**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 
 **Washington,
        D.C. 20549**
 
 **FORM
        10-Q**
 
 
 *(Mark
        One)*
 **[X]     
        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT
        OF 1934**
 
 **For
        the quarterly period ended June 30, 2005**
 
 **or**
 
 **[  ]     
        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT
        OF 1934**
 
 **For
        the transition period from ________to _________**
 
 **Commission
        file number:** **333-112593**
 **333-112593-01** ****
 
 **CCO
        Holdings, LLC ***
 **CCO
        Holdings Capital Corp. ***
 *(Exact
        name of registrants as specified in their charters)*
 
 **Delaware**
              
              **86-1067239****Delaware**
              
              **20-0257904***(State
                  or other jurisdiction of incorporation or
                  organization)*
              
              *(I.R.S.
                  Employer Identification
                  Number)*
 
 **12405
        Powerscourt Drive**
 **St.
        Louis, Missouri   63131**
 *(Address
        of principal executive offices including zip code)*
 
 **(314)
        965-0555**
 *(Registrants’
        telephone number, including area code)*
 
 Indicate
        by check mark whether the registrants (1) have 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 registrants were
        required to file such reports), and (2) have been subject to such filing
        requirements for the past 90 days. YES [X] NO [  ]
 
 Indicate
        by check mark whether the registrants are accelerated filers (as defined
        in Rule
        12b-2 of the Exchange Act). YES [ ] NO [X]
 
 Indicate
        the number of shares outstanding of each of the issuers' classes of common
        stock, as of the latest practicable date:
 
 All
        of
        the issued and outstanding shares of capital stock of CCO Holdings Capital
        Corp.
        are held by CCO Holdings, LLC. All of the limited liability company membership
        interests of CCO Holdings, LLC are held by CCH II, LLC (an indirect wholly
        owned subsidiary
        of Charter Communications Holdings, LLC, a reporting company under the Exchange
        Act). There is no public trading market for any of the aforementioned limited
        liability company membership interests of shares of capital stock.
 
 *
        CCO
        Holdings, LLC and CCO Holdings Capital Corp. meet the conditions set forth
        in
        General Instruction H(1)(a) and (b) to Form 10-Q and are therefore filing
        with
        the reduced disclosure format.
  
  Table
            of Contents
  
 **CCO
        Holdings, LLC**
 **CCO
        Holdings Capital Corp.**
 **Quarterly
        Report on Form 10-Q for the Period ended June 30, 2005**
 
 **Table
        of Contents**
 
 PART
                  I. FINANCIAL INFORMATION
              **Page**Item
                  1.Financial
                  Statements - CCO Holdings, LLC and SubsidiariesCondensed
                  Consolidated Balance Sheets as ofJune
                  30, 2005and
                  December 31, 2004
              4Condensed
                  Consolidated Statements of Operations for the three
                  and sixmonths
                  endedJune
                  30, 2005and
                  2004
              5Condensed
                  Consolidated Statements of Cash Flows for thesix
                  months endedJune
                  30, 2005and 2004
              6Notes
                  to Condensed Consolidated Financial
                  Statements
              7Item
                  2.Management's
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              25Item
                  4.Controls
                  and Procedures
              41PART
                  II. OTHER INFORMATIONItem
                  1.Legal
                  Proceedings
              42Item
                  6.Exhibits
              44SIGNATURES
              45EXHIBIT
                  INDEX
              46
 
 
 This
        quarterly report on Form 10-Q is for the three and six months ended
        June
        30, 2005. The Securities and Exchange Commission ("SEC") allows us
        to
        "incorporate by reference" information that we file with the SEC, which means
        that we can disclose important information to you by referring you directly
        to
        those documents. Information incorporated by reference is considered to be
        part
        of this quarterly report. In addition, information that we file with the
        SEC in
        the future will automatically update and supersede information contained
        in this
        quarterly report. In this quarterly report, "we," "us" and "our" refer to
        CCO
        Holdings, LLC and its subsidiaries.
 
 
 Table
            of Contents
  
 **CAUTIONARY
        STATEMENT REGARDING FORWARD-LOOKING STATEMENTS:**
 
 This quarterly
        report includes
        forward-looking statements within the meaning of Section 27A of the
        Securities Act of 1933, as amended (the " Securities
        Act " ),
        and
        Section 21E of the Securities Exchange Act of 1934, as amended (the " Exchange
        Act " ),
        regarding, among other things, our plans, strategies and prospects, both
        business and financial including, without limitation, the forward-looking
        statements set forth in the " Results
        of Operations " and " Liquidity
        and Capital Resources " sections
        under Part I, Item 2. " Management’s
        Discussion and Analysis of Financial Condition and Results of
        Operations " in this quarterly
        report .
        Although we believe that our plans, intentions and expectations reflected
        in or
        suggested by these forward-looking statements are reasonable, we cannot assure
        you that we will achieve or realize these plans, intentions or expectations.
        Forward-looking statements are inherently subject to risks, uncertainties
        and
        assumptions including, without limitation, the factors described under " Certain
        Trends and Uncertainties " under
        Part I, Item 2. " Management’s
        Discussion and Analysis of Financial Condition and Results of
        Operations " in this quarterly
        report .
        Many of
        the forward-looking statements contained in this quarterly
        report may
        be
        identified by the use of forward-looking words such as " believe, "  " expect, "  " anticipate, "  " should, "  " planned, "  " will, "  " may, "  " intend, "  " estimated " and " potential " among
        others. Important factors that could cause actual results to differ materially
        from the forward-looking statements we make in this quarterly
        report are
        set
        forth in this quarterly
        report and
        in
        other reports or documents that we file from time to time with the SEC, and
        include, but are not limited to:
 
 ·
              the
                  availability of funds to meet interest payment obligations under
                  our and
                  our parent companies’ debt and to fund our operations and necessary
                  capital expenditures, either through cash flows from operating
                  activities,
                  further borrowings or other
                  sources;
 ·
              our
                  ability to sustain and grow revenues and cash flows from operating
                  activities by offering video, high-speed Internet, telephone and
                  other
                  services and to maintain a stable customer base, particularly in
                  the face
                  of increasingly aggressive competition from other service
                  providers;
 ·
              our
                  and our parent companies’ ability to comply with all covenants in our and
                  our parent companies’ indentures and credit facilities, any violation of
                  which would result in a violation of the applicable facility or
                  indenture
                  and could trigger a default of other obligations under cross-default
                  provisions;
 ·
              our
                  and our parent companies’ ability to pay or refinance debt as it becomes
                  due;
 ·
              our
                  ability to obtain programming at reasonable prices or to pass programming
                  cost increases on to our customers;
 ·
              general
                  business conditions, economic uncertainty or slowdown;
                  and
 ·
              the
                  effects of governmental regulation, including but not limited to
                  local
                  franchise authorities, on our business.
 
 All
        forward-looking statements attributable to us or any person acting on our
        behalf
        are expressly qualified in their entirety by this cautionary statement. We
        are
        under no duty or obligation to update any of the forward-looking statements
        after the date of this quarterly
        report .
    3
 Table
            of Contents
   **PART
        I. FINANCIAL INFORMATION.**
 
 
 **Item
        1.**  **Financial
        Statements.**
 
 **CCO
        HOLDINGS, LLC AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED BALANCE SHEETS**
 **(DOLLARS
        IN MILLIONS)**
 
 **June
                  30****,**
              
              **December
                  31,****2005**
              
              **2004****(Unaudited)****ASSETS**CURRENT
                  ASSETS:Cash
                  and cash equivalents
              
              $
              22
              
              $
              546Accounts
                  receivable, less allowance for doubtful accounts of$14
                  and $15, respectively
              
              
              180
              
              
              175Prepaid
                  expenses and other current assets
              
              
              17
              
              
              20Total
                  current assets
              
              
              219
              
              
              741INVESTMENT
                  IN CABLE PROPERTIES:Property,
                  plant and equipment, net of accumulateddepreciation
                  of $6,026 and $5,142, respectively
              
              
              6,033
              
              
              6,110Franchises,
                  net
              
              
              9,839
              
              
              9,878Total
                  investment in cable properties, net
              
              
              15,872
              
              
              15,988OTHER
                  NONCURRENT ASSETS
              
              
              252
              
              
              235Total
                  assets
              
              $
              16,343
              
              $
              16,964**LIABILITIES
                  AND MEMBER’S EQUITY**CURRENT
                  LIABILITIES:Accounts
                  payable and accrued expenses
              
              $
              900
              
              $
              901Payables
                  to related party
              
              
              150
              
              
              24Total
                  current liabilities
              
              
              1,050
              
              
              925LONG-TERM
                  DEBT
              
              
              8,444
              
              
              8,294LOANS
                  PAYABLE - RELATED PARTY
              
              
              62
              
              
              29DEFERRED
                  MANAGEMENT FEES - RELATED PARTY
              
              
              14
              
              
              14OTHER
                  LONG-TERM LIABILITIES
              
              
              477
              
              
              493MINORITY
                  INTEREST
              
              
              662
              
              
              656MEMBER’S
                  EQUITY:Member’s
                  equity
              
              
              5,639
              
              
              6,568Accumulated
                  other comprehensive loss
              
              
              (5
              )
              
              (15
              )Total
                  member’s equity
              
              
              5,634
              
              
              6,553Total
                  liabilities and member’s equity
              
              $
              16,343
              
              $
              16,964
  The
              accompanying notes are an integral part of these condensed consolidated
              financial statements.
 4
 Table
            of Contents
  **CCO
        HOLDINGS, LLC AND SUBSIDIARIES**
 **CONDENSED**  **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 **(DOLLARS
        IN MILLIONS)**
 **Unaudited**
 
  
  **Three
                  Months Ended****June
                  30****,**
              
              **Six
                  Months Ended****June
                  30****,****2005**
              
              **2004**
              
              **2005**
              
              **2004**REVENUES
              
              $
              1,323
              
              $
              1,239
              
              $
              2,594
              
              $
              2,453COSTS
                  AND EXPENSES:Operating
                  (excluding depreciation and amortization)
              
              
              569
              
              
              515
              
              
              1,128
              
              
              1,027Selling,
                  general and administrative
              
              
              256
              
              
              244
              
              
              493
              
              
              483Depreciation
                  and amortization
              
              
              378
              
              
              364
              
              
              759
              
              
              734Asset
                  impairment charges
              
              
              8
              
              
              --
              
              
              39
              
              
              --(Gain)
                  loss on sale of assets, net
              
              
              --
              
              
              2
              
              
              4
              
              
              (104
              )Option
                  compensation expense, net
              
              
              4
              
              
              12
              
              
              8
              
              
              26Special
                  charges, net
              
              
              (2
              )
              
              87
              
              
              2
              
              
              971,213
              
              
              1,224
              
              
              2,433
              
              
              2,263Income
                  from operations
              
              
              110
              
              
              15
              
              
              161
              
              
              190OTHER
                  INCOME AND EXPENSES:Interest
                  expense, net
              
              
              (168
              )
              
              (137
              )
              
              (324
              )
              
              (258
              )Gain
                  (loss) on derivative instruments and hedging activities,
                  net
              
              
              (1
              )
              
              63
              
              
              26
              
              
              56Loss
                  on extinguishment of debt
              
              
              (1
              )
              
              (21
              )
              
              (6
              )
              
              (21
              )Gain
                  on investments
              
              
              20
              
              
              1
              
              
              21
              
              
              --(150
              )
              
              (94
              )
              
              (283
              )
              
              (223
              )Loss
                  before minority interest and income taxes
              
              
              (40
              )
              
              (79
              )
              
              (122
              )
              
              (33
              )MINORITY
                  INTEREST
              
              
              (3
              )
              
              (6
              )
              
              (6
              )
              
              (9
              )Loss
                  before income taxes
              
              
              (43
              )
              
              (85
              )
              
              (128
              )
              
              (42
              )INCOME
                  TAX EXPENSE
              
              
              (2
              )
              
              (3
              )
              
              (8
              )
              
              (4
              )Net
                  loss
              
              $
              (45
              )
              $
              (88
              )
              $
              (136
              )
              $
              (46
              )
  The
              accompanying notes are an integral part of these condensed consolidated
              financial statements.
 5
 Table
            of Contents
  **CCO
        HOLDINGS, LLC AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **(DOLLARS
        IN MILLIONS)**
 **Unaudited**
 **Six
                  Months Ended****June
                  30,****2005**
              
              **2004**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (136
              )
              $
              (46
              )Adjustments
                  to reconcile net loss to net cash flows from operating
                  activities:Minority
                  interest
              
              
              6
              
              
              9Depreciation
                  and amortization
              
              
              759
              
              
              734Asset
                  impairment charges
              
              
              39
              
              
              --Option
                  compensation expense, net
              
              
              8
              
              
              23Special
                  charges, net
              
              
              (2
              )
              
              85Noncash
                  interest expense
              
              
              13
              
              
              6Gain
                  on derivative instruments and hedging activities, net
              
              
              (26
              )
              
              (56
              )(Gain)
                  loss on sale of assets, net
              
              
              4
              
              
              (104
              )Loss
                  on extinguishment of debt
              
              
              --
              
              
              18Gain
                  on investments
              
              
              (21
              )
              
              --Deferred
                  income taxes
              
              
              5
              
              
              2Other,
                  net
              
              
              --
              
              
              (5
              )Changes
                  in operating assets and liabilities, net of effects from
                  dispositions:Accounts
                  receivable
              
              
              (10
              )
              
              (1
              )Prepaid
                  expenses and other assets
              
              
              (21
              )
              
              (4
              )Accounts
                  payable, accrued expenses and other
              
              
              (46
              )
              
              (131
              )Receivables
                  from and payables to related party, including deferred management
                  fees
              
              
              (20
              )
              
              (52
              )Net
                  cash flows from operating activities
              
              
              552
              
              
              478CASH
                  FLOWS FROM INVESTING ACTIVITIES:Purchases
                  of property, plant and equipment
              
              
              (542
              )
              
              (380
              )Change
                  in accrued expenses related to capital expenditures
              
              
              48
              
              
              (38
              )Proceeds
                  from sale of assets
              
              
              8
              
              
              727Purchases
                  of investments
              
              
              (1
              )
              
              --Proceeds
                  from investments
              
              
              16
              
              
              --Other,
                  net
              
              
              (1
              )
              
              (2
              )Net
                  cash flows from investing activities
              
              
              (472
              )
              
              307CASH
                  FLOWS FROM FINANCING ACTIVITIES:Borrowings
                  of long-term debt
              
              
              635
              
              
              2,812Borrowings
                  from related parties
              
              
              140
              
              
              --Repayments
                  of long-term debt
              
              
              (819
              )
              
              (3,159
              )Repayments
                  to related parties
              
              
              (107
              )
              
              --Payments
                  for debt issuance costs
              
              
              (3
              )
              
              (94
              )Distributions
              
              
              (450
              )
              
              (341
              )Net
                  cash flows from financing activities
              
              
              (604
              )
              
              (782
              )NET
                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
              
              
              (524
              )
              
              3CASH
                  AND CASH EQUIVALENTS, beginning of period
              
              
              546
              
              
              85CASH
                  AND CASH EQUIVALENTS, end of period
              
              $
              22
              
              $
              88CASH
                  PAID FOR INTEREST
              
              $
              308
              
              $
              294NONCASH
                  TRANSACTIONS:Issuance
                  of debt by Charter Communications Operating, LLC
              
              $
              333
              
              $
              --Distribution
                  of Charter Communications Holdings, LLC notes and accrued
                  interest
              
              $
              (343
              )
              $
              --Transfer
                  of property, plant and equipment from parent company
              
              $
              139
              
              $
              --
 
  The
              accompanying notes are an integral part of these condensed consolidated
              financial statements.
 6
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
   **1.**
              **Organization
                  and Basis of Presentation**
 
 CCO
        Holdings, LLC ("CCO Holdings") is a holding company whose primary assets
        at June
        30, 2005 are equity interests in its operating subsidiaries. CCO Holdings
        is a
        subsidiary of CCH II, LLC ("CCH II"). CCH II is a subsidiary of CCH I, LLC
        ("CCH
        I"), which is a subsidiary of Charter Communications Holdings, LLC ("Charter
        Holdings"). Charter Holdings is a subsidiary of Charter Communications Holding
        Company, LLC ("Charter Holdco"), which is a subsidiary of Charter
        Communications, Inc. ("Charter"). CCO Holdings is the sole owner of Charter
        Communications Operating, LLC ("Charter Operating"). The condensed consolidated
        financial statements include the accounts of CCO Holdings and all of its
        direct
        and indirect subsidiaries where the underlying operations reside, collectively
        referred to herein as the "Company." All significant intercompany accounts
        and
        transactions among consolidated entities have been eliminated. The Company
        is a
        broadband communications company operating in the United States. The Company
        offers its customers traditional cable video programming (analog and digital
        video) as well as high-speed Internet services and, in some areas, advanced
        broadband services such as high definition television, video on demand and
        telephone. The Company sells its cable video programming, high-speed Internet
        and advanced broadband services on a subscription basis. The Company also
        sells
        local advertising on satellite-delivered networks.
 
 The
        accompanying condensed consolidated financial statements of the Company have
        been prepared in accordance with accounting principles generally accepted
        in the
        United States for interim financial information and the rules and regulations
        of
        the Securities and Exchange Commission ("SEC"). Accordingly, certain information
        and footnote disclosures typically included in CCO Holdings’ Annual Report on
        Form 10-K have been condensed or omitted for this quarterly report. The
        accompanying condensed consolidated financial statements are unaudited and
        are
        subject to review by regulatory authorities. However, in the opinion of
        management, such financial statements include all adjustments, which consist
        of
        only normal recurring adjustments, necessary for a fair presentation of the
        results for the periods presented. Interim results are not necessarily
        indicative of results for a full year.
  The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States requires management to make estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and
        disclosure of contingent assets and liabilities at the date of the financial
        statements and the reported amounts of revenues and expenses during the
        reporting period. Areas involving significant judgments and estimates include
        capitalization of labor and overhead costs; depreciation and amortization
        costs;
        impairments of property, plant and equipment, franchises and goodwill; income
        taxes; and contingencies. Actual results could differ from those
        estimates.
  *Reclassifications*
  Certain
        2004 amounts have been reclassified to conform with the 2005
        presentation.
 
 **2.**
              **Liquidity
                  and Capital Resources**
 
 The
        Company incurred net loss of $45 million and $88 million for the three months
        ended June 30, 2005 and 2004, respectively, and $136 million and $46 million
        for
        the six months ended June 30, 2005 and 2004, respectively. The Company’s net
        cash flows from operating activities were $552 million and $478 million for
        the
        six months ended June 30, 2005 and 2004, respectively.
 
 The
        Company's long-term financing as of June 30, 2005 consists of $5.4 billion
        of
        credit facility debt and $3.0 billion accreted value of high-yield notes.
        For
        the remainder of 2005, $15 million of the Company’s debt matures, and in 2006,
        an additional $30 million of the Company’s debt matures. In 2007 and beyond,
        significant additional amounts will become due under the Company’s remaining
        long-term debt obligations.
 
 The
        Company has historically required significant cash to fund debt service costs,
        capital expenditures and ongoing operations. Historically, the Company has
        funded these requirements through cash flows from operating activities,
        borrowings under its credit facilities, equity contributions from its parent
        companies, borrowings from its parent companies, sales of assets, issuances
        of
        debt securities and from cash on hand. However, the mix of funding sources
  7
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  changes
        from period to period. For the six months ended June 30, 2005, the Company
        generated $552 million of net cash flows from operating activities, after
        paying
        cash interest of $308 million. In addition, the Company used approximately
        $542
        million for purchases of property, plant and equipment. Finally, the Company
        had
        net cash flows used in financing activities of $604 million, which included,
        among other things, approximately $705 million in repayment of borrowings
        under
        the Company’s revolving credit facility. This repayment was the primary reason
        cash on hand decreased by $524 million to $22 million at June 30,
        2005.
 
 The
        Company expects that cash on hand, cash flows from operating activities and
        the
        amounts available under its credit facilities will be adequate to meet its
        and
        its parent companies’ cash needs for the remainder of 2005. Cash flows from
        operating activities and amounts available under the Company’s credit facilities
        may not be sufficient to fund the Company’s operations and satisfy its and its
        parent companies’ principal repayment obligations that come due in 2006 and, the
        Company believes, will not be sufficient to fund its operations and satisfy
        such
        repayment obligations thereafter.
 
 It
        is
        likely that the Company and its parent companies will require additional
        funding
        to repay debt maturing after 2006. The Company has been advised that Charter
        is
        working with its financial advisors to address such funding requirements.
        However, there can be no assurance that such funding will be available to
        the
        Company. Although Mr. Allen and his affiliates have purchased equity from
        Charter and Charter Holdco in the past, Mr. Allen and his affiliates are
        not
        obligated to purchase equity from, contribute to or loan funds to Charter,
        Charter Holdco or the Company in the future.
 
