the rate provisions of the 1992 Cable Act, in jurisdictions that
have not yet chosen to certify, refunds covering a one-year period on basic
services may be ordered upon future certification if the Partnership is unable
to justify its rates through a benchmark or cost-of-service filing or small
system cost-of-service filing pursuant to FCC rules. Management is unable to
estimate at this time the amount of refunds, if any, that may be payable by
the Partnership in the event certain of its rates are successfully challenged
by franchising authorities or found to be unreasonable by the FCC. Management
does not believe that the amount of any such refunds would have a material
adverse effect on the financial position or results of operations of the
Partnership.

The 1992 Cable Act modified the franchise renewal process to make it easier for
a franchising authority to deny renewal.  Historically, franchises have been
renewed for cable operators that have provided satisfactory services and have
complied with the terms of the franchise agreement.  Although management
believes that the Partnership has generally met the terms of its franchise
agreements and has provided quality levels of service, and anticipates the
Partnership's future franchise renewal prospects generally will be favorable,
there can be no assurance that any such franchises will be renewed or, if
renewed, that the franchising authorities will not impose more onerous
requirements on the Partnership than previously existed.




                                    F-28
<PAGE>   54



During 1996, Congress passed and the President signed into law the
Telecommunications Act of 1996 (the "Telecommunications Act") which alters
federal, state, and local laws and regulations pertaining to cable television,
telecommunications, and other services.  Under the Telecommunications Act,
telephone companies can compete directly with cable operators in the provision
of video programming.

Certain provisions of the Telecommunications Act could materially affect the
growth and operation of the cable television industry and the cable services
provided by the Partnership.  Although the new legislation may substantially
lessen regulatory burdens, the cable television industry may be subject to
additional competition as a result thereof.  There are numerous rule-makings to
be undertaken by the FCC which will interpret and implement the
Telecommunication Act's provisions.  In addition, certain provisions of the
Telecommunications Act (such as the deregulation of cable programming rates)
are not immediately effective.  Further, certain of the Telecommunications
Act's provisions have been and are likely to be subject to judicial challenges.
Management is unable at this time to predict the outcome of such rule-makings
or litigation or the substantive effect of the new legislation and the
rule-makings on the financial position or results of operations of the
Partnership.

9. 401(k) PLAN:

The Partnership's employees may participate in the Charter Communications, Inc.
401(k) Plan (the "Plan").  All employees who have attained age 21 and completed
two months of employment are eligible to participate in the Plan.  The Plan is
a tax-qualified retirement savings plan to which employees may elect to make
pretax contributions up to the lesser of 10% of their compensation or dollar
thresholds established under the Internal Revenue Code.  The Partnership
contributes an amount equal to 50% of the first 5% contributed by each
employee.  During 1997, 1996 and 1995, the Partnership contributed
approximately $9,300, $20,500 and $22,100, respectively.

10. NET INCOME (LOSS) FOR INCOME TAX PURPOSES:

The following reconciliation summarizes the differences between the
Partnership's net income (loss) for financial reporting purposes and net income
(loss) for federal income tax purposes for the years ended December 31:


<TABLE>
<CAPTION>
                                                         1997            1996            1995
                                                   ----------------  --------------  --------------
<S>                                                <C>               <C>             <C>
Net income (loss) for financial reporting
 purposes                                               $31,598,553    $(4,756,897)     $(5,835,749)
Depreciation differences between financial
 reporting and tax reporting                               (483,060)      (302,210)        (299,122)
Amortization differences between financial
 reporting and tax reporting                                464,431      1,501,067        1,857,724
Difference in gain on sale of cable television
 systems for financial reporting and tax
 reporting                                                 (196,950)              -               -
Differences in expenses recorded for financial
 reporting and tax reporting                               (423,984)        181,261           7,973
Differences in revenue reported financial
 reporting and tax reporting                               (136,513)        (21,849)        196,640
Other                                                           606           2,959           5,034
                                                   ----------------  --------------  --------------
Net income (loss) for federal income tax                $30,823,083    $ (3,395,669)    $(4,067,500)
 purposes                                          ================  ==============  ==============
Net income (loss) per Limited Partnership unit
 for federal income tax purposes                            $90,005    $    (11,414)       $(13,672)
                                                   ================  ==============  ==============
</TABLE>




