<PAGE>
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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

                                       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 0-16779

                   ENSTAR INCOME/GROWTH PROGRAM FIVE-A, L.P.
             -----------------------------------------------------
             (Exact name of Registrant as specified in its charter)

         GEORGIA                                            58-1712898
-----------------------------------                ----------------------------
   (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                      Identification Number)

  10900 WILSHIRE BOULEVARD - 15TH FLOOR
       LOS ANGELES, CALIFORNIA                               90024
----------------------------------------            ---------------------------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code:            (310) 824-9990
                                                             ------------------
Securities registered pursuant to Section 12 (b) of the Act:        NONE

Securities registered pursuant to Section 12 (g) of the Act:   Name of each
                                                                 exchange
             Title of each Class                            on which registered
             -------------------                            -------------------
  UNITS OF LIMITED PARTNERSHIP INTEREST                            NONE

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by

     Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.
Yes  [X]    No  [ ]

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

     State the aggregate market value of the voting equity securities held by
non-affiliates of the registrant. 59,646 of the registrant's 59,766 units of
limited partnership interests, its only class of equity securities, are held by
non-affiliates. There is no public trading market for the units, and transfers
of units are subject to certain restrictions; accordingly, the registrant is
unable to state the market value of the units held by non-affiliates.

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                   The Exhibit Index is located at Page E-1.


<PAGE>

                                     PART I

ITEM 1.  BUSINESS

INTRODUCTION

          Enstar Income/Growth Program Five-A, L.P., a Georgia limited 
partnership (the "Partnership"), is engaged in the ownership, operation and 
development, and, when appropriate, sale or other disposition, of cable 
television systems in small to medium-sized communities. The Partnership was 
formed on September 4, 1986. The general partners of the Partnership are 
Enstar Communications Corporation, a Georgia corporation (the "Corporate 
General Partner"), and Robert T. Graff, Jr. (the "Individual General Partner" 
and, together with the Corporate General Partner, the "General Partners"). On 
September 30, 1988, ownership of the Corporate General Partner was acquired 
by Falcon Cablevision, a California limited partnership that has been engaged 
in the ownership and operation of cable television systems since 1984 
("Falcon Cablevision"). The general partner of Falcon Cablevision was Falcon 
Holding Group, L.P., a Delaware limited partnership ("FHGLP"), until 
September 1998. On September 30, 1998, FHGLP acquired ownership of the 
Corporate General Partner from Falcon Cablevision. Simultaneously with the 
closing of that transaction, FHGLP contributed all of its existing cable 
television system operations to Falcon Communications, L.P. ("FCLP"), a 
California limited partnership and successor to FHGLP. FHGLP serves as the 
managing partner of FCLP, and the general partner of FHGLP is Falcon Holding 
Group, Inc., a California corporation ("FHGI"). The Corporate General Partner 
has contracted with FCLP and its affiliates to provide management services 
for the Partnership. See Item 13., "Certain Relationships and Related 
Transactions." The General Partner, FCLP and affiliated companies are 
responsible for the day to day management of the Partnership and its 
operations. See "Employees" below.

          Based on its belief that the market for cable systems has generally 
improved, the Corporate General Partner is evaluating strategies for 
liquidating the Partnership. These strategies include the potential sale of 
substantially all of the Partnership's assets to third parties and/or 
affiliates of the Corporate General Partner, and the subsequent liquidation 
of the Partnership. The Corporate General Partner expects to complete its 
evaluation within the next several months and intends to advise unitholders 
promptly if it believes that commencing a liquidating transaction would be in 
the best interests of unitholders.

          A cable television system receives television, radio and data 
signals at the system's "headend" site by means of over-the-air antennas, 
microwave relay systems and satellite earth stations. These signals are then 
modulated, amplified and distributed, primarily through coaxial and fiber 
optic distribution systems, to customers who pay a fee for this service. 
Cable television systems may also originate their own television programming 
and other information services for distribution through the system. Cable 
television systems generally are constructed and operated pursuant to 
non-exclusive franchises or similar licenses granted by local governmental 
authorities for a specified term of years.

          The systems offer customers various levels (or "tiers") of cable 
services consisting of broadcast television signals of local network, 
independent and educational stations, a limited number of television signals 
from so-called "super stations" originating from distant cities (such as 
WGN), various satellite-delivered, non-broadcast channels (such as Cable News 
Network ("CNN"), MTV: Music Television ("MTV"), the USA Network ("USA"), 
ESPN, Turner Network Television ("TNT") and The Disney Channel), programming 
originated locally by the cable television system (such as public, 
educational and governmental access programs) and informational displays 
featuring news, weather, stock market and financial reports, and public 
service announcements. A number of the satellite services are also offered in 
certain packages. For an extra monthly charge, the systems also offer 
"premium" television services to their customers. These services (such as 
Home Box Office ("HBO") and Showtime) are satellite channels that consist 
principally of feature films, live sporting events, concerts and other 
special entertainment features, usually presented without commercial 
interruption. See "Legislation and Regulation."

                                     -2-


<PAGE>


          A customer generally pays an initial installation charge and fixed 
monthly fees for basic, expanded basic, other tiers of satellite services and 
premium programming services. Such monthly service fees constitute the 
primary source of revenues for the systems. In addition to customer revenues, 
the systems receive revenue from the sale of available advertising spots on 
advertiser-supported programming. The systems also offer to their customers 
home shopping services, which pay the systems a share of revenues from sales 
of products in the systems' service areas, in addition to paying the systems 
a separate fee in return for carrying their shopping service. Certain other 
channels have also offered the cable systems managed by FCLP, including those 
of the Partnership, fees in return for carrying their service. Due to a 
general lack of channel capacity available for adding new channels, the 
Partnership's management cannot predict the impact of such potential payments 
on the Partnership's business. See Item 7., "Management's Discussion and 
Analysis of Financial Condition and Results of Operations - Liquidity and 
Capital Resources."

