**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 September 30, 2007**





**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**
              **Delaware**
            
            **86-1067239**
              **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 large accelerated filers, accelerated
      filers, or non-accelerated filers. See definition of “accelerated filer and
      large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):





Large
      accelerated
      filer o                                                        Accelerated
      filer o                                                  Non-accelerated
      filer  þ





Indicate
      by check mark whether the registrants are shell companies (as defined in Rule
      12b-2 of the Act). Yes oNo þ





Number
      of
      shares of common stock of CCO Holdings Capital Corp. outstanding as of November
      13, 2007: 1





*
      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.










**CCO
      Holdings, LLC**


**CCO
      Holdings Capital Corp.**


**Quarterly
      Report on Form 10-Q for the Period ended September 30,
      2007**





**Table
      of Contents**





PART
                I. FINANCIAL INFORMATION
            **Page**Item
                1. **Financial Statements - CCO Holdings, LLC and
                Subsidiaries**Condensed
                Consolidated Balance Sheets as of September 30, 2007and
                December 31, 2006
            4Condensed
                Consolidated Statements of Operations for the three and
                ninemonths
                ended September 30, 2007 and 2006
            5Condensed
                Consolidated Statements of Cash Flows for thenine
                months ended September 30, 2007 and 2006
            6Notes
                to Condensed Consolidated Financial Statements
            7Item
                2. Management's Discussion and Analysis of Financial Condition and
                Results of Operations
            17Item
                4. Controls and Procedures
            27PART
                II. OTHER INFORMATIONItem
                1. Legal Proceedings
            28Item
                1A.  Risk Factors
            28Item
                6. Exhibits
            34SIGNATURES
            S-1EXHIBIT
                INDEX
            E-1





This
      quarterly report on Form 10-Q is for the three and nine months ended
      September 30, 2007.  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.  This information
      incorporates documents previously filed by our parent company, Charter
      Communications, Inc., with the SEC including its quarterly report on Form 10-Q
      for the quarter ended September 30, 2007, filed on November 8,
      2007.  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.











**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 "Risk Factors" under Part II, Item
      1A.  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," "aim," "on track," "target," "opportunity" 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, in general, 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 and, in particular,
                our
                and our parent companies’ ability to fund debt obligations (by dividend,
                investment or otherwise) to the applicable obligor of such
                debt;


·
            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 could trigger a default of our other obligations under cross-default
                provisions;


·
            our
                and our parent companies’ ability to pay or refinance debt prior to or
                when it becomes due and/or refinance that debt through new issuances,
                exchange offers or otherwise, including restructuring our and our
                parent
                companies’ balance sheet and leverage
                position; ·
            competition
              from other distributors, including incumbent telephone companies, direct
              broadcast satellite operators, wireless broadband providers, and DSL
              providers; ·
            difficulties
              in introducing, growing, and operating our telephone services, such
              as our
              ability to adequately meet customer expectations for the reliability
              of
              voice services; ·
            our
                ability to adequately meet demand for installations and customer
                service;


·
            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 and grow our customer base, particularly
                in the
                face of increasingly aggressive
                competition;


·
            our
              ability to obtain programming at reasonable prices or to adequately
              raise
              prices to offset the effects of higher programming
              costs; ·
            general
              business conditions, economic uncertainty or slowdown;
              and ·
            the
              effects of governmental regulation, including but not limited to local
              and
              state 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


**PART
      I. FINANCIAL INFORMATION.**








**Item
                1.**
            **Financial
                Statements.**





**CCO
      HOLDINGS, LLC AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**(DOLLARS
      IN
      MILLIONS)**





**September
                30,**
            
            
            **December
                31,****2007**
            
            
            **2006****(Unaudited)****ASSETS**CURRENT
                ASSETS:Cash
                and cash equivalents
            
            $
            4
            
            
            $
            28Accounts
                receivable, less allowance for doubtful accounts of$18
                and $16, respectively
            
            
            220
            
            
            
            194Prepaid
                expenses and other current assets
            
            
            26
            
            
            
            23Total
                current assets
            
            
            250
            
            
            
            245INVESTMENT
                IN CABLE PROPERTIES:Property,
                plant and equipment, net of accumulateddepreciation
                of $8,563 and $7,602, respectively
            
            
            5,075
            
            
            
            5,181Franchises,
                net
            
            
            9,144
            
            
            
            9,223Total
                investment in cable properties, net
            
            
            14,219
            
            
            
            14,404OTHER
                NONCURRENT ASSETS
            
            
            193
            
            
            
            176Total
                assets
            
            $
            14,662
            
            
            $
            14,825**LIABILITIES
                AND MEMBER’S EQUITY**CURRENT
                LIABILITIES:Accounts
                payable and accrued expenses
            
            $
            930
            
            
            $
            901Payables
                to related party
            
            
            152
            
            
            
            147Total
                current liabilities
            
            
            1,082
            
            
            
            1,048LONG-TERM
                DEBT
            
            
            9,630
            
            
            
            8,610LOANS
                PAYABLE – RELATED PARTY
            
            
            332
            
            
            
            303DEFERRED
                MANAGEMENT FEES – RELATED PARTY
            
            
            14
            
            
            
            14OTHER
                LONG-TERM LIABILITIES
            
            
            444
            
            
            
            362MINORITY
                INTEREST
            
            
            655
            
            
            
            641MEMBER’S
                EQUITY:Member’s
                equity
            
            
            2,530
            
            
            
            3,846Accumulated
                other comprehensive income (loss)
            
            
            (25
            )
            
            
            1Total
                member’s equity
            
            
            2,505
            
            
            
            3,847Total
                liabilities and member’s equity
            
            $
            14,662
            
            
            $
            14,825





The
          accompanying notes are an integral part of these condensed consolidated
          financial
          statements.
 4


**CCO
      HOLDINGS, LLC AND SUBSIDIARIES**


**CONDENSED****CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(DOLLARS
      IN MILLIONS)**


**Unaudited**






**Three
                Months Ended September 30,**
            
            
            **Nine
                Months Ended September 30,****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**REVENUES
            
            $
            1,525
            
            
            $
            1,388
            
            
            $
            4,449
            
            
            $
            4,091COSTS
                AND EXPENSES:Operating
                (excluding depreciation and amortization)
            
            
            679
            
            
            
            615
            
            
            
            1,957
            
            
            
            1,830Selling,
                general and administrative
            
            
            341
            
            
            
            309
            
            
            
            961
            
            
            
            860Depreciation
                and amortization
            
            
            334
            
            
            
            334
            
            
            
            999
            
            
            
            1,024Asset
                impairment charges
            
            
            56
            
            
            
            60
            
            
            
            56
            
            
            
            159Other
                operating expenses, net
            
            
            8
            
            
            
            4
            
            
            
            13
            
            
            
            141,418
            
            
            
            1,322
            
            
            
            3,986
            
            
            
            3,887Operating
                income from continuing operations
            
            
            107
            
            
            
            66
            
            
            
            463
            
            
            
            204OTHER
                INCOME AND (EXPENSES):Interest
                expense, net
            
            
            (193
            )
            
            
            (184
            )
            
            
            (579
            )
            
            
            (574
            )Other
                income (expense), net
            
            
            (24
            )
            
            
            1
            
            
            
            (62
            )
            
            
            (18
            )(217
            )
            
            
            (183
            )
            
            
            (641
            )
            
            
            (592
            )Loss
                from continuing operations before income taxes
            
            
            (110
            )
            
            
            (117
            )
            
            
            (178
            )
            
            
            (388
            )INCOME
                TAX EXPENSE
            
            
            (21
            )
            
            
            (1
            )
            
            
            (22
            )
            
            
            (5
            )Loss
                from continuing operations
            
            
            (131
            )
            
            
            (118
            )
            
            
            (200
            )
            
            
            (393
            )INCOME
                FROM DISCONTINUED OPERATIONS, NET OF TAX
            
            
            --
            
            
            
            200
            
            
            
            --
            
            
            
            238Net
                income (loss)
            
            $
            (131
            )
            
            $
            82
            
            
            $
            (200
            )
            
            $
            (155
            )


The
          accompanying notes are an integral part of these condensed consolidated
          financial statements.
 5


**CCO
      HOLDINGS, LLC AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(DOLLARS
      IN MILLIONS)**


**Unaudited**





**Nine
                Months Ended September 30,****2007**
            
            
            **2006**CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (200
            )
            
            $
            (155
            )Adjustments
                to reconcile net loss to net cash flows from operating
                activities:Depreciation
                and amortization
            
            
            999
            
            
            
            1,032Asset
                impairment charges
            
            
            56
            
            
            
            159Noncash
                interest expense
            
            
            13
            
            
            
            18Deferred
                income taxes
            
            
            16
            
            
            
            --(Gain)
                loss on sale of assets
            
            
            5
            
            
            
            (198
            )Loss
                on extinguishment of debt
            
            
            21
            
            
            
            27Other,
                net
            
            
            48
            
            
            
            --Changes
                in operating assets and liabilities, net of effects from acquisitions
                and
                dispositions:Accounts
                receivable
            
            
            (31
            )
            
            
            44Prepaid
                expenses and other assets
            
            
            (4
            )
            
            
            (11
            )Accounts
                payable, accrued expenses and other
            
            
            79
            
            
            
            14Receivables
                from and payables to related party, including deferred management
                fees
            
            
            19
            
            
            
            30Net
                cash flows from operating activities
            
            
            1,021
            
            
            
            960CASH
                FLOWS FROM INVESTING ACTIVITIES:Purchases
                of property, plant and equipment
            
            
            (890
            )
            
            
            (795
            )Change
                in accrued expenses related to capital expenditures
            
            
            (51
            )
            
            
            4Proceeds
                from sales of assets, including cable systems
            
            
            37
            
            
            
            988Other,
                net
            
            
            (31
            )
            
            
            (1
            )Net
                cash flows from investing activities
            
            
            (935
            )
            
            
            196CASH
                FLOWS FROM FINANCING ACTIVITIES:Borrowings
                of long-term debt
            
            
            7,472
            
            
            
            5,970Borrowings
                from related parties
            
            
            --
            
            
            
            300Repayments
                of long-term debt
            
            
            (6,452
            )
            
            
            (6,638
            )Repayments
                to related parties
            
            
            --
            
            
            
            (20
            )Payments
                for debt issuance costs
            
            
            (33
            )
            
            
            (19
            )Contributions
            
            
            --
            
            
            
            148Distributions
            
            
            (1,102
            )
            
            
            (835
            )Other,
                net
            
            
            5
            
            
            
            --Net
                cash flows from financing activities
            
            
            (110
            )
            
            
            (1,094
            )NET
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            (24
            )
            
            
            62CASH
                AND CASH EQUIVALENTS, beginning of period
            
            
            28
            
            
            
            3CASH
                AND CASH EQUIVALENTS, end of period
            
            $
            4
            
            
            $
            65CASH
                PAID FOR INTEREST
            
            $
            509
            
            
            $
            483NONCASH
                TRANSACTIONS:Issuance
                of debt by Charter Communications Operating, LLC
            
            $
            --
            
            
            $
            37Retirement
                of Renaissance Media Group LLC debt
            
            $
            --
            
            
            $
            (37
            )


The
          accompanying notes are an integral part of these condensed consolidated
          financial
          statements.
 6
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**


**1.**
            **Organization
                and Basis of Presentation**





CCO
      Holdings, LLC ("CCO Holdings") is a holding company whose principal assets
      at
      September 30, 2007 are the equity interests in its operating
      subsidiaries.  CCO Holdings is a direct subsidiary of CCH II, LLC
      (“CCH II”), which is an indirect subsidiary of Charter Communications Holdings,
      LLC ("Charter Holdings").  Charter Holdings is an indirect subsidiary
      of Charter Communications, Inc. (“Charter”).  The condensed
      consolidated financial statements include the accounts of CCO Holdings and
      all
      of its subsidiaries where the underlying operations reside, which are
      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 to residential and commercial customers
      traditional cable video programming (analog and digital video), high-speed
      Internet services, advanced broadband services such as high definition
      television, Charter OnDemandTM, and digital video recorder service, and, in many
      of our markets, telephone service.  The Company sells its cable video
      programming, high-speed Internet, telephone, and advanced broadband services
      on
      a subscription basis.  The Company also sells local advertising on
      cable 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 (the "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.