                                    F-29
<PAGE>   55



The following summarizes the Partnership's financial reporting basis of net
assets (in excess of) less than its income tax reporting basis as of December
31:


<TABLE>
<CAPTION>
                                       1997              1996
                                  --------------  -----------------
<S>                               <C>             <C>
Accounts receivable                       $5,166            $25,788
Franchise costs and other assets       2,275,411         11,938,514
Accrued expenses                         193,695            597,057
Deferred revenue                          38,278            174,791
                                  --------------  -----------------
                                      $2,512,550        $12,736,150
                                  ==============  =================
Property, plant and equipment         $(955,946)      $(10,048,954)
                                  ==============  =================
</TABLE>

11. INSURANCE SETTLEMENT:

In September 1996, Hurricane Fran caused damage to certain of the Partnership's
North Carolina system.  The estimated total damage to the system was
approximately $955,000.  During 1997 and 1996, the Partnership incurred
approximately $214,000 and $855,000 in repairs, respectively.  The Partnership
received insurance proceeds of approximately $536,000 and $150,000 during 1997
and 1996, respectively.  In 1996, the Partnership recorded a $383,000
nonoperating loss for its portion of the insurance deductible.



                                    F-30
<PAGE>   56




                     CENCOM CABLE INCOME PARTNERS II, L.P.

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>

Exhibit
Number                              Description                             Page
-------                             -----------                             ----
<S>      <C>                                                                <C>
 3(a)    Agreement of Limited Partnership, filed as Exhibit 3(b) to the     N/A
         Registrant's Registration Statement on Form S-1 (Registration
         No. 33-17174), incorporated herein by this reference.
 3(b)    Amended and Restated Agreement of Limited Partnership, filed as    N/A
         Exhibit 3(c) to the Registrant's Registration Statement on Form
         S-1 (Registration No. 33-17174), incorporated herein by this
         reference.
 10(a)   Management Agreement between the Registrant and the Management     N/A
         Company filed as Exhibit 10(a) to the Registrant's Registration
         Statement on Form S-1 (Registration No. 33-17174), incorporated
         herein by this reference.
 10(j)   Agreement of Limited Partnership of Cencom Partners, L.P., dated   N/A
         January 30, 1990, by and between the Registrant and Cencom Cable
         Associates, Inc., filed as Exhibit 10(j) to the Registrant's
         Form 10-K for the year ended December 31, 1990, incorporated
         herein by this reference.
 10(r)   Assignment of shares of common stock of the General Partner,       N/A
         dated July 15, 1994, filed as Exhibit 10(r) to the Registrant's
         Form 10-K for the year ended December 31, 1994, incorporated
         herein by reference.
 10(s)   Assignment of the Management Agreement, dated July 15, 1994,       N/A
         between the General Partner and Cencom Cable Associates, Inc.,
         filed as Exhibit 10(s) to the Registrant's Form 10-K for the
         year ended December 31, 1994, incorporated herein by reference.
 10(t)   Transfer of Limited Partnership Interest in the Registrant,        N/A
         dated January 18, 1995, filed as Exhibit 10(t) to the
         Registrant's Form 10-K for the year ended December 31, 1994,
         incorporated herein by reference.
 10(u)   Assignment of Limited Partnership Interest in Cencom Partners,     N/A
         L.P., dated January 18, 1995, filed as Exhibit 10(u) to the
         Registrant's Form 10-K for the year ended December 31, 1994,
         incorporated herein by reference.
 10(y)   Credit Agreement dated May 23, 1997 among Cencom Cable Income      N/A
         Partners II, L.P. and Cencom Partners, L.P. as Borrowers and
         Canadian Imperial Bank of Commerce as the Lender and Agent,
         filed as Exhibit 10(y) to the Registrant's Form 10-Q for the
         quarter ended March 31, 1996 and incorporated herein by
         reference.
 *12.2   Ratio of Earnings to Fixed Charges.
 *27.1   Financial Data Schedule.

</TABLE>
                                      E-1
*Filed herewith.