 ***Credit
        Facilities and Covenants***
 
 The
        Company’s ability to operate depends upon, among other things, its continued
        access to capital, including credit under the Charter Operating credit
        facilities. These credit facilities, along with the Company’s indentures,
        contain certain restrictive covenants, some of which require the Company
        to
        maintain specified financial ratios and meet financial tests and to provide
        audited financial statements with an unqualified opinion from the Company’s
        independent auditors. As of June 30, 2005, the Company was in compliance
        with
        the covenants under its indentures and credit facilities and the Company
        expects
        to remain in compliance with those covenants for the next twelve months.
        As of
        June 30, 2005, the Company had borrowing availability under the credit
        facilities of $870 million, none of which was restricted due to covenants.
        Continued access to the Company’s credit facilities is subject to the Company
        remaining in compliance with the covenants of these credit facilities, including
        covenants tied to the Company’s operating performance. If the Company’s
        operating performance results in non-compliance with these covenants, or
        if any
        of certain other events of non-compliance under these credit facilities or
        indentures governing the Company’s debt occurs, funding under the credit
        facilities may not be available and defaults on some or potentially all of
        the
        Company’s debt obligations could occur. An event of default under the covenants
        governing any of the Company’s debt instruments could result in the acceleration
        of its payment obligations under that debt and, under certain circumstances,
        in
        cross-defaults under its other debt obligations, which could have a material
        adverse effect on the Company’s consolidated financial condition or results of
        operations.
 
 The
        Charter Operating credit facilities required the Company to redeem the CC
        V
        Holdings, LLC notes as a result of the Charter Holdings leverage ratio becoming
        less than 8.75 to 1.0. In satisfaction of this requirement, in March 2005,
        CC V
        Holdings, LLC redeemed all of its outstanding notes, at 103.958% of principal
        amount, plus accrued and unpaid interest to the date of redemption. The total
        cost of the redemption including accrued and unpaid interest was approximately
        $122 million. The Company funded the redemption with borrowings under the
        Charter Operating credit facilities.
 
 **Parent****Companies’
        Debt Obligations**
 
 Any
        financial or liquidity problems of the Company’s parent companies could cause
        serious disruption to the Company's business and have a material adverse
        effect
        on the Company’s business and results of operations. A failure by Charter
        Holdings to satisfy its debt payment obligations or a bankruptcy filing with
        respect to Charter Holdings would give the lenders under the Charter Operating
        credit facilities the right to accelerate the payment obligations
  8
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  under
        these facilities. Any such acceleration would be a default under the indenture
        governing the Company’s notes. A s
        of June
        30, 2005, Charter had approximately $888 million principal amount of senior
        convertible notes outstanding with approximately $25 million and $863 million
        maturing in 2006 and 2009, respectively. During
        the six months ended June 30, 2005, the
        Company distributed $450 million to CCH II of which $60 million was subsequently
        distributed to Charter Holdco . As of
        June 30, 2005, Charter Holdco was owed $62 million in intercompany loans
        from
        its subsidiaries, which amount was available to pay interest and principal
        on
        Charter's convertible senior notes.  In
        addition, Charter
        has $122 million of governmental securities pledged as security for the next
        five semi-annual interest payments on Charter’s 5.875% convertible senior
        notes.
 
 A s
        of June
        30, 2005, Charter Holdings had approximately $8.5 billion principal amount
        of
        high-yield notes outstanding with approximately $105 million, $3.4 billion
        and
        $5.0 billion maturing in 2007, 2009 and thereafter, respectively. As of June
        30,
        2005, CCH II had approximately $1.6 billion principal amount of high-yield
        notes
        outstanding maturing in 2010. Charter, Charter Holdings and CCH II will need
        to
        raise additional capital or receive distributions or payments from the Company
        in order to satisfy their debt obligations. However, because of their
        significant indebtedness, the ability of the parent companies to raise
        additional capital at reasonable rates is uncertain. Distributions by Charter’s
        subsidiaries to a parent company (including Charter, Charter Holdco, Charter
        Holdings and CCH II) for
        payment of principal on the parent companies’ debt obligations ,
        however, are restricted by the indentures governing the CCH II notes, CCO
        Holdings notes, and Charter Operating notes, unless
        under their respective indentures there is no default and a specified leverage
        ratio test is met at the time of such event.
 
 In
        accordance with the registration rights agreement entered into with their
        initial sale, Charter was required to register for resale by April 21, 2005
        its
        5.875% convertible senior notes due 2009, issued in November 2004. Since
        these
        convertible notes were not registered by that date, Charter paid or will
        pay
        liquidated damages totaling $0.5 million through July 14, 2005, the day prior
        to
        the effective date of the registration statement. In addition, in accordance
        with the share lending agreement entered into in connection with the initial
        sale of its 5.875% convertible senior notes due 2009, Charter was required
        to
        register by April 1, 2005 150 million shares of its Class A common stock
        that
        Charter was obligated to lend to Citigroup Global Markets Limited ("CGML")
        at
        CGML’s request. Because this registration statement was not declared effective
        by such date, Charter paid or will pay liquidated damages totaling $11 million
        from April 2, 2005 through July 17, 2005, the day before the effective date
        of
        the registration statement. The liquidated damages were recorded as interest
        expense in Charter’s condensed consolidated statements of
        operations.
 
 ***Specific
        Limitations at Charter Holdings***
 
 The
        indentures governing the Charter Holdings notes permit Charter Holdings to
        make
        distributions to Charter Holdco for payment of interest or principal on the
        convertible senior notes, only if, after giving effect to the distribution,
        Charter Holdings can incur additional debt under the leverage ratio of 8.75
        to
        1.0, there is no default under Charter Holdings’ indentures and other specified
        tests are met. For the quarter ended June
        30,
        2005, t here
        was
        no default under Charter Holdings’ indentures and other specified tests were
        met. However, Charter Holdings did not meet the leverage ratio of 8.75 to
        1.0
        based on June
        30 ,
        2005
        financial results. As a result, distributions from Charter Holdings to Charter
        or Charter Holdco are currently restricted and will continue to be restricted
        until that test is met.  During
        this restriction period ,
        the
        indentures governing the Charter Holdings notes permit Charter Holdings and
        its
        subsidiaries to make specified investments in Charter Holdco or Charter,
        up to
        an amount determined by a formula, as long as there is no default under the
        indentures.
 
 **3.**
              **Sale
                  of Assets**
 
 As
        of
        June 30, 2005, the Company has concluded it is probable that three pending
        cable
        asset sales, representing approximately 33,000 customers, will close within
        the
        next twelve months thus meeting the criteria for assets held for sale under
        Statement of Financial Accounting Standards ("SFAS") No. 144, *Accounting
        for the Impairment or Disposal of Long-Lived Assets* .
        As such
        the assets were written down to fair value less estimated costs to sell
        resulting in asset impairment charges during the three and six months ended
        June
        30, 2005 of approximately $8 million and $39 million, respectively. At June
        30,
        2005 assets held for sale, included in investment in cable properties, are
        approximately $40 million.
 
 9
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  In
        March
        2004, the Company closed the sale of certain cable systems in Florida,
        Pennsylvania, Maryland, Delaware and West Virginia to Atlantic Broadband
        Finance, LLC. The Company closed the sale of an additional cable system in
        New
        York to Atlantic Broadband Finance, LLC in April 2004. These transactions
        resulted in a $106 million pretax gain recorded as a gain on sale of assets
        in
        the Company’s consolidated statements of operations. The total net proceeds from
        the sale of all of these systems were approximately $735 million. The proceeds
        were used to repay a portion of amounts outstanding under the Company’s
        revolving credit facility.
 
 Gain
        on
        investments for the three and six months ended June 30, 2005 primarily
        represents a
        gain
        realized on an exchange of the Company’s interest in an equity investee for an
        investment in a larger enterprise.
 
 **4.**
              **Franchises
                  and Goodwill**
 
 Franchise
        rights represent the value attributed to agreements with local authorities
        that
        allow access to homes in cable service areas acquired through the purchase
        of
        cable systems. Management estimates the fair value of franchise rights at
        the
        date of acquisition and determines if the franchise has a finite life or
        an
        indefinite-life as defined by SFAS No. 142, *Goodwill
        and Other Intangible Assets* . Franchises
        that qualify for indefinite-life treatment under SFAS No. 142 are
        tested
        for impairment annually based on valuations, or more frequently as warranted
        by
        events or changes in circumstances. Such test resulted in a total franchise
        impairment of approximately $3.3 billion during the third quarter of 2004.
        Franchises are aggregated into essentially inseparable asset groups to conduct
        the valuations. The asset groups generally represent geographic clustering
        of
        the Company’s cable systems into groups by which such systems are managed.
        Management believes such grouping represents the highest and best use of
        those
        assets.
 
 The
        Company’s valuations, which are based on the present value of projected after
        tax cash flows, result in a value of property, plant and equipment, franchises,
        customer relationships and its total entity value. The value of goodwill
        is the
        difference between the total entity value and amounts assigned to the other
        assets.
 
 Franchises,
        for valuation purposes, are defined as the future economic benefits of the
        right
        to solicit and service potential customers (customer marketing rights), and
        the
        right to deploy and market new services such as interactivity and telephone
        to
        the potential customers (service marketing rights). Fair value is determined
        based on estimated discounted future cash flows using assumptions consistent
        with internal forecasts. The franchise after-tax cash flow is calculated
        as the
        after-tax cash flow generated by the potential customers obtained and the
        new
        services added to those customers in future periods. The sum of the present
        value of the franchises’ after-tax cash flow in years 1 through 10 and the
        continuing value of the after-tax cash flow beyond year 10 yields the fair
        value
        of the franchise.
 
 The
        Company follows the guidance of EITF Issue 02-17, *Recognition
        of Customer Relationship Intangible Assets Acquired in a Business Combination,* in
        valuing customer relationships. Customer relationships, for valuation purposes,
        represent the value of the business relationship with existing customers
        and are
        calculated by projecting future after-tax cash flows from these customers
        including the right to deploy and market additional services such as
        interactivity and telephone to these customers. The present value of these
        after-tax cash flows yields the fair value of the customer relationships.
        Substantially all acquisitions occurred prior to January 1, 2002. The Company
        did not record any value associated with the customer relationship intangibles
        related to those acquisitions. For acquisitions subsequent to January 1,
        2002
        the Company did assign a value to the customer relationship intangible, which
        is
        amortized over its estimated useful life.
 
  10
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  As
        of
        June 30, 2005 and December 31, 2004, indefinite-lived and finite-lived
        intangible assets are presented in the following table:
 
 **June
                  30, 2005**
              
              **December 31,
                  2004****Gross**
                **Carrying**
                **Amount**
              
              **Accumulated**
                **Amortization**
              
              **Net**
                **Carrying**
                **Amount**
              
              **Gross**
                **Carrying**
                **Amount**
              
              **Accumulated
                  Amortization**
              
              **Net**
                **Carrying**
                **Amount****Indefinite-lived
                  intangible assets:**Franchises
                  with indefinite lives
              
              $
              9,806
              
              $
              --
              
              $
              9,806
              
              $
              9,845
              
              $
              --
              
              $
              9,845Goodwill
              
              
              52
              
              
              --
              
              
              52
              
              
              52
              
              
              --
              
              
              52$
              9,858
              
              $
              --
              
              $
              9,858
              
              $
              9,897
              
              $
              --
              
              $
              9,897**Finite-lived
                  intangible assets:**Franchises
                  with finite lives
              
              $
              39
              
              $
              6
              
              $
              33
              
              $
              37
              
              $
              4
              
              $
              33
 
 Franchises
        with indefinite lives decreased $39 million as a result of the asset impairment
        charges recorded related to three pending cable asset sales (see Note 3).
        Franchise amortization expense for the three and six months ended June 30,
        2005
        and 2004 was $1 million and $2 million, respectively, which represents the
        amortization relating to franchises that did not qualify for indefinite-life
        treatment under SFAS No. 142, including costs associated with franchise
        renewals. The Company expects that amortization expense on franchise assets
        will
        be approximately $3 million annually for each of the next five years. Actual
        amortization expense in future periods could differ from these estimates
        as a
        result of new intangible asset acquisitions or divestitures, changes in useful
        lives and other relevant factors.
 
 **5.**
              **Accounts
                  Payable and Accrued
                  Expenses**
 
 Accounts
        payable and accrued expenses consist of the following as of June 30, 2005
        and
        December 31, 2004:
 
 **June
                    30,**
                  **2005**
              
              **December 31,**
                **2004**Accounts
                  payable - trade
              
              $
              82
              
              $
              138Accrued
                  capital expenditures
              
              
              108
              
              
              60Accrued
                  expenses:Interest
              
              
              106
              
              
              101Programming
                  costs
              
              
              285
              
              
              278Franchise-related
                  fees
              
              
              54
              
              
              67Compensation
              
              
              65
              
              
              47Other
              
              
              200
              
              
              210$
              900
              
              $
              901
 
  11
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  **6.**
              **Long-Term
                  Debt**
 
 Long-term
        debt consists of the following as of June
        30,
        2005 and
        December 31, 2004:
 
 **June
                  30, 2005**
              
              **December
                  31, 2004****Face
                  Value**
              
              **Accreted
                  Value**
              
              **Face
                  Value**
              
              **Accreted
                  Value****Long-Term
                  Debt**CCO
                  Holdings, LLC:83⁄4%
                  senior notes due 2013
              
              $
              500
              
              $
              500
              
              $
              500
              
              $
              500Senior
                  floating rate notes due 2010
              
              
              550
              
              
              550
              
              
              550
              
              
              550Charter
                  Operating:8%
                  senior second lien notes due 2012
              
              
              1,100
              
              
              1,100
              
              
              1,100
              
              
              1,1008
                  3/8% senior second lien notes due 2014
              
              
              733
              
              
              733
              
              
              400
              
              
              400Renaissance
                  Media Group LLC:10.000%
                  senior discount notes due 2008
              
              
              114
              
              
              116
              
              
              114
              
              
              116CC
                  V Holdings:11.875%
                  senior discount notes due 2008
              
              
              --
              
              
              --
              
              
              113
              
              
              113**Credit
                  Facilities**Charter
                  Operating
              
              
              5,445
              
              
              5,445
              
              
              5,515
              
              
              5,515$
              8,442
              
              $
              8,444
              
              $
              8,292
              
              $
              8,294
 
 The
        accreted values presented above represent the face value of the notes less
        the
        original issue discount at the time of sale plus the accretion to the balance
        sheet date.
 
 In
        March
        and June 2005, Charter Operating consummated exchange transactions with a
        small
        number of institutional holders of Charter Holdings 8.25% senior notes due
        2007
        pursuant to which Charter Operating issued, in private placements, approximately
        $333 million principal amount of new notes with terms identical to Charter
        Operating's 8.375% senior second lien notes due 2014 in exchange for
        approximately $346 million of the Charter Holdings 8.25% senior notes due
        2007.
        The Charter Holdings notes received in the exchange were thereafter distributed
        to Charter Holdings and cancelled.
 
 In
        March
        2005, Charter’s subsidiary, CC V Holdings, LLC, redeemed all of its 11.875%
        notes due 2008, at 103.958% of principal amount, plus accrued and unpaid
        interest to the date of redemption. The total cost of redemption was
        approximately $122 million and was funded through borrowings under the Charter
        Operating credit facilities. The redemption resulted in a loss on extinguishment
        of debt for the six months ended June 30, 2005 of approximately $5 million. Following
        such redemption, CC V Holdings, LLC and its subsidiaries (other than
        non-guarantor subsidiaries) guaranteed the Charter Operating credit facilities
        and granted a lien on all of their assets as to which a lien can be perfected
        under the Uniform Commercial Code by the filing of a financing
        statement.
 
 **7.**
              **Minority
                  Interest**
 
 Minority
        interest on the Company’s consolidated balance sheets represents preferred
        membership interests in CC VIII, LLC ("CC VIII"), an indirect subsidiary
        of CCO
        Holdings. As more fully described in Note 17, this preferred interest arises
        from the approximately $630 million of preferred membership units
        issued by
        CC VIII in connection with an acquisition in February 2000 and continues
        to be
        the subject of a dispute between Charter and Mr. Paul G. Allen, Charter’s
        Chairman and controlling shareholder. Generally, operating earnings or losses
        are allocated to the minority owner based on its ownership percentage, thereby
        increasing or decreasing the Company’s net loss, respectively. To the extent
        they relate to CC VIII, the allocations of earnings or losses are subject
        to
        adjustment based on the ultimate resolution of this disputed ownership. Due
        to
        the uncertainties related to the ultimate resolution, effective January 1,
        2005,
        the Company ceased recognizing minority interest in earnings or losses of
        CC
        VIII for financial reporting purposes until such time as the resolution of
        the
        matter is determinable or other events occur. For the three and six
  12
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  months
        ended June 30, 2005, the Company’s results include income of $8 million and $17
        million, respectively, attributable to CC VIII.
 
 **8.**
              **Comprehensive
                  Loss**
 
 Certain
        marketable equity securities are classified as available-for-sale and reported
        at market value with unrealized gains and losses recorded as accumulated
        other
        comprehensive loss on the accompanying condensed consolidated balance sheets.
        Additionally, the Company reports changes in the fair value of interest rate
        agreements designated as hedging the variability of cash flows associated
        with
        floating-rate debt obligations, that meet the effectiveness criteria of SFAS
        No. 133, *Accounting
        for Derivative Instruments and Hedging Activities* ,
        in
        accumulated other comprehensive loss. Comprehensive loss for the three months
        ended June 30, 2005 and 2004 was $44 million and $61 million, respectively,
        and
        $126 million and $17 million for the six months ended June 30, 2005 and 2004,
        respectively.
 
 **9.**
              **Accounting
                  for Derivative Instruments and Hedging
                  Activities**
 
 The
        Company uses interest rate risk management derivative instruments, such as
        interest rate swap agreements and interest rate collar agreements (collectively
        referred to herein as interest rate agreements) to manage its interest costs.
        The Company’s policy is to manage interest costs using a mix of fixed and
        variable rate debt. Using interest rate swap agreements, the Company has
        agreed
        to exchange, at specified intervals through 2007, the difference between
        fixed
        and variable interest amounts calculated by reference to an agreed-upon notional
        principal amount. Interest rate collar agreements are used to limit the
        Company’s exposure to and benefits from interest rate fluctuations on variable
        rate debt to within a certain range of rates.
 
 The
        Company does not hold or issue derivative instruments for trading purposes.
        The
        Company does, however, have certain interest rate derivative instruments
        that
        have been designated as cash flow hedging instruments. Such instruments
        effectively convert variable interest payments on certain debt instruments
        into
        fixed payments. For qualifying hedges, SFAS No. 133 allows derivative
        gains
        and losses to offset related results on hedged items in the consolidated
        statement of operations. The Company has formally documented, designated
        and
        assessed the effectiveness of transactions that receive hedge accounting.
        For
        the three months ended June 30, 2005 and 2004, net gain (loss) on derivative
        instruments and hedging activities includes gains of $0 and $3 million,
        respectively, and for the six months ended June 30, 2005 and 2004, net gain
        (loss) on derivative instruments and hedging activities includes gains of
        $1
        million and $2 million, respectively, which represent cash flow hedge
        ineffectiveness on interest rate hedge agreements arising from differences
        between the critical terms of the agreements and the related hedged obligations.
        Changes in the fair value of interest rate agreements designated as hedging
        instruments of the variability of cash flows associated with floating-rate
        debt
        obligations that meet the effectiveness criteria of SFAS No. 133 are
        reported in accumulated other comprehensive loss. For the three months ended
        June 30, 2005 and 2004, a gain of $0 and $27 million, respectively, and for
        the
        six months ended June 30, 2005 and 2004, a gain of $9 million and $29 million,
        respectively, related to derivative instruments designated as cash flow hedges,
        was recorded in accumulated other comprehensive loss. The amounts are
        subsequently reclassified into interest expense as a yield adjustment in
        the
        same period in which the related interest on the floating-rate debt obligations
        affects earnings (losses).
 
 Certain
        interest rate derivative instruments are not designated as hedges as they
        do not
        meet the effectiveness criteria specified by SFAS No. 133. However,
        management believes such instruments are closely correlated with the respective
        debt, thus managing associated risk. Interest rate derivative instruments
        not
        designated as hedges are marked to fair value, with the impact recorded as gain
        (loss) on derivative instruments and hedging activities in the Company’s
        condensed consolidated statements of operations .
        For the
        three months ended June 30, 2005 and 2004, net
        gain
        (loss) on derivative instruments and hedging activities includes losses of
        $1
        million and gains of $60 million, respectively, and for the six months ended
        June 30, 2005 and 2004, net gain (loss) on derivative instruments and heding
        activities includes gains of $25 million and $54 million, respectively, for
        interest rate derivative instruments not designated as hedges.
 
 As
        of
        June 30, 2005 and December 31, 2004, the Company had outstanding $2.2
        billion and $2.7 billion and $20 million and $20 million, respectively, in
        notional amounts of interest rate swaps and collars, respectively. The
  13
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  notional
        amounts of interest rate instruments do not represent amounts exchanged by
        the
        parties and, thus, are not a measure of exposure to credit loss. The amounts
        exchanged are determined by reference to the notional amount and the other
        terms
        of the contracts.
 