          All of the Partnership's cable television business operations are 
conducted through its participation as a co-general partner with a 50% 
interest in Enstar Cable of Cumberland Valley (the "Joint Venture"), the 
other general partner of which is also a limited partnership sponsored by the 
General Partners of the Partnership. The Joint Venture was formed in order to 
enable each of its partners to participate in the acquisition and ownership 
of a more diverse pool of systems by combining certain of its financial 
resources. Because all of the Partnership's operations are conducted through 
its participation in the Joint Venture, much of the discussion in this report 
relates to the Joint Venture and its activities. References to the 
Partnership include the Joint Venture, where appropriate.

          The Joint Venture began its cable television business operations in 
January 1988 with the acquisition of certain cable television systems located 
in Kentucky and Tennessee and expanded its operations during February 1989 
with the acquisition of certain cable television systems located in Arkansas 
and Missouri. The Kentucky systems provide service to customers in and around 
the Cumberland Valley area. The Missouri systems provide service to customers 
in and around the municipality of Hermitage. As of December 31, 1998, the 
Joint Venture served approximately 16,200 basic subscribers in these areas. 
In February 1993, the systems serving Noel, Missouri and Sulphur Springs, 
Arkansas were sold. The Joint Venture does not expect to make any additional 
material acquisitions during the remaining term of the Joint Venture.

          FCLP receives a management fee and reimbursement of expenses from 
the Corporate General Partner for managing the Partnership's cable television 
operations. See Item 11., "Executive Compensation."

          The Chief Executive Officer of FHGI is Marc B. Nathanson. Mr. 
Nathanson has managed FCLP or its predecessors since 1975. Mr. Nathanson is a 
veteran of more than 30 years in the cable industry and, prior to forming 
FCLP's predecessors, held several key executive positions with some of the 
nation's largest cable television companies. The principal executive offices 
of the Partnership, the Corporate General Partner and FCLP are located at 
10900 Wilshire Boulevard, 15th Floor, Los Angeles, California 90024, and 
their telephone number is (310) 824-9990. See Item 10., "Directors and 
Executive Officers of the Registrant."

BUSINESS STRATEGY

          Historically, the Joint Venture has followed a systematic approach to
acquiring, operating and developing cable television systems based on the
primary goal of increasing operating cash flow while maintaining the quality of
services offered by its cable television systems. The Joint Venture's business
strategy has focused on serving small to medium-sized communities. The Joint
Venture believes that given a similar rate, technical, and channel
capacity/utilization profile, its cable television systems generally involve
less risk of increased competition than systems in large urban cities. In the
Joint Venture's markets, consumers have access to only a limited number of
over-the-air broadcast television signals. In addition, these markets typically
offer fewer competing entertainment alternatives than large cities. Nonetheless,
the Joint 

                                     -3-


<PAGE>


Venture believes that all cable operators will face increased competition in 
the future from alternative providers of multi-channel video programming 
services. See "Competition."

          Adoption of rules implementing certain provisions of the Cable 
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable 
Act") by the Federal Communications Commission (the "FCC") has had a negative 
impact on the Joint Venture's revenues and cash flow. These rules are subject 
to further amendment to give effect to the Telecommunications Act of 1996 
(the "1996 Telecom Act"). Among other changes, the 1996 Telecom Act provides 
that the regulation of certain cable programming service tier ("CPST") rates 
will terminate on March 31, 1999. There can be no assurance as to what, if 
any, further action may be taken by the FCC, Congress or any other regulatory 
authority or court, or the effect thereof on the Joint Venture's business. 
See "Legislation and Regulation" and Item 7., "Management's Discussion and 
Analysis of Financial Condition and Results of Operations."

          CLUSTERING

          The Joint Venture has sought to acquire cable television operations 
in communities that are proximate to other owned or affiliated systems in 
order to achieve the economies of scale and operating efficiencies associated 
with regional "clusters." The Joint Venture believes clustering can reduce 
marketing and personnel costs and can also reduce capital expenditures in 
cases where cable service can be delivered to a number of systems within a 
single region through a central headend reception facility.

          CAPITAL EXPENDITURES

          As noted in "Technological Developments," the Joint Venture's 
systems have almost no available channel capacity with which to add new 
channels or to provide pay-per-view offerings to customers. As a result, 
significant amounts of capital for future upgrades will be required in order 
to increase available channel capacity, improve quality of service and 
facilitate the expansion of new services such as advertising, pay-per-view, 
new unregulated tiers of satellite-delivered services and home shopping, so 
that the systems remain competitive within the industry.

          The Joint Venture's management has selected a technical standard 
that incorporates the use of fiber optic technology where applicable in its 
engineering design for the majority of its systems that are to be rebuilt. A 
system built with this type of architecture can provide for future channels 
of analog service as well as new digital services. Such a system will also 
permit the introduction of high speed data transmission/Internet access and 
telephony services in the future after incurring incremental capital 
expenditures related to these services. The Joint Venture is also evaluating 
the use of digital compression technology in its systems. See "Technological 
Developments" and "Digital Compression."