**2.           Liquidity
      and Capital Resources**





The
      Company incurred net losses of $131 million for the three months ended September
      30, 2007, and $200 million and $155 million for the nine months ended September
      30, 2007 and 2006, respectively.  The Company had net income of $82
      million for the three months ended September 30, 2006.  The Company’s
      net cash flows from operating activities were $1.0 billion and $960 million
      for
      the nine months ended September 30, 2007 and 2006, respectively.





The
      Company's long-term financing as of September 30, 2007 totaled $9.6 billion,
      consisting of $7.0 billion of credit facility debt and $2.7 billion accreted
      value of high-yield notes.  For the remainder of 2007, none of the
      Company’s debt matures.  As of September 30, 2007, the Company’s 2008
      and 2009 debt maturities each totaled $65 million.  In 2010 and
      beyond, significant additional amounts will become due under the Company’s
      remaining long-term debt obligations.





The
      Company requires significant cash to fund debt service costs, capital
      expenditures and ongoing operations.  The Company has historically
      funded these requirements through cash flows from operating activities,
      borrowings under its credit facilities, equity contributions from its 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 nine months ended September 30, 2007, the Company
      generated $1.0 billion of net cash flows from operating activities, after paying
      cash interest of $509 million.  In addition, the Company used $890
      million for purchases of property, plant and equipment.  Finally, the
      Company used $110 million of net cash flows in financing
      activities.


7
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**





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 through 2008.  The Company believes that
      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’ interest and principal repayment
      obligations in 2009, and will not be sufficient to fund such needs in 2010
      and
      beyond.  The Company has been advised that Charter continues to work
      with its financial advisors concerning its approach to addressing liquidity,
      debt maturities, and overall balance sheet leverage.





***Credit
      Facility Availability***





The
      Company’s ability to operate depends upon, among other things, its continued
      access to capital, including credit under the Charter Communications Operating,
      LLC (“Charter Operating”) credit facilities.  The Charter Operating
      credit facilities, along with the Company’s indentures and the CCO Holdings
      credit facility, contain certain restrictive covenants, some of which require
      the Company to maintain specified leverage ratios, meet financial tests, and
      provide annual audited financial statements with an unqualified opinion from
      the
      Company’s independent auditors.  As of September 30, 2007, 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 September 30, 2007, the Company’s potential
      availability under Charter Operating’s revolving credit facility totaled
      approximately $1.3 billion, none of which was limited by covenant
      restrictions.  Continued access to the Company’s credit facilities is
      subject to the Company remaining in compliance with these covenants, including
      covenants tied to the Company’s leverage ratio.  If any event of
      non-compliance were to occur, funding under the credit facilities may not be
      available and defaults on some or potentially all of the Company’s and its
      parent companies’ debt obligations could occur.  An event of default
      under 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 and its parent companies’ other debt obligations, which
      could have a material adverse effect on the Company’s consolidated financial
      condition and results of operations.





***Parent
      Company 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, CCH I Holdings, LLC (“CIH”), CCH I, LLC (“CCH I”), or CCH II
      to satisfy their debt payment obligations or a bankruptcy with respect to
      Charter Holdings, CIH, CCH I, or CCH II would give the lenders under the
      Company’s credit facilities the right to accelerate the payment obligations
      under these facilities.  Any such acceleration would be a default
      under the indenture governing the Company’s notes.  On a consolidated
      basis, the Company’s parent companies have a significant level of debt, which,
      including the Company’s debt, totaled approximately $19.7 billion as of
      September 30, 2007.





***Limitations
      on Distributions***





As
      long
      as Charter’s convertible senior notes remain outstanding and are not otherwise
      converted into shares of common stock, Charter must pay interest on the
      convertible senior notes and repay the principal amount.  In October
      2007, Charter Communications Holding Company, LLC (“Charter Holdco”) completed
      an exchange offer, in which $364 million of Charter’s 5.875% convertible senior
      notes due November 2009 were exchanged for $479 million of Charter’s 6.50%
      convertible senior notes.  Approximately $49 million of Charter’s
      5.875% convertible senior notes remain outstanding, net of $814 million of
      the
      5.875% convertible senior notes now held by Charter Holdco.  Charter’s
      ability to make interest payments on its convertible senior notes, and 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 and its subsidiaries.  As of September
      30, 2007, Charter Holdco was owed $123 million in intercompany loans from
      Charter Operating and had $44 million in cash, which amounts were available
      to
      pay interest and principal on Charter's convertible senior notes.  In
      addition, Charter has $25 million of U.S. government securities pledged as
      security for the semi-annual interest payments on Charter’s 5.875%
      convertible


8
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**


senior
      notes scheduled in November 2007.  As long as Charter Holdco continues
      to hold the $814 million of Charter’s 5.875% convertible senior notes, Charter
      Holdco will receive interest payments from the government securities pledged
      for
      Charter’s 5.875% convertible senior notes.  The remaining amount of
      interest payments expected to be received by Charter Holdco in November 2007
      is
      approximately $24 million, which may be available to pay semiannual interest
      on
      the outstanding principal amount of $49 million of Charter’s 5.875% convertible
      senior notes and $479 million of Charter’s 6.50% convertible senior notes,
      although Charter Holdco may use those amounts for other purposes.





As
      of
      September 30, 2007, Charter Holdings, CIH, CCH I, and CCH II had approximately
      $9.5 billion principal amount of debt outstanding with approximately $0, $188
      million, $2.2 billion, and $7.1 billion maturing in 2008, 2009, 2010, and
      thereafter, respectively.  Charter Holdings, CIH, CCH I, 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,
      their significant indebtedness may negatively impact the Company’s and
      their ability to raise additional capital.  During the nine months
      ended September 30, 2007, the Company distributed $1.1 billion of cash to its
      parent company.





Distributions
      by Charter’s subsidiaries to a parent company (including Charter, Charter
      Holdco, CCHC, LLC ("CCHC"), Charter Holdings, CIH, CCH I, and CCH II) for
      payment of principal on parent company notes, are restricted under the
      indentures governing the CIH notes, CCH I notes, CCH II notes, CCO Holdings
      notes, Charter Operating notes, and under the CCO Holdings credit facilities,
      unless there is no default under the applicable indenture and credit facilities,
      and unless each applicable subsidiary’s leverage ratio test is met at the time
      of such distribution.  For the quarter ended September 30, 2007, there
      was no default under any of these indentures or credit
      facilities.  However, certain of Charter’s subsidiaries did not meet
      their applicable leverage ratio tests based on September 30, 2007 financial
      results.  As a result, distributions from certain of Charter’s
      subsidiaries to their parent companies will continue to be restricted unless
      those tests are met.  Distributions by Charter Operating for payment
      of principal on parent company notes are further restricted by the covenants
      in
      its credit facilities.





Distributions
      by CIH, CCH I, CCH II, CCO Holdings, and Charter Operating to a parent company
      for payment of parent company interest are permitted if there is no default
      under the aforementioned indentures and CCO Holdings credit
      facilities.





The
      indentures governing the Charter Holdings notes permit Charter Holdings to
      make
      distributions to Charter Holdco for payment of interest or principal on
      Charter’s 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 September
      30, 2007, there was no default under Charter Holdings’ indentures and the other
      specified tests were met.  However, Charter Holdings did not meet the
      leverage ratio test of 8.75 to 1.0 based on September 30, 2007 financial
      results.  As a result, distributions from Charter Holdings to Charter or
      Charter Holdco would have been restricted at such time and will continue to
      be
      restricted unless that test is met.  During periods in which
      distributions are restricted, the indentures governing the Charter Holdings
      notes permit Charter Holdings and its subsidiaries to make specified investments
      (that are not restricted payments) in Charter Holdco or Charter, up to an amount
      determined by a formula, as long as there is no default under the
      indentures.





***Recent
      Financing Transactions***





In
      March
      2007, Charter Operating entered into an Amended and Restated Credit Agreement
      (the “Charter Operating Credit Agreement”) which provides for a $1.5 billion
      senior secured revolving line of credit, a continuation of the existing $5.0
      billion term loan facility (which was refinanced with new term loans in April
      2007), and a $1.5 billion new term loan facility, which was funded in March
      and
      April 2007.  In March 2007, CCO Holdings entered into a credit
      agreement which consisted of a $350 million term loan facility funded in March
      and April 2007.  In April 2007, Charter Holdings completed a cash
      tender offer and purchased $97 million of its outstanding notes.  In
      addition, Charter Holdings redeemed $187 million of its 8.625% senior notes
      due
      April 1, 2009 and CCO Holdings redeemed


9
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**


$550
      million of its senior floating rate notes due December 15,
      2010.  These redemptions closed in April 2007.  See Note
      6.





**3.**
            **Sale
                of Assets**





In
      2006,
      the Company sold certain cable television systems serving approximately 356,000
      analog video customers in 1) West Virginia and Virginia to Cebridge Connections,
      Inc. (the “Cebridge Transaction”);  2) Illinois and Kentucky to
      Telecommunications Management, LLC, doing business as New Wave Communications
      (the “New Wave Transaction”) and 3) Nevada, Colorado, New Mexico and Utah to
      Orange Broadband Holding Company, LLC (the “Orange Transaction”) for a total
      sales price of approximately $971 million.  The Company used the net
      proceeds from the asset sales to reduce borrowings, but not commitments, under
      the revolving portion of the Company’s credit facilities.  These cable
      systems met the criteria for assets held for sale.  As such, the
      assets were written down to fair value less estimated costs to sell, resulting
      in asset impairment charges during the nine months ended September 30, 2006
      of
      approximately $99 million related to the New Wave Transaction and the Orange
      Transaction.  The Company determined that the West Virginia and
      Virginia cable systems comprise operations and cash flows that for financial
      reporting purposes meet the criteria for discontinued
      operations.  Accordingly, the results of operations for the West
      Virginia and Virginia cable systems have been presented as discontinued
      operations, net of tax, for the three and nine months ended September 30, 2006,
      including a gain of $200 million on the sale of cable systems.





Summarized
      consolidated financial information for the three and nine months ended September
      30, 2006 for the West Virginia and Virginia cable systems is as
      follows:





**Three
                Months**
              **Ended
                September 30, 2006**
            
            
            **Nine
                Months**
              **Ended
                September 30, 2006**Revenues
            
            $
            --
            
            
            $
            109Net
                income
            
            $
            200
            
            
            $
            238





Also,
      during the three months ended September 30, 2007 and 2006, the Company recorded
      asset impairment charges of $56 million and $60 million, respectively, related
      to other cable systems meeting the criteria of assets held for sale during
      the
      respective periods.





**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 Statement of Financial Accounting
      Standards (“SFAS”) No. 142, *Goodwill and Other Intangible
      Assets*.  Franchises that qualify for indefinite-life treatment
      under SFAS No. 142 are tested for impairment annually each October 1 based
      on valuations, or more frequently as warranted by events or changes in
      circumstances.  The October 1, 2007 annual impairment test will be
      finalized in the fourth quarter of 2007 and any impairment resulting from such
      test will be recorded in the fourth quarter.  Franchises are aggregated
      into essentially inseparable asset groups to conduct the
      valuations.  The asset groups generally represent geographical
      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.





10
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**


As
      of
      September 30, 2007 and December 31, 2006, indefinite-lived and finite-lived
      intangible assets are presented in the following table:





**September
                30, 2007**
            
            
            **December 31,
                2006****Gross**
              **Carrying**
              **Amount**
            
            
            **Accumulated**
              **Amortization**
            
            
            **Net**
              **Carrying**
              **Amount**
            
            
            **Gross**
              **Carrying**
              **Amount**
            
            
            **Accumulated
                Amortization**
            
            
            **Net**
              **Carrying**
              **Amount****Indefinite-lived
                intangible assets:**Franchises
                with indefinite lives
            
            $
            9,131
            
            
            $
            --
            
            
            $
            9,131
            
            
            $
            9,207
            
            
            $
            --
            
            
            $
            9,207Goodwill
            
            
            79
            
            
            
            --
            
            
            
            79
            
            
            
            61
            
            
            
            --
            
            
            
            61$
            9,210
            
            
            $
            --
            
            
            $
            9,210
            
            
            $
            9,268
            
            
            $
            --
            
            
            $
            9,268**Finite-lived
                intangible assets:**Franchises
                with finite lives
            
            $
            23
            
            
            $
            10
            
            
            $
            13
            
            
            $
            23
            
            
            $
            7
            
            
            $
            16





For
      the
      nine months ended September 30, 2007, the net carrying amount of
      indefinite-lived franchises was reduced by $20 million, related to cable asset
      sales completed in the first nine months of 2007, and $56 million as a result
      of
      asset impairment charges recorded related to other cable asset
      sales.  Franchise amortization expense represents the amortization
      relating to franchises that did not qualify for indefinite-life treatment under
      SFAS No. 142, including costs associated with franchise
      renewals.  Franchise amortization expense for the three and nine
      months ended September 30, 2007 was approximately $1 million and $3 million,
      respectively, and for the three and nine months ended September 30, 2006 was
      approximately $0 and $1 million, respectively.  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.