 **10.**
              **Revenues**
 
 Revenues
        consist of the following for the three and six months ended June 30, 2005
        and
        2004:
 
 **Three
                  Months**
                **Ended
                  June 30,**
              
              **Six
                  Months**
                **Ended
                  June 30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Video
              
              $
              861
              
              $
              846
              
              $
              1,703
              
              $
              1,695High-speed
                  Internet
              
              
              226
              
              
              181
              
              
              441
              
              
              349Advertising
                  sales
              
              
              76
              
              
              73
              
              
              140
              
              
              132Commercial
              
              
              69
              
              
              58
              
              
              134
              
              
              114Other
              
              
              91
              
              
              81
              
              
              176
              
              
              163$
              1,323
              
              $
              1,239
              
              $
              2,594
              
              $
              2,453
 
 **11.**
              **Operating
                  Expenses**
 
 Operating
        expenses consist of the following for the three and six months ended June
        30,
        2005 and 2004:
 
 **Three
                  Months**
                **Ended
                  June 30,**
              
              **Six
                  Months**
                **Ended
                  June 30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Programming
              
              $
              351
              
              $
              329
              
              $
              709
              
              $
              663Advertising
                  sales
              
              
              25
              
              
              25
              
              
              50
              
              
              48Service
              
              
              193
              
              
              161
              
              
              369
              
              
              316$
              569
              
              $
              515
              
              $
              1,128
              
              $
              1,027
 
 **12.**
              **Selling,
                  General and Administrative
                  Expenses**
 
 Selling,
        general and administrative expenses consist of the following for the three
        and
        six months ended June 30, 2005 and 2004:
 
 **Three
                  Months**
                **Ended
                  June 30,**
              
              **Six
                  Months**
                **Ended
                  June 30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**General
                  and administrative
              
              $
              225
              
              $
              208
              
              $
              427
              
              $
              416Marketing
              
              
              31
              
              
              36
              
              
              66
              
              
              67$
              256
              
              $
              244
              
              $
              493
              
              $
              483
 
 Components
        of selling expense are included in general and administrative and marketing
        expense.
 
  14
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  **13.**
              **Special
                  Charges**
 
 The
        Company has recorded special charges as a result of reducing its workforce,
        consolidating administrative offices and management realignment in 2004 and
        2005. The activity associated with this initiative is summarized in the table
        below.
 
 **Three
                  Months**
                **Ended
                  June 30,**
              
              **Six
                  Months**
                **Ended
                  June 30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Beginning
                  Balance
              
              $
              6
              
              $
              7
              
              $
              6
              
              $
              14Special
                  Charges
              
              
              --
              
              
              2
              
              
              4
              
              
              3Payments
              
              
              (2
              )
              
              (3
              )
              
              (6
              )
              
              (11
              )Balance
                  at June 30,
              
              $
              4
              
              $
              6
              
              $
              4
              
              $
              6
 
 For
        the
        three and six months ended June 30, 2005, special charges were offset by
        approximately $2 million related to an agreed upon discount in respect of
        the
        portion of the settlement consideration payable under the Stipulations of
        Settlement of the consolidated Federal Class Action and the Federal Derivative
        Action allocable to plaintiff’s attorney fees and Charter’s insurance carrier as
        a result of the election to pay such fees in cash (see Note 15).
 
 For
        the
        three and six months ended June 30, 2004, special charges also includes
        approximately $85 million, which represents the aggregate value of the Charter
        Class A common stock and warrants to purchase Charter Class A common stock
        contemplated to be issued as part of the terms set forth in memoranda of
        understanding regarding settlement of the consolidated Federal Class Action
        and
        Federal Derivative Action. For the six months ended June 30, 2004, special
        charges includes approximately $9 million of litigation costs related to
        the
        tentative settlement of the South Carolina national class action suit, subject
        to final documentation and court approval (see Note 15).
 
 **14.**
              **Income
                  Taxes**
 
 The
        Company is a single member limited liability company not subject to income
        tax.  The Company holds all operations through indirect subsidiaries.
         The majority of these indirect subsidiaries are limited liability
        companies that are not subject to income tax.  However, certain of
        the
        Company’s indirect subsidiaries are corporations that are subject to income
        tax.
 
 As
        of June
        30 ,
        2005
        and December 31, 2004, the Company had net deferred income tax liabilities
        of
        approximately $214 million and $208 million, respectively.  The net
        deferred income tax liabilities relate to certain of the Company’s indirect
        subsidiaries, which file separate income tax returns.
 
 During
        the three and six months ended June 30, 2005, the Company recorded $2 million
        and $8 million of income tax expense, respectively, and during the three
        and six
        months ended June 30, 2004 the Company recorded $3 million and $4 million
        of
        income tax expense, respectively.  The income tax expense is recognized
        through current federal and state income tax expense as well as increases
        to the
        deferred tax liabilities of certain of the Company’s indirect corporate
        subsidiaries.
 
 Charter
        Holdco is currently under examination by the Internal Revenue Service for
        the
        tax years ending December 31, 2000, 2002 and 2003.  The results of
        the
        Company (excluding the indirect corporate subsidiaries) for these years are
        subject to this examination.  Management does not expect the results
        of
        this examination to have a material adverse effect on the Company’s financial
        condition or results of operations.
  15
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  **15.**  **Contingencies**
 
 ***Securities
        Class Actions and Derivative Suits***
 
 Fourteen
        putative federal class action lawsuits (the "Federal Class Actions")
        were
        filed against Charter and certain of its former and present officers and
        directors in various jurisdictions allegedly on behalf of all purchasers
        of
        Charter’s securities during the period from either November 8 or
        November 9, 1999 through July 17 or July 18, 2002. Unspecified
        damages were sought by the plaintiffs. In general, the lawsuits alleged that
        Charter utilized misleading accounting practices and failed to disclose these
        accounting practices and/or issued false and misleading financial statements
        and
        press releases concerning Charter’s operations and prospects. The Federal
        Class Actions were specifically and individually identified in public
        filings made by Charter prior to the date of this quarterly report. On
        March 12, 2003, the Panel transferred the six Federal Class Actions
        not filed in the Eastern District of Missouri to that district for coordinated
        or consolidated pretrial proceedings with the eight Federal Class Actions
        already pending there. The Court subsequently consolidated the Federal
        Class Actions into a single action (the "Consolidated Federal
        Class Action") for pretrial purposes. On August 5, 2004, the
        plaintiff’s representatives, Charter and the individual defendants who were the
        subject of the suit entered into a Memorandum of Understanding setting forth
        agreements in principle to settle the Consolidated Federal Class Action.
        These parties subsequently entered into Stipulations of Settlement dated
        as of
        January 24, 2005 (described more fully below) which incorporate the
        terms
        of the August 5, 2004 Memorandum of Understanding.
  On
        September 12, 2002, a shareholders derivative suit (the "State Derivative
        Action") was filed in the Circuit Court of the City of St. Louis,
        State of
        Missouri (the "Missouri State Court"), against Charter and its then current
        directors, as well as its former auditors. The plaintiffs alleged that the
        individual defendants breached their fiduciary duties by failing to establish
        and maintain adequate internal controls and procedures. On March 12,
        2004,
        an action substantively identical to the State Derivative Action was filed
        in
        Missouri State Court against Charter and certain of its current and former
        directors, as well as its former auditors. On July 14, 2004, the Court
        consolidated this case with the State Derivative Action.
 
 Separately,
        on February 12, 2003, a shareholders derivative suit (the "Federal
        Derivative Action"), was filed against Charter and its then current directors
        in
        the United States District Court for the Eastern District of Missouri. The
        plaintiff in that suit alleged that the individual defendants breached their
        fiduciary duties and grossly mismanaged Charter by failing to establish and
        maintain adequate internal controls and procedures.
 
 As
        noted
        above, Charter and the individual defendants entered into a Memorandum of
        Understanding on August 5, 2004 setting forth agreements in principle
        regarding settlement of the Consolidated Federal Class Action, the
        State
        Derivative Action(s) and the Federal Derivative Action (the "Actions"). Charter
        and various other defendants in those actions subsequently entered into
        Stipulations of Settlement dated as of January 24, 2005, setting forth
        a
        settlement of the Actions in a manner consistent with the terms of the
        Memorandum of Understanding. The Stipulations of Settlement, along with various
        supporting documentation, were filed with the Court on February 2,
        2005. On
        May 23, 2005 the United States District Court for the Eastern District
        of
        Missouri conducted the final fairness hearing for the Actions, and on
        June 30, 2005, the Court issued its final approval of the settlements.
        Members of the class had 30 days from the issuance of the June 30
        order
        approving the settlement to file an appeal challenging the approval. Two
        notices of appeal were filed relating to the settlement, but Charter does
        not
        yet know the specific issues presented by such appeals ,
        nor
        have briefing schedules been set.
 
 As
        amended, the Stipulations of Settlement provide that, in exchange for a release
        of all claims by plaintiffs against Charter and its former and present officers
        and directors named in the Actions, Charter would pay to the plaintiffs a
        combination of cash and equity collectively valued at $144 million,
        which
        will include the fees and expenses of plaintiffs’ counsel. Of this amount,
        $64 million would be paid in cash (by Charter’s insurance carriers) and the
        $80 million balance was to be paid (subject to Charter’s right to
        substitute cash therefor described below) in shares of Charter Class A
        common stock having an aggregate value of $40 million and ten-year
        warrants
        to purchase shares of Charter Class A common stock having an aggregate
        warrant value of $40 million, with such values in each case being
        determined pursuant to formulas set forth in the Stipulations of Settlement.
        However, Charter had the right, in its sole
  16
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  discretion,
        to substitute cash for some or all of the aforementioned securities on a
        dollar
        for dollar basis. Pursuant to that right, Charter elected to fund the
        $80 million obligation with 13.4 million shares of Charter
        Class A common stock (having an aggregate value of approximately
        $15 million pursuant to the formula set forth in the Stipulations
        of
        Settlement) with the remaining balance (less an agreed upon $2 million
        discount in respect of that portion allocable to plaintiffs’ attorneys’ fees) to
        be paid in cash. In addition, Charter had agreed to issue additional shares
        of
        its Class A common stock to its insurance carrier having an aggregate
        value
        of $5 million; however, by agreement with its carrier Charter has
        paid
        $4.5 million in cash in lieu of issuing such shares. Charter delivered
        the
        settlement consideration to the claims administrator on July 8, 2005,
        and
        it will be held in escrow pending any appeals of the approval. On July 14,
        2005,
        the Circuit Court for the City of St. Louis dismissed with prejudice the
        State
        Derivative Actions.
 
 As
        part
        of the settlements, Charter has committed to a variety of corporate governance
        changes, internal practices and public disclosures, some of which have already
        been undertaken and none of which are inconsistent with measures Charter
        is
        taking in connection with the recent conclusion of the SEC
        investigation.
 
 ***Government
        Investigations***
 
 In
        August
        2002, Charter became aware of a grand jury investigation being conducted
        by the
        U.S. Attorney’s Office for the Eastern District of Missouri into certain of
        its accounting and reporting practices, focusing on how Charter reported
        customer numbers, and its reporting of amounts received from digital set-top
        terminal suppliers for advertising. The U.S. Attorney’s Office publicly
        stated that Charter was not a target of the investigation. Charter was also
        advised by the U.S. Attorney’s Office that no current officer or member of
        its board of directors was a target of the investigation. On July 24,
        2003,
        a federal grand jury charged four former officers of Charter with conspiracy
        and
        mail and wire fraud, alleging improper accounting and reporting practices
        focusing on revenue from digital set-top terminal suppliers and inflated
        customer account numbers. Each of the indicted former officers pled guilty
        to
        single conspiracy counts related to the original mail and wire fraud charges
        and
        were sentenced April 22, 2005. Charter has advised the Company that
        it has
        fully cooperated with the investigation, and following the sentencings, the
        U.S. Attorney’s Office for the Eastern District of Missouri announced that
        its investigation was concluded and that no further indictments would
        issue.
 
 ***Indemnification***
 
 Charter
        was generally required to indemnify, under certain conditions, each of the
        named
        individual defendants in connection with the matters described above pursuant
        to
        the terms of its bylaws and (where applicable) such individual defendants’
        employment agreements. In accordance with these documents, in connection
        with
        the grand jury investigation, a now-settled SEC investigation and the
        above-described lawsuits, some of Charter’s current and former directors and
        current and former officers have been advanced certain costs and expenses
        incurred in connection with their defense. On February 22, 2005, Charter
        filed suit against four of its former officers who were indicted in the course
        of the grand jury investigation. These suits seek to recover the legal fees
        and
        other related expenses advanced to these individuals. One of these former
        officers has counterclaimed against Charter alleging, among other things,
        that
        Charter owes him additional indemnification for legal fees that Charter did
        not
        pay and another of these former officers has counterclaimed against Charter
        for
        accrued sick leave.
 
 ***Other
        Litigation***
 
 In
        addition to the matters set forth above, Charter is also party to other lawsuits
        and claims that arose in the ordinary course of conducting its business.
        In the
        opinion of management, after taking into account recorded liabilities, the
        outcome of these other lawsuits and claims are not expected to have a material
        adverse effect on the Company’s consolidated financial condition, results of
        operations or its liquidity.
 
 **16.**
              **Stock
                  Compensation Plans**
 
 Prior
        to
        January 1, 2003, the Company accounted for stock-based compensation in
        accordance with Accounting Principles Board ("APB") Opinion No. 25, *Accounting
        for Stock Issued to Employees* ,
        and
        related interpretations, as
  17
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  permitted
        by SFAS No. 123, *Accounting
        for Stock-Based Compensation* .
        On
        January 1, 2003, the Company adopted the fair value measurement provisions
        of SFAS No. 123 using the prospective method, under which the Company
        recognizes compensation expense of a stock-based award to an employee over
        the
        vesting period based on the fair value of the award on the grant date consistent
        with the method described in Financial Accounting Standards Board Interpretation
        No. 28, *Accounting
        for Stock Appreciation Rights and Other Variable Stock Option or Award
        Plans* .
        Adoption of these provisions resulted in utilizing a preferable accounting
        method as the condensed consolidated financial statements will present the
        estimated fair value of stock-based compensation in expense consistently
        with
        other forms of compensation and other expense associated with goods and services
        received for equity instruments. In accordance with SFAS No. 148, *Accounting
        for Stock-Based Compensation - Transition and Disclosure,* the
        fair
        value method is being applied only to awards granted or modified after
        January 1, 2003, whereas awards granted prior to such date will continue
        to
        be accounted for under APB No. 25, unless they are modified or settled
        in
        cash. The ongoing effect on consolidated results of operations or financial
        condition will depend on future stock-based compensation awards granted by
        Charter.
 
 SFAS
        No. 123 requires pro forma disclosure of the impact on earnings as
        if the
        compensation expense for these plans had been determined using the fair value
        method. The following table presents the Company’s net loss as reported and the
        pro forma amounts that would have been reported using the fair value method
        under SFAS No. 123 for the periods presented:
 **Three
                  Months Ended**
                **June
                  30,**
              
              **Six
                  Months Ended**
                **June
                  30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Net
                  loss
              
              $
              (45
              )
              $
              (88
              )
              $
              (136
              )
              $
              (46
              )Add
                  back stock-based compensation expense related to stock
                options
                  included in reported net loss
              
              
              4
              
              
              12
              
              
              8
              
              
              26Less
                  employee stock-based compensation expense determined under fair
                value
                  based method for all employee stock option awards
              
              
              (4
              )
              
              (10
              )
              
              (8
              )
              
              (31
              )Effects
                  ofunvested
                  options instock
                  option exchange
              
              
              --
              
              
              --
              
              
              --
              
              
              48Pro
                  forma
              
              $
              (45
              )
              $
              (86
              )
              $
              (136
              )
              $
              (3
              )
 
 In
        January 2004, Charter began an option exchange program in which the Company
        offered its employees the right to exchange all stock options (vested and
        unvested) under the 1999 Charter Communications Option Plan and 2001 Stock
        Incentive Plan that had an exercise price over $10 per share for shares of
        restricted Charter Class A common stock or, in some instances, cash. Based
        on
        a sliding exchange ratio, which varied depending on the exercise price of
        an
        employee’s outstanding options, if an employee would have received more than 400
        shares of restricted stock in exchange for tendered options, Charter issued
        to
        that employee shares of restricted stock in the exchange. If, based on the
        exchange ratios, an employee would have received 400 or fewer shares of
        restricted stock in exchange for tendered options, Charter instead paid the
        employee cash in an amount equal to the number of shares the employee would
        have
        received multiplied by $5.00.  The
        offer
        applied to options (vested and unvested) to purchase a total of 22,929,573
        shares of Charter Class A common stock, or approximately 48% of Charter’s
        47,882,365 total options (vested and unvested) issued and outstanding as
        of
        December 31, 2003. Participation by employees was voluntary. Those members
        of
        Charter’s board of directors who were not also employees of the Company were not
        eligible to participate in the exchange offer.
 
 In
        the
        closing of the exchange offer on February 20, 2004, Charter accepted for
        cancellation eligible options to purchase approximately 18,137,664 shares
        of
        Charter Class A common stock. In exchange, Charter granted 1,966,686 shares
        of
        restricted stock, including 460,777 performance shares to eligible employees
        of
        the rank of senior vice president and above, and paid a total cash amount
        of
        approximately $4 million (which amount includes applicable withholding taxes)
        to
        those employees who received cash rather than shares of restricted stock.
        The
        restricted stock was granted on February 25, 2004. Employees tendered
        approximately 79% of the options exchangeable under the program.
  18
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  The
        cost
        to the Company of the stock option exchange program was approximately $10
        million, with a 2004 cash compensation expense of approximately $4 million
        and a
        non-cash compensation expense of approximately $6 million to be expensed
        ratably
        over the three-year vesting period of the restricted stock issued in the
        exchange.
 
 In
        January 2004, the Compensation Committee of the board of directors of Charter
        approved Charter’s Long-Term Incentive Program ("LTIP"), which is a program
        administered under the 2001 Stock Incentive Plan. Under the LTIP, employees
        of
        Charter and its subsidiaries whose pay classifications exceed ****** a
        certain
        level are eligible to receive stock options, and more senior level employees
        are
        eligible to receive stock options and performance shares. The stock options
        vest
        25% on each of the first four anniversaries of the date of grant. The
        performance units vest on the third anniversary of the grant date and shares
        of
        Charter Class A common stock are issued, conditional upon Charter’s performance
        against financial performance targets established by Charter’s management and
        approved by its board of directors. Charter granted 6.9 million performance
        shares in January 2004 under this program and the Company recognized expense
        of
        $3 million and $6 million during the three and six months ended June 30,
        2004,
        respectively. However, in the fourth quarter of 2004, the Company reversed
        the
        $8 million of expense recorded in the first three quarters of 2004 based
        on the
        Company’s assessment of the probability of achieving the financial performance
        measures established by Charter and required to be met for the performance
        shares to vest. In March and April 2005, Charter granted 2.8 million performance
        shares under the LTIP. The impact of such grants were de minimis to the
        Company’s results of operations for the three and six months ended June 30,
        2005.
 
 **17.**
              **Related
                  Party Transactions**
 
 The
        following sets forth certain transactions in which the Company and the
        directors, executive officers and affiliates of the Company are involved.
        Unless
        otherwise disclosed, management believes that each of the transactions described
        below was on terms no less favorable to the Company than could have been
        obtained from independent third parties.
 
 ***CC
        VIII***
 
 As
        part
        of the acquisition of the cable systems owned by Bresnan Communications Company
        Limited Partnership in February 2000, CC VIII, CCO Holdings’ indirect limited
        liability company subsidiary, issued, after adjustments, 24,273,943 Class
        A
        preferred membership units (collectively, the "CC VIII interest")
        with a
        value and an initial capital account of approximately $630 million to certain
        sellers affiliated with AT&T Broadband, subsequently owned by Comcast
        Corporation (the "Comcast sellers"). While held by the Comcast sellers,
        the
        CC VIII interest was entitled to a 2% priority return on its initial
        capital account and such priority return was entitled to preferential
        distributions from available cash and upon liquidation of CC VIII. While
        held by
        the Comcast sellers, the CC VIII interest generally did not share
        in the
        profits and losses of CC VIII. Mr. Allen granted the Comcast
        sellers
        the right to sell to him the CC VIII interest for approximately
        $630 million plus 4.5% interest annually from February 2000 (the "Comcast
        put right"). In April 2002, the Comcast sellers exercised the Comcast put
        right
        in full, and this transaction was consummated on June 6, 2003. Accordingly,
        Mr. Allen has become the holder of the CC VIII interest, indirectly
        through an affiliate. Consequently, subject to the matters referenced in
        the
        next paragraph, Mr. Allen generally thereafter will be allocated his
        pro
        rata share (based on number of membership interests outstanding) of profits
        or
        losses of CC VIII. In
        the
        event of a liquidation of CC VIII, Mr. Allen would be entitled to a priority
        distribution with respect to the 2% priority return (which will continue
        to
        accrete). Any remaining distributions in liquidation would be distributed
        to CC
        V Holdings, LLC and Mr. Allen in proportion to CC V Holdings, LLC's capital
        account and Mr. Allen's capital account (which will equal the initial capital
        account of the Comcast sellers of approximately $630 million, increased or
        decreased by Mr. Allen's pro rata share of CC VIII’s profits or losses (as
        computed for capital account purposes) after June 6, 2003).  The
        limited liability company agreement of CC VIII does not provide for
        a
        mandatory redemption of the CC VIII interest.
  An
        issue has arisen as to whether the documentation
        for the Bresnan transaction was correct and complete with regard to the ultimate
        ownership of the CC VIII interest following consummation of the Comcast
        put
        right. Specifically, under the terms of the Bresnan transaction documents
        that
        were entered into in June 1999, the Comcast sellers originally would have
        received, after adjustments, 24,273,943 Charter Holdco membership units,
        but due
        to an FCC
 19
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  regulatory
        issue raised by the Comcast sellers shortly before closing, the Bresnan
        transaction was modified to provide that the Comcast sellers instead would
        receive the preferred equity interests in CC VIII represented by the CC VIII
        interest. As part of the last-minute changes to the Bresnan transaction
        documents, a draft amended version of the Charter Holdco limited liability
        company agreement was prepared, and contract provisions were drafted for
        that
        agreement that would have required an automatic exchange of the CC VIII interest
        for 24,273,943 Charter Holdco membership units if the Comcast sellers exercised
        the Comcast put right and sold the CC VIII interest to Mr. Allen or his
        affiliates. However, the provisions that would have required this automatic
        exchange did not appear in the final version of the Charter Holdco limited
        liability company agreement that was delivered and executed at the closing
        of
        the Bresnan transaction. The law firm that prepared the documents for the
        Bresnan transaction brought this matter to the attention of Charter and
        representatives of Mr. Allen in 2002.
 