          As discussed in prior reports, the Joint Venture postponed a number 
of rebuild and upgrade projects because of the uncertainty related to 
implementation of the 1992 Cable Act and the negative impact thereof on the 
Joint Venture's business and access to capital. As a result, the Joint 
Venture's systems are significantly less technically advanced than had been 
expected prior to the implementation of reregulation. The Joint Venture is 
party to a loan agreement with an affiliate which provides for a revolving 
loan facility of $9,181,000 (the "Facility"). The Joint Venture's management 
expects to increase borrowings under the Facility to meet system upgrade and 
other liquidity requirements. The Joint Venture is required to upgrade its 
system in Campbell County, Tennessee under a provision of its franchise 
agreement. Upgrade expenditures are budgeted at a total estimated cost of 
approximately $470,000. The upgrade began in 1998 and $82,800 had been 
incurred as of December 31, 1998. The franchise agreement requires the 
project be completed by October 2000. Additionally, the Joint Venture expects 
to upgrade its systems in surrounding communities at a total estimated cost 
of approximately $500,000 beginning in 2000. The Joint Venture spent 
approximately $1,361,400 in 1998 to replace and upgrade cable plant in 
Kentucky that sustained storm damage in February 1998. The Joint Venture is 
budgeted to spend approximately $1,257,000 in 1999 for plant extensions, new 

                                     -4-


<PAGE>

equipment and system upgrades, including its upgrades in Tennessee. See Note 
6 of the Notes to Financial Statements for the Joint Venture, "Legislation 
and Regulation" and Item 7., "Management's Discussion and Analysis of 
Financial Condition and Results of Operations - Liquidity and Capital 
Resources."

          DECENTRALIZED MANAGEMENT

          The Corporate General Partner manages the Joint Venture's systems 
on a decentralized basis. The Corporate General Partner believes that its 
decentralized management structure, by enhancing management presence at the 
system level, increases its sensitivity to the needs of its customers, 
enhances the effectiveness of its customer service efforts, eliminates the 
need for maintaining a large centralized corporate staff and facilitates the 
maintenance of good relations with local governmental authorities.

          MARKETING

          The Joint Venture's marketing strategy is to provide added value to 
increasing levels of subscription services through "packaging." In addition 
to the basic service package, customers in substantially all of the systems 
may purchase an expanded group of regulated services, additional unregulated 
packages of satellite-delivered services, and premium services. The Joint 
Venture has employed a variety of targeted marketing techniques to attract 
new customers by focusing on delivering value, choice, convenience and 
quality. The Joint Venture employs direct mail, radio and local newspaper 
advertising, telemarketing and door-to-door selling utilizing demographic 
"cluster codes" to target specific messages to target audiences. In certain 
systems, the Joint Venture offers discounts to customers who purchase premium 
services on a limited trial basis in order to encourage a higher level of 
service subscription. The Joint Venture also has a coordinated strategy for 
retaining customers that includes televised retention advertising to 
reinforce the initial decision to subscribe and encourage customers to 
purchase higher service levels.

          CUSTOMER SERVICE AND COMMUNITY RELATIONS

          The Joint Venture places a strong emphasis on customer service and 
community relations and believes that success in these areas is critical to 
its business. FCLP has developed and implemented a wide range of monthly 
internal training programs for its employees, including its regional 
managers, that focus on the Joint Venture's operations and employee 
interaction with customers. The effectiveness of FCLP's training program as 
it relates to the employees' interaction with customers is monitored on an 
ongoing basis, and a portion of the regional managers' compensation is tied 
to achieving customer service targets. FCLP conducts an extensive customer 
survey on a periodic basis and uses the information in its efforts to enhance 
service and better address the needs of the Joint Venture's customers. A 
quarterly newsletter keeps customers up to date on new service offerings, 
special events and company information. In addition, the Joint Venture is 
participating in the industry's Customer Service Initiative which emphasizes 
an on-time guarantee program for service and installation appointments. 
FCLP's corporate executives and regional managers lead the Joint Venture's 
involvement in a number of programs benefiting the communities the Joint 
Venture serves, including, among others, Cable in the Classroom, Drug 
Awareness, Holiday Toy Drive and the Cystic Fibrosis Foundation. Cable in the 
Classroom is the cable television industry's public service initiative to 
enrich education through the use of commercial-free cable programming. In 
addition, a monthly publication, CABLE IN THE CLASSROOM magazine provides 
educational program listings by curriculum area, as well as feature articles 
on how teachers across the country use the programs.

                                     -5-

<PAGE>


DESCRIPTION OF THE JOINT VENTURE'S SYSTEMS

          The table below sets forth certain operating statistics for the Joint
Venture's cable systems as of December 31, 1998.

<TABLE>
<CAPTION>
                                                                                                        Average
                                                                                                        Monthly
                                                                        Premium                         Revenue
                             Homes        Basic          Basic          Service         Premium        Per Basic
System                      Passed(1)   Subscribers   Penetration(2)    Units(3)     Penetration(4)   Subscriber(5)
------                      ---------   -----------   --------------    --------     --------------   -------------
<S>                         <C>         <C>           <C>               <C>          <C>              <C>

Monticello, KY and
  Jellico, TN                 21,326        15,216         71.3%          2,706          17.8%           $35.87

Pomme De Terre, MO             3,583           966         27.0%            122          12.6%           $31.11
                              ------        ------                        -----
Total                         24,909        16,182         65.0%          2,828          17.5%           $35.57
                              ------        ------                        -----
                              ------        ------                        -----
</TABLE>

----------------------

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

          (2) Basic subscribers as a percentage of homes passed by cable.