For
      the
      nine months ended September 30, 2007, goodwill increased $18 million as a result
      of the Company’s purchase of certain cable systems in June and August of
      2007.  The amount recorded to goodwill is based on a preliminary
      allocation of purchase price and is subject to change based on finalization
      of
      the fair value allocations.





**5.           Accounts
      Payable and Accrued Expenses**





Accounts
      payable and accrued expenses consist of the following as of September 30, 2007
      and December 31, 2006:





**September
                30,**
              **2007**
            
            
            **December 31,**
              **2006**Accounts
                payable - trade
            
            $
            112
            
            
            $
            79Accrued
                capital expenditures
            
            
            46
            
            
            
            97Accrued
                expenses:Interest
            
            
            159
            
            
            
            117Programming
                costs
            
            
            277
            
            
            
            268Franchise-related
                fees
            
            
            56
            
            
            
            68Compensation
            
            
            72
            
            
            
            74Other
            
            
            208
            
            
            
            198$
            930
            
            
            $
            901





11
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**


**6.**
            **Long-Term
                Debt**





Long-term
      debt consists of the following as of September 30, 2007 and December 31,
      2006:





**September
                30, 2007**
            
            
            **December
                31, 2006****Principal
                Amount**
            
            
            **Accreted
                Value**
            
            
            **Principal
                Amount**
            
            
            **Accreted
                Value****Long-Term
                Debt**CCO
                Holdings, LLC:Senior
                floating notes due December 15, 2010
            
            $
            --
            
            
            $
            --
            
            
            $
            550
            
            
            $
            5508
                3/4% senior notes due November 15, 2013
            
            
            800
            
            
            
            795
            
            
            
            800
            
            
            
            795Credit
                facility
            
            
            350
            
            
            
            350
            
            
            
            --
            
            
            
            --Charter
                Communications Operating, LLC:8.000%
                senior second lien notes due April 30, 2012
            
            
            1,100
            
            
            
            1,100
            
            
            
            1,100
            
            
            
            1,1008
                3/8% senior second lien notes due April 30, 2014
            
            
            770
            
            
            
            770
            
            
            
            770
            
            
            
            770Credit
                facilities
            
            
            6,615
            
            
            
            6,615
            
            
            
            5,395
            
            
            
            5,395$
            9,635
            
            
            $
            9,630
            
            
            $
            8,615
            
            
            $
            8,610





The
      accreted values presented above generally represent the principal amount of
      the
      notes less the original issue discount at the time of sale, plus the accretion
      to the balance sheet date.





In
      March
      2007, Charter Operating entered into the Charter Operating Credit Agreement
      which provides for a $1.5 billion senior secured revolving line of credit,
      a
      continuation of the existing $5.0 billion term loan facility (the “Existing Term
      Loan”), and a $1.5 billion new term loan facility (the “New Term Loan”), which
      was funded in March and April 2007.  Borrowings under the Charter
      Operating Credit Agreement bear interest at a variable interest rate based
      on
      either LIBOR or a base rate, plus in either case, an applicable
      margin.  The applicable margin for LIBOR loans under the New Term Loan
      and revolving loans is 2.00% above LIBOR.  The revolving line of
      credit commitments terminate in March 2013.  The Existing Term Loan
      and the New Term Loan are subject to amortization at 1% of their initial
      principal amount per annum commencing on March 31, 2008 with the remaining
      principal amount of the New Term Loan due in March 2014.  The Charter
      Operating Credit Agreement also modified the quarterly consolidated leverage
      ratio to be less restrictive.





In
      March
      2007, CCO Holdings entered into a credit agreement (the “CCO Holdings Credit
      Agreement”) which consisted of a $350 million term loan facility (the “Term
      Facility”).  The Term Facility matures in September 2014 (the
“Maturity Date”).  Borrowings under the CCO Holdings Credit Agreement
      bear interest at a variable interest rate based on either LIBOR or a base rate
      plus, in either case, an applicable margin.  The applicable margin for
      LIBOR term loans is 2.50% above LIBOR.  The CCO Holdings Credit
      Agreement is secured by the equity interests of Charter Operating, and all
      proceeds thereof.





As
      part
      of the refinancing, the existing $350 million revolving/term credit facility
      was
      terminated.  The refinancing resulted in a loss on extinguishment of
      debt of approximately $13 million for the nine months ended September 30, 2007,
      included in other income (expense), net on the Company’s condensed consolidated
      statements of operations.





In
      April
      2007, CCO Holdings redeemed $550 million of its senior floating rate notes
      due
      December 15, 2010.  The redemption resulted in a loss on
      extinguishment of debt of approximately $19 million for the nine months ended
      September 30, 2007, included in other income (expense), net on the Company’s
      condensed consolidated statements of operations.





12
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**


**7.           Loans
      Payable-Related Party**





Loans
      payable-related party as of September 30, 2007 and December 31, 2006 consists
      of
      loans from Charter Holdco to the Company of $123 million and $3 million,
      respectively, from Charter Holdings to the Company of $0 and $105 million,
      and
      from CCH II to the Company of $209 million and $195 million,
      respectively.  These loans bear interest at a rate of LIBOR plus 3.0%
      reset quarterly.  These loans are subject to certain limitations and
      may be repaid with borrowings under the Company’s revolving credit
      facility.





**8.           Minority
      Interest**





Minority
      interest on the Company’s condensed consolidated balance sheets at September 30,
      2007 and December 31, 2006 represents preferred membership interests in CC
      VIII,
      LLC (“CC VIII”), an indirect subsidiary of CCO Holdings, of $655 million and
      $641 million, respectively.  This preferred interest is held by Mr.
      Allen, Charter’s Chairman and controlling shareholder, and CCH
      I.  Minority interest in the accompanying condensed consolidated
      statements of operations includes the 2% accretion of the preferred membership
      interests plus approximately 18.6% of CC VIII’s income, net of
      accretion.





**9.**
            **Comprehensive
                Income (Loss)**





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 income (loss).  Comprehensive loss was
      $204 million for the three months ended September 30, 2007, and $226 million
      and
      $156 million for the nine months ended September 30, 2007 and 2006,
      respectively.  Comprehensive income for the three months ended
      September 30, 2006 was $81 million.





**10.**
            **Accounting
                for Derivative Instruments and Hedging
                Activities**





The
      Company uses interest rate derivative instruments, including but not limited
      to
      interest rate swap agreements and interest rate collar agreements (collectively
      referred to herein as interest rate agreements) to manage its interest costs
      and
      reduce the Company’s exposure to increases in floating interest
      rates.  The Company’s policy is to manage its exposure to fluctuations
      in interest rates by maintaining a mix of fixed and variable rate debt within
      a
      targeted range.  Using interest rate swap agreements, the Company has
      agreed to exchange, at specified intervals through 2013, the difference between
      fixed and variable interest amounts calculated by reference to agreed-upon
      notional principal amounts.





The
      Company’s hedging policy does not permit it to 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 each of the three months ended September
      30, 2007 and 2006, other income (expense), net includes $0, and for the
      nine months ended September 30, 2007 and 2006, other income (expense), net
      includes $0 and gains of $2 million, respectively, which represent cash flow
      hedge ineffectiveness on interest rate hedge agreements.  This
      ineffectiveness arises from differences between critical terms of the agreements
      and the related hedged obligations.





Changes
      in the fair value of interest rate agreements that are designated as hedging
      instruments of the variability of cash flows associated with floating rate
      debt
      obligations, and that meet the effectiveness criteria of SFAS No. 133 are
      reported in accumulated other comprehensive income (loss).  For the
      three months ended September
      30, 2007 and 2006, losses of $73 million and $1 million, respectively,
      and for the nine months ended September 30, 2007 and 2006, losses of $25 million
      and $1 million, respectively, related to derivative instruments designated
      as
      cash flow hedges, were recorded in accumulated other comprehensive income
      (loss).  The amounts are subsequently reclassified as
      an


13
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**


increase
      or decrease to interest expense in the same periods 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 other income (expense) in the Company’s condensed consolidated
      statements of operations.  For the three months ended September
      30, 2007 and 2006, other income (expense), net, includes losses of $21
      million and $3 million, respectively, and for the nine months ended September
      30, 2007 and 2006, other income (expense), net includes losses of $16 million
      and gains of $6 million, respectively, resulting from interest rate derivative
      instruments not designated as hedges.





As
      of
September
      30, 2007 and December 31, 2006, the Company had outstanding $4.3 billion
      and $1.7 billion, respectively, in notional amounts of interest rate
      swaps.  The 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.





**11.           Other
      Operating Expenses, Net**





Other
      operating expenses, net consist of the following for the three and nine months
      ended September 30, 2007 and 2006:





**Three
                Months**
              **Ended
                September 30,**
            
            
            **Nine
                Months**
              **Ended
                September 30,****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**Loss
                on sale of assets, net
            
            $
            2
            
            
            $
            2
            
            
            $
            5
            
            
            $
            2Special
                charges, net
            
            
            6
            
            
            
            2
            
            
            
            8
            
            
            
            12$
            8
            
            
            $
            4
            
            
            $
            13
            
            
            $
            14





Special
      charges, net for the three and nine months ended September 30, 2007 and 2006,
      primarily represent severance associated with the closing of call centers and
      divisional restructuring.





**12.**
            **Other
                Income (Expense), Net**





Other
      income (expense), net consists of the following for the three and nine months
      ended September 30, 2007 and 2006:





**Three
                Months**
              **Ended
                September 30,**
            
            
            **Nine
                Months**
              **Ended
                September 30,****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**Gain
                (loss) on derivative instruments and
              hedging
                activities, net
            
            $
            (21
            )
            
            $
            (3
            )
            
            $
            (16
            )
            
            $
            8Loss
                on extinguishment of debt
            
            
            --
            
            
            
            --
            
            
            
            (32
            )
            
            
            (27
            )Minority
                interest
            
            
            (4
            )
            
            
            (4
            )
            
            
            (14
            )
            
            
            (14
            )Gain
                on investments
            
            
            2
            
            
            
            8
            
            
            
            1
            
            
            
            12Other,
                net
            
            
            (1
            )
            
            
            --
            
            
            
            (1
            )
            
            
            3$
            (24
            )
            
            $
            1
            
            
            $
            (62
            )
            
            $
            (18
            )





14
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**


The
      Charter Operating refinancing in April 2006 resulted in a loss on extinguishment
      of debt for the nine months ended September 30, 2006 of approximately $27
      million.





**13.**
            **Income
                Taxes**





CCO
      Holdings is a single member limited liability company not subject to income
      tax.  CCO Holdings holds all operations through indirect
      subsidiaries.  The majority of these indirect subsidiaries are
      generally limited liability companies that are also not subject to income
      tax.  However, certain of these limited liability companies are
      subject to state income tax.  In addition, the subsidiaries that are
      corporations are subject to federal and state income tax.





As
      of
      September 30, 2007 and December 31, 2006, the Company had net deferred income
      tax liabilities of approximately $230 million and $200 million,
      respectively.  The deferred tax liabilities relate to certain of the
      Company’s indirect subsidiaries that file separate income tax
      returns.  During the nine months
      ended
      September 30, 2007, the Company recorded an additional $32 million of deferred
      tax liabilities previously recorded at the Company’s indirect parent
      company.