 Thereafter,
        the board of directors of Charter formed a Special Committee (currently
        comprised of Messrs. Merritt, Tory and Wangberg) to investigate the
        matter
        and take any other appropriate action on behalf of Charter with respect to
        this
        matter. After conducting an investigation of the relevant facts and
        circumstances, the Special Committee determined that a "scrivener’s error" had
        occurred in February 2000 in connection with the preparation of the last-minute
        revisions to the Bresnan transaction documents and that, as a result, Charter
        should seek the reformation of the Charter Holdco limited liability company
        agreement, or alternative relief, in order to restore and ensure the obligation
        that the CC VIII interest be automatically exchanged for Charter Holdco units.
        The Special Committee further determined that, as part of such contract
        reformation or alternative relief, Mr. Allen should be required to
        contribute the CC VIII interest to Charter Holdco in exchange for
        24,273,943 Charter Holdco membership units. The Special Committee also
        recommended to the board of directors of Charter that, to the extent the
        contract reformation is achieved, the board of directors should consider
        whether
        the CC VIII interest should ultimately be held by Charter Holdco or
        Charter
        Holdings or another entity owned directly or indirectly by them.
 
 Mr. Allen
        disagrees with the Special Committee’s determinations described above and has so
        notified the Special Committee. Mr. Allen contends that the transaction is
        accurately reflected in the transaction documentation and contemporaneous
        and
        subsequent company public disclosures.
 
 The
        parties engaged in a process of non-binding mediation to seek to resolve
        this
        matter, without success. The Special Committee is evaluating what further
        actions or processes it may undertake to resolve this dispute. To accommodate
        further deliberation, each party has agreed to refrain from initiating legal
        proceedings over this matter until it has given at least ten days’ prior notice
        to the other. In addition, the Special Committee and Mr. Allen have determined
        to utilize the Delaware Court of Chancery’s program for mediation of complex
        business disputes in an effort to resolve the CC VIII interest dispute. If
        the
        Special Committee and Mr. Allen are unable to reach a resolution through
        that mediation process or to agree on an alternative dispute resolution process,
        the Special Committee intends to seek resolution of this dispute through
        judicial proceedings in an action that would be commenced, after appropriate
        notice, in the Delaware Court of Chancery against Mr. Allen and his
        affiliates seeking contract reformation, declaratory relief as to the respective
        rights of the parties regarding this dispute and alternative forms of legal
        and
        equitable relief. The ultimate resolution and financial impact of the dispute
        are not determinable at this time.
 
 ***TechTV,
        Inc.***
 
 TechTV,
        Inc. ( " TechTV " )
        operated a cable television network that offered programming mostly related
        to
        technology. Pursuant to an affiliation agreement that originated in 1998
        and
        that terminates in 2008, TechTV has provided the Company with programming
        for
        distribution via Charter’s cable systems. The affiliation agreement provides,
        among other things, that TechTV must offer Charter certain terms and conditions
        that are no less favorable in the affiliation agreement than are given to
        any
        other distributor that serves the same number of or fewer TechTV viewing
        customers. Additionally, pursuant to the affiliation agreement, the Company
        was
        entitled to incentive payments for channel launches through December 31,
        2003.
  In
        March 2004, Charter Holdco entered into agreements
        with Vulcan Programming and TechTV, which provide for (i) Charter Holdco
        and
        TechTV to amend the affiliation agreement which, among other things, revises
        the
        description of the TechTV network content, provides for Charter Holdco to
        waive
        certain claims against TechTV relating to alleged
 20
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  breaches
        of the affiliation agreement and provides for TechTV to make payment of
        outstanding launch receivables due to Charter Holdco under the affiliation
        agreement, (ii) Vulcan Programming to pay approximately $10 million and purchase
        over a 24-month period, at fair market rates, $2 million of advertising time
        across various cable networks on Charter cable systems in consideration of
        the
        agreements, obligations, releases and waivers under the agreements and in
        settlement of the aforementioned claims and (iii) TechTV to be a provider
        of
        content relating to technology and video gaming for Charter’s interactive
        television platforms through December 31, 2006 (exclusive for the first year).
        For each of the three and six months ended June 30, 2005 and 2004, the Company
        recognized approximately $0.3 million and $0.6 million, respectively, of
        the
        Vulcan Programming payment as an offset to programming expense. For the three
        and six months ended June 30, 2005, the Company paid approximately $0.5 million
        and $1 million, respectively, and for the three and six months ended June
        30,
        2004, the Company paid approximately $0.4 million and $0.6 million,
        respectively, under the affiliation agreement.
 
 The
        Company believes that Vulcan Programming, which is 100% owned by Mr. Allen,
        owned an approximate 98% equity interest in TechTV at the time Vulcan
        Programming sold TechTV to an unrelated third party in May 2004. Until September
        2003, Mr. Savoy, a former Charter director, was the president and
        director
        of Vulcan Programming and was a director of TechTV. Mr. Wangberg,
        one of
        Charter’s directors, was the chairman, chief executive officer and a director of
        TechTV. Mr. Wangberg resigned as the chief executive officer of TechTV in
        July
        2002. He remained a director of TechTV along with Mr. Allen until Vulcan
        Programming sold TechTV.
 
 ***Digeo,
        Inc.***
 
 In
        March
        2001, a subsidiary of CCO Holdings, Charter Communications Ventures, LLC
        ( " Charter
        Ventures " ),
        and
        Vulcan Ventures Incorporated formed DBroadband Holdings, LLC for the sole
        purpose of purchasing equity interests in Digeo, Inc. ( " Digeo " ),
        an
        entity controlled by Paul Allen. In connection with the execution of the
        broadband carriage agreement, DBroadband Holdings, LLC purchased an equity
        interest in Digeo funded by contributions from Vulcan Ventures Incorporated.
        The
        equity interest is subject to a priority return of capital to Vulcan Ventures
        up
        to the amount contributed by Vulcan Ventures on Charter Ventures’ behalf. After
        Vulcan Ventures recovers its amount contributed and any cumulative loss
        allocations, Charter Ventures has a 100% profit interest in DBroadband Holdings,
        LLC. Charter Ventures is not required to make any capital contributions,
        including capital calls, to Digeo. DBroadband Holdings, LLC is therefore
        not
        included in the Company’s consolidated financial statements. Pursuant to an
        amended version of this arrangement, in 2003, Vulcan Ventures contributed
        a
        total of $29 million to Digeo, $7 million of which was contributed
        on
        Charter Ventures’ behalf, subject to Vulcan Ventures’ aforementioned priority
        return. Since the formation of DBroadband Holdings, LLC, Vulcan Ventures
        has
        contributed approximately $56 million on Charter Ventures’ behalf.
 
 On
        March 2, 2001, Charter Ventures entered into a broadband carriage
        agreement
        with Digeo Interactive, LLC ("Digeo Interactive"), a wholly owned subsidiary
        of
        Digeo. The carriage agreement provided that Digeo Interactive would provide
        to
        Charter a "portal" product, which would function as the television-based
        Internet portal (the initial point of entry to the Internet) for Charter’s
        customers who received Internet access from Charter. The agreement term was
        for
        25 years and Charter agreed to use the Digeo portal exclusively for
        six
        years. Before the portal product was delivered to Charter, Digeo terminated
        development of the portal product.
 
 On
        September 27, 2001, Charter and Digeo Interactive amended the broadband
        carriage agreement. According to the amendment, Digeo Interactive would provide
        to Charter the content for enhanced "Wink" interactive television services,
        known as Charter Interactive Channels ("i-channels"). In order to provide
        the
        i-channels, Digeo Interactive sublicensed certain Wink technologies to Charter.
        Charter is entitled to share in the revenues generated by the i-channels.
        Currently, the Company’s digital video customers who receive i-channels receive
        the service at no additional charge.
  On
        September 28, 2002, Charter entered into a
        second amendment to its broadband carriage agreement with Digeo Interactive.
        This amendment superseded the amendment of September 27, 2001. It
        provided
        for the development by Digeo Interactive of future features to be included
        in
        the Basic i-TV service to be provided by Digeo and for Digeo’s
 
 21
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  development
        of an interactive " toolkit " to
        enable Charter to develop interactive local content. Furthermore, Charter
        could
        request that Digeo Interactive manage local content for a fee. The amendment
        provided for Charter to pay for development of the Basic i-TV service as
        well as
        license fees for customers who would receive the service, and for Charter
        and
        Digeo to split certain revenues earned from the service. The Company paid
        Digeo
        Interactive approximately $1 million and $1 million for the three and six
        months
        ended June 30, 2005, respectively, and $1 million and $1 million for the
        three
        and six months ended June 30, 2004, respectively, for customized development
        of
        the i-channels and the local content tool kit. This amendment expired pursuant
        to its terms on December 31, 2003. Digeo Interactive is continuing to provide
        the Basic i-TV service on a month-to-month basis.
 
 On
        June
        30, 2003, Charter Holdco entered into an agreement with Motorola, Inc. for
        the
        purchase of 100,000 digital video recorder ("DVR") units. The software for
        these
        DVR units is being supplied by Digeo Interactive, LLC under a license agreement
        entered into in April 2004. Under the license agreement Digeo Interactive
        granted to Charter Holdco the right to use Digeo’s proprietary software for the
        number of DVR units that Charter deployed from a maximum of 10 headends through
        year-end 2004. This maximum number of headends was increased from 10 to 15
        pursuant to a letter agreement executed on June 11, 2004 and the date for
        entering into license agreements for units deployed was extended to June
        30,
        2005. The number of headends was increased from 15 to 20 pursuant to a letter
        agreement dated August 4, 2004, from 20 to 30 pursuant to a letter agreement
        dated September 28, 2004 and from 30 to 50 headends by a letter agreement
        in
        February 2005. The license granted for each unit deployed under the agreement
        is
        valid for five years. In addition, Charter will pay certain other fees including
        a per-headend license fee and maintenance fees. Maximum license and maintenance
        fees during the term of the agreement are expected to be approximately $7
        million. The agreement provides that Charter is entitled to receive contract
        terms, considered on the whole, and license fees, considered apart from other
        contract terms, no less favorable than those accorded to any other Digeo
        customer. Charter paid approximately $0.1 million and $0.2 million in license
        and maintenance fees for the three and six months ended June 30, 2005,
        respectively.
 
 In
        April
        2004, the Company launched DVR service using units containing the Digeo software
        in Charter’s Rochester, Minnesota market using a broadband media center that is
        an integrated set-top terminal with a cable converter, DVR hard drive and
        connectivity to other consumer electronics devices (such as stereos, MP3
        players, and digital cameras).
 
 In
        May
        2004, Charter Holdco entered into a binding term sheet with Digeo Interactive
        for the development, testing and purchase of 70,000 Digeo PowerKey DVR units.
        The term sheet provided that the parties would proceed in good faith to
        negotiate, prior to year-end 2004, definitive agreements for the development,
        testing and purchase of the DVR units and that the parties would enter into
        a
        license agreement for Digeo's proprietary software on terms substantially
        similar to the terms of the license agreement described above. In November
        2004,
        Charter Holdco and Digeo Interactive executed the license agreement and in
        December 2004, the parties executed the purchase agreement, each on terms
        substantially similar to the binding term sheet. Product development and
        testing
        has been completed. Total purchase price and license and maintenance fees
        during
        the term of the definitive agreements are expected to be approximately $41
        million. The definitive agreements are terminable at no penalty to Charter
        in
        certain circumstances. Charter
        paid approximately $1 million and $2 million in capital purchases under this
        agreement for the three and six months ended June 30, 2005,
        respectively.
 
 In
        late
        2003, Microsoft filed suit against Digeo for $9 million in a breach
        of
        contract action, involving an agreement that Digeo and Microsoft had entered
        into in 2001. Digeo informed us that it believed it had an indemnification
        claim
        against us for half that amount. Digeo settled with Microsoft agreeing to
        make a
        cash payment and to purchase certain amounts of Microsoft software products
        and
        consulting services through 2008. In consideration of Digeo agreeing to release
        us from its potential claim against us, after consultation with outside counsel
        we agreed, in June 2005, to purchase a total of $2.3 million in Microsoft
        consulting services through 2008, a portion of which amounts Digeo has informed
        us will count against Digeo’s purchase obligations with Microsoft.
  The
        Company believes that Vulcan Ventures, an entity
        controlled by Mr. Allen, owns an approximate 60% equity interest in
        Digeo,
        Inc., on a fully-converted non-diluted basis. Mr. Allen, Lance Conn and Jo
        Allen
        Patton, directors of Charter, are directors of Digeo, and Mr. Vogel was a
        director of Digeo in 2004. During 2004 and 2005, Mr. Vogel held options
        to
        purchase 10,000 shares of Digeo common stock.
 22
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
  ***Oxygen
        Media LLC***
 
 Oxygen
        Media LLC ("Oxygen") provides programming content aimed at the female audience
        for distribution over cable systems and satellite. On July 22, 2002,
        Charter Holdco entered into a carriage agreement with Oxygen, whereby the
        Company agreed to carry programming content from Oxygen. Under the carriage
        agreement, the Company currently makes Oxygen programming available to
        approximately 5 million of its video customers. The term of the carriage
        agreement was retroactive to February 1, 2000, the date of launch
        of Oxygen
        programming by the Company, and runs for a period of five years from that
        date.
        For the three and six months ended June 30, 2005, the Company paid Oxygen
        approximately $2 million and $5 million, respectively, and for the three
        and six
        months ended June 30, 2004, the Company paid Oxygen approximately $3 million
        and
        $7 million, respectively, for programming content. In addition, Oxygen pays
        the
        Company marketing support fees for customers launched after the first year
        of
        the term of the carriage agreement up to a total of $4 million. The
        Company
        recorded approximately $0.1 million related to these launch incentives as
        a
        reduction of programming expense for the six months ended June 30, 2005,
        and
        $0.4 million and $0.7 million for the three and six months ended June
        30,
        2004, respectively.
 
 Concurrently
        with the execution of the carriage agreement, Charter Holdco entered into
        an
        equity issuance agreement pursuant to which Oxygen’s parent company, Oxygen
        Media Corporation ( " Oxygen
        Media " ),
        granted a subsidiary of Charter Holdco a warrant to purchase 2.4 million
        shares of Oxygen Media common stock for an exercise price of $22.00 per share.
        In February 2005, this warrant expired unexercised. Charter Holdco was also
        to
        receive unregistered shares of Oxygen Media common stock with a guaranteed
        fair
        market value on the date of issuance of $34 million, on or prior to
        February 2, 2005, with the exact date to be determined by Oxygen Media,
        but
        this commitment was later revised as discussed below.
 
 The
        Company recognized the guaranteed value of the investment over the life of
        the
        carriage agreement as a reduction of programming expense. For the six months
        ended June 30, 2005, the Company recorded approximately $2 million, as a
        reduction of programming expense and for the three and six months ended June
        30,
        2004, the Company recorded approximately $3 million and $7 million,
        respectively. The carrying value of the Company’s investment in Oxygen was
        approximately $33 million and $32 million as of June 30, 2005 and
        December 31, 2004, respectively.
 
 In
        August
        2004, Charter Holdco and Oxygen entered into agreements that amended and
        renewed
        the carriage agreement. The amendment to the carriage agreement (a) revises
        the
        number of the Company’s customers to which Oxygen programming must be carried
        and for which the Company must pay, (b) releases Charter Holdco from any
        claims
        related to the failure to achieve distribution benchmarks under the carriage
        agreement, (c) requires Oxygen to make payment on outstanding receivables
        for
        marketing support fees due to the Company under the carriage agreement; and
        (d)
        requires that Oxygen provide its programming content to the Company on economic
        terms no less favorable than Oxygen provides to any other cable or satellite
        operator having fewer subscribers than the Company. The renewal of the carriage
        agreement (a) extends the period that the Company will carry Oxygen programming
        to the Company’s customers through January 31, 2008, and (b) requires license
        fees to be paid based on customers receiving Oxygen programming, rather than
        for
        specific customer benchmarks.
 
 In
        August
        2004, Charter Holdco and Oxygen also amended the equity issuance agreement
        to
        provide for the issuance of 1 million shares of Oxygen Preferred Stock with
        a
        liquidation preference of $33.10 per share plus accrued dividends to Charter
        Holdco on February 1, 2005 in place of the $34 million of unregistered shares
        of
        Oxygen Media common stock. Oxygen Media delivered these shares in March 2005.
        The preferred stock is convertible into common stock after December 31, 2007
        at
        a conversion ratio per share of preferred stock, the numerator of which is
        the
        liquidation preference and the denominator of which is the fair market value
        per
        share of Oxygen Media common stock on the conversion date.
  As
        of June 30, 2005, through Vulcan Programming, Mr.
        Allen owned an approximate 31% interest in Oxygen assuming no exercises of
        outstanding warrants or conversion or exchange of convertible or exchangeable
        securities. Ms. Jo Allen Patton is a director and the President of Vulcan
        Programming. Mr. Lance Conn is a Vice President of Vulcan Programming. Marc
        Nathanson has an indirect beneficial interest of less than 1% in Oxygen.
 23
 Table
            of Contents
 **CCO
            HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
            in millions)**
   **18.**
              **Recently
                  Issued Accounting
                  Standards**
 
 In
        November 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
        No.
        153, *Exchanges
        of Non-monetary Assets - An Amendment of APB No. 29* .
        This
        statement eliminates the exception to fair value for exchanges of similar
        productive assets and replaces it with a general exception for exchange
        transactions that do not have commercial substance - that is, transactions
        that
        are not expected to result in significant changes in the cash flows of the
        reporting entity. The Company adopted this pronouncement effective April
        1,
        2005. The exchange transaction discussed in Note 3 was accounted for under
        this
        standard.
 
 In
        December 2004, the Financial Accounting Standards Board issued the revised
        SFAS
        No. 123, *Share-Based
        Payment* ,
        which
        addresses the accounting for share-based payment transactions in which a
        company
        receives employee services in exchange for (a) equity instruments of that
        company or (b) liabilities that are based on the fair value of the company’s
        equity instruments or that may be settled by the issuance of such equity
        instruments. This statement will be effective for the Company beginning January
        1, 2006. Because the Company adopted the fair value recognition provisions
        of
        SFAS No. 123 on January 1, 2003, the Company does not expect this revised
        standard to have a material impact on its financial statements.
 
 The
        Company does not believe that any other recently issued, but not yet effective
        accounting pronouncements, if adopted, would have a material effect on the
        Company’s accompanying financial statements.
 
  24
 Table
            of Contents
   **Item
        2.****Management's
        Discussion and Analysis of Financial Condition and Results of
        Operations.**
 
 **General**
 
 CCO
        Holdings, LLC (“CCO Holdings”) is a holding company whose principal assets as of June
        30,
        2005 are
        equity interests in its operating subsidiaries. CCO Holdings is a subsidiary
        of
        CCH II, LLC ("CCH II"). CCH II is a subsidiary of CCH I, LLC ("CCH I"), which
        is
        a subsidiary of Charter Communications Holdings, LLC ("Charter Holdings").
        Charter Holdings is a subsidiary of Charter Communications Holding Company,
        LLC
        (“Charter Holdco”), which is a subsidiary of Charter Communications, Inc.
        ("Charter"). “We,”“us” and “our” refer to CCO Holdings and its subsidiaries. Our
        "parent companies" are CCH II, CCH I, Charter Holdings, Charter Holdco and
        Charter. We
        are a
        broadband communications company operating in the United States. We offer
        our
        customers traditional cable video programming (analog and digital video)
        as well
        as high-speed Internet services and in some areas advanced broadband services
        such as high definition television, video on demand, telephone and interactive
        television. We sell our cable video programming, high-speed Internet and
        advanced broadband services on a subscription basis.
 
 The
        following table summarizes our customer statistics for analog and digital
        video,
        residential high-speed Internet and residential telephone as of June
        30,
        2005 and 2004 :
 
 **Approximate
                  as of****June
                  30,**
              
              **June
                  30,****2005
                  (a)**
              
              **2004
                  (a)****Cable
                  Video Services:****Analog
                  Video:**Residential
                  (non-bulk) analog video customers (b)
              
              
              5,683,400
              
              
              5,892,600Multi-dwelling
                  (bulk) and commercial unit customers (c)
              
              
              259,700
              
              
              240,600Total
                  analog video customers (b)(c)
              
              
              5,943,100
              
              
              6,133,200**Digital
                  Video:**Digital
                  video customers (d)
              
              
              2,685,600
              
              
              2,650,200**Non-Video
                  Cable Services:**Residential
                  high-speed Internet customers (e)
              
              
              2,022,200
              
              
              1,711,400Telephone
                  customers (f)
              
              
              67,800
              
              
              31,200
 
 (a)
              "Customers"
                  include all persons our corporate billing records show as receiving
                  service (regardless of their payment status), except for complimentary
                  accounts (such as our employees). At June 30, 2005 and 2004, "customers"
                  include approximately 45,100 and 58,700 persons whose accounts
                  were over
                  60 days past due in payment, approximately 8,200 and 6,300 persons
                  whose
                  accounts were over 90 days past due in payment, and approximately
                  4,500
                  and 2,000 of which were over 120 days past due in payment, respectively.
 