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

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

          (5) Average monthly revenue per basic subscriber has been computed 
based on revenue for the year ended December 31, 1998.

                                     -6-


<PAGE>

CUSTOMER RATES AND SERVICES

          The Joint Venture's cable television systems offer customers 
packages of services that include the local area network, independent and 
educational television stations, a limited number of television signals from 
distant cities, numerous satellite-delivered, non-broadcast channels (such as 
CNN, MTV, USA, ESPN, TNT and The Disney Channel) and certain informational 
and public access channels. For an extra monthly charge, the systems provide 
certain premium television services, such as HBO and Showtime. The Joint 
Venture also offers other cable television services to its customers. For 
additional charges, in most of its systems, the Joint Venture also rents 
remote control devices and VCR compatible devices (devices that make it 
easier for a customer to tape a program from one channel while watching a 
program on another).

          The service options offered by the Joint Venture vary from system 
to system, depending upon a system's channel capacity and viewer interests. 
Rates for services also vary from market to market and according to the type 
of services selected.

          Pursuant to the 1992 Cable Act, most cable television systems are 
subject to rate regulation of the basic service tier, the non-basic service 
tiers other than premium (per channel or program) services, the charges for 
installation of cable service, and the rental rates for customer premises 
equipment such as converter boxes and remote control devices. These rate 
regulation provisions affect all of the Joint Venture's systems not deemed to 
be subject to effective competition under the FCC's definition. See 
"Legislation and Regulation."

          At December 31, 1998, the Joint Venture's monthly rates for basic 
cable service for residential customers, including certain discounted rates, 
ranged from $18.74 to $24.06 and its premium service rate was $11.95, 
excluding special promotions offered periodically in conjunction with the 
Joint Venture's marketing programs. A one-time installation fee, which the 
Joint Venture may wholly or partially waive during a promotional period, is 
usually charged to new customers. Commercial customers, such as hotels, 
motels and hospitals, are charged a negotiated, non-recurring fee for 
installation of service and monthly fees based upon a standard discounting 
procedure. Most multi-unit dwellings are offered a negotiated bulk rate in 
exchange for single-point billing and basic service to all units. These rates 
are also subject to regulation.

EMPLOYEES

          The Joint Venture has no employees. The various personnel required 
to operate the Joint Venture's business are employed by the Corporate General 
Partner, its subsidiary corporation and FCLP. The cost of such employment is 
allocated and charged to the Joint Venture for reimbursement pursuant to the 
partnership agreement and management agreement. Other personnel required to 
operate the Joint Venture's business are employed by affiliates of the 
Corporate General Partner. The cost of such employment is allocated and 
charged to the Joint Venture. The amounts of these reimbursable costs are set 
forth below in Item 11., "Executive Compensation."

TECHNOLOGICAL DEVELOPMENTS

          As part of its commitment to customer service, the Joint Venture seeks
to apply technological advances in the cable television industry to its cable
television systems on the basis of cost effectiveness, capital availability,
enhancement of product quality and service delivery and industry wide
acceptance. Currently, the Joint Venture's systems have an average channel
capacity of 36 and, on average, 99% of the channel capacity of the systems was
utilized at December 31, 1998. The Joint Venture believes that system upgrades
would enable it to provide customers with greater programming diversity, better
picture quality and alternative communications delivery systems made possible by
the introduction of fiber optic technology and by the possible future
application of digital compression. See "Business Strategy - Capital
Expenditures," 


                                     -7-


<PAGE>

"Legislation and Regulation" and Item 7., "Management's Discussion and 
Analysis of Financial Condition and Results of Operations."

          The use of fiber optic cable as an alternative to coaxial cable is 
playing a major role in expanding channel capacity and improving the 
performance of cable television systems. Fiber optic cable is capable of 
carrying hundreds of video, data and voice channels and, accordingly, its 
utilization is essential to the enhancement of a cable television system's 
technical capabilities. The Joint Venture's current policy is to utilize 
fiber optic technology where applicable in rebuild projects which it 
undertakes. The benefits of fiber optic technology over traditional coaxial 
cable distribution plant include lower ongoing maintenance and power costs 
and improved picture quality and reliability.

DIGITAL COMPRESSION

          The Joint Venture has been closely monitoring developments in the 
area of digital compression, a technology that will enable cable operators to 
increase the channel capacity of cable television systems by permitting a 
significantly increased number of video signals to fit in a cable television 
system's existing bandwidth. Depending on the technical characteristics of 
the existing system, the Joint Venture believes that the utilization of 
digital compression technology will enable its systems to increase channel 
capacity in certain systems in a manner that could, in the short term, be 
more cost efficient than rebuilding such systems with higher capacity 
distribution plant. However, the Joint Venture believes that unless the 
system has sufficient unused channel capacity and bandwidth, the use of 
digital compression to increase channel offerings is not a substitute for the 
rebuild of the system, which will improve picture quality, system reliability 
and quality of service. The use of digital compression will expand the number 
and types of services these systems offer and enhance the development of 
current and future revenue sources. This technology is under frequent 
management review.