Income
      tax expense is
      recognized through current federal and state income tax expense, as well as,
      increases to the related deferred tax liabilities of certain of the Company’s
      indirect subsidiaries.During the three and nine months ended
      September 30, 2007, the Company recorded $21 million and $22 million of income
      tax expense, respectively.  During the three and nine months ended
      September 30, 2006, the Company recorded $1 million and $5 million of income
      tax
      expense, respectively.  Income tax expense for the three and nine
      months ended September 30, 2007 includes $18 million of income tax expense
      previously recorded at the Company’s indirect parent company.  This
      adjustment should have been recorded by the Company in prior
      periods.





Charter
      Holdco, the Company’s indirect parent company, is currently under examination by
      the Internal Revenue Service for the tax years ending December 31, 2002 through
      2005.  In
      addition, Charter is under examination by the Internal Revenue Service for
      the
      tax year ended December 31, 2004.Management does not expect
      the results of these examinations to have a material adverse effect on the
      Company’s consolidated financial condition or results of
      operations.





**14.**
            **Contingencies**




The
      Company and its parent companies are defendants or co-defendants in several
      unrelated lawsuits claiming infringement of various patents relating to various
      aspects of its businesses.  Other industry participants are also
      defendants in certain of these cases, and, in many cases, the Company expects
      that any potential liability would be the responsibility of its equipment
      vendors pursuant to applicable contractual indemnification provisions. In the
      event that a court ultimately determines that the Company infringes on any
      intellectual property rights, it may be subject to substantial damages and/or
      an
      injunction that could require the Company or its vendors to modify certain
      products and services the Company offers to its subscribers.  While
      the Company believes the lawsuits are without merit and intends to defend the
      actions vigorously, the lawsuits could be material to the Company’s consolidated
      results of operations of any one period, and no assurance can be given that
      any
      adverse outcome would not be material to the Company’s consolidated financial
      condition, results of operations, or liquidity.





The
      Company and its parent companies are party to other lawsuits and claims
      that arise in the ordinary course of conducting its business.  The
      ultimate outcome of these other legal matters pending against the Company or
      its
      parent companies cannot be predicted, and although such lawsuits and claims
      are not expected individually to have a material adverse effect on the Company’s
      consolidated financial condition, results of operations, or liquidity, such
      lawsuits could have, in the aggregate, a material adverse effect on the
      Company’s consolidated financial condition, results of operations, or
      liquidity.





15
 **CCO
          HOLDINGS, LLC AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 **(dollars
          in millions, except where indicated)**


**15.           Stock
      Compensation Plans**





Charter
      has stock option plans (the “Plans”) which provide for the grant of
      non-qualified stock options, stock appreciation rights, dividend equivalent
      rights, performance units and performance shares, share awards, phantom stock
      and/or restricted stock (not to exceed 20.0 million shares of Charter Class
      A
      common stock), as each term is defined in the Plans.  Employees,
      officers, consultants and directors of Charter and its subsidiaries and
      affiliates are eligible to receive grants under the Plans.  Options
      granted generally vest over four years from the grant date, with 25% generally
      vesting on the anniversary of the grant date and ratably
      thereafter.  Generally, options expire 10 years from the grant
      date.  The Plans allow for the issuance of up to a total of 90.0
      million shares of Charter Class A common stock (or units convertible into
      Charter Class A common stock).  During the three and nine months ended
      September 30, 2007, Charter granted 0.1 million and 4.0 million stock options,
      respectively, and 2.6 million and 9.5 million performance units, respectively,
      under Charter’s Long-Term Incentive Program.  During the three and
      nine months ended September 30, 2007, Charter issued 2.5 million and 2.8 million
      shares of restricted Class A common stock.  The Company recorded $5
      million and $3 million of stock compensation expense for the three months ended
      September 30, 2007 and 2006, respectively, and $15 million and $10 million
      for
      the nine months ended September 30, 2007 and 2006, which is included in selling,
      general, and administrative expense.








16


**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
      at
      September 30, 2007 are the equity interests in its operating
      subsidiaries.  CCO Holdings is a direct subsidiary of CCH II, LLC
      (“CCH II”), which is an indirect subsidiary of Charter Communications Holdings,
      LLC ("Charter Holdings").  Charter Holdings is an indirect subsidiary
      of Charter Communications, Inc. (“Charter”). "We," "us" and "our" refer to CCO
      Holdings and/or its subsidiaries.





We
      are a
      broadband communications company operating in the United States.  We
      offer our residential and commercial customers traditional cable video
      programming (analog and digital video, which we refer to as “video service”),
      high-speed Internet services, advanced broadband cable services (such as Charter
      OnDemandTM video service (“OnDemand”), high definition television service, and
      digital video recorder (“DVR”) service) and, in many of our markets, telephone
      service.  We sell our cable video programming, high-speed Internet,
      telephone, 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 September 30,
      2007 and 2006:





**Approximate
                as of****September
                30,**
            
            
            **September
                30,****2007
                (a)**
            
            
            **2006
                (a)****Video
                Cable Services:****Analog
                Video:**Residential
                (non-bulk) analog video customers (b)
            
            
            5,073,900
            
            
            
            5,216,900Multi-dwelling
                (bulk) and commercial unit customers (c)
            
            
            273,900
            
            
            
            259,700Total
                analog video customers (b)(c)
            
            
            5,347,800
            
            
            
            5,476,600**Digital
                Video:**Digital
                video customers (d)
            
            
            2,882,900
            
            
            
            2,767,900**Non-Video
                Cable Services:**Residential
                high-speed Internet customers (e)
            
            
            2,639,200
            
            
            
            2,343,200Telephone
                customers (f)
            
            
            802,600
            
            
            
            339,600





After
      giving effect to sales of cable systems in January 2007 and May 2007, and the
      acquisition of cable systems in August 2007, analog video customers, digital
      video customers, high-speed Internet customers and telephone customers would
      have been 5,442,300, 2,753,700, 2,342,900, and 339,600, respectively, as of
      September 30, 2006.





(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 September 30, 2007 and
                2006, "customers" include approximately 33,800 and 43,500 persons
                whose
                accounts were over 60 days past due in payment, approximately 5,700
                and
                8,400 persons whose accounts were over 90 days past due in payment,
                and
                approximately 2,100 and 5,100 of which were over 120 days past due
                in
                payment, respectively.


(b)
              "Analog
                    video customers" include all customers who receive video
                    services.


(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 used
                consistently.


17


(d)
              "Digital
                  video customers" include all households that have one or more digital
                  set-top boxes or cable cards
                  deployed.


(e)
            "Residential
                high-speed Internet customers" represent those residential customers
                who
                subscribe to our high-speed Internet
                service.





(f)
            "Telephone
                customers" include all customers receiving telephone
                service.





**Overview**




For
      the
      three months ended September 30, 2007 and 2006, our operating income from
      continuing operations was $107 million and $66 million, respectively, and for
      the nine months ended September 30, 2007 and 2006, our operating income from
      continuing operations was $463 million and $204 million,
      respectively.  We had operating margins of 7% and 5% for the three
      months ended September 30, 2007 and 2006, respectively, and 10% and 5% for
      the
      nine months ended September 30, 2007 and 2006, respectively.  The
      increase in operating income from continuing operations and operating margins
      for the three and nine months ended September 30, 2007 compared to the three
      and
      nine months ended September 30, 2006 was principally due to revenues increasing
      at a faster rate than expenses, reflecting increased operational efficiencies,
      improved geographic footprint, and benefits from improved third-party contracts,
      coupled with a decrease of $103 million in asset impairment charges during
      the
      nine months ended September 30, 2007 compared to the nine months ended September
      30, 2006.





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
      expenses and interest expenses we incur because of our high amounts of debt,
      and
      depreciation expenses resulting from the capital investments we have made and
      continue to make in our cable properties.  We expect that these
      expenses will remain significant.




**Sale
      of Assets**




In
      2006,
      we sold certain cable television systems serving approximately 356,000 analog
      video customers in 1) West Virginia and Virginia to Cebridge Connections, Inc.
      (the “Cebridge Transaction”);  2) Illinois and Kentucky to
      Telecommunications Management, LLC, doing business as New Wave Communications
      (the “New Wave Transaction”) and 3) Nevada, Colorado, New Mexico and Utah to
      Orange Broadband Holding Company, LLC (the “Orange Transaction”) for a total
      sales price of approximately $971 million.  We used the net proceeds
      from the asset sales to reduce borrowings, but not commitments, under the
      revolving portion of our credit facilities.  These cable systems met
      the criteria for assets held for sale.  As such, the assets were
      written down to fair value less estimated costs to sell, resulting in asset
      impairment charges during the nine months ended September 30, 2006 of
      approximately $99 million related to the New Wave Transaction and the Orange
      Transaction.  We determined that the West Virginia and Virginia cable
      systems comprise operations and cash flows that for financial reporting purposes
      meet the criteria for discontinued operations.  Accordingly, the
      results of operations for the West Virginia and Virginia cable systems have
      been
      presented as discontinued operations, net of tax, for the three and nine months
      ended September 30, 2006, including a gain of $200 million on the sale of cable
      systems.





Also,
      during the three months ended September 30, 2007 and 2006, we recorded asset
      impairment charges of $56 million and $60 million, respectively, related to
      other cable systems meeting the criteria of assets held for sale during the
      respective periods.





18


**RESULTS
      OF OPERATIONS**





***Nine
      Months Ended September 30, 2007 Compared to Nine Months Ended September 30,
      2006***





The
      following table sets forth the percentages of revenues that items in the
      accompanying condensed consolidated statements of operations constituted for
      the
      periods presented (dollars in millions):





**Nine
                Months Ended September 30,****2007**
            
            
            **2006**REVENUES
            
            $
            4,449
            
            
            
            100
            %
            
            $
            4,091
            
            
            
            100
            %COSTS
                AND EXPENSES:Operating
                (excluding depreciation and amortization)
            
            
            1,957
            
            
            
            44
            %
            
            
            1,830
            
            
            
            45
            %Selling,
                general and administrative
            
            
            961
            
            
            
            22
            %
            
            
            860
            
            
            
            21
            %Depreciation
                and amortization
            
            
            999
            
            
            
            23
            %
            
            
            1,024
            
            
            
            25
            %Asset
                impairment charges
            
            
            56
            
            
            
            1
            %
            
            
            159
            
            
            
            4
            %Other
                operating expenses, net
            
            
            13
            
            
            
            --
            
            
            
            14
            
            
            
            --3,986
            
            
            
            90
            %
            
            
            3,887
            
            
            
            95
            %Operating
                income from continuing operations
            
            
            463
            
            
            
            10
            %
            
            
            204
            
            
            
            5
            %OTHER
                EXPENSES:Interest
                expense, net
            
            
            (579
            )
            
            
            
            
            
            
            (574
            )Other
                expense, net
            
            
            (62
            )
            
            
            
            
            
            
            (18
            )(641
            )
            
            
            
            
            
            
            (592
            )Loss
                from continuing operations before income taxes
            
            
            (178
            )
            
            
            
            
            
            
            (388
            )INCOME
                TAX EXPENSE
            
            
            (22
            )
            
            
            
            
            
            
            (5
            )Loss
                from continuing operations
            
            
            (200
            )
            
            
            
            
            
            
            (393
            )INCOME
                FROM DISCONTINUED OPERATIONS, NET OF TAX
            
            
            --
            
            
            
            
            
            
            
            238Net
                loss
            
            $
            (200
            )
            
            
            
            
            
            $
            (155
            )





***Revenues***.  Average
      monthly revenue per analog video customer increased to $92 for the nine months
      ended September 30, 2007 from $81 for the nine months ended September 30, 2006,
      primarily as a result of increases in customers purchasing combinations of
      digital, high-speed Internet, and telephone services, incremental revenues
      from
      OnDemand, DVR, high-definition television services, and rate
      adjustments.  Average monthly revenue per analog video customer
      represents total quarterly revenue, divided by the number of respective months,
      divided by the average number of analog video customers during the respective
      period.