 (b)
              "Residential
                  (non-bulk) analog video customers" include all customers who receive
                  video
                  services, except for complimentary accounts (such as our employees).
 
 (c)
              Included
                  within "video customers" are those in commercial and multi-dwelling
                  structures, which are calculated on an equivalent bulk unit ("EBU")
                  basis.
                  EBU is calculated for a system by dividing the bulk price charged
                  to
                  accounts in an area by the most prevalent price charged to non-bulk
                  residential customers in that market for the comparable tier of
                  service.
                  The EBU method of estimating analog video customers is consistent
                  with the
                  methodology used in determining costs paid to programmers and has
                  been
                  consistently applied year over year. As we increase our effective
                  analog
                  prices to residential customers without a corresponding increase
                  in the
                  prices charged to commercial service or multi-dwelling customers,
                  our EBU
                  count will decline even if there is no real loss in commercial
                  service or
                  multi-dwelling customers.
 
 (d)
              "Digital
                  video customers" include all households that have one or more digital
                  set-top terminals. Included in "digital video customers" on June
                  30, 2005
                  and 2004 are approximately 9,700 and 11,400 customers, respectively,
                  that
                  receive digital video service directly through satellite transmission.
 
 25
 Table
            of Contents
 (e)
              "High-speed
                  Internet customers" represent those customers who subscribe to
                  our
                  high-speed Internet service. At June 30, 2005 and 2004, approximately
                  1,787,600 and 1,543,000 of these high-speed Internet customers,
                  respectively, receive video services from us and are included within
                  our
                  video statistics above.
 
 (f)
              "Telephone
                  customers" include all households who subscribe to our telephone
                  service.
 
 **Overview
        of Operations**
  We
        have a
        history of net losses. Further, we expect to continue to report net losses
        for
        the foreseeable future. Our net losses are principally attributable to
        insufficient revenue to cover the combination
        of operating costs and interest
        costs we incur, depreciation expenses that we incur resulting from the capital
        investments we have made and continue to make in our business, and amortization
        and impairment of our franchise intangibles. We expect that these expenses
        (other than amortization and impairment of franchises) will remain significant,
        and we therefore expect to continue to report net losses for the foreseeable
        future. Effective January 1, 2005, we ceased recognizing minority interest
        in
        earnings or losses of CC VIII, LLC for financial reporting purposes until
        the
        resolution of the dispute between Charter and Mr. Allen regarding the preferred
        membership units in CC VIII, LLC is determinable or other events
        occur.
  For
        the
        three months ended June 30, 2005 and 2004, our income from operations, which
        includes depreciation and amortization expense and asset impairment charges
        but
        excludes interest expense, was $110 million and $15 million, respectively,
        and
        for the six months ended June 30, 2005 and 2004, our income from operations
        was
        $161 million and $190 million, respectively. We had operating margins of
        8% and
        1% for the three months ended June 30, 2005 and 2004, respectively, and 6%
        and
        8% for the six months ended June 30, 2005 and 2004, respectively. The increase
        in income from operations and operating margins from the three months ended
        June
        30, 2004 compared to 2005 was principally due to approximately $85 million
        recorded in special charges for the three months ended June 30, 2004 as part
        of
        the terms set forth in memoranda of understanding regarding settlement of
        the
        consolidated Federal Class Action and Federal Derivative Action which did
        not
        recur in 2005. See
        "—
        Legal Proceedings." The
        decrease in income from operations and operating margins from the six months
        ended June 30, 2004 compared to 2005 was principally due to the one-time
        gain as
        a result of the sale of certain cable systems in Florida, Pennsylvania,
        Maryland, Delaware and West Virginia to Atlantic Broadband Finance, LLC of
        approximately $106 million, recognized in the six months ended June 30, 2004,
        offset by $85 million recorded in special charges discussed above.
  Historically,
        our ability to fund operations and investing activities has depended on our
        continued access to credit under our credit facilities. We expect we will
        continue to borrow under our credit facilities from time to time to fund
        cash
        needs. The occurrence of an event of default under our credit facilities
        could
        result in borrowings from these credit facilities being unavailable to us
        and
        could, in the event of a payment default or acceleration, also trigger events
        of
        default under the indentures governing our outstanding notes and would have
        a
        material adverse effect on us. Approximately $15 million of our debt matures
        during the remainder of 2005, which we expect to fund through borrowings
        under
        our revolving credit facility. See "— Liquidity and Capital
        Resources."
 
 **Critical
        Accounting Policies and Estimates**
 
 For
        a
        discussion of our critical accounting policies and the means by which we
        develop
        estimates therefor, see "Item 7. Management’s Discussion and Analysis of
        Financial Condition and Results of Operations" in our 2004 Annual Report
        on Form
        10-K.
 
 26
 Table
            of Contents
 
 **RESULTS
        OF OPERATIONS**
 
 ***Six
        Months Ended June 30, 2005 Compared to Six Months Ended June 30,
        2004***
 
 The
        following table sets forth the percentages of revenues that items in the
        accompanying consolidated statements of operations constituted for the periods
        presented (dollars in millions):
 
 **Six
                  Months Ended June 30,****2005**
              
              **2004**Revenues
              
              $
              2,594
              
              
              100
              %
              $
              2,453
              
              
              100
              %Costs
                  and expenses:Operating
                  (excluding depreciation and amortization)
              
              
              1,128
              
              
              44
              %
              
              1,027
              
              
              42
              %Selling,
                  general and administrative
              
              
              493
              
              
              19
              %
              
              483
              
              
              19
              %Depreciation
                  and amortization
              
              
              759
              
              
              29
              %
              
              734
              
              
              30
              %Asset
                  impairment charges
              
              
              39
              
              
              2
              %
              
              --
              
              
              --(Gain)
                  loss on sale of assets, net
              
              
              4
              
              
              --
              
              
              (104
              )
              
              (4
              )%Option
                  compensation expense, net
              
              
              8
              
              
              --
              
              
              26
              
              
              1
              %Special
                  charges, net
              
              
              2
              
              
              --
              
              
              97
              
              
              4
              %2,433
              
              
              94
              %
              
              2,263
              
              
              92
              %Income
                  from operations
              
              
              161
              
              
              6
              %
              
              190
              
              
              8
              %Interest
                  expense, net
              
              
              (324
              )
              
              
              
              
              (258
              )Gain
                  on derivative instruments and hedging activities, net
              
              
              26
              
              
              
              
              
              56Loss
                  on extinguishment of debt
              
              
              (6
              )
              
              
              
              
              (21
              )Gain
                  on investments
              
              
              21
              
              
              
              
              
              --(283
              )
              
              
              
              
              (223
              )Loss
                  before minority interest and income taxes
              
              
              (122
              )
              
              
              
              
              (33
              )Minority
                  interest
              
              
              (6
              )
              
              
              
              
              (9
              )Loss
                  before income taxes
              
              
              (128
              )
              
              
              
              
              (42
              )Income
                  tax expense
              
              
              (8
              )
              
              
              
              
              (4
              )Net
                  loss
              
              $
              (136
              )
              
              
              
              $
              (46
              )
  ***Revenues.*** **** Revenues
        increased by $141 million, or 6%, from $2.5 billion for the six months ended
        June 30, 2004 to $2.6 billion for the six months ended June 30, 2005. This
        increase is principally the result of an increase of 310,800 and 35,400
        high-speed Internet and digital video customers, respectively, as well as
        price
        increases for video and high-speed Internet services, and is offset partially
        by
        a decrease of 190,100 analog video customers. The cable system sales to Atlantic
        Broadband Finance, LLC, which closed in March and April 2004 (referred to
        herein
        as the "System Sales") reduced the increase in revenues by $29 million. Our
        goal
        is to increase revenues by improving customer service which we believe will
        stabilize our analog video customer base, implementing price increases on
        certain services and packages and increasing the number of customers who
        purchase high-speed Internet services, digital video and advanced products
        and
        services such as telephone, VOD, high definition television and digital video
        recorder service.
 
 Average
        monthly revenue per analog video customer increased to $72.38 for the six
        months
        ended June 30, 2005 from $65.39 for the six months ended June 30, 2004 primarily
        as a result of incremental revenues from advanced services and price increases.
        Average monthly revenue per analog video customer represents total revenue
        for
        the six months ended during the respective period, divided by six, divided
        by
        the average number of analog video customers during the respective
        period.
 
  27
 Table
            of Contents
  Revenues
        by service offering were as follows (dollars in millions):
 **Six
                    Months Ended June 30,****2005**
                
                
                **2004**
                
                
                **2005
                    over 2004****Revenues**
                
                
                **%
                    of**
                  **Revenues**
                
                
                
                **Revenues**
                
                
                **%
                    of**
                  **Revenues**
                
                
                
                **Change**
                
                
                **%
                    Change**Video
                
                $
                1,703
                
                
                66
                %
                
                $
                1,695
                
                
                69
                %
                
                $
                8
                
                
                --High-speed
                    Internet
                
                
                441
                
                
                17
                %
                
                
                349
                
                
                14
                %
                
                
                92
                
                
                26
                %Advertising
                    sales
                
                
                140
                
                
                5
                %
                
                
                132
                
                
                5
                %
                
                
                8
                
                
                6
                %Commercial
                
                
                134
                
                
                5
                %
                
                
                114
                
                
                5
                %
                
                
                20
                
                
                18
                %Other
                
                
                176
                
                
                7
                %
                
                
                163
                
                
                7
                %
                
                
                13
                
                
                8
                %$
                2,594
                
                
                100
                %
                
                $
                2,453
                
                
                100
                %
                
                $
                141
                
                
                6
                %
 Video
          revenues consist primarily of revenues from analog and digital video services
          provided to our non-commercial customers. Video revenues increased by $8
          million
          for the six months ended June 30, 2005 compared to the six months ended
          June 30,
          2004. Approximately $68 million of the increase was the result of price
          increases and incremental video revenues from existing customers and
          approximately $8 million resulted from an increase in digital video customers.
          The increases were offset by decreases of approximately $21 million resulting
          from the System Sales and approximately an additional $47 million related
          to a
          decrease in analog video customers.
 
 Revenues
        from high-speed Internet services provided to our non-commercial customers
        increased $92 million, or 26%, from $349 million for the six months ended
        June
        30, 2004 to $441 million for the six months ended June 30, 2005.
        Approximately $68 million of the increase related to the increase in the
        average
        number of customers receiving high-speed Internet services, whereas
        approximately $27 million related to the increase in average price of the
        service. The increase in high-speed Internet revenues was reduced by
        approximately $3 million as a result of the System Sales.
 
 Advertising
        sales revenues consist primarily of revenues from commercial advertising
        customers, programmers and other vendors. Advertising sales increased $8
        million, or 6%, from $132 million for the six months ended June 30, 2004
        to $140
        million for the six months ended June 30, 2005, primarily as a result of
        an
        increase in new advertising sales customers and in advertising rates. The
        increase was offset by a decrease of $1 million as a result of the System
        Sales.
        For the six months ended June 30, 2005 and 2004, we received $7 million and
        $6
        million in advertising sales revenues from vendors.
 
 Commercial
        revenues consist primarily of revenues from cable video and high-speed Internet
        services to our commercial customers. Commercial revenues increased $20 million,
        or 18%, from $114 million for the six months ended June 30, 2004 to $134
        million
        for the six months ended June 30, 2005, primarily as a result of an increase
        in
        commercial high-speed Internet revenues. The increase was reduced by
        approximately $2 million as a result of the System Sales.
 
 Other
        revenues consist of revenues from franchise fees, telephone revenue, equipment
        rental, customer installations, home shopping, dial-up Internet service,
        late
        payment fees, wire maintenance fees and other miscellaneous revenues. Other
        revenues increased $13 million, or 8%, from $163 million for the six months
        ended June 30, 2004 to $176 million for the six months ended June 30, 2005.
        The
        increase was primarily the result of an increase in telephone revenue of
        $6
        million, installation revenue of $5 million and franchise fees of $4 million
        and
        was partially offset by approximately $2 million as a result of the System
        Sales.
 
  28
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  ***Operating
        Expenses*** **.** Operating expenses increased $101 million, or 10%, from $1.0 billion for
        the six
        months ended June 30, 2004 to $1.1 billion for the six months ended June
        30,
        2005. The increase in operating expenses was reduced by $12 million as a
        result
        of the System Sales. Programming costs included in the accompanying condensed
        consolidated statements of operations were $709 million and $663 million,
        representing 29% of total costs and expenses for each of the six months ended
        June 30, 2005 and 2004, respectively. Key expense components as a percentage
        of
        revenues were as follows (dollars in millions):
 **Six
                    Months Ended June 30,****2005**
                
                
                **2004**
                
                
                **2005
                    over 2004****Expenses**
                
                
                **%
                    of**
                  **Revenues**
                
                
                
                **Expenses**
                
                
                **%
                    of**
                  **Revenues**
                
                
                
                **Change**
                
                
                **%
                    Change**Programming
                
                $
                709
                
                
                28
                %
                
                $
                663
                
                
                27
                %
                
                $
                46
                
                
                7
                %Advertising
                    sales
                
                
                50
                
                
                2
                %
                
                
                48
                
                
                2
                %
                
                
                2
                
                
                4
                %Service
                
                
                369
                
                
                14
                %
                
                
                316
                
                
                13
                %
                
                
                53
                
                
                17
                %$
                1,128
                
                
                44
                %
                
                $
                1,027
                
                
                42
                %
                
                $
                101
                
                
                10
                %
 Programming
          costs consist primarily of costs paid to programmers for analog, premium,
          digital channels, VOD and pay-per-view programming. The increase in programming
          costs of $46 million, or 7%, for the six months ended June 30, 2005
          over
          the six months ended June 30, 2004 was a result of price increases, particularly
          in sports programming, partially offset by decreases in analog video customers.
          Additionally, the increase in programming costs was reduced by $9 million
          as a
          result of the System Sales. Programming costs were offset by the amortization
          of
          payments received from programmers in support of launches of new channels
          of $18
          million and $28 million for the six months ended June 30, 2005 and
          2004,
          respectively. Programming costs for the six months ended June 30, 2004
          also
          include a $4 million reduction related to the settlement of a dispute with
          TechTV, Inc. See Note 17 to the condensed consolidated financial
          statements.
 
 Our
        cable
        programming costs have increased in every year we have operated in excess
        of
        U.S. inflation and cost-of-living increases, and we expect them to continue
        to
        increase because of a variety of factors, including inflationary or negotiated
        annual increases, additional programming being provided to customers and
        increased costs to purchase programming. In 2005, programming costs have
        and we
        expect they will continue to increase at a higher rate than in 2004. These
        costs
        will be determined in part on the outcome of programming negotiations in
        2005
        and will likely be subject to offsetting events or otherwise affected by
        factors
        similar to the ones mentioned in the preceding paragraph. Our increasing
        programming costs will result in declining operating margins for our video
        services to the extent we are unable to pass on cost increases to our customers.
        We expect to partially offset any resulting margin compression from our
        traditional video services with revenue from advanced video services, increased
        high-speed Internet revenues, advertising revenues and commercial service
        revenues.
 
 Advertising
        sales expenses consist of costs related to traditional advertising services
        provided to advertising customers, including salaries, benefits and commissions.
        Advertising sales expenses increased $2 million, or 4%, primarily as a result
        of
        increased salary, benefit and commission costs. Service costs consist primarily
        of service personnel salaries and benefits, franchise fees, system utilities,
        Internet service provider fees, maintenance and pole rent expense. The increase
        in service costs of $53 million, or 17%, resulted primarily from increased
        labor and maintenance costs to support our infrastructure, increased equipment
        maintenance, an increase in franchise fees as a result of increased revenues
        and
        higher fuel prices. The increase in service costs was reduced by $3 million
        as a
        result of the System Sales.
  29
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  ***Selling,
        General and Administrative Expenses.*** Selling,
        general and administrative expenses increased by $10 million, or 2%, from
        $483
        million for the six months ended June
        30 ,
        2004 to
        $493 million for the six months ended June
        30 ,
        2005. The
        increase in selling, general and administrative expenses was reduced by $4
        million as a result of the System Sales. Key
        components of expense as a percentage of revenues were as follows (dollars
        in
        millions):
 **Six
                    Months Ended June 30,****2005**
                
                
                **2004**
                
                
                **2005
                    over 2004****Expenses**
                
                **%
                    of**
                  **Revenues**
                
                
                **Expenses**
                
                **%
                    of**
                  **Revenues**
                
                
                **Change**
                
                **%
                    Change**General
                    and administrative
                
                $
                427
                
                
                16
                %
                
                $
                416
                
                
                17
                %
                
                $
                11
                
                
                3
                %Marketing
                
                
                66
                
                
                3
                %
                
                
                67
                
                
                2
                %
                
                
                (1
                )
                
                (1
                )%$
                493
                
                
                19
                %
                
                $
                483
                
                
                19
                %
                
                $
                10
                
                
                2
                %
 General
          and administrative expenses consist primarily of salaries and benefits,
          rent
          expense, billing costs, call center costs, internal network costs, bad
          debt
          expense and property taxes. The increase in general and administrative
          expenses
          of $11 million, or 3%, resulted primarily from increases in professional
          fees of $15 million and salaries and benefits of $13 million, offset by
          the
          System Sales of $4 million and decreases in bad debt expense of $10
          million.
 
 Marketing
        expenses decreased $1 million, or 1%, as a result of a decrease in
        expenditures as a result of disciplined spending and more targeted marketing
        tactics. We expect marketing expenditures to increase for the remainder of
        2005.
 
 ***Depreciation
        and Amortization*** *.* Depreciation
        and amortization expense increased by $25 million, or 3%, from $734
        million for
        the
        six months ended June
        30 ,
        2004 to
        $759
        million for
        the
        six months ended June
        30 ,
        2005 .
        The
        increase in depreciation was related to an increase in capital
        expenditures.
 
 ***Asset
        Impairment Charges.*** Asset
        impairment charges for the six months ended June 30, 2005 represent the
        write-down of assets related to three pending cable asset sales to fair value
        less costs to sell. See Note 3 to the condensed consolidated financial
        statements.
 
 ***(Gain)
        Loss on Sale of Assets, Net.*** Loss
        on
        sale of assets of $4 million for the six months ended June 30, 2005 primarily
        represents the loss recognized on the disposition of plant and equipment.
        Gain
        on sale of assets of $104 million for the six months ended June 30, 2004
        primarily represents the pretax gain realized on the sale of systems to Atlantic
        Broadband Finance, LLC which closed on March 1 and April 30, 2004.
 
 ***Option
        Compensation Expense, Net*** .
        Option
        compensation expense of $8 million for the six months ended June
        30,
        2005 primarily represents options expensed in accordance with SFAS No. 123, *Accounting
        for Stock-Based Compensation* .
        Option
        compensation expense of $26 million for the six months ended June 30, 2004
        primarily represents the expense of approximately $8 million related to a
        stock
        option exchange program, under which
        our employees were offered the right to exchange all stock options (vested
        and
        unvested) issued under the 1999 Charter Communications Option Plan and 2001
        Stock Incentive Plan that had an exercise price over $10 per share for shares
        of
        restricted Charter Class A common stock or, in some instances, cash .
        The
        exchange offer closed in February 2004. Additionally, during the six months
        ended June 30, 2004, we recognized approximately $6 million related to the
        performance shares granted under the Charter Long-Term Incentive Program
        and
        approximately $12 million related to options granted following the adoption
        of Statement
        of Financial Accounting Standards ("SFAS") No. 123, *Accounting
        for Stock-Based Compensation* .
 
 ***Special
        Charges, Net*** *.* Special
        charges of $2 million for the six months ended June 30, 2005 represents $4
        million of severance and related costs of our management realignment offset
        by
        approximately $2 million related to an agreed upon cash discount on settlement
        of the consolidated Federal Class Action and Federal Derivative
        Action .
        See "—
        Legal Proceedings." Special charges of $97 million for the six months ended
        June
        30, 2004 represents approximately $85 million as part of the terms set forth
        in
        memoranda of understanding regarding settlement of the consolidated Federal
        Class Action and Federal Derivative Action and approximately $9 million of
        litigation costs related to the tentative settlement of the South Carolina
        national class action suit, which settlements are subject to
  30
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  final
        documentation and court approval and approximately $3 million of severance
        and
        related costs of our workforce reduction.
 
 ***Interest
        Expense, Net*** . Net
        interest expense increased by $66 million, or 26%, from $258 million for
        the
        six months ended June
        30 ,
        2004 to
        $324 million for
        the
        six months ended June
        30 ,
        2005 .
        The
        increase in net interest expense was a result of an increase in our average
        borrowing rate from 6.40% in
        the
        six months ended June
        30 , 2004
        to
        7.39% in the
        six
        months ended June
        30 ,
        2005 and
        an
        increase of $748 million in average debt outstanding from $7.6 billion for
        the
        six months ended June
        30 ,
        2004 compared
        to $8.4 billion for
        the
        six months ended June
        30 ,
        2005.
 