PROGRAMMING

          The Joint Venture purchases basic and premium programming for its 
systems from FCLP. In turn, FCLP charges the Joint Venture for these costs 
based on an estimate of what the Corporate General Partner could negotiate 
for such services for the 15 partnerships managed by the Corporate General 
Partner as a group (approximately 91,000 basic subscribers at December 31, 
1998), which is generally based on a fixed fee per customer or a percentage 
of the gross receipts for the particular service. Certain other channels have 
also offered FCLP and the Joint Venture's systems fees in return for carrying 
their service. Due to a lack of channel capacity available for adding new 
channels, the Joint Venture's management cannot predict the impact of such 
potential payments on its business. In addition, the FCC may require that 
such payments from programmers be offset against the programming fee 
increases which can be passed through to subscribers under the FCC's rate 
regulations. FCLP's programming contracts are generally for a fixed period of 
time and are subject to negotiated renewal. FCLP does not have long-term 
programming contracts for the supply of a substantial amount of its 
programming. Accordingly, no assurance can be given that its, and 
correspondingly the Joint Venture's programming costs will not continue to 
increase substantially in the near future, or that other materially adverse 
terms will not be added to FCLP's programming contracts. Management believes, 
however, that FCLP's relations with its programming suppliers generally are 
good.

          The Joint Venture's cable programming costs have increased in 
recent years and are expected to continue to increase due to additional 
programming being provided to basic customers, requirements to carry channels 
under retransmission carriage agreements entered into with certain 
programming sources, increased costs to produce or purchase cable programming 
generally (including sports programming), inflationary increases and other 
factors. The 1996 retransmission carriage agreement negotiations resulted in 
the Joint Venture agreeing to carry one new service in its Monticello system, 
for which it expects to receive reimbursement of certain costs related to 
launching the service. All other negotiations were completed with essentially 
no change to the previous agreements. Under the FCC's rate regulations, 
increases in 

                                     -8-



<PAGE>


programming costs for regulated cable services occurring after the earlier of 
March 1, 1994, or the date a system's basic cable service became regulated, 
may be passed through to customers. See "Legislation and Regulation - Federal 
Regulation - Carriage of Broadcast Television Signals." Generally, 
programming costs are charged among systems on a per customer basis.

FRANCHISES

          Cable television systems are generally constructed and operated 
under non-exclusive franchises granted by local governmental authorities. 
These franchises typically contain many conditions, such as time limitations 
on commencement and completion of construction; conditions of service, 
including number of channels, types of programming and the provision of free 
service to schools and certain other public institutions; and the maintenance 
of insurance and indemnity bonds. The provisions of local franchises are 
subject to federal regulation under the Cable Communications Policy Act of 
1984 (the "1984 Cable Act"), the 1992 Cable Act and the 1996 Telecom Act. See 
"Legislation and Regulation."

          As of December 31, 1998, the Joint Venture held 19 franchises. 
These franchises, all of which are non-exclusive, provide for the payment of 
fees to the issuing authority. Annual franchise fees imposed on the Joint 
Venture systems range up to 5% of the gross revenues generated by a system. 
The 1984 Cable Act prohibits franchising authorities from imposing franchise 
fees in excess of 5% of gross revenues and also permits the cable system 
operator to seek renegotiation and modification of franchise requirements if 
warranted by changed circumstances.

          The following table groups the franchises of the Joint Venture's 
cable television systems by date of expiration and presents the number of 
franchises for each group of franchises and the approximate number and 
percentage of homes subscribing to cable service for each group as of 
December 31, 1998.

<TABLE>
<CAPTION>
                                                             Number of               Percentage of
          Year of                  Number of                   Basic                     Basic
   Franchise Expiration           Franchises                Subscribers               Subscribers
   --------------------           ----------                -----------              -------------
<S>                               <C>                       <C>                      <C>

Prior to 2000                          11                       11,443                   70.7%
2000 - 2004                             5                        2,030                   12.5%
2005 and after                          3                        1,958                   12.1%
                                       --                       ------                   ----
Total                                  19                       15,431                   95.3%
                                       --                       ------                   ----
                                       --                       ------                   ----
</TABLE>

          The Joint Venture operates cable television systems which serve 
multiple communities and, in some circumstances, portions of such systems 
extend into jurisdictions for which the Joint Venture believes no franchise 
is necessary. In the aggregate, approximately 751 customers, comprising 
approximately 4.7% of the Joint Venture's customers, are served by 
unfranchised portions of such systems. In certain instances, however, where a 
single franchise comprises a large percentage of the customers in an 
operating region, the loss of such franchise could decrease the economies of 
scale achieved by the Joint Venture's clustering strategy. The Joint Venture 
has never had a franchise revoked for any of its systems and believes that it 
has satisfactory relationships with substantially all of its franchising 
authorities.

          The 1984 Cable Act provides, among other things, for an orderly 
franchise renewal process in which franchise renewal will not be unreasonably 
withheld or, if renewal is denied and the franchising authority acquires 
ownership of the system or effects a transfer of the system to another 
person, the operator generally is entitled to the "fair market value" for the 
system covered by such franchise, but no value may be attributed to the 
franchise itself. In addition, the 1984 Cable Act, as amended by the 1992 
Cable Act, establishes comprehensive renewal procedures which require that an 
incumbent franchisee's renewal 

                                     -9-


<PAGE>


application be assessed on its own merit and not as part of a comparative 
process with competing applications. See "Legislation and Regulation."