19


Revenues
      by service offering were as follows (dollars in millions):





**Nine
                Months Ended September 30,****2007**
            
            
            **2006**
            
            
            **2007
                over 2006****Revenues**
            
            
            **%
                of**
              **Revenues**
            
            
            **Revenues**
            
            
            **%
                of**
              **Revenues**
            
            
            **Change**
            
            
            **%
                Change**Video
            
            $
            2,542
            
            
            
            57
            %
            
            $
            2,520
            
            
            
            62
            %
            
            $
            22
            
            
            
            1
            %High-speed
                Internet
            
            
            926
            
            
            
            21
            %
            
            
            773
            
            
            
            19
            %
            
            
            153
            
            
            
            20
            %Telephone
            
            
            236
            
            
            
            5
            %
            
            
            86
            
            
            
            2
            %
            
            
            150
            
            
            
            174
            %Advertising
                sales
            
            
            216
            
            
            
            5
            %
            
            
            228
            
            
            
            6
            %
            
            
            (12
            )
            
            
            (5
            %)Commercial
            
            
            251
            
            
            
            6
            %
            
            
            227
            
            
            
            5
            %
            
            
            24
            
            
            
            11
            %Other
            
            
            278
            
            
            
            6
            %
            
            
            257
            
            
            
            6
            %
            
            
            21
            
            
            
            8
            %$
            4,449
            
            
            
            100
            %
            
            $
            4,091
            
            
            
            100
            %
            
            $
            358
            
            
            
            9
            %





Video
      revenues consist primarily of revenues from analog and digital video services
      provided to our non-commercial customers.  Analog video customers
      decreased by 128,800 customers from September 30, 2006, 34,300 of which was
      related to asset sales, net of acquisitions, compared to September 30,
      2007.  Digital video customers increased by 115,000, offset by a loss
      of 14,200 customers related to asset sales, net of acquisitions.  The
      increase in video revenues is attributable to the following (dollars in
      millions):





**2007
                compared to 2006**
              **Increase
                / (Decrease)**Rate
                adjustments and incremental video services
            
            $
            59Increase
                in digital video customers
            
            
            45Decrease
                in analog video customers
            
            
            (27
            )System
                sales, net of acquisitions
            
            
            (55
            )$
            22





High-speed
      Internet customers grew by 296,000 customers, offset by a loss of 300 customers
      related to asset sales, net of acquisitions, from September 30, 2006 to
      September 30, 2007.  The increase in high-speed Internet revenues from
      our non-commercial customers is attributable to the following (dollars in
      millions):





**2007
                compared to 2006**
              **Increase
                / (Decrease)**Increase
                in high-speed Internet customers
            
            $
            114Rate
                adjustments and service upgrades
            
            
            49System
                sales, net of acquisitions
            
            
            (10
            )$
            153





Revenues
      from telephone services increased primarily as a result of an increase of
      463,000 telephone customers from September 30, 2006 to September 30,
      2007.





Advertising
      sales revenues consist primarily of revenues from commercial advertising
      customers, programmers, and other vendors.  Advertising sales revenues
      decreased primarily as a result of a decrease in national advertising sales,
      including political advertising, and as a result of decreases in advertising
      sales revenues from programmers.  For the nine months ended September
      30, 2007 and 2006, we received $9 million and $13 million, in advertising sales
      revenues from programmers, respectively.





Commercial
      revenues consist primarily of revenues from services provided to our commercial
      customers.  Commercial revenues increased primarily as a result of an
      increase in commercial video and high-speed Internet


20


revenues,
      offset by a decrease of $7 million related to asset sales, net of acquisitions,
      for the nine months ended September 30, 2007.





Other
      revenues consist of franchise fees, equipment rental, customer installations,
      home shopping, dial-up Internet service, late payment fees, wire maintenance
      fees and other miscellaneous revenues.  For the nine months ended
      September 30, 2007 and 2006, franchise fees represented approximately 47% and
      52%, respectively, of total other revenues.  The increase in other
      revenues was primarily the result of increases in Universal Service Fund
      revenues, wire maintenance fees, and late payment fees.





***Operating
      expenses*****.**  The increase in operating
      expenses is attributable to the following (dollars in millions):





**2007
                compared to 2006**
              **Increase
                / (Decrease)**Programming
                costs
            
            $
            77Labor
                costs
            
            
            30Costs
                of providing telephone services
            
            
            30Maintenance
                costs
            
            
            14Universal
                Service Fund fees
            
            
            11Other,
                net
            
            
            9System
                sales
            
            
            (44
            )$
            127





Programming
      costs were approximately $1.2 billion and $1.1 billion, representing 60% and
      62%
      of total operating expenses for the nine months ended September 30, 2007 and
      2006, respectively.  Programming costs consist primarily of costs paid
      to programmers for analog, premium, digital, OnDemand, and pay-per-view
      programming.  The increase in programming costs is primarily a result
      of contractual rate increases and a decrease in favorable programming contract
      settlements of $3 million in the nine months ended September 30,
      2007.  Programming costs were also offset by the amortization of
      payments received from programmers in support of launches of new channels of
      $16
      million and $17 million for the nine months ended September 30, 2007 and 2006,
      respectively.  System sales, net of acquisitions, include decreases in
      expense of approximately $26 million for the nine months ended September 30,
      2007 related to programming.  We expect programming expenses to
      continue to increase due to a variety of factors, including annual increases
      imposed by programmers, and additional programming, including high-definition
      and OnDemand programming, being provided to our customers.





***Selling,
      general and administrative expenses.*****The increase in
      selling, general and administrative expenses is attributable to the following
      (dollars in millions):





**2007
                compared to 2006**
              **Increase
                / (Decrease)**Customer
                care costs
            
            $
            51Marketing
                costs
            
            
            40Employee
                costs
            
            
            21Other,
                net
            
            
            2System
                sales, net of acquisitions
            
            
            (13
            )$
            101





***Depreciation
      and amortization.*****Depreciation and amortization
      expense decreased by $25 million for the nine months ended September 30, 2007
      compared to September 30, 2006,and was primarily the result of systems sales
      and
      certain assets becoming fully depreciated offset by depreciation on capital
      expenditures.





***Asset
      impairment charges.***Asset impairment charges for the
      nine months ended September 30, 2007 and 2006 represent the write-down of assets
      related to cable asset sales to fair value less costs to sell.  See Note 3 to
      the condensed consolidated financial statements.


21


***Other
      operating expenses, net.***For the nine months ended
      September 30, 2007 compared to the nine months ended September 30, 2006, the
      decrease in other operating expenses, net is attributable to a $4 million
      decrease in special charges, offset by a $3 million increase in losses on sales
      of assets.  For more information, see Note 11 to the accompanying
      condensed consolidated financial statements contained in “Item 1. Financial
      Statements.”





***Interest
      expense, net.*****For the nine months ended September
      30, 2007 compared to the nine months ended September 30, 2006, net interest
      expense increased by $5 million, which was a result of an increase in our
      average debt outstanding from $8.7 billion for the nine months ended September
      30, 2006 to $9.0 billion for the nine months ended September 30, 2007,
      respectively, offset by a decrease in our average borrowing rate from 8.2%
      for
      the nine months ended September 30, 2006 to 7.7% for the nine months ended
      September 30, 2007, respectively.





***Other
      expense, net.***The increase in other expense is
      attributable to the following (dollars in millions):





**2007
                compared to 2006**Increase
                in loss on derivative instruments and hedging activities,
                net
            
            $
            (24
            )Increase
                in loss on extinguishment of debt
            
            
            (5
            )Decrease
                in gain on investments
            
            
            (11
            )Other,
                net
            
            
            (4
            )$
            (44
            )





For
      more
      information, see Note 12 to the accompanying condensed consolidated financial
      statements contained in “Item 1. Financial Statements.”





***Income
      tax expense.*****Income tax expense was recognized
      through increases in deferred tax liabilities and current federal and state
      income tax expenses of certain of our indirect subsidiaries.  Income
      tax expense for the nine months ended September 30, 2007 includes $18 million
      of
      income tax expense previously recorded at the Company’s indirect parent
      company.





***Income
        from discontinued operations, net of tax.***  Income from
        discontinued operations, net of tax, decreased in the nine months ended
        September 30, 2007 compared to the corresponding prior year period, due to
        the
        sale of the West Virginia and Virginia systems in July 2006.  For more
        information, see Note 3 to the accompanying condensed consolidated financial
        statements contained in “Item 1. Financial Statements.”





***Net
      loss.*****Net loss increased by $45 million, or 29%, for
      the nine months ended September 30, 2007 compared to the nine months ended
      September 30, 2006 as a result of the factors described above. The impact to
      net
      loss in the nine months ended September 30, 2007 of asset impairment charges
      and
      losses on extinguishment of debt was to increase net loss by $88
      million.  The impact to net loss in the nine months ended September
      30, 2006 of the asset impairment charges, gain on sale of assets, and losses
      on
      extinguishment of debt was to decrease net loss by $14 million.





**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.




Our
      long-term financing as of September 30, 2007 totaled $9.6 billion, consisting
      of
      $7.0 billion of credit facility debt and $2.7 billion accreted value of
      high-yield notes.  For the remainder of 2007, none of our debt
      matures.  As of September 30, 2007, our 2008 and 2009 debt maturities
      each totaled $65 million.  In 2010 and beyond, significant additional
      amounts will become due under our remaining long-term debt
      obligations.





Our
      business requires significant cash to fund debt service costs, capital
      expenditures and ongoing operations.  We have historically funded
      these requirements through cash flows from operating activities, borrowings
      under our


22


credit
      facilities, equity contributions 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 nine months
      ended September 30, 2007, we generated $1.0 billion of net cash flows from
      operating activities after paying cash interest of $509 million.  In
      addition, we used $890 million for purchases of property, plant and
      equipment.  Finally, we used $110 million of net cash flows in
      financing activities.  We expect that our mix of sources of funds will
      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 and
      our
      parent companies’ access to the debt and equity markets, the timing of possible
      asset sales and based on 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 believe future asset sales to be 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 through 2008.  We believe that 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’
interest and principal repayment obligations in 2009, and will not be sufficient
      to fund such needs in 2010 and beyond.  We have been advised that
      Charter continues to work with its financial advisors concerning its approach
      to
      addressing liquidity, debt maturities and its overall balance sheet
      leverage.





***Credit
      Facility Availability***





Our
      ability to operate depends upon, among other things, our continued access to
      capital, including credit under the Charter Communications Operating, LLC
      (“Charter Operating”) credit facilities.  The Charter Operating credit
      facilities, along with our indentures and the CCO Holdings credit facility,
      contain certain restrictive covenants, some of which require us to maintain
      specified leverage ratios and meet financial tests and to provide annual audited
      financial statements with an unqualified opinion from our independent
      auditors.  As of September 30, 2007, 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
      September 30, 2007, our potential availability under Charter Operating’s
      revolving credit facility totaled approximately $1.3 billion, none of which
      was
      limited by covenant restrictions.  Continued access to our credit
      facilities is subject to our remaining in compliance with these covenants,
      including covenants tied to our leverage ratio.  If any events of
      non-compliance occur, funding under the credit facilities may not be available
      and defaults on some or potentially all of our and our parent companies’ debt
      obligations could occur.  An event of default under 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 and
      our
      parent companies’ other debt obligations, which could have a material adverse
      effect on our consolidated financial condition and results of
      operations.





***Parent
      Company 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, CCH I
      Holdings, LLC (“CIH”), CCH I, LLC (“CCH I”), or CCH II to satisfy their debt
      payment obligations or a bankruptcy with respect to Charter Holdings, CIH,
      CCH
      I, or CCH II would give the lenders under our 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.  On a consolidated basis, our parent companies have a
      significant level of debt, which, including our debt, totaled approximately
      $19.7 billion as of September 30, 2007.





***Limitations
      on Distributions***





As
      long
      as Charter’s convertible senior notes remain outstanding and are not otherwise
      converted into shares of common stock, Charter must pay interest on the
      convertible senior notes and repay the principal amount.  In October
      2007, Charter Communications Holding Company, LLC (“Charter Holdco”) completed
      an exchange offer, in which $364 million of Charter’s 5.875% convertible senior
      notes due November 2009 were exchanged for $479 million of Charter’s 6.50%
      convertible senior notes.  Approximately $49 million of Charter’s
      5.875% convertible senior notes remain outstanding, net of $814 million of
      the
      5.875% convertible senior notes now held by Charter Holdco.  Charter’s
      ability to make interest payments on its convertible senior notes and 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 and its subsidiaries.  As of September
      30, 2007, Charter Holdco was owed $123


23


million
      in intercompany loans from Charter Operating and had $44 million in cash, which
      amounts were available to pay interest and principal on Charter's convertible
      senior notes.  In addition, Charter has $25 million of U.S. government
      securities pledged as security for the semi-annual interest payments on
      Charter’s 5.875% convertible senior notes scheduled in 2007.  As long
      as Charter Holdco continues to hold the $814 million of Charter’s 5.875%
      convertible senior notes, Charter Holdco will receive interest payments from
      the
      government securities pledged for Charter’s 5.875% convertible senior
      notes.  The remaining amount of interest payments expected to be received
      by Charter Holdco in November 2007 is approximately $24 million, which may
      be
      available to pay semiannual interest on the outstanding principal amount of
      $49
      million of Charter’s 5.875% convertible senior notes and $479 million of
      Charter’s 6.50% convertible senior notes, although Charter Holdco may use those
      amounts for other purposes.