 ***Gain
        on Derivative Instruments and Hedging Activities, Net.*** Net
        gain
        on derivative instruments and hedging activities decreased $30 million from
        $56
        million for the six months ended June 30, 2004 to $26 million for the six
        months
        ended June 30, 2005. The decrease is primarily a result of a decrease in
        gains
        on interest rate agreements, which do not qualify for hedge accounting under
        SFAS No. 133, which decreased from $54 million for the six months ended June
        30,
        2004 to $25 million for the six months ended June 30, 2005.
 
 ***Loss
        on extinguishment of debt.*** Loss
        on
        extinguishment of debt of $6 million for the six months ended June 30, 2005
        primarily represents approximately $5 million of losses related to the
        redemption of our subsidiary’s, CC V Holdings, LLC, 11.875% notes due 2008. See
        Note 6 to the condensed consolidated financial statements. Loss
        on
        extinguishment of debt of $21 million for the six months ended June 30, 2004
        represents the write-off of deferred financing fees and third party costs
        related to the Charter Communications Operating, LLC (“Charter Operating”)
        refinancing in April 2004.
 
 ***Gain
        on investments.*** **** Gain
        on
        investments of $21 million for the six months ended June 30, 2005 primarily
        represents a gain
        realized on an exchange of our interest in an equity investee for an investment
        in a larger enterprise .
 
 ***Minority
        Interest.*** ** Minority
        interest represents the 2% accretion of the preferred membership interests
        in
        our indirect subsidiary, CC VIII, LLC, and in 2004, the pro rata share of
        the
        profits and losses of CC VIII, LLC. Effective January 1, 2005, we ceased
        recognizing minority interest in earnings or losses of CC VIII for financial
        reporting purposes until the dispute between Charter and Mr. Allen regarding
        the
        preferred membership interests in CC VIII is resolved. See Note 7 to the
        condensed consolidated financial statements.
 
 ***Income
        Tax Expense.*** ** Income
        tax expense of $8 million and $4 million was recognized for the six months
        ended
        June 30, 2005 and 2004, respectively. Income tax expense represents increases
        in
        the deferred tax liabilities and current federal and state income tax expenses
        of certain of our indirect corporate subsidiaries .
 
 ***Net
        Loss*** .
        Net
        loss increased by $90 million, from $46 million for the six months ended June
        30 ,
        2004 to
        $136 million for the six months ended June
        30 ,
        2005 as
        a result of the factors described above.
 
 **Liquidity
        and Capital Resources**
  ***Introduction*** ****
  This
        section contains a discussion of our liquidity and capital resources, including
        a discussion of our cash position, sources and uses of cash, access to credit
        facilities and other financing sources, historical financing activities,
        cash
        needs, capital expenditures and outstanding debt.
  ***Overview*** ****
 
 Our
        business requires significant cash to fund debt service costs, capital
        expenditures and ongoing operations. We have historically funded our debt
        service costs, operating activities and capital requirements through cash
        flows
        from operating activities, borrowings under our credit facilities, equity
        contributions from our parent companies, borrowings from our parent companies,
        sales of assets, issuances of debt securities and cash on hand. However,
        the mix
        of funding sources changes from period to period. For the six months ended
        June
        30, 2005, we generated $552 million of net cash flows from operating activities
        after paying cash interest of $308 million. In addition, we used approximately
        $542 million for purchases of property, plant and equipment. Finally, we
        had net
        cash flows used in financing activities of $604 million, which included,
        among
        other things, approximately $705 million in repayment of borrowings under
        the
        Charter Operating revolving credit facility. This repayment was the primary
        reason cash on hand decreased by $524 million to $22 million at June 30,
        2005.
        We expect that our mix of sources of funds will
  31
 Table
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  continue
        to change in the future based on overall needs relative to our cash flow
        and on
        the availability of funds under our credit facilities, our access to the
        debt
        markets, the timing of possible asset sales and our ability to generate cash
        flows from operating activities. We continue to explore asset dispositions
        as
        one of several possible actions that we could take in the future to improve
        our
        liquidity, but we do not presently consider future asset sales as a significant
        source of liquidity.
 
 We
        expect
        that cash on hand, cash flows from operating activities and the amounts
        available under our credit facilities will be adequate to meet our and our
        parent companies’ cash needs for
        the
        remainder of 2005.
        Cash flows from operating activities and amounts available under our credit
        facilities may not be sufficient to fund our operations and satisfy our and
        our
        parent companies’ principal repayment obligations that come due in 2006 and, we
        believe, such amounts will not be sufficient to fund our operations and satisfy
        such repayment obligations thereafter.
 
 It
        is
        likely that we and our parent companies’ will require additional funding to
        repay debt maturing after 2006. We have been advised that Charter is working
        with its financial advisors to address such funding requirements. However,
        there
        can be no assurance that such funding will be available to us. Although Mr.
        Allen and his affiliates have purchased equity from Charter
        and Charter Holdco in the
        past, Mr. Allen and his affiliates are not obligated to purchase equity from,
        contribute to or loan funds to us
        or our
        parent companies in the
        future.
 
 ***Credit
        Facilities and Covenants***
 
 Our
        ability to operate depends upon, among other things, our continued access
        to
        capital, including credit under the Charter Operating credit facilities.
        These
        credit facilities, along with our indentures, contain certain restrictive
        covenants, some of which require us to maintain specified financial ratios
        and
        meet financial tests and to provide audited financial statements with an
        unqualified opinion from our independent auditors. As of June 30, 2005, we
        were
        in compliance with the covenants under our indentures and credit facilities
        and
        we expect to remain in compliance with those covenants for the next twelve
        months. As of June 30, 2005, we had borrowing availability under our credit
        facilities of $870 million, none of which was restricted due to covenants.
        Continued access to our credit facilities is subject to our remaining in
        compliance with the covenants of these credit facilities, including covenants
        tied to our operating performance. If our operating performance results in
        non-compliance with these covenants, or if any of certain other events of
        non-compliance under these credit facilities or indentures governing our
        debt
        occurs, funding under the credit facilities may not be available and defaults
        on
        some or potentially all of our debt obligations could occur. An event of
        default
        under the covenants governing any of our debt instruments could result in
        the
        acceleration of our payment obligations under that debt and, under certain
        circumstances, in cross-defaults under our other debt obligations, which
        could
        have a material adverse effect on our consolidated financial condition and
        results of operations.
 
 The
        Charter Operating credit facilities required us to redeem the CC V Holdings,
        LLC
        notes as a result of the Charter Holdings leverage ratio becoming less than
        8.75
        to 1.0. In satisfaction of this requirement, in March 2005, CC V Holdings,
        LLC
        redeemed all of its outstanding notes, at 103.958% of principal amount, plus
        accrued and unpaid interest to the date of redemption. The total cost of
        the
        redemption including accrued and unpaid interest was approximately $122 million.
        We funded the redemption with borrowings under the Charter Operating credit
        facilities.
 
 **Parent
        Compan****ies'
        Debt Obligations**
 
 Any
        financial or liquidity problems of our parent companies could cause serious
        disruption to our business and have a material adverse effect on our business
        and results of operations. A failure by Charter Holdings to satisfy its debt
        payment obligations or a bankruptcy filing with respect to Charter Holdings
        would give the lenders under the Charter Operating credit facilities the
        right
        to accelerate the payment obligations under these facilities. Any such
        acceleration would be a default under the indenture governing our notes. A s
        of June
        30, 2005, Charter had approximately $888 million principal amount of senior
        convertible notes outstanding with approximately $25 million and $863 million
        maturing in 2006 and 2009, respectively. During
        the six months ended June 30, 2005, we distributed $450 million to CCH II
        of
        which $60 million was subsequently distributed to Charter Holdco. As of
        June 30, 2005, Charter Holdco was owed $62 million in intercompany loans
        from
        its subsidiaries, which amount was available to pay interest and principal
        on
        Charter's convertible senior notes.  In
        addition, Charter has $122 million of governmental securities pledged as
        security for the next five semi-annual interest payments on Charter ' s
        5.875%
        convertible senior notes.
 
 32
 Table
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  A s
        of June
        30, 2005, Charter Holdings had approximately $8.5 billion principal amount
        of
        high-yield notes outstanding with approximately $105 million, $3.4 billion
        and
        $5.0 billion maturing in 2007, 2009 and thereafter, respectively. As of June
        30,
        2005, CCH II had approximately $1.6 billion principal amount of high-yield
        notes
        outstanding maturing in 2010. Charter, Charter Holdings and CCH II will need
        to
        raise additional capital or receive distributions or payments from us in
        order
        to satisfy their debt obligations. However, because of their significant
        indebtedness, the ability of the parent companies to raise additional capital
        at
        reasonable rates is uncertain. Distributions by Charter’s subsidiaries to a
        parent company (including Charter, Charter Holdco, Charter Holdings and CCH
        II) for
        payment of principal on the parent companies’ debt obligations ,
        however, are restricted by the indentures governing the CCH II notes, CCO
        Holdings notes, and Charter Operating notes, unless
        under their respective indentures there is no default and a specified leverage
        ratio test is met at the time of such event.
 
 In
        accordance with the registration rights agreement entered into with their
        initial sale, Charter was required to register for resale by April 21, 2005
        its
        5.875% convertible senior notes due 2009, issued in November 2004. Since
        these
        convertible notes were not registered by that date, Charter paid or will
        pay
        liquidated damages totaling $0.5 million through July 14, 2005, the day prior
        to
        the effective date of the registration statement. In addition, in accordance
        with the share lending agreement entered into in connection with the initial
        sale of Charter’s 5.875% convertible senior notes due 2009, Charter was required
        to register by April 1, 2005 150
        million shares of its Class A common stock that Charter was obligated to
        lend to
        Citigroup Global Markets Limited ("CGML") at CGML’s request .
        Because
        this registration statement was not declared effective by such date, Charter
        paid or will pay liquidated damages totaling $11 million from April 2, 2005
        through July 17, 2005, the day before the effective date of the registration
        statement. The
        liquidated damages were recorded as interest expense in Charter’s condensed
        consolidated statements of operations.
 
 ***Specific
        Limitations at Charter Holdings***
 
 The
        indentures governing the Charter Holdings notes permit Charter Holdings to
        make
        distributions to Charter Holdco for payment of interest or principal on the
        convertible senior notes, only if, after giving effect to the distribution,
        Charter Holdings can incur additional debt under the leverage ratio of 8.75
        to
        1.0, there is no default under Charter Holdings' indentures and other specified
        tests are met. For the quarter ended June 30, 2005, there was no default
        under
        Charter Holdings' indentures and other specified tests were met. However,
        Charter Holdings did not meet the leverage ratio of 8.75 to 1.0 based on June
        30 ,
        2005 financial
        results. As a result, distributions from Charter Holdings to Charter or Charter
        Holdco are currently
        restricted and will continue to be restricted until that test is met. During
        this restriction period ,
        the
        indentures governing the Charter Holdings notes permit Charter Holdings and
        its
        subsidiaries to make specified investments in Charter Holdco or Charter,
        up to
        an amount determined by a formula, as long as there is no default under the
        indentures.
 
 In
        the
        past, our parent companies have accessed the equity and high-yield debt markets
        as a source of capital to fund their subsidiaries' operations. We believe
        that
        our parent companies' continued access to the debt markets will depend on
        market
        conditions in light of, among other things, their significant levels of debt,
        their debt ratings, general economic conditions, and the business condition
        of
        the cable, telecommunications and technology industry. If they are unable
        to
        raise the required capital on reasonable terms, our parent companies could
        elect
        to cause us to distribute or otherwise pay to them (to the extent available
        and
        permitted by the indentures governing our notes) the necessary funds to pay
        principal and interest amounts due on Charter's, Charter Holdings' or CCH
        II’s
        debt, which could negatively impact our liquidity. If, at any time, additional
        capital or borrowing capacity is required beyond amounts internally generated
        or
        available under our credit facilities or through additional debt financings,
        we
        would consider:
 
 ·
              issuing
                  debt or equity at the parent companies, the proceeds of which could
                  be
                  loaned or contributed to us;
 
 ·
              issuing
                  debt securities that may have structural or other priority over
                  our
                  existing notes;
 
 ·
              further
                  reducing our expenses and capital expenditures, which may impair
                  our
                  ability to increase revenue;
 
 ·
              selling
                  assets; or
 
 ·
              requesting
                  waivers or amendments with respect to our credit facilities, the
                  availability and terms of which would be subject to market
                  conditions.
 
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 Table
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  If
        the
        above strategies are not successful, we could be forced to restructure our
        obligations or seek protection under the bankruptcy laws. In addition, if
        we
        find it necessary to engage in a recapitalization or other similar transaction,
        our noteholders might not receive principal and interest payments to which
        they
        are contractually entitled.
 
 ***Sale
        of Assets***
 
 In
        March
        2004, we closed the sale of certain cable systems in Florida, Pennsylvania,
        Maryland, Delaware and West Virginia to Atlantic Broadband Finance, LLC.
        We
        closed the sale of an additional cable system in New York to Atlantic Broadband
        Finance, LLC in April 2004. The total net proceeds from the sale of all of
        these
        systems were approximately $735 million. The proceeds were used to repay
        a
        portion of amounts outstanding under our revolving credit facility.
 
 ***Long-Term
        Debt***
 
 As
        of June
        30,
        2005 and
        December 31, 2004, long-term debt totaled approximately $8.4 billion and
        $8.3
        billion, respectively. This debt was comprised of approximately $5.4 billion
        and
        $5.5 billion of
        credit
        facility debt and $3.0
        billion and $2.8 billion accreted value of high-yield notes, respectively.
        As of June
        30,
        2005 and
        December 31, 2004, the weighted average interest rate on the credit facility
        debt was approximately 7.2% and 6.8%, respectively, and the weighted average
        interest rate on the high-yield notes was approximately 8.2% and 8.2%,
        respectively, resulting in a blended weighted average interest rate of 7.5%
        and
        7.3%, respectively. The
        interest rate on approximately 55% and 59% of the total principal amount
        of our
        debt was effectively fixed, including the effects of our interest rate hedge
        agreements as of June 30, 2005 and December 31, 2004, respectively.
 
 ***Issuance
        of Charter Operating Notes in Exchange for Charter Holdings Notes.*** In
        March
        and June 2005, our subsidiary, Charter Operating, consummated exchange
        transactions with a small number of institutional holders of Charter Holdings
        8.25% Senior Notes due 2007 pursuant to which Charter Operating issued, in
        private placement, approximately $333 million principal amount of its 8.375%
        senior second lien Notes due 2014 in exchange for approximately $346 million
        of
        the Charter Holdings 8.25% senior notes due 2007. The Charter Holdings notes
        received in the exchange were thereafter distributed to Charter Holdings
        and
        cancelled.
 
 ***CC
        V Holdings, LLC Notes.*** The
        Charter Operating credit facilities required us to redeem the CC V Holdings,
        LLC
        notes as a result of the Charter Holdings leverage ratio becoming less than
        8.75
        to 1.0. In satisfaction of this requirement, in March
        2005, CC V Holdings, LLC redeemed all of its 11.875% notes due 2008, at 103.958%
        of principal amount, plus accrued and unpaid interest to the date of redemption.
        The total cost of redemption was approximately $122 million and was funded
        through borrowings under our credit facilities. Following
        such redemption, CC V Holdings, LLC and its subsidiaries (other than
        non-guarantor subsidiaries) guaranteed the Charter Operating credit facilities
        and granted a lien on all of their assets as to which a lien can be perfected
        under the Uniform Commercial Code by the filing of a financing
        statement.
 
 ***Historical
        Operating, Financing and Investing Activities***
 
 We
        held
        $22 million in cash and cash equivalents as of June 30, 2005 compared
        to
        $546 million as of December 31, 2004. The decrease in cash and cash
        equivalents reflects the repayment of approximately $705 million of borrowings
        under our revolving credit facilities.
  ***Operating
        Activities.*** ** Net
        cash
        provided by operating activities increased $74 million, or 15%, from $478
        million for the six months ended June 30, 2004 to $552 million for the six
        months ended June 30, 2005. For the six months ended June 30, 2005, net cash
        provided by operating activities increased primarily as a result of changes
        in
        operating assets and liabilities that used $91 million less cash during the
        six
        months ended June 30, 2005 than the corresponding period in 2004 combined
        with
        an increase in revenue over cash costs year over year partially offset by
        an
        increase in cash interest expense of $59 million over the corresponding prior
        period.
  ***Investing
        Activities.*** ** Net
        cash
        used by investing activities for the six months ended June 30, 2005 was $472
        million and net cash provided by investing activities for the six months
        ended
        June 30, 2004 was $307 million. Investing activities used $779 million more
        cash
        during the six months ended June 30, 2005 than the corresponding period in
        2004
        primarily as a result of proceeds from the sale of
        certain cable systems to Atlantic Broadband Finance, LLC in 2004 and
        increased cash used for capital expenditures in 2005.
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  ***Financing
        Activities.*** ** Net
        cash
        used in financing activities decreased $178 million from $782 million for
        the
        six months ended June 30, 2004 to $604 million for the six months ended June
        30,
        2005. The decrease in cash used during the six months ended June 30, 2005
        as
        compared to the corresponding period in 2004, was primarily the result of
        a
        decrease in payments for debt issuance costs and in net repayments of long-term
        debt offset partially by an increase in distributions to parent
        company.
 
 ***Capital
        Expenditures*** ****
 
 We
        have
        significant ongoing capital expenditure requirements. Capital expenditures
        were
        $542 million and $380 million for the six months ended June
        30,
        2005 and
        2004, respectively. In addition, Charter Holdco transferred $139 million
        of
        property, plant and equipment to us. Capital
        expenditures increased as a result of increased spending on support capital
        related to our investment in service improvements; scalable infrastructure
        related to telephone services, VOD and digital simulcast; and customer premise
        equipment primarily related to the continued demand for advanced digital
        set-tops. See
        the
        table below for more details.
  Upgrading
        our cable systems has enabled us to offer digital television, high-speed
        Internet services, VOD, interactive services, additional channels and tiers,
        and
        expanded pay-per-view options to a larger customer base. Our capital
        expenditures are funded primarily from cash flows from operating activities,
        the
        issuance of debt and borrowings under credit facilities. In addition, during
        the
        six months ended June
        30,
        2005 and
        2004, our liabilities related to capital expenditures increased $48 million
        and
        decreased $38 million, respectively.
 
 During
        2005, we expect capital expenditures to be approximately $1 billion. The
        increase in capital expenditures for 2005 compared to 2004 is the result
        of
        expected increases in telephone services and deployment of advanced digital
        boxes. We expect that the nature of these expenditures will continue to be
        composed primarily of purchases of customer premise equipment, support capital
        and for scalable infrastructure costs. We expect to fund capital expenditures
        for 2005 primarily from cash flows from operating activities and borrowings
        under our credit facilities.
  We
        have
        adopted capital expenditure disclosure guidance, which was developed by eleven
        publicly traded cable system operators, including Charter, with the support
        of
        the National Cable & Telecommunications Association ("NCTA"). The disclosure
        is intended to provide more consistency in the reporting of operating statistics
        in capital expenditures and customers among peer companies in the cable
        industry. These disclosure guidelines are not required disclosure under GAAP,
        nor do they impact our accounting for capital expenditures under GAAP.
 
 The
        following table presents our major capital expenditures categories in accordance
        with NCTA disclosure guidelines for the three and six months ended June 30,
        2005
        and 2004 (dollars in millions):
 
 **Three
                  Months Ended June 30,**
              
              **Six
                  Months Ended June 30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Customer
                  premise equipment (a)
              
              $
              142
              
              $
              105
              
              $
              228
              
              $
              217Scalable
                  infrastructure (b)
              
              
              47
              
              
              14
              
              
              89
              
              
              33Line
                  extensions (c)
              
              
              48
              
              
              35
              
              
              77
              
              
              60Upgrade/Rebuild
                  (d)
              
              
              12
              
              
              6
              
              
              22
              
              
              18Support
                  capital (e)
              
              
              82
              
              
              33
              
              
              126
              
              
              52Total
                  capital expenditures (f)
              
              $
              331
              
              $
              193
              
              $
              542
              
              $
              380
 
 (a)
              Customer
                  premise equipment includes costs incurred at the customer residence
                  to
                  secure new customers, revenue units and additional bandwidth revenues.
                  It
                  also includes customer installation costs in accordance with SFAS
                  51 and
                  customer premise equipment (e.g., set-top terminals and cable modems,
                  etc.).
 (b)
              Scalable
                  infrastructure includes costs, not related to customer premise
                  equipment
                  or our network, to secure growth of new customers, revenue units
                  and
                  additional bandwidth revenues or provide service enhancements (e.g.,
                  headend equipment).
 (c)
              Line
                  extensions include network costs associated with entering new service
                  areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment,
                  make-ready and design engineering).
 (d)
              Upgrade/rebuild
                  includes costs to modify or replace existing fiber/coaxial cable
                  networks,
                  including betterments.
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  (e)
                Support
                    capital includes costs associated with the replacement or enhancement
                    of
                    non-network assets due to technological and physical obsolescence
                    (e.g.,
                    non-network equipment, land, buildings and
                    vehicles).
 (f)
              Represents
                  all capital expenditures made during the three and six months ended
                  June
                  30, 2005 and 2004, respectively.
  **Certain
        Trends and Uncertainties**
 
 The
        following discussion highlights a number of trends and uncertainties, in
        addition to those discussed elsewhere in this quarterly report and in the " Critical
        Accounting Policies and Estimates " section
        of Item 7. " Management's
        Discussion and Analysis of Financial Condition and Results of
        Operations " in our
        2004 Annual Report on Form 10-K, that could materially impact our business,
        results of operations and financial condition.
 