COMPETITION

          Cable television systems compete with other communications and 
entertainment media, including over-the-air television broadcast signals 
which a viewer is able to receive directly using the viewer's own television 
set and antenna. The extent to which a cable system competes with 
over-the-air broadcasting depends upon the quality and quantity of the 
broadcast signals available by direct antenna reception compared to the 
quality and quantity of such signals and alternative services offered by a 
cable system. Cable systems also face competition from alternative methods of 
distributing and receiving television signals and from other sources of 
entertainment such as live sporting events, movie theaters and home video 
products, including videotape recorders and videodisc players. In recent 
years, the FCC has adopted policies providing for authorization of new 
technologies and a more favorable operating environment for certain existing 
technologies that provide, or may provide, substantial additional competition 
for cable television systems. The extent to which cable television service is 
competitive depends in significant part upon the cable television system's 
ability to provide an even greater variety of programming than that available 
over the air or through competitive alternative delivery sources.

          Individuals presently have the option to purchase home satellite 
dishes, which allow the direct reception of satellite-delivered broadcast and 
nonbroadcast program services formerly available only to cable television 
subscribers. Most satellite-distributed program signals are being 
electronically scrambled to permit reception only with authorized decoding 
equipment for which the consumer must pay a fee. The 1992 Cable Act enhances 
the right of cable competitors to purchase nonbroadcast satellite-delivered 
programming. See "Legislation and Regulation-Federal Regulation."

          Television programming is now also being delivered to individuals 
by high-powered direct broadcast satellites ("DBS") utilizing video 
compression technology. This technology has the capability of providing more 
than 100 channels of programming over a single high-powered DBS satellite 
with significantly higher capacity available if, as is the case with DIRECTV, 
multiple satellites are placed in the same orbital position. Unlike cable 
television systems, however, DBS satellites are limited by law in their 
ability to deliver local broadcast signals. One DBS provider, EchoStar, has 
announced plans to deliver a limited number of local broadcast signals in a 
limited number of markets and has initiated efforts to have the practice 
legalized. Legislation has been introduced in Congress which would permit DBS 
operators to elect to provide local broadcast signals to their customers 
under the Copyright Act. If DBS providers are ultimately permitted to deliver 
local broadcast signals, cable television systems would lose a significant 
competitive advantage. DBS service can be received virtually anywhere in the 
continental United States through the installation of a small rooftop or 
side-mounted antenna, and it is more accessible than cable television service 
where cable plant has not been constructed or where it is not cost effective 
to construct cable television facilities. DBS service is being heavily 
marketed on a nationwide basis by several service providers. In addition, 
medium-power fixed-service satellites can be used to deliver direct-to-home 
satellite services over small home satellite dishes, and one provider, 
PrimeStar, currently provides service to subscribers using such a satellite. 
DIRECTV has recently agreed to purchase PrimeStar.

          Multichannel multipoint distribution systems ("wireless cable") 
deliver programming services over microwave channels licensed by the FCC and 
received by subscribers with special antennas. Wireless cable systems are 
less capital intensive, are not required to obtain local franchises or to pay 
franchise fees, and are subject to fewer regulatory requirements than cable 
television systems. To date, the ability of wireless cable services to 
compete with cable television systems has been limited by channel capacity 
(35-channel maximum) and the need for unobstructed line-of-sight over-the-air 
transmission. Although relatively few wireless cable systems in the United 
States are currently in operation or under construction, virtually all 
markets have been licensed or tentatively licensed. The use of digital 
compression technology, and the FCC's 


<PAGE>

recent amendment to its rules, which permits reverse path or two-way 
transmission over wireless facilities, may enable wireless cable systems to 
deliver more channels and additional services.

          Private cable television systems compete to service condominiums, 
apartment complexes and certain other multiple unit residential developments. 
The operators of these private systems, known as satellite master antenna 
television ("SMATV") systems, often enter into exclusive agreements with 
apartment building owners or homeowners' associations which preclude 
franchised cable television operators from serving residents of such private 
complexes. However, the 1984 Cable Act gives franchised cable operators the 
right to use existing compatible easements within their franchise areas upon 
nondiscriminatory terms and conditions. Accordingly, where there are 
preexisting compatible easements, cable operators may not be unfairly denied 
access or discriminated against with respect to the terms and conditions of 
access to those easements. There have been conflicting judicial decisions 
interpreting the scope of the access right granted by the 1984 Cable Act, 
particularly with respect to easements located entirely on private property. 
Under the 1996 Telecom Act, SMATV systems can interconnect non-commonly owned 
buildings without having to comply with local, state and federal regulatory 
requirements that are imposed upon cable systems providing similar services, 
as long as they do not use public rights of way.

          The FCC has initiated a new interactive television service which 
will permit non-video transmission of information between an individual's 
home and entertainment and information service providers. This service, which 
can be used by DBS systems, television stations and other video programming 
distributors (including cable television systems), is an alternative 
technology for the delivery of interactive video services. It does not appear 
at the present time that this service will have a material impact on the 
operations of cable television systems.

          The FCC has allocated spectrum in the 28 GHz range for a new 
multichannel wireless service that can be used to provide video and 
telecommunications services. The FCC recently completed the process of 
awarding licenses to use this spectrum via a market-by-market auction. It 
cannot be predicted at this time whether such a service will have a material 
impact on the operations of cable television systems.

          Cable systems generally operate pursuant to franchises granted on a 
non-exclusive basis. In addition, the 1992 Cable Act prohibits franchising 
authorities from unreasonably denying requests for additional franchises and 
permits franchising authorities to build and operate their own cable systems. 
Municipally-owned cable systems enjoy certain competitive advantages such as 
lower-cost financing and exemption from the payment of franchise fees.