As
      of
      September 30, 2007, Charter Holdings, CIH, CCH I, and CCH II had approximately
      $9.5 billion principal amount of debt outstanding with approximately $0, $188
      million, $2.2 billion, and $7.1 billion maturing in 2008, 2009, 2010, and
      thereafter, respectively.  Charter Holdings, CIH, CCH I, 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,
      their significant indebtedness may negatively impact our and their ability
      to raise additional capital.  During the nine months ended September
      30, 2007, we distributed $1.1 billion of cash to our parent
      company.





Distributions
      by Charter’s subsidiaries to a parent company (including Charter, Charter
      Holdco, CCHC, LLC ("CCHC"), Charter Holdings, CIH, CCH I, and CCH II) for
      payment of principal on parent company notes, are restricted under the
      indentures governing the CIH notes, CCH I notes, CCH II notes, CCO Holdings
      notes, Charter Operating notes, and under the CCO Holdings credit facilities,
      unless there is no default under the applicable indenture and credit facilities,
      and unless each applicable subsidiary’s leverage ratio test is met at the time
      of such distribution.  For the quarter ended September 30, 2007, there
      was no default under any of these indentures or credit
      facilities.  However, certain of Charter’s subsidiaries did not meet
      their applicable leverage ratio tests based on September 30, 2007 financial
      results.  As a result, distributions from certain of Charter’s
      subsidiaries to their parent companies will continue to be restricted unless
      those tests are met.  Distributions by Charter Operating for payment
      of principal on parent company notes are further restricted by the covenants
      in
      its credit facilities.





Distributions
      by CIH, CCH I, CCH II, CCO Holdings and Charter Operating to a parent company
      for payment of parent company interest are permitted if there is no default
      under the aforementioned indentures and CCO Holdings Credit
      facilities.





The
      indentures governing the Charter Holdings notes permit Charter Holdings to
      make
      distributions to Charter Holdco for payment of interest or principal on
      Charter’s 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 September
      30, 2007, there was no default under Charter Holdings’ indentures, the other
      specified tests were met.  However, Charter Holdings did not meet its
      leverage ratio test of 8.75 to 1.0 based on September 30, 2007 financial
      results.  As a result, distributions from Charter Holdings to Charter or
      Charter Holdco would have been restricted at such time and will continue to
      be
      restricted unless that test is met.  During periods in which
      distributions are restricted, the indentures governing the Charter Holdings
      notes permit Charter Holdings and its subsidiaries to make specified investments
      (that are not restricted payments) in Charter Holdco or Charter, up to an amount
      determined by a formula, as long as there is no default under the
      indentures.





In
      addition to the limitation on distributions under the various indentures
      discussed above, distributions by our subsidiaries may be limited by applicable
      law.  See “Risk Factors — Because of our holding company structure,
      our outstanding notes are structurally subordinated in right of payment to
      all
      liabilities of our subsidiaries.  Restrictions in our subsidiary’s
      debt instruments and under applicable law limit their ability to provide funds
      to us or our various parent companies who are debt issuers.”





***Access
      to Capital***





Our
      ability to incur additional debt may be limited by the restrictive covenants
      in
      our indentures and credit facilities.  No assurances can be given that
      we will not experience liquidity problems if we do not obtain sufficient
      additional financing on a timely basis as our debt becomes due or because of
      adverse market conditions, increased competition or other unfavorable
      events.  If, at any time, additional capital or borrowing capacity is
      required beyond amounts


24


internally
      generated or available under our credit facilities or through additional debt
      or
      equity financings, we would consider:





•
            issuing
                equity at a parent company level, 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 and grow operating cash
                flows;•
            selling
                assets; or•
            requesting
                waivers or amendments with respect to our credit facilities, which
                may not
                be available on acceptable terms; and cannot be
                assured.





If
      the
      above strategies were 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 the full principal and
      interest payments to which they are contractually entitled.





***Recent
      Financing Transactions***





On
      March
      6, 2007, Charter Operating entered into an Amended and Restated Credit Agreement
      among Charter Operating, CCO Holdings, the several lenders from time to time
      that are parties thereto, JPMorgan Chase Bank, N.A., as administrative agent,
      and certain other agents (the “Charter Operating Credit
      Agreement”).





The
      Charter Operating Credit Agreement provides for a $1.5 billion senior secured
      revolving line of credit, a continuation of the existing $5.0 billion term
      loan
      facility (which was refinanced with new term loans in April 2007) (“Replacement
      Existing Term Loan”), and a $1.5 billion new term loan facility (the “New Term
      Loan”) which was funded in March and April 2007.  Borrowings under the
      Charter Operating Credit Agreement bear interest at a variable interest rate
      based on either LIBOR or a base rate, plus in either case, an applicable
      margin.  The applicable margin for LIBOR loans under the Replacement
      Existing Term Loan, the New Term Loan, and revolving loans is 2.00% above
      LIBOR.  The revolving line of credit commitments terminate on March 6,
      2013.  The Replacement Existing Term Loan and the New Term Loan are
      subject to amortization at 1% of their initial principal amount per annum and
      amortization commences on March 31, 2008.  The remaining principal
      amount of the Replacement Existing Term Loan and the New Term Loan will be
      due
      on March 6, 2014.  The Charter Operating Credit Agreement contains
      financial covenants requiring Charter Operating to maintain a quarterly
      consolidated leverage ratio not to exceed 5 to 1 and a first lien leverage
      ratio
      not to exceed 4 to 1.





On
      March
      6, 2007, CCO Holdings entered into a credit agreement among CCO Holdings, the
      several lenders from time to time that are parties thereto, Bank of America,
      N.A., as administrative agent, and certain other agents (the “CCO Holdings
      Credit Agreement”).  The CCO Holdings Credit Agreement consists of a
      $350 million term loan facility (the “Term Facility”).  The term loan
      matures on September 6, 2014 (the “Maturity Date”).  Borrowings under
      the CCO Holdings Credit Agreement bear interest at a variable interest rate
      based on either LIBOR or a base rate plus, in either case, an applicable
      margin.  The applicable margin for LIBOR term loans is 2.50% above
      LIBOR.  The CCO Holdings Credit Agreement is secured by the equity
      interests of Charter Operating, and all proceeds thereof.





We
      used a
      portion of the additional proceeds from the Charter Operating Credit Agreement
      and CCO Holdings Credit Agreement to redeem $550 million of CCO Holdings’
outstanding floating rate notes due 2010, to redeem approximately $187 million
      of Charter Holdings’ outstanding 8.625% senior notes due 2009, to fund the
      purchase of notes in a tender offer for total consideration (including premiums
      and accrued interest) of $100 million of certain notes outstanding at Charter
      Holdings, and to repay $105 million of Charter Holdings’ notes maturing in April
      2007.  The remainder was used for other general corporate
      purposes.





***Historical
      Operating, Financing and Investing Activities***





Our
      cash
      flows for the nine months ended September 30, 2006 include the cash flows
      related to our discontinued operations.





We
      held
      $4 million in cash and cash equivalents as of September 30, 2007 compared to
      $28 million as of December 31, 2006.  For the nine months ended
      September 30, 2007, we generated $1.0 billion of net cash flows from operating
      activities after paying cash interest of $509 million.  In addition,
      we used $890 million for purchases of


25


property,
      plant and equipment.  Finally, we used $110 million of net cash flows
      in financing activities.




***Operating
      Activities.*****Net cash provided by operating
      activities increased $61 million, or 6%, from $960 million for the nine months
      ended September 30, 2006 to $1.0 billion for the nine months ended September
      30,
      2007, primarily as a result of revenues increasing at a faster rate than cash
      expenses, offset by changes in operating assets and liabilities that provided
      $14 million less cash during the nine months ended September 30, 2007 than
      the
      corresponding period in 2006, and an increase of $10 million in interest on
      cash
      pay obligations during the same period.





***Investing
      Activities.*****Net cash used by investing activities
      was $935 million for the nine months ended September 30, 2007 compared to net
      cash provided by investing activities of $196 million for the nine months ended
      September 30, 2006, with the difference between the two periods primarily
      related to a decrease of $951 million in proceeds from sales of assets, an
      increase of $95 million in cash used for the purchase of property, plant, and
      equipment, and a decrease in accrued expenses related to capital
      expenditures.




***Financing
      Activities.*****Net cash used in financing activities
      was $110 million and 1.1 billion for the nine months ended September 30, 2007
      and 2006, respectively.  The decrease in cash used during the nine
      months ended September 30, 2007 as compared to the corresponding period in
      2006,
      was primarily the result of an increase in borrowings of long-term debt offset
      by an increase in distributions to parent companies.





***Capital
      Expenditures***





We
      have
      significant ongoing capital expenditure requirements.  Capital
      expenditures were $890 million and $795 million for the nine months ended
      September 30, 2007 and 2006, respectively.  Capital expenditures
      increased as a result of spending on customer premise equipment and support
      capital to meet increased digital, high-speed Internet, and telephone customer
      growth.  See the table below for more details.




Our
      capital expenditures are funded primarily from cash flows from operating
      activities, the issuance of debt, and borrowings under our credit
      facilities.  In addition, during the nine months ended September 30,
      2007 and 2006, our liabilities related to capital expenditures decreased $51
      million and increased $4 million, respectively.





During
      2007, we expect capital expenditures to be approximately $1.2
      billion.  We expect that the nature of these expenditures will
      continue to be composed primarily of purchases of customer premise equipment
      related to telephone and other advanced services, support capital, and for
      scalable infrastructure costs.  We have funded and expect to continue
      to fund capital expenditures for 2007 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 us, 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 among peer companies in the cable
      industry.  These disclosure guidelines are not required disclosure
      under Generally Accepted Accounting Principles ("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 nine months ended September 30, 2007
      and
      2006 (dollars in millions):





**Nine
                Months Ended**
              **September
                30,****2007**
            
            
            **2006**Customer
                premise equipment (a)
            
            $
            428
            
            
            $
            378Scalable
                infrastructure (b)
            
            
            164
            
            
            
            146Line
                extensions (c)
            
            
            76
            
            
            
            82Upgrade/Rebuild
                (d)
            
            
            35
            
            
            
            36Support
                capital (e)
            
            
            187
            
            
            
            153Total
                capital expenditures
            
            $
            890
            
            
            $
            795





26


(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 No. 51, *Financial Reporting by Cable Television
              Companies,*and customer premise equipment (e.g., set-top boxes 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.


(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).





**Item
      4.                      Controls
      and Procedures.**





As
      of the
      end of the period covered by this report, management, including our Chief
      Executive Officer and 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 certifications provided by a
      number of executives.  Based upon, and as of the date of that
      evaluation, our Chief Executive Officer and 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
      were no changes in our internal control over financial reporting during the
      quarter ended September 30, 2007 that materially affected, or are reasonably
      likely to materially affect, our internal controls over financial
      reporting.





In
      designing and evaluating the disclosure controls and procedures, our management
      recognized that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable, not absolute, assurance of achieving
      the
      desired control objectives, and management necessarily was required to apply
      its
      judgment in evaluating the cost-benefit relationship of possible controls and
      procedures.  Based upon the above evaluation, we believe that our
      controls provide such reasonable assurances.