 ***Restrictive
        Covenants.*** ** Our
        credit facilities and the indentures governing our and our subsidiaries’ other
        debt contain a number of significant covenants that could adversely impact
        our
        ability to operate our business, and therefore could adversely affect our
        results of operations. These covenants restrict our and our subsidiaries’
        ability to:
 
 ·incur
                  additional debt;·repurchase
                  or redeem equity interests and debt;·issue
                  equity;·make
                  certain investments or acquisitions;·pay
                  dividends or make other distributions;·dispose
                  of assets or merge;·enter
                  into related party transactions;·grant
                  liens; and·pledge
                  assets.
 
 Furthermore,
        our credit facilities require us to, among other things, maintain specified
        financial ratios, meet specified financial tests and provide audited financial
        statements with an unqualified opinion from our independent auditors. Our
        ability to comply with these provisions may be affected by events beyond
        our
        control.
 
 The
        breach of any covenants or obligations in the foregoing indentures or credit
        facilities, not otherwise waived or amended, could result in a default under
        the
        applicable debt agreement or instrument and could trigger acceleration of
        the
        related debt, which in turn could trigger defaults under other agreements
        governing our long-term indebtedness. In addition, the secured lenders under
        the
        Charter Operating credit facilities and the Charter Operating senior second-lien
        notes could foreclose on their collateral, which includes equity interests
        in
        our subsidiaries, and exercise other rights of secured creditors. Any default
        under those credit facilities, the indentures governing our convertible notes
        or
        our subsidiaries’ debt could adversely affect our growth, our financial
        condition and our results of operations and our ability to make payments
        on our
        notes and the credit facilities and other debt of our subsidiaries. For more
        information, see the section above entitled "— Liquidity and Capital
        Resources."
 
 ***Parent
        Companies’ Liquidity Concerns*** **.** Our
        parent companies have a significant amount of debt and may incur additional
        debt
        in the future. At June 30, 2005, Charter had approximately $25 million and
        $863
        million aggregate principal amount of convertible senior notes outstanding,
        which mature in 2006 and 2009, respectively, and Charter Holdings had
        approximately $8.5 billion aggregate principal amount of senior notes and
        senior
        discount notes, some of which mature in 2007 and the remainder of which mature
        in 2009 through 2012. As of June 30, 2005, CCH II had approximately $1.6
        billion
        principal amount of high-yield notes outstanding maturing in 2010. Charter,
        Charter Holdings and CCH II will need to raise additional capital or receive
        distributions or payments from us in order to satisfy its debt obligations.
 
 Charter’s
        ability to make interest payments on its convertible senior notes, and, in
        2006
        and 2009, to repay the outstanding principal of its convertible senior notes,
        will depend on its ability to raise additional capital and/or on receipt
        of
        payments or distributions from Charter Holdco or its subsidiaries, including
        CCO
        Holdings and Charter Operating. Distributions
        by Charter’s subsidiaries to a parent company (including Charter, Charter
        Holdco, Charter Holdings and CCH II) for
        payment of principal on Charter’s convertible senior notes ,
        however, are restricted by the indentures governing the CCH II notes, CCO
        Holdings notes and Charter Operating notes, unless
        under their respective indentures there is no default and a specified leverage
        ratio test is met at the time of such event. During the six months ended
        June
        30, 2005, we distributed $450 million to CCH II of which $60 million was
        subsequently
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  distributed
        to Charter Holdco. As of
        June 30, 2005, Charter Holdco was owed $62 million in intercompany loans
        from
        its subsidiaries, which amount was available to pay interest and principal
        on
        Charter's convertible senior notes.  In
        addition, Charter has $122 million of governmental securities pledged as
        security for the next five semi-annual interest payments on Charter’s 5.875%
        convertible senior notes.
 
 The
        indentures governing the Charter Holdings notes permit Charter Holdings to
        make
        distributions to Charter Holdco for payment of interest or principal on the
        convertible senior notes, only if, after giving effect to the distribution,
        Charter Holdings can incur additional debt under the leverage ratio of 8.75
        to
        1.0, there is no default under Charter Holdings' indentures and other specified
        tests are met. For the quarter ended June 30, 2005, there was no default
        under
        Charter Holdings' indentures and other specified tests were met. However,
        Charter Holdings did not meet the leverage ratio of 8.75 to 1.0 based on June
        30 ,
        2005 financial
        results. As a result, distributions from Charter Holdings to Charter or Charter
        Holdco are currently
        restricted and will continue to be restricted until that test is met. During
        this restriction period ,
        the
        indentures governing the Charter Holdings notes permit Charter Holdings and
        its
        subsidiaries to make specified investments in Charter Holdco or Charter,
        up to
        an amount determined by a formula, as long as there is no default under the
        indentures.
 
 Because
        Charter is our manager, any financial or liquidity problems of Charter could
        cause serious disruption to our business and have a material adverse effect
        on
        our business and results of operations. Any such event could adversely impact
        our own credit rating, and our relations with customers and suppliers, which
        could in turn further impair our ability to obtain financing and operate
        our
        business. Further, to the extent that any such event results in a change
        of
        control of Charter (whether through a bankruptcy, receivership or other
        reorganization of Charter and/or Charter Holdco, or otherwise), it could
        result
        in an event of default under our credit facilities and would require a change
        of
        control repurchase offer under our outstanding notes.
 
 ***Acceleration
        of Indebtedness of Our Subsidiaries.*** ** In
        the
        event of a default under our credit facilities or notes, our creditors could
        elect to declare all amounts borrowed, together with accrued and unpaid interest
        and other fees, to be due and payable. In such event, our credit facilities
        and
        indentures would not permit CCO Holdings’ subsidiaries to distribute funds to
        CCO Holdings to pay interest or principal on its notes. If the amounts
        outstanding under such credit facilities or notes are accelerated, all of
        the
        debt and liabilities of CCO Holdings’ subsidiaries would be payable from the
        subsidiaries’ assets, prior to any distribution of the subsidiaries’ assets to
        pay the interest and principal amounts on CCO Holdings’ notes. In addition, the
        lenders under our credit facilities could foreclose on their collateral,
        which
        includes equity interests in CCO Holdings’ subsidiaries, and they could exercise
        other rights of secured creditors. In any such case, we might not be able
        to
        repay or make any payments on our notes. Additionally, an acceleration or
        payment default under our credit facilities would cause a cross-default in
        the
        indentures governing the Charter Holdings notes, CCH II notes, CCO Holdings
        notes, Charter Operating notes and Charter’s convertible senior notes and would
        trigger the cross-default provision of the Charter Operating credit agreement.
        Any default under any of our credit facilities or notes might adversely affect
        the holders of our notes and our growth, financial condition and results
        of
        operations and could force us to examine all options, including seeking the
        protection of the bankruptcy laws.
  ***CCO
        Holdings Relies on its Subsidiaries to Meet its Liquidity Needs, and CCO
        Holdings’ Notes are Structurally Subordinated to all Liabilities of its
        Subsidiaries.***  ** We
        rely
        on our subsidiaries to make distributions or other payments to CCO Holdings
        to
        enable CCO Holdings to make payments on its notes. The borrowers and guarantors
        under the Charter Operating credit facilities and senior second-lien notes
        are
        CCO Holdings’ indirect subsidiaries. A number of CCO Holdings’ subsidiaries are
        also obligors under other debt instruments, including Charter Operating,
        which
        is a co-issuer of senior second-lien notes. As of June 30, 2005, our total
        debt
        was approximately $8.4 billion, of which $7.4 billion was structurally senior
        to
        the CCO Holdings notes. The Charter Operating credit facilities and the
        indentures governing the senior notes, senior discount notes and senior
        second-lien notes issued by subsidiaries of CCO Holdings contain restrictive
        covenants that limit the ability of such subsidiaries to make distributions
        or
        other payments to CCO Holdings.
 
 In
        the
        event of a default under our credit facilities or notes, our lenders or
        noteholders could elect to declare all amounts borrowed, together with accrued
        and unpaid interest and other fees, to be due and payable. An acceleration
        or
        certain payment events of default under our credit facilities would cause
        a
        cross-default in the indentures governing the Charter Holdings notes, CCH
        II
        notes, CCO Holdings notes, Charter Operating notes and Charter’s convertible
        senior notes. Similarly, such a default or acceleration under any of these
        notes
        would cause a cross-default under the notes of the parent entities of the
        relevant entity. If the amounts outstanding under the credit facilities or
        notes
        are accelerated, all
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  of
        the
        debt and liabilities of CCO Holdings’ subsidiaries would be payable from the
        subsidiaries’ assets, prior to any distribution of the subsidiaries’ assets to
        pay the interest and principal amounts on CCO Holdings’ notes. In addition, the
        lenders under our credit facilities and noteholders under our Charter Operating
        notes could foreclose on their collateral, which includes equity interests
        in
        CCO Holdings’ subsidiaries, and they could exercise other rights of secured
        creditors. Any default under any of our credit facilities or notes could
        force
        us to examine all options, including seeking the protection of the bankruptcy
        laws. In
        the
        event of the bankruptcy, liquidation or dissolution of a subsidiary, following
        payment by such subsidiary of its liabilities, the lenders under our credit
        facilities and the holders of the other debt instruments and all other creditors
        of CCO Holdings’ subsidiaries would have the right to be paid before holders of
        CCO Holdings’ notes from any of CCO Holdings’ subsidiaries’ assets. Such
        subsidiaries may not have sufficient assets remaining to make any payments
        to
        CCO Holdings as an equity holder or otherwise and may be restricted by
        bankruptcy and insolvency laws from making any such payments.
 
 The
        foregoing contractual and legal restrictions could limit CCO Holdings’ ability
        to make payments of principal and/or interest to the holders of its notes.
        Further, if CCO Holdings made such payments by causing a subsidiary to make
        a
        distribution to it, and such transfer were deemed a fraudulent transfer or
        an
        unlawful distribution, the holders of CCO Holdings’ notes could be required to
        return the payment to (or for the benefit of) the creditors of its
        subsidiaries.
  ***Securities
        Litigation.*** A
        number
        of putative federal class action lawsuits were filed against Charter and
        certain
        of its former and present officers and directors alleging violations of
        securities laws, which have been consolidated for pretrial purposes. In
        addition, a number of shareholder derivative lawsuits were filed against
        Charter
        in the same and other jurisdictions. A shareholders derivative suit was filed
        in
        the U.S. District Court for the Eastern District of Missouri against Charter
        and
        its then current directors. Also, three shareholders derivative suits were
        filed
        in Missouri state court against Charter, its then current directors and its
        former independent auditor. These state court actions have been consolidated.
        The federal shareholders derivative suit and the consolidated derivative
        suit
        each alleged that the defendants breached their fiduciary duties.
 
 Charter
        entered into Stipulations of Settlement setting forth proposed terms of
        settlement for the above-described class actions and derivative suits. On
        May 23, 2005 the United States District Court for the Eastern District
        of
        Missouri conducted the final fairness hearing for the Actions, and on
        June 30, 2005, the Court issued its final approval of the settlements.
        Members of the class had 30 days from the issuance of the June 30
        order
        approving the settlement to file an appeal challenging the approval. Two
        notices
        of appeal were filed relating to the settlement, but Charter does not yet
        know
        the specific issues presented by such appeals, nor have briefing schedules
        been
        set. See "Part II, Item 1. Legal Proceedings."
 
 Moreover,
        due to (i) the inherent uncertainties of litigation and investigations, (ii)
        the
        remaining conditions to the finalization of our anticipated settlements,
        (iii)
        the possibility of appeals and objections to the settlements and (iv) the
        need
        for us to comply with, and/or otherwise implement certain covenants, conditions,
        undertakings, procedures and other obligations that would be or have been
        imposed under the terms of the settlements, Charter cannot predict with
        certainty the ultimate outcome of these proceedings. An unfavorable outcome
        in
        the lawsuits described above could result in substantial potential liabilities
        and have a material adverse effect on our consolidated financial condition
        and
        results of operations or our liquidity. Further, these proceedings, and our
        actions in response to these proceedings, could result in substantial additional
        defense costs and the diversion of management’s attention, and could adversely
        affect our ability to execute our business and financial
        strategies.
 
 ***Competition.*** The
        industry in which we operate is highly competitive, and has become more so
        in
        recent years. In some instances, we compete against companies with fewer
        regulatory burdens, easier access to financing, greater personnel resources,
        greater brand name recognition and long-established relationships with
        regulatory authorities and customers. Increasing consolidation in the cable
        industry and the repeal of certain ownership rules may provide additional
        benefits to certain of our competitors, either through access to financing,
        resources or efficiencies of scale.
 
 Our
        principal competitor for video services throughout our territory is direct
        broadcast satellite television services, also known as DBS. Competition from
        DBS, including intensive marketing efforts, aggressive pricing, and the ability
        of DBS to provide certain services that we are in the process of developing,
        has
        had an adverse impact on our ability to retain customers. DBS has grown rapidly
        over the last several years and continues to do so. The cable industry,
        including Charter, has lost a significant number of subscribers to DBS
        competition, and we face serious challenges in this area in the future. We
        believe that competition from DBS service providers may present greater
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  challenges
        in areas of lower population density, and that our systems serve a higher
        concentration of such areas than those of other major cable service
        providers.
 
 Local
        telephone companies and electric utilities can offer video and other services
        in
        competition with us, and they increasingly may do so in the future. Certain
        telephone companies have begun more extensive deployment of fiber in their
        networks that will enable them to begin providing video services, as well
        as
        telephone and high-bandwidth Internet access services, to residential and
        business customers. Some of these telephone companies have obtained, and
        are now
        seeking, franchises or alternative authorizations that are less burdensome
        than
        existing Charter franchises. The subscription television industry also faces
        competition from free broadcast television and from other communications
        and
        entertainment media. Further loss of customers to DBS or other alternative
        video
        and data services could have a material negative impact on the value of our
        business and its performance.
 
 With
        respect to our Internet access services, we face competition, including
        intensive marketing efforts and aggressive pricing, from telephone companies
        and
        other providers of “dial-up” and digital subscriber line technology, also known
        as DSL. DSL service is competitive with high-speed Internet service over
        cable
        systems. In addition, DBS providers have entered into joint marketing
        arrangements with Internet access providers to offer bundled video and Internet
        service, which competes with our ability to provide bundled services to our
        customers. In addition, as we expand our telephone offerings, we will face
        considerable competition from established telephone companies.
 
 In
        order
        to attract new customers, from time to time we make promotional offers,
        including offers of temporarily reduced-price or free service. These promotional
        programs result in significant advertising, programming and operating expenses,
        and also require us to make capital expenditures to acquire additional digital
        set-top terminals. Customers who subscribe to our services as a result of
        these
        offerings may not remain customers for any significant period of time following
        the end of the promotional period. A failure to retain existing customers
        and
        customers added through promotional offerings or to collect the amounts they
        owe
        us could have an adverse effect on our business and financial
        results.
 
 Mergers,
        joint ventures and alliances among franchised, wireless or private cable
        operators, satellite television providers, telephone companies and others,
        and
        the repeal of certain ownership rules may provide additional benefits to
        some of
        our competitors, either through access to financing, resources or efficiencies
        of scale, or the ability to provide multiple services in direct competition
        with
        us.
 
 ***Long-Term
        Indebtedness — Change of Control Payments.*** We and
        our parent companies may not have the ability to raise the funds necessary
        to
        fulfill our obligations under our and our parent companies’ senior and senior
        discount notes and our credit facilities following a change of control. Under
        the indentures governing our parent companies’ notes, upon the occurrence of
        specified change of control events, each such issuer is required to offer
        to
        repurchase all of its outstanding notes. However, our parent companies may
        not
        have sufficient funds at the time of the change of control event to make
        the
        required repurchase of the applicable notes and all of the notes issuers
        are
        limited in their ability to make distributions or other payments to their
        respective parent companies to fund any required repurchase. In addition,
        a
        change of control under our credit facilities and indentures governing their
        and
        our notes could require the repayment of borrowings under those credit
        facilities and indentures. Because such credit facilities and notes are
        obligations of CCO Holdings’ subsidiaries, the credit facilities and the notes
        would have to be repaid by CCO Holdings’ subsidiaries before their assets could
        be available to CCO Holdings or its parent companies to repurchase CCO Holdings’
        and its parent companies’ notes. Any failure to make or complete a change of
        control offer would place the applicable issuer or borrower in default under
        its
        notes. The failure of CCO Holdings’ subsidiaries to make a change of control
        offer or repay the amounts outstanding under their credit facilities would
        place
        them in default under these agreements and could result in a default under
        the
        indentures governing the CCO Holdings and its parent companies’ notes. See "—
        Certain Trends and Uncertainties — Liquidity."
  ***Variable
        Interest Rates.*** At June
        30, 2005, excluding the effects of hedging, approximately 71% of our debt
        bears
        interest at variable rates that are linked to short-term interest rates.
        In
        addition, a significant portion of our existing debt, assumed debt or debt
        we
        might arrange in the future will bear interest at variable rates. If interest
        rates rise, our costs relative to those obligations will also rise. As of
        June
        30, 2005 and December 31, 2004, the weighted average interest rate
        on the
        credit facility debt was approximately 7.2% and 6.8%, respectively, and the
        weighted average interest rate on the high-yield notes was approximately
        8.2%
        and 8.2%, respectively, resulting in a blended weighted average interest
        rate of
        7.5% and 7.3%, respectively. The interest rate on approximately 55% and 59%
        of
        the total principal amount of our debt was effectively fixed, including the
        effects of our interest rate hedge
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 Table
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  agreements
        as of June 30, 2005 and December 31, 2004, respectively.
  ***Services.*** We
        expect
        that a substantial portion of our near-term growth will be achieved through
        revenues from high-speed Internet services, digital video, bundled service
        packages, and to a lesser extent various commercial services that take advantage
        of cable’s broadband capacity. We may not be able to offer these advanced
        services successfully to our customers or provide adequate customer service
        and
        these advanced services may not generate adequate revenues. Also, if the
        vendors
        we use for these services are not financially viable over time, we may
        experience disruption of service and incur costs to find alternative vendors.
        In
        addition, the technology involved in our product and service offerings generally
        requires that we have permission to use intellectual property and that such
        property not infringe on rights claimed by others. If it is determined that
        the
        product or service being utilized infringes on the rights of others, we may
        be
        sued or be precluded from using the technology.
 
 ***Increasing
        Programming Costs.*** Programming
        has been, and is expected to continue to be, our largest operating expense
        item.
        In recent years, the cable industry has experienced a rapid escalation in
        the
        cost of programming, particularly sports programming. We expect programming
        costs to continue to increase because of a variety of factors, including
        inflationary or negotiated annual increases, additional programming being
        provided to customers and increased costs to purchase programming. The inability
        to fully pass these programming cost increases on to our customers would
        have an
        adverse impact on our cash flow and operating margins. As measured by
        programming costs, and excluding premium services (substantially all of which
        were renegotiated and renewed in 2003), as of July 7, 2005 approximately
        9% of
        our current programming contracts were expired, and approximately another
        21%
        are scheduled to expire at or before the end of 2005. There can be no assurance
        that these agreements will be renewed on favorable or comparable terms. To
        the
        extent that we are unable to reach agreement with certain programmers on
        terms
        that we believe are reasonable we may be forced to remove such programming
        channels from our line-up, which could result in a further loss of customers.
 
 ***Notes
        Price Volatility.*** The
        market price of our publicly traded notes has been and is likely to continue
        to
        be highly volatile. We expect that the price of our securities may fluctuate
        in
        response to various factors, including the factors described in this section
        and
        various other factors, which may be beyond our control. These factors beyond
        our
        control could include: financial forecasts by securities analysts; new
        conditions or trends in the cable or telecommunications industry; general
        economic and market conditions and specifically, conditions related to the
        cable
        or telecommunications industry; any change in our debt ratings; the development
        of improved or competitive technologies; the use of new products or promotions
        by us or our competitors; changes in accounting rules or interpretations;
        and
        new regulatory legislation adopted in the United States.
 
 In
        addition, the securities market in general, and the market for cable television
        securities in particular, have experienced significant price fluctuations.
        Volatility in the market price for companies may often be unrelated or
        disproportionate to the operating performance of those companies. These broad
        market and industry factors may seriously harm the market price of our notes,
        regardless of our operating performance. In the past, securities litigation
        has
        often commenced following periods of volatility in the market price of a
        company’s securities, and several purported class action lawsuits were filed
        against Charter in 2001 and 2002, following a decline in its stock price.
  ***Economic
        Slowdown; Global Conflict*** **.** It
        is
        difficult to assess the impact that the general economic slowdown and global
        conflict will have on future operations. However, the economic slowdown has
        resulted and could continue to result in reduced spending by customers and
        advertisers, which could reduce our revenues, and also could affect our ability
        to collect accounts receivable and maintain customers. Reductions in operating
        revenues would likely negatively affect our ability to make expected capital
        expenditures and could also result in our inability to meet our obligations
        under our financing agreements. These developments could also have a negative
        impact on our financing and variable interest rate agreements through
        disruptions in the market or negative market conditions.
 
 ***Regulation
        and Legislation*** **.** Cable
        system operations are extensively regulated at the federal, state, and local
        level, including rate regulation of basic service and equipment and municipal
        approval of franchise agreements and their terms, such as franchise requirements
        to upgrade cable plant and meet specified customer service standards. Additional
        legislation and regulation is always possible.
 