          The 1996 Telecom Act eliminates the restriction against ownership 
(subject to certain exceptions) and operation of cable systems by local 
telephone companies within their local exchange service areas. Telephone 
companies are now free to enter the retail video distribution business 
through any means, such as DBS, wireless cable, SMATV or as traditional 
franchised cable system operators. Alternatively, the 1996 Telecom Act 
authorizes local telephone companies to operate "open video systems" (a 
facilities-based distribution system, like a cable system, but which is 
"open," i.e., also available for use by programmers other than the owner of 
the facility) without obtaining a local cable franchise, although telephone 
companies operating such systems can be required to make payments to local 
governmental bodies in lieu of cable franchise fees. Up to two-thirds of the 
channel capacity on an "open video system" must be available to programmers 
unaffiliated with the local telephone company. As a result of the foregoing 
changes, well financed businesses from outside the cable television industry 
(such as public utilities that own the poles to which cable is attached) may 
become competitors for franchises or providers of competing services. The 
1996 Telecom Act, however, also includes numerous provisions designed to make 
it easier for cable operators and others to compete directly with local 
exchange telephone carriers in the provision of traditional telephone service 
and other telecommunications services.

                                     -11-


<PAGE>


          Other new technologies, including Internet-based services, may 
become competitive with services that cable television systems can offer. The 
1996 Telecom Act directed the FCC to establish, and the FCC has adopted, 
regulations and policies for the issuance of licenses for digital television 
("DTV") to incumbent television broadcast licensees. DTV is expected to 
deliver high definition television pictures, multiple digital-quality program 
streams, as well as CD-quality audio programming and advanced digital 
services, such as data transfer or subscription video. The FCC also has 
authorized television broadcast stations to transmit textual and graphic 
information useful both to consumers and businesses. The FCC also permits 
commercial and noncommercial FM stations to use their subcarrier frequencies 
to provide nonbroadcast services including data transmission. The cable 
television industry competes with radio, television, print media and the 
Internet for advertising revenues. As the cable television industry continues 
to offer more of its own programming channels, e.g., Discovery and USA 
Network, income from advertising revenues can be expected to increase.

          Recently a number of Internet service providers, commonly known as 
ISPs, have requested local authorities and the FCC to provide rights of 
access to cable television systems' broadband infrastructure in order that 
they be permitted to deliver their services directly to cable television 
systems' customers. In a recent report, the FCC declined to institute a 
proceeding to examine this issue, and concluded that alternative means of 
access are or soon will be made to a broad range of ISPs. The FCC declined to 
take action on ISP access to broadband cable facilities, and the FCC 
indicated that it would continue to monitor this issue. Several local 
jurisdictions also are reviewing this issue.

          Telephone companies are accelerating the deployment of Asymmetric 
Digital Subscriber Line technology, known as ADSL. These companies report that 
ADSL technology will allow Internet access to subscribers at peak data 
transmission speeds equal or greater than that of modems over conventional 
telephone lines. Several of the Regional Bell Operating Companies have 
requested the FCC to fully deregulate packet-switched networks (a type of 
data communication in which small blocks of data are independently 
transmitted and reassembled at their destination) to allow them to provide 
high-speed broadband services, including interactive online services, without 
regard to present service boundaries and other regulatory restrictions. The 
Joint Venture cannot predict the likelihood of success of the online services 
offered by these competitors, (ISP attempts to gain access to the cable 
industry's broadband facilities), or the impact on the Joint Venture's 
business.

          Premium programming provided by cable systems is subject to the 
same competitive factors which exist for other programming discussed above. 
The continued profitability of premium services may depend largely upon the 
continued availability of attractive programming at competitive prices.

          Advances in communications technology, as well as changes in the 
marketplace and the regulatory and legislative environment, are constantly 
occurring. Thus, it is not possible to predict the competitive effect that 
ongoing or future developments might have on the cable industry. See 
"Legislation and Regulation."

                                     -12-

<PAGE>

                          LEGISLATION AND REGULATION

          The cable television industry is regulated by the FCC, some state 
governments and substantially all local governments. In addition, various 
legislative and regulatory proposals under consideration from time to time by 
Congress and various federal agencies have in the past materially affected, 
and may in the future materially affect, the Partnership and the cable 
television industry. The following is a summary of federal laws and 
regulations affecting the growth and operation of the cable television 
industry and a description of certain state and local laws. The Partnership 
believes that the regulation of its industry remains a matter of interest to 
Congress, the FCC and other regulatory authorities. There can be no assurance 
as to what, if any, future actions such legislative and regulatory 
authorities may take or the effect thereof on the Partnership and Joint 
Venture.

FEDERAL REGULATION

          The primary federal statute dealing with the regulation of the cable 
television industry is the Communications Act of 1934 (the "Communications 
Act"), as amended. The three principal amendments to the Communications Act 
that shaped the existing regulatory framework for the cable television 
industry were the 1984 Cable Act, the 1992 Cable Act and the 1996 Telecom Act.

          The FCC, the principal federal regulatory agency with jurisdiction 
over cable television, has promulgated regulations to implement the 
provisions contained in the Communications Act. The FCC has the authority to 
enforce these regulations through the imposition of substantial fines, the 
issuance of cease and desist orders and/or the imposition of other 
administrative sanctions, such as the revocation of FCC licenses needed to 
operate certain transmission facilities often used in connection with cable 
operations. A brief summary of certain of these federal regulations as 
adopted to date follows.