27


**PART
      II. OTHER INFORMATION.**





**Item
                1.**
            **Legal
                Proceedings.**





We
      and
      our parent companies are defendants or co-defendants in several unrelated
      lawsuits claiming infringement of various patents relating to various aspects
      of
      our businesses.  Other industry participants are also defendants in
      certain of these cases, and, in many cases, we expect that any potential
      liability would be the responsibility of our equipment vendors pursuant to
      applicable contractual indemnification provisions. In the event that a court
      ultimately determines that we infringe on any intellectual property rights,
      we
      may be subject to substantial damages and/or an injunction that could require
      us
      or our vendors to modify certain products and services we offer to our
      subscribers.  While we believe the lawsuits are without merit and
      intend to defend the actions vigorously, the lawsuits could be material to
      our
      consolidated results of operations of any one period, and no assurance can
      be
      given that any adverse outcome would not be material to our consolidated
      financial condition, results of operations or liquidity.





We
      and
      our parent companies are party to other lawsuits and claims that arise in the
      ordinary course of conducting our business.  The ultimate outcome of
      these other legal matters pending against us or our parent companies cannot
      be predicted, and although such lawsuits and claims are not expected
      individually to have a material adverse effect on our consolidated financial
      condition, results of operations or liquidity, such lawsuits could have, in
      the
      aggregate, a material adverse effect on our consolidated financial condition,
      results of operations or liquidity.





**Item
                1A.**
            **Risk
                Factors.**





Our
      Annual Report on Form 10-K for the year ended December 31, 2006 includes “Risk
      Factors” under Item 1A of Part I.  Except for the updated risk factors
      described below, there have been no material changes from the risk factors
      described in our Form 10-K.  The information below updates, and should
      be read in conjunction with, the risk factors and information disclosed in
      our
      Form 10-K.





**Risks
      Related to Significant Indebtedness of Us and Our Parent
      Companies**





***We
      and our parent companies have a significant amount of debt and may incur
      significant additional debt, including secured debt, in the future, which could
      adversely affect our and our parent companies’ financial health and our and
      their ability to react to changes in our business.***





We
      and
      our parent companies have a significant amount of debt and may (subject to
      applicable restrictions in their debt instruments) incur additional debt in
      the
      future.  As of September 30, 2007, our total debt was approximately
      $9.6 billion, our member’s equity was approximately $2.5 billion and the
      deficiency of earnings to cover fixed charges for the nine months ended
      September 30, 2007 was $164 million.





As
      of
      September 30, 2007, our parent companies had approximately $10.0 billion
      aggregate principal amount of debt.  In October 2007, Charter Holdco
      completed a tender offer, in which $364 million of Charter’s 5.875% convertible
      senior notes due 2009 were accepted for $479 million of Charter’s 6.50%
      convertible senior notes due 2027.  Approximately $49 million of
      Charter’s 5.875% convertible senior notes remain outstanding.  We and
      our parent companies will need to raise additional capital and/or receive
      distributions or payments from subsidiaries in order to satisfy our and their
      respective debt obligations.  An additional $814 million aggregate
      principal amount of Charter’s convertible senior notes are held by Charter
      Holdco.





Because
      of our and their significant indebtedness, our and our parent companies’ ability
      to raise additional capital at reasonable rates or at all is uncertain, and
      our
      and our parent companies’ ability to make distributions or payments to our and
      their respective parent companies is subject to availability of funds and
      restrictions under our and our subsidiary’s applicable debt instruments and
      under applicable law.  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.





Our
      and
      our parent companies’ significant amount of debt could have other important
      consequences.  For example, the debt will or could:


28





·
            require
              us to dedicate a significant portion of our cash flow from operating
              activities to make payments on our and our parent companies’ debt, which
              will reduce our funds available for working capital, capital expenditures
              and other general corporate expenses; ·
            limit
                our flexibility in planning for, or reacting to, changes in our business,
                the cable and telecommunications industries and the economy at
                large;


·
            place
                us at a disadvantage as compared to our competitors that have
                proportionately less debt;


·
            make
                us vulnerable to interest rate increases, because approximately 30%
                of our
                borrowings are, and will continue to be, subject to variable rates
                of
                interest;


·
            expose
                us to increased interest expense as we refinance existing lower interest
                rate instruments;


·
            adversely
                affect our relationship with customers and
                suppliers;


·
            limit
                our and our parent companies’ ability to borrow additional funds in the
                future, due to applicable financial and restrictive covenants in
                our
                debt;


·
            make
                it more difficult for us to satisfy our obligations to the holders
                of our
                notes and to the lenders under our credit facilities as well as our
                parent
                companies’ ability to satisfy their obligations to their noteholders;
                and


·
            limit
                future increases in the value, or cause a decline in the value of
                Charter’s equity, which could limit Charter’s ability to raise additional
                capital by issuing equity.





A
      default
      by us or one of our parent companies under our and their debt obligations could
      result in the acceleration of those obligations, which in turn could trigger
      cross defaults under other agreements governing our and our parent companies’
long-term indebtedness.  In addition, the secured lenders under our
      credit facilities and the holders of the Charter Operating senior second-lien
      notes could foreclose on their collateral, which includes equity interest in
      our
      subsidiaries, and exercise other rights of secured creditors.  Any
      default under those credit facilities or the indentures governing Charter’s
      convertible senior notes or our and our parent companies’ debt could adversely
      affect our growth, our financial condition, our results of operations, and
      our
      and our parent companies’ ability to make payments on our credit facilities and
      our and our parent companies’ other debt, and could force us to seek the
      protection of the bankruptcy laws.  We and our parent companies may
      incur significant additional debt in the future.  If current debt amounts
      increase, the related risks that we now face will intensify.





***We
      may not be able to access funds under the Charter Operating credit facilities
      if
      we fail to satisfy the covenant restrictions in such credit facilities, which
      could adversely affect our financial condition and our ability to conduct our
      business.***





We
      have
      historically relied on access to credit facilities in order to fund operations
      and to service parent company debt, and we expect such reliance to continue
      in
      the future.  Our total potential borrowing availability under our
      revolving credit facility was approximately $1.3 billion as of September 30,
      2007, none of which is limited by covenant restrictions.  There can be
      no assurance that our actual availability under our credit facilities will
      not
      be limited by covenant restrictions in the future.





One
      of
      the conditions to the availability of funding under our credit facilities is
      the
      absence of a default under such facilities, including as a result of any failure
      to comply with the covenants under the facilities.  Among other
      covenants, the Charter Operating credit facilities require us to maintain
      specific leverage ratios.  The Charter Operating credit facilities
      also provide that Charter Operating has to obtain an unqualified audit opinion
      from its independent accountants for each fiscal year.  There can be
      no assurance that Charter Operating will be able to continue to comply with
      these or any other of the covenants under the credit facilities.





An
      event
      of default under the credit facilities or indentures, if not waived, could
      result in the acceleration of those debt obligations and, consequently, could
      trigger cross defaults under other agreements governing our and our parent
      companies’ long-term indebtedness.  In addition, the secured lenders
      under the Charter Operating credit facilities and the holders of the Charter
      Operating senior second-lien notes could foreclose on their collateral, which
      includes equity interest in our subsidiaries, and exercise other rights of
      secured creditors.  Any default under those credit facilities or the
      indentures governing our or our parent companies’ debt could adversely affect
      our growth, our financial condition, our results of operations, and our and
      our
      parent companies’ ability to make payments on our credit facilities and our and
      our parent companies’ other debt, and could force us to seek the protection of
      the bankruptcy laws, which could materially adversely impact our ability to
      operate our business and to make payments under our debt
      instruments.





29


***We
      depend on generating sufficient cash flow and having access to additional
      external liquidity sources to fund our and our parent companies’ debt
      obligations, capital expenditures, and ongoing
      operations.***





Our
      ability to service our and our parent companies’ debt and to fund our planned
      capital expenditures and ongoing operations will depend on both our and our
      parent companies’ ability to generate cash flow and our and our parent
      companies’ access to additional external liquidity sources.  Our and our
      parent companies’ ability to generate cash flow is dependent on many factors,
      including:





·
            competition
                from other distributors, including incumbent telephone companies,
                direct
                broadcast satellite operators, wireless broadband providers and DSL
                providers;


·
            difficulties
                in introducing, growing, and operating our telephone services, such
                as our
                ability to adequately meet customer expectations for the reliability
                of
                voice services;


·
            our
                ability to adequately meet demand for installations and customer
                service;


·
            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 and grow our customer base, particularly
                in the
                face of increasingly aggressive
                competition;


·
            our
                ability to obtain programming at reasonable prices or to adequately
                raise
                prices to offset the effects of higher programming
                costs;


·
            general
                business conditions, economic uncertainty or slowdown;
                and


·
            the
                effects of governmental regulation, including but not limited to
                local and
                state franchise authorities, on our
                business.





Some
      of
      these factors are beyond our control.  If we and our parent companies are
      unable to generate sufficient cash flow or access additional external liquidity
      sources, we and our parent companies may not be able to service and repay our
      and our parent companies’ debt, operate our business, respond to competitive
      challenges, or fund our and our parent companies’ other liquidity and capital
      needs.  Although we and our parent companies have been able to raise funds
      through issuances of debt in the past, we may not be able to access additional
      sources of external liquidity on similar terms, if at all.  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 through 2008.  We believe that 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’
interest and principal repayment obligations in 2009, and will not be sufficient
      to fund such needs in 2010 and beyond.  See “Part I.  Item
      2.  Management's Discussion and Analysis of Financial Condition and
      Results of Operations — Liquidity and Capital Resources.”





***Because
      of our holding company structure, our outstanding notes are structurally
      subordinated in right of payment to all liabilities of our
      subsidiaries.  Restrictions in our subsidiary’s debt instruments and
      under applicable law limit their ability to provide funds to us or our various
      parent companies who are debt issuers.***





Our
      primary assets are our equity interests in our subsidiaries.  Our
      operating subsidiaries are separate and distinct legal entities and are not
      obligated to make funds available to us for payments on our notes or other
      obligations in the form of loans, distributions or otherwise.  Our
      subsidiary’s ability to make distributions to us is subject to their compliance
      with the terms of their credit facilities and indentures and restrictions under
      applicable law.  Under the Delaware limited liability company act, our
      subsidiaries may only make distributions to us if they have “surplus” as defined
      in the act.  Under fraudulent transfer laws, our subsidiaries may not
      make distributions to us or the applicable debt issuers to service debt
      obligations if they are insolvent or are rendered insolvent
      thereby.  The measures of insolvency for purposes of these fraudulent
      transfer laws vary depending upon the law applied in any proceeding to determine
      whether a fraudulent transfer has occurred. Generally, however, an entity would
      be considered insolvent if:





·
            the
                sum of its debts, including contingent liabilities, was greater than
                the
                fair saleable value of all its
                assets;


·
            the
                present fair saleable value of its assets was less than the amount
                that
                would be required to pay its probable liability on its existing debts,
                including contingent liabilities, as they became absolute and mature;
                or


·
            it
                could not pay its debts as they became
                due.


30


While
      we
      believe that our relevant subsidiaries currently have surplus and are not
      insolvent, there can be no assurance that these subsidiaries will be permitted
      to make distributions in the future in compliance with these restrictions in
      amounts needed to service our indebtedness.  Our direct subsidiary
      includes the borrowers and guarantors under the Charter Operating credit
      facilities.  Charter Operating is also an obligor under the
      second-lien notes.  As of September 30, 2007, our total debt was
      approximately $9.6 billion, of which approximately $8.5 billion was structurally
      senior to the CCO Holdings notes.





In
      the
      event of bankruptcy, liquidation or dissolution of one or more of our
      subsidiaries, that subsidiary’s assets would first be applied to satisfy its own
      obligations, and following such payments, such subsidiary may not have
      sufficient assets remaining to make payments to us as an equity holder or
      otherwise.  In that event:





·
            the
                lenders under Charter Operating’s credit facilities whose interests are
                secured by substantially all of our operating assets, will have the
                right
                to be paid in full before us from any of our subsidiaries’ assets;
                and


·
            the
                holders of preferred membership interests in our subsidiary, CC VIII,
                would have a claim on a portion of its assets that may reduce the
                amounts
                available for repayment to holders of our outstanding
                notes.





**Risks
      Related to Our Business**





***We
      operate in a very competitive business environment, which affects our ability
      to
      attract and retain customers and can adversely affect our business and
      operations***





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 competitors for video services throughout our territory are direct
      broadcast satellite operators (“DBS”).  The two largest DBS providers
      are The DIRECTV Group, Inc. and Echostar Communications,
      Inc.  Competition from DBS, including intensive marketing efforts with
      aggressive pricing and exclusive programming has had an adverse impact on our
      ability to retain customers. DBS has grown rapidly over the last several years.
      The cable industry, including us, has lost a significant number of video
      customers 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 challenges in areas of lower population density, and that our
      systems service a higher concentration of such areas than those of certain
      other
      major cable service providers.