 Cable
        operators also face significant regulation of their channel carriage. They
        currently can be required to devote substantial capacity to the carriage
        of
        programming that they would not carry voluntarily, including certain local
        broadcast signals, local public, educational and government access programming,
        and unaffiliated commercial
  40
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  leased
        access programming. This carriage burden could increase in the future,
        particularly if cable systems were required to carry both the analog and
        digital
        versions of local broadcast signals (dual carriage) or to carry multiple
        program
        streams included with a single digital broadcast transmission (multicast
        carriage). Additional government mandated broadcast carriage obligations
        could
        disrupt existing programming commitments, interfere with our preferred use
        of
        limited channel capacity and limit our ability to offer services that would
        maximize customer appeal and revenue potential. Although the FCC issued a
        decision in February 2005, confirming an earlier ruling against mandating
        either
        dual carriage or multicast carriage, that decision has been appealed. In
        addition, the FCC could reverse its own ruling or Congress could legislate
        additional carriage obligations.
 
 Over
        the
        past several years, proposals have been advanced that would require cable
        operators offering Internet service to provide non-discriminatory access
        to
        cable’s broadband infrastructure to competing Internet service providers. In a
        June 2005 ruling, commonly referred to as *Brand
        X* ,
        the
        Supreme Court upheld an FCC decision making it less likely that any
        non-discriminatory "open access" requirements (which are generally associated
        with common carrier regulation of "telecommunications services") will be
        imposed
        on the cable industry by local, state or federal authorities. The Supreme
        Court
        held that the FCC was correct in classifying cable-provided Internet service
        as
        an "information service," rather than a "telecommunications service." This
        favorable regulatory classification limits the ability of various governmental
        authorities to impose open access requirements on cable-provided Internet
        service. Given the recency of the *Brand
        X* decision,
        however, the nature of any legislative or regulatory response remains uncertain.
        The imposition of open access requirements could materially affect our business.
 
 **Item
        4.****Controls
        and Procedures.**
 
 As
        of the
        end of the period covered by this report, management, including our Interim
        Chief Executive Officer and Interim Chief Financial Officer, evaluated the
        effectiveness of the design and operation of our disclosure controls and
        procedures with respect to the information generated for use in this quarterly
        report. The evaluation was based in part upon reports and affidavits provided
        by
        a number of executives. Based upon, and as of the date of that evaluation,
        our
        Interim Chief Executive Officer and Interim Chief Financial Officer concluded
        that the disclosure controls and procedures were effective to provide reasonable
        assurances that information required to be disclosed in the reports we file
        or
        submit under the Securities Exchange Act of 1934 is recorded, processed,
        summarized and reported within the time periods specified in the Commission’s
        rules and forms.
 
 There
        was
        no change in our internal control over financial reporting during the quarter
        ended June 30, 2005 that has materially affected, or is reasonably likely
        to
        materially affect, our internal control over financial reporting.
 
 In
        designing and evaluating the disclosure controls and procedures, our management
        recognized that any controls and procedures, no matter how well designed
        and
        operated, can provide only reasonable, not absolute, assurance of achieving
        the
        desired control objectives and management necessarily was required to apply
        its
        judgment in evaluating the cost-benefit relationship of possible controls
        and
        procedures. Based upon the above evaluation, our management believes that
        its
        controls provide such reasonable assurances.
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  **PART
        II. OTHER INFORMATION.**
 
 **Item
        1.****Legal
        Proceedings.**
 
 **Securities
        Class Actions and Derivative Suits**
 
 Fourteen
        putative federal class action lawsuits (the "Federal Class Actions")
        were
        filed against Charter and certain of its former and present officers and
        directors in various jurisdictions allegedly on behalf of all purchasers
        of
        Charter’s securities during the period from either November 8 or
        November 9, 1999 through July 17 or July 18, 2002. Unspecified
        damages were sought by the plaintiffs. In general, the lawsuits alleged that
        Charter utilized misleading accounting practices and failed to disclose these
        accounting practices and/or issued false and misleading financial statements
        and
        press releases concerning Charter’s operations and prospects. The Federal
        Class Actions were specifically and individually identified in public
        filings made by Charter prior to the date of this quarterly report. On
        March 12, 2003, the Panel transferred the six Federal Class Actions
        not filed in the Eastern District of Missouri to that district for coordinated
        or consolidated pretrial proceedings with the eight Federal Class Actions
        already pending there. The Court subsequently consolidated the Federal
        Class Actions into a single action (the "Consolidated Federal
        Class Action") for pretrial purposes. On August 5, 2004, the
        plaintiff’s representatives, Charter and the individual defendants who were the
        subject of the suit entered into a Memorandum of Understanding setting forth
        agreements in principle to settle the Consolidated Federal Class Action.
        These parties subsequently entered into Stipulations of Settlement dated
        as of
        January 24, 2005 (described more fully below) which incorporate the
        terms
        of the August 5, 2004 Memorandum of Understanding.
 
 The
        Consolidated Federal Class Action is entitled:
 
 ·
              In
                  re Charter Communications, Inc. Securities Litigation, MDL Docket
                  No. 1506
                  (All Cases), StoneRidge Investments Partners, LLC, Individually
                  and On
                  Behalf of All Others Similarly Situated, v. Charter Communications,
                  Inc.,
                  Paul Allen, Jerald L. Kent, Carl E. Vogel, Kent Kalkwarf, David
                  G.
                  Barford, Paul E. Martin, David L. McCall, Bill Shreffler, Chris
                  Fenger,
                  James H. Smith, III, Scientific-Atlanta, Inc., Motorola, Inc. and
                  Arthur
                  Andersen, LLP, Consolidated Case No.
                  4:02-CV-1186-CAS.
 
 On
        September 12, 2002, a shareholders derivative suit (the "State Derivative
        Action") was filed in the Circuit Court of the City of St. Louis,
        State of
        Missouri (the "Missouri State Court"), against Charter and its then current
        directors, as well as its former auditors. The plaintiffs alleged that the
        individual defendants breached their fiduciary duties by failing to establish
        and maintain adequate internal controls and procedures.
 
 The
        consolidated State Derivative Action is entitled:
 
 ·
              Kenneth
                  Stacey, Derivatively on behalf of Nominal Defendant Charter
                  Communications, Inc., v. Ronald L. Nelson, Paul G. Allen, Marc
                  B.
                  Nathanson, Nancy B. Peretsman, William Savoy, John H. Tory, Carl
                  E. Vogel,
                  Larry W. Wangberg, and Charter Communications, Inc.
 
 On
        March 12, 2004, an action substantively identical to the State Derivative
        Action was filed in Missouri State Court against Charter and certain of its
        current and former directors, as well as its former auditors. On July 14,
        2004, the Court consolidated this case with the State Derivative Action.
 
 This
        action is entitled:
 
 ·
              Thomas
                  Schimmel, Derivatively on behalf on Nominal Defendant Charter
                  Communications, Inc., v. Ronald L. Nelson, Paul G. Allen, Marc
                  B.
                  Nathanson, Nancy B. Peretsman, William D. Savoy, John H. Tory,
                  Carl E.
                  Vogel, Larry W. Wangberg, and Arthur Andersen, LLP, and Charter
                  Communications, Inc.
 
 Separately,
        on February 12, 2003, a shareholders derivative suit (the "Federal
        Derivative Action"), was filed against Charter and its then current directors
        in
        the United States District Court for the Eastern District of Missouri. The
        plaintiff in that suit alleged that the individual defendants breached their
        fiduciary duties and grossly mismanaged Charter by failing to establish and
        maintain adequate internal controls and procedures.
 
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  The
        Federal Derivative Action is entitled:
 
 ·
              Arthur
                  Cohn, Derivatively on behalf of Nominal Defendant Charter Communications,
                  Inc., v. Ronald L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy
                  B.
                  Peretsman, William Savoy, John H. Tory, Carl E. Vogel, Larry W.
                  Wangberg,
                  and Charter Communications, Inc.
 
 As
        noted
        above, Charter and the individual defendants entered into a Memorandum of
        Understanding on August 5, 2004 setting forth agreements in principle
        regarding settlement of the Consolidated Federal Class Action, the
        State
        Derivative Action(s) and the Federal Derivative Action (the "Actions"). Charter
        and various other defendants in those actions subsequently entered into
        Stipulations of Settlement dated as of January 24, 2005, setting forth
        a
        settlement of the Actions in a manner consistent with the terms of the
        Memorandum of Understanding. The Stipulations of Settlement, along with various
        supporting documentation, were filed with the Court on February 2,
        2005. On
        May 23, 2005 the United States District Court for the Eastern District
        of
        Missouri conducted the final fairness hearing for the Actions, and on
        June 30, 2005, the Court issued its final approval of the settlements.
        Members of the class had 30 days from the issuance of the June 30
        order
        approving the settlement to file an appeal challenging the approval. Two
        notices
        of appeal were filed relating to the settlement, but Charter does not yet
        know
        the specific issues presented by such appeals, nor have briefing schedules
        been
        set.
 
 As
        amended, the Stipulations of Settlement provide that, in exchange for a release
        of all claims by plaintiffs against Charter and its former and present officers
        and directors named in the Actions, Charter would pay to the plaintiffs a
        combination of cash and equity collectively valued at $144 million,
        which
        will include the fees and expenses of plaintiffs’ counsel. Of this amount,
        $64 million would be paid in cash (by Charter’s insurance carriers) and the
        $80 million balance was to be paid (subject to Charter’s right to
        substitute cash therefor described below) in shares of Charter Class A
        common stock having an aggregate value of $40 million and ten-year
        warrants
        to purchase shares of Charter Class A common stock having an aggregate
        warrant value of $40 million, with such values in each case being
        determined pursuant to formulas set forth in the Stipulations of Settlement.
        However, Charter had the right, in its sole discretion, to substitute cash
        for
        some or all of the aforementioned securities on a dollar for dollar basis.
        Pursuant to that right, Charter elected to fund the $80 million obligation
        with 13.4 million shares of Charter Class A common stock (having
        an
        aggregate value of approximately $15 million pursuant to the formula
        set
        forth in the Stipulations of Settlement) with the remaining balance (less
        an
        agreed upon $2 million discount in respect of that portion allocable
        to
        plaintiffs’ attorneys’ fees) to be paid in cash. In addition, Charter had agreed
        to issue additional shares of its Class A common stock to its insurance
        carrier having an aggregate value of $5 million; however, by agreement
        with
        its carrier Charter has paid $4.5 million in cash in lieu of issuing
        such
        shares. Charter delivered the settlement consideration to the claims
        administrator on July 8, 2005, and it will be held in escrow pending
        any
        appeals of the approval. On July 14, 2005, the Circuit Court for the City
        of St.
        Louis dismissed with prejudice the State Derivative Actions.
 
 As
        part
        of the settlements, Charter has committed to a variety of corporate governance
        changes, internal practices and public disclosures, some of which have already
        been undertaken and none of which are inconsistent with measures Charter
        is
        taking in connection with the recent conclusion of the SEC
        investigation.
 
 **Government
        Investigations**
 
 In
        August
        2002, Charter became aware of a grand jury investigation being conducted
        by the
        U.S. Attorney’s Office for the Eastern District of Missouri into certain of
        its accounting and reporting practices, focusing on how Charter reported
        customer numbers, and its reporting of amounts received from digital set-top
        terminal suppliers for advertising. The U.S. Attorney’s Office publicly
        stated that Charter was not a target of the investigation. Charter was also
        advised by the U.S. Attorney’s Office that no current officer or member of
        its board of directors was a target of the investigation. On July 24,
        2003,
        a federal grand jury charged four former officers of Charter with conspiracy
        and
        mail and wire fraud, alleging improper accounting and reporting practices
        focusing on revenue from digital set-top terminal suppliers and inflated
        customer account numbers. Each of the indicted former officers pled guilty
        to
        single conspiracy counts related to the original mail and wire fraud charges
        and
        were sentenced April 22, 2005. Charter has advised us that it has
        fully
        cooperated with the investigation, and following the sentencings, the
        U.S. Attorney’s Office for the Eastern District of Missouri announced that
        its investigation was concluded and that no further indictments would
        issue.
 
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  **Indemnification**
 
 Charter
        was generally required to indemnify, under certain conditions, each of the
        named
        individual defendants in connection with the matters described above pursuant
        to
        the terms of its bylaws and (where applicable) such individual defendants’
        employment agreements. In accordance with these documents, in connection
        with
        the grand jury investigation, a now-settled SEC investigation and the
        above-described lawsuits, some of Charter’s current and former directors and
        current and former officers have been advanced certain costs and expenses
        incurred in connection with their defense. On February 22, 2005, Charter
        filed suit against four of its former officers who were indicted in the course
        of the grand jury investigation. These suits seek to recover the legal fees
        and
        other related expenses advanced to these individuals. One of these former
        officers has counterclaimed against Charter alleging, among other things,
        that
        Charter owes him additional indemnification for legal fees that Charter did
        not
        pay and another of these former officers has counterclaimed against Charter
        for
        accrued sick leave.
 
 **Other
        Litigation**
 
 In
        addition to the matters set forth above, Charter is also party to other lawsuits
        and claims that arose in the ordinary course of conducting its business.
        In the
        opinion of management, after taking into account recorded liabilities, the
        outcome of these other lawsuits and claims are not expected to have a material
        adverse effect on our consolidated financial condition, results of operations
        or
        our liquidity.
 
 **Item
        6.****Exhibits.**
 
 The
        index
        to the exhibits begins on page 46 of this quarterly report.
 44
 Table
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  **SIGNATURES**
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, as amended, CCO
        Holdings, LLC and CCO Holdings Capital Corp. have duly caused this quarterly
        report to be signed on their behalf by the undersigned, thereunto duly
        authorized.
 
 CCO
        HOLDINGS, LLC
 Registrant
 By:
        CHARTER COMMUNICATIONS, INC., Sole Manager
 
 Dated:
                  August 5, 2005
              By:/s/
                  Paul E. MartinName:
              Paul
                  E. MartinTitle:
              *Senior
                  Vice President,**Interim
                  Chief Financial Officer,**Principal
                  Accounting Officer and**Corporate
                  Controller**(Principal
                  Financial Officer and**Principal
                  Accounting Officer)*
 
 
 CCO
        HOLDINGS CAPITAL CORP.
 Registrant
 
 Dated:
                  August 5, 2005
              By:/s/
                  Paul E. MartinName:
              Paul
                  E. MartinTitle:
              *Senior
                  Vice President,**Interim
                  Chief Financial Officer,**Principal
                  Accounting Officer and**Corporate
                  Controller**(Principal
                  Financial Officer and**Principal
                  Accounting Officer)*
 
 
 
 
  45
 Table
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  **EXHIBIT
        INDEX**
 
 ExhibitNumber
                
                Description
                    of Document3.1
                
                Certificate
                    of Formation of CCO Holdings, LLC (incorporated by reference
                    to
                    Exhibit 3.1 to the registration statement on Form S-4
                    of CCO
                    Holdings, LLC and CCO Holdings Capital Corporation filed on February
                    6,
                    2004 (File No. 333-112593)).3.2
                
                Certificate
                    of Correction of Certificate of Formation of CCO Holdings, LLC
                    (incorporated by reference to Exhibit 3.2 to the registration
                    statement on Form S-4 of CCO Holdings, LLC and CCO Holdings
                    Capital
                    Corporation filed on February 6, 2004 (File No.
                    333-112593)).3.3
                
                Amended
                    and Restated Limited Liability Company Agreement of CCO Holdings,
                    LLC,
                    dated as of June 19, 2003 (incorporated by reference to Exhibit 3.3
                    to the registration statement on Form S-4 of CCO Holdings,
                    LLC and
                    CCO Holdings Capital Corporation filed on February 6, 2004 (File
                    No.
                    333-112593)).3.4
                
                Certificate
                    of Incorporation of CCO Holdings Capital Corp. (originally named
                    CC Holdco
                    I Capital Corp.) (incorporated by reference to Exhibit 3.4
                    to the
                    registration statement on Form S-4 of CCO Holdings, LLC
                    and CCO
                    Holdings Capital Corporation filed on February 6, 2004 (File
                    No.
                    333-112593)).3.5
                
                Certificate
                    of Amendment of Certificate of Incorporation of CCO Holdings
                    Capital Corp.
                    (incorporated by reference to Exhibit 3.5 to the registration
                    statement on Form S-4 of CCO Holdings, LLC and CCO Holdings
                    Capital
                    Corporation filed on February 6, 2004 (File No.
                    333-112593)).3.6
                
                By-laws
                    of CCO Holdings Capital Corp. (incorporated by reference to
                    Exhibit 3.6 to the registration statement on Form S-4
                    of CCO
                    Holdings, LLC and CCO Holdings Capital Corporation filed on February
                    6,
                    2004 (File No. 333-112593)).4.1
                
                Indenture
                    relating to the 83/4%
                    Senior Notes due 2013, dated as of November 10, 2003,
                    by and among
                    CCO Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo
                    Bank, N.A.,
                    as trustee (incorporated by reference to Exhibit 4.1 to
                    Charter
                    Communications, Inc.’s current report on Form 8-K filed on
                    November 12, 2003 (File No. 000-27927)).4.2
                
                Indenture
                    relating to the Senior Floating Rate Notes due 2010 dated as
                    of
                    December 15, 2004 among CCO Holdings, LLC, CCO Holdings
                    Capital Corp.
                    and Wells Fargo Bank, N.A., as trustee (incorporated by reference
                    to
                    Exhibit 10.1 to the current report on Form 8-K
                    of CCO Holdings,
                    LLC filed on December 21, 2004 (File No.
                    333-112593)).4.3
                
                Exchange
                    and Registration Rights Agreement dated December 15, 2004
                    by and
                    among CCO Holdings, LLC, CCO Holdings Capital Corp, on the one
                    hand, and
                    Credit Suisse First Boston LLC and Citigroup Global Markets Inc,
                    on the
                    other hand, as representatives (incorporated by reference to
                    Exhibit 10.2 to the current report on Form 8-K
                    of CCO Holdings,
                    LLC filed on December 21, 2004 (File
                    No. 333-112593)).10.1
                    (a)
                
                Stipulation
                    of Settlement, dated as of January 24, 2005, regarding settlement
                    of
                    Consolidated Federal Class Action entitled In Re Charter Communications,
                    Inc. Securities Litigation. (Incorporated by reference to Exhibit
                    10.48 tothe
                    annual report on Form 10-K filed byCharter
                    Communications, Inc. on March 3, 2005 (File No.
                    000-27927)).10.1
                    (b)
                
                Amendment
                    to Stipulation of Settlement, dated as of May 23, 2005, regarding
                    settlement of Consolidated Federal Class Action entitled In Re
                    Charter
                    Communications, Inc. Securities Litigation. (incorporated by
                    reference to
                    Exhibit 10.35(b)to
                    Amendment No. 3 to the registration statement on Form S-1filed
                    by Charter Communications, Inc. on June 8, 2005 (File No.
                    333-121186)).10.2+
                
                Employment
                    Agreement dated as of April 1, 2005, by and between Michael J.
                    Lovett and
                    Charter Communications, Inc. (Incorporated by reference to Exhibit
                    10.11
                    tothe
                    quarterly report on Form 10-Q filed byCharter
                    Communications, Inc. on May 3, 2005 (File No.
                    000-27927)).10.3+
                
                Letter
                    Agreement, dated April 15, 2005, by and between Charter Communications,
                    Inc. and Paul E. Martin (incorporated by reference to Exhibit
                    99.1 to the
                    current report on Form 8-K of Charter Communications, Inc. filed
                    April 19,
                    2005 (File No. 0000-27927)).10.4+
                
                2005
                    Executive Cash Award Plan dated as of June 9, 2005 (incorporated
                    by
                    reference to Exhibit 99.1 to the current report on Form 8-K of
                    Charter
                    Communications, Inc. filed June 15, 2005 (File No.
                    0000-27927)).10.5+
                
                Restricted
                    Stock Agreement, dated as of July 13, 2005, by and between
                    Robert P.
                    May and Charter Communications, Inc. (incorporated by reference
                    to
                    Exhibit 99.1 to the current report on Form 8-K
                    of Charter
                    Communications, Inc. filed July 13, 2005 (File
                    No. 000-27927)).
  46
 Table
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 10.6+
                Restricted
                    Stock Agreement, dated as of July 13, 2005, by and between
                    Michael J.
                    Lovett and Charter Communications, Inc. (incorporated by reference
                    to
                    Exhibit 99.2 to the current report on Form 8-K
                    of Charter
                    Communications, Inc. filed July 13, 2005 (File
                    No. 000-27927)).31.1*
                Certificate
                    of Interim Chief Executive Officer pursuant to Rule 13a-14(a)/Rule
                    15d-14(a) under the Securities Exchange Act of 1934.31.2*
                Certificate
                    of Interim Chief Financial Officer pursuant to Rule 13a-14(a)/Rule
                    15d-14(a) under the Securities Exchange Act of 1934.32.1*
                Certification
                    pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                    906 of
                    the Sarbanes-Oxley Act of 2002 (Interim Chief Executive Officer).32.2*
                Certification
                    pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                    906 of
                    the Sarbanes-Oxley Act of 2002 (Interim Chief Financial Officer).
 
 
 *
        Document attached
 
 +
        Management compensatory plan or arrangement
  47