Local
      telephone companies, including two major local telephone companies,
      AT&T and Verizon, and electric utilities can offer video and other services
      in competition with us, and we expect they will increasingly do so in the
      future.  AT&T and Verizon have both announced, and are making,
      upgrades of their networks.  Some upgraded portions of these networks
      carry two-way video services comparable to ours, high-speed data services that
      operate at speeds as high or higher than ours, and digital voice services that
      are similar to ours, and these services are offered at prices similar to those
      for comparable Charter services.  Based on internal estimates, we
      believe that AT&T and Verizon are actively marketing these services in
      areas serving approximately 6% to 7% of our homes passed as of September 30,
      2007, an increase from an estimated 2% at March 31, 2007. Additional
      upgrades and product launches  are expected in markets in which we
      operate. In addition, in many of our markets, these companies have entered
      into co-marketing arrangements with DBS operators to offer service bundles
      combining video services provided by a DBS operator with digital subscriber
      line
      Internet services (“DSL”) and traditional telephone and wireless
      services offered by the telephone companies and their
      affiliates.  These service bundles substantially resemble our
      bundles.





The
      existence of more than one cable system operating in the same territory is
      referred to as an overbuild.  Overbuilds could adversely affect our
      growth, financial condition, and results of operations, by creating or
      increasing competition.  Based on internal estimates, as of September
      30, 2007, we are aware of traditional overbuild situations impacting
      approximately 7% to 8% of our estimated homes passed, and potential traditional
      overbuild situations in areas servicing approximately an additional 1% of our
      estimated homes passed.  Additional overbuild situations may occur in
      other systems.


31


With
      respect to our Internet access services, we face competition, including
      intensive marketing efforts and aggressive pricing, from telephone companies
      and
      other providers of 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.  Moreover, as we expand our
      telephone offerings, we will face considerable competition from established
      telephone companies and other carriers.





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
      and install customer premise equipment.  Customers who subscribe to
      our services as a result of these offerings may not remain customers following
      the end of the promotional period.  A failure to retain customers or
      to collect the amounts they owe us, could have a material adverse effect on
      our
      business and financial results.





Mergers,
      joint ventures, and alliances among franchised, wireless, or private cable
      operators, DBS providers, local exchange carriers, and others, 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.





In
        addition to the various competitive factors discussed above, our business
        is
        subject to risks relating to increasing competition for the leisure and
        entertainment time of consumers. Our business competes with all other sources
        of
        entertainment and information delivery, including broadcast television, movies,
        live events, radio broadcasts, home video products, console games, print
        media,
        and the Internet.  Technological advancements, such as video-on-demand, new
        video formats, and Internet streaming and downloading, have increased the
        number
        of entertainment and information delivery choices available to consumers,
        and
        intensified the challenges posed by audience fragmentation. The increasing
        number of choices available to audiences could negatively impact not only
        consumer demand for our products and services, but also advertisers’ willingness
        to purchase advertising from us.  If we do not respond appropriately to
        further increases in the leisure and entertainment choices available to
        consumers, our competitive position could deteriorate, and our financial
        results
        could suffer.





We
      cannot
      assure you that our cable systems will allow us to compete
      effectively.  Additionally, as we expand our offerings to include
      other telecommunications services, and to introduce new and enhanced services,
      we will be subject to competition from other providers of the services we
      offer.  We cannot predict the extent to which competition may affect
      our business and operations in the future.





***For
      tax purposes, there is significant risk that Charter will experience an
      ownership change resulting in a material limitation on the use of a substantial
      amount of Charter's existing net operating loss
      carryforwards.***





As
      of
      September 30, 2007, Charter had approximately $7.6 billion of tax net operating
      losses, resulting in a gross deferred tax asset of approximately $3.0 billion,
      expiring in the years 2007 through 2027.  Due to uncertainties in projected
      future taxable income, valuation allowances have been established against the
      gross deferred tax assets for book accounting purposes, except for deferred
      benefits available to offset certain deferred tax liabilities.  Currently,
      such tax net operating losses can accumulate and be used to offset any of
      Charter’s future taxable income.  However, an “ownership change” as defined
      in Section 382 of the Internal Revenue Code of 1986, as amended, would place
      significant limitations, on an annual basis, on the use of such net operating
      losses to offset future taxable income Charter may generate.  Although
      Charter has instituted a Rights Plan designed with the goal of attempting to
      prevent ownership change, Charter cannot provide any assurance that the Rights
      Plan will actually prevent an ownership change from occurring.  A
      limitation on Charter’s ability to use its net operating losses, in conjunction
      with the net operating loss expiration provisions, could effectively eliminate
      Charter’s ability to use a substantial portion of its net operating losses to
      offset any future taxable income.





***Future
      transactions and the timing of such transactions could cause an ownership change
      for U.S. federal income tax purposes.***





Future
      transactions and the timing of such transactions could cause an ownership change
      for income tax purposes. Such transactions may include additional issuances
      of
      common stock by Charter (including but not limited to issuances upon future
      conversion of Charter’s 5.875% convertible senior notes and 6.50% convertible
      senior notes), the return to Charter of the borrowed shares loaned by Charter
      in
      connection with the issuance of Charter’s 5.875% convertible senior notes and
      the 6.50% convertible senior notes, or acquisitions or sales of shares by
      certain holders


32


of
      Charter’s shares, including persons who have held, currently hold, or may
      accumulate in the future five percent or more of Charter’s outstanding stock
      (including upon an exchange by Mr. Allen or his affiliates, directly or
      indirectly, of membership units of Charter Holdco into Charter’s Class B common
      stock).  Many of the foregoing transactions, including whether Mr.
      Allen exchanges his Charter Holdco units, are beyond Charter’s
      control.





**Risks
      Related to Regulatory and Legislative Matters**





***Our
      cable system franchises are non-exclusive. Accordingly, local franchising
      authorities can grant additional franchises and create competition in market
      areas where none existed previously, resulting in overbuilds, which could
      adversely affect results of operations.***





Our
      cable
      system franchises are non-exclusive.  Consequently, local franchising
      authorities can grant additional franchises to competitors in the same
      geographic area or operate their own cable systems.  In addition, certain
      telephone companies are seeking authority to operate in communities without
      first obtaining a local franchise.  As a result, competing operators may
      build systems in areas in which we hold franchises. In some cases, municipal
      utilities may legally compete with us without obtaining a franchise from the
      local franchising authority.





Legislative
      proposals have been introduced in many state legislatures that would greatly
      streamline cable franchising.  This legislation is intended to facilitate
      entry by new competitors, particularly local telephone companies.  Such
      legislation has passed in numerous states, including states where we have
      significant operations.  Although most of these states have provided some
      regulatory relief for incumbent cable operators, some of these proposals are
      viewed as being more favorable to new entrants due to a number of factors,
      including efforts to withhold streamlined cable franchising from incumbents
      until after the expiration of their existing franchises, and the potential
      for
      new entrants to serve only higher-income areas of a particular community.
 To the extent we are not able to avail ourselves of this streamlined
      franchising process, we may continue to be subject to more onerous franchise
      requirements at the local level than new entrants. In March 2007, the FCC
      released a ruling designed to streamline competitive cable
      franchising.  Among other things, the FCC prohibited local franchising
      authorities from imposing “unreasonable” build-out requirements and established
      a mechanism whereby competing providers can secure “interim authority” to offer
      cable service if the local franchising authority has not acted on a franchise
      application within 90 days (in the case of competitors with existing right
      of
      way authority) or 180 days (in the case of competitors without existing right
      of
      way authority).  Local regulators have appealed the FCC’s
      ruling.  On October 31, 2007, the FCC announced that it had decided to
      grant incumbent cable operators some, but not all, of the local franchising
      relief it granted to new entrants in December 2006.  For example,
      while the FCC granted incumbents relief from unreasonable public, education
      and
      government access (“PEG”) channel and institutional network for non-commercial,
      intra-governmental purposes (“I-net”) requirements, it did not extend to cable
      incumbents the relief it granted to new entrants from unreasonable delays in
      granting franchises or unreasonable build out requirements; and the relief
      granted to incumbents is effective only upon franchise renewal.





***We
      may be required to provide access to our network to other Internet service
      providers, which could significantly increase our competition and adversely
      affect our ability to provide new products and
      services.***





A
      number
      of companies, including independent Internet service providers, or ISPs, have
      requested local authorities and the FCC to require cable operators to provide
      non-discriminatory access to cable’s broadband infrastructure, so that these
      companies may deliver Internet services directly to customers over cable
      facilities.  In a 2005 ruling, commonly referred to as *Brand
      X*, the Supreme Court upheld an FCC decision making it less likely that
      any
      nondiscriminatory “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.”  Notwithstanding *Brand X*, there has been continued
      advocacy by certain Internet content providers and consumer groups for new
      federal laws or regulations to adopt so-called “net neutrality” principles
      limiting the ability of broadband network owners (like us) to manage and control
      their own networks.  The proposals might prevent network owners, for
      example, from charging bandwidth intensive content providers, such as certain
      online gaming, music, and video service providers, an additional fee to ensure
      quality delivery of the services to consumers.  If we were not allowed
      to manage our network as we see best serves our customers, or were prohibited
      from charging heavy bandwidth intensive services a fee for expanding our network
      capacity or for use of our networks, we believe that it could impair our ability
      to provide high quality service to our customers or use our bandwidth in ways
      that would generate maximum revenues.  In April 2007,
      the


33


FCC
      issued a notice of inquiry regarding the marketing practices of broadband
      providers as a precursor to considering the need for any FCC regulation of
      internet service providers.





***Changes
      in channel carriage regulations could impose significant additional costs on
      us.***





Cable
      operators also face significant regulation of their channel
      carriage.  We can be required to devote substantial capacity to the
      carriage of programming that we might not carry, absent contractual obligations,
      including certain local broadcast signals; local PEG programming; and
      unaffiliated commercial leased access programming (required channel capacity
      for
      use by persons unaffiliated with the cable operator who desire to distribute
      programming over a cable system).  This carriage burden could increase
      in the future, particularly if we are required to carry multiple program streams
      included with a single digital broadcast transmission (multicast
      carriage).  The FCC recently adopted a new transition plan addressing
      the cable industry’s carriage obligations once the broadcast industry migration
      from analog to digital transmission is completed in February
      2009.  Under the FCC’s three year transition plan, most cable systems
      will be required to offer both an analog and digital version of local broadcast
      signals for three years after the digital transition date.  The FCC is
      also considering whether it should adjust its existing rules governing
      commercial leased access to encourage greater use by interested
      programmers.  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 our revenue potential.





**Item
                6.**
            **Exhibits.**





The
      index
      to the exhibits begins on page E-1 of this quarterly report.








34


**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 its behalf by the undersigned, thereunto duly
      authorized.





CCO
      HOLDINGS, LLC


Registrant





By:
      CHARTER COMMUNICATIONS INC., Sole Manager





Dated:
                November 13, 2007
            By:
                /s/ Kevin D.
                HowardName:
            Kevin
                D. HowardTitle:
            *Vice
                President, Controller and Chief Accounting
                Officer*





CCO
      HOLDINGS CAPITAL
      CORP.


Registrant





Dated:
                November 13, 2007
            By:
                /s/ Kevin D.
                HowardName:
            Kevin
                D. HowardTitle:
            *Vice
                President, Controller and Chief Accounting
                Officer*














S-1


**EXHIBIT
      INDEX**







Exhibit
              Number
            
            Description
                of Document3.1(a)
            
            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)).3.1(b)
            
            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)).3.2
            
            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)).3.3(a)
            
            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)).3.3(b)
            
            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)).3.4
            
            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)).12.1*
            
            Computation
                of Ratio of Earnings to Fixed Charges.31.1*
            
            Certificate
                of Chief Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a)
                under
                the Securities Exchange Act of 1934.31.2*
            
            Certificate
                of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a)
                under
                the Securities Exchange Act of 1934.32.1*
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002 (Chief 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 (Chief Financial
                Officer).





*
      Document attached


+
      Management compensatory plan or arrangement


E-1