          RATE REGULATION

          The 1992 Cable Act replaced the FCC's previous standard for 
determining "effective competition," under which most cable systems were not 
subject to local rate regulation, with a statutory provision that resulted in 
nearly all cable television systems becoming subject to local rate regulation 
of basic service. The 1996 Telecom Act, however, expanded the definition of 
effective competition to include situations where a local telephone company 
or an affiliate, or any multichannel video provider using telephone company 
facilities, offers comparable video service by any means except DBS. A 
finding of effective competition exempts both basic and nonbasic tiers from 
regulation. Additionally, the 1992 Cable Act required the FCC to adopt a 
formula, enforceable by franchising authorities, to assure that basic cable 
rates are reasonable; allowed the FCC to review rates for nonbasic service 
tiers (other than per-channel or per-program services) in response to 
complaints filed by franchising authorities and/or cable customers; 
prohibited cable television systems from requiring subscribers to purchase 
service tiers above basic service in order to purchase premium services if 
the system is technically capable of doing so; required the FCC to adopt 
regulations to establish, on the basis of actual costs, the price for 
installation of cable service, remote controls, converter boxes and 
additional outlets; and allowed the FCC to impose restrictions on the 
retiering and rearrangement of cable services under certain limited 
circumstances. The 1996 Telecom Act limits the class of complainants 
regarding nonbasic tier rates to franchising authorities only and ends FCC 
regulation of nonbasic tier rates on March 31, 1999.

          The FCC's regulations contain standards for the regulation of basic 
and nonbasic cable service rates (other than per-channel or per-program 
services). Local franchising authorities and/or the FCC are empowered to 
order a reduction of existing rates which exceed the maximum permitted level 
for either basic and/or nonbasic cable services and associated equipment, and 
refunds can be required. The rate regulations adopt a benchmark price cap 
system for measuring the reasonableness of existing basic and nonbasic 
service rates. Alternatively, cable operators have the opportunity to make 
cost-of-service showings which, in some cases, may justify rates above the 
applicable benchmarks. The rules also require that charges for cable-related 
equipment (E.G., converter boxes and remote control devices) and installation 
services be unbundled from the provision of 


                                     -13-

<PAGE>

cable service and based upon actual costs plus a reasonable profit. The 
regulations also provide that future rate increases may not exceed an 
inflation-indexed amount, plus increases in certain costs beyond the cable 
operator's control, such as taxes, franchise fees and increased programming 
costs. Cost-based adjustments to these capped rates can also be made in the 
event a cable operator adds or deletes channels. In addition, new product 
tiers consisting of services new to the cable system can be created free of 
rate regulation as long as certain conditions are met, such as not moving 
services from existing tiers to the new tier. These provisions currently 
provide limited benefit to the Joint Venture's systems due to the lack of 
channel capacity previously discussed. There is also a streamlined 
cost-of-service methodology available to justify a rate increase on basic and 
regulated nonbasic tiers for "significant" system rebuilds or upgrades.

          Franchising authorities have become certified by the FCC to 
regulate the rates charged by the Joint Venture for basic cable service and 
for installation charges and equipment rental. The Joint Venture has had to 
bring its rates and charges into compliance with the applicable benchmark or 
equipment and installation cost levels in substantially all of its systems. 
This has had a negative impact on the Joint Venture's revenues and cash flow.

          FCC regulations adopted pursuant to the 1992 Cable Act require 
cable systems to permit customers to purchase video programming on a per 
channel or a per program basis without the necessity of subscribing to any 
tier of service, other than the basic service tier, unless the cable system 
is technically incapable of doing so. Generally, an exemption from compliance 
with this requirement for cable systems that do not have such technical 
capability is available until a cable system obtains the capability, but not 
later than December 2002. At the present time, the Joint Venture's systems 
are unable to comply with this requirement.

          CARRIAGE OF BROADCAST TELEVISION SIGNALS

          The 1992 Cable Act adopted new television station carriage 
requirements. These rules allow commercial television broadcast stations 
which are "local" to a cable system, I.E., the system is located in the 
station's Area of Dominant Influence, to elect every three years whether to 
require the cable system to carry the station, subject to certain exceptions, 
or whether the cable system will have to negotiate for "retransmission 
consent" to carry the station. Local non-commercial television stations are 
also given mandatory carriage rights, subject to certain exceptions, within 
the larger of: (i) a 50-mile radius from the station's city of license; or 
(ii) the station's Grade B contour (a measure of signal strength). Unlike 
commercial stations, noncommercial stations are not given the option to 
negotiate retransmission consent for the carriage of their signal. In 
addition, cable systems must obtain retransmission consent for the carriage 
of all "distant" commercial broadcast stations, except for certain 
"superstations," I.E., commercial satellite-delivered independent stations, 
such as WGN. The Joint Venture has thus far not been required to pay cash 
compensation to broadcasters for retransmission consent or been required by 
broadcasters to remove broadcast stations from the cable television channel 
line-ups. The Joint Venture has, however, agreed to carry some services in 
specified markets pursuant to retransmission consent arrangements which it 
believes are comparable to those entered into by most other large cable 
operators, and for which it pays monthly fees to the service providers, as it 
does with other satellite providers. The second election between must-carry 
and retransmission consent for local commercial television broadcast stations 
was October 1, 1996, and the Joint Venture has agreed to carry one new 
service in specified markets pursuant to these retransmission consent 
arrangements. The next election between must-carry and retransmission consent 
for local commercial television broadcast stations will be October 1, 1999.

          The FCC is currently conducting a rulemaking proceeding regarding 
the carriage responsibilities of cable television systems during the 
transition of broadcast television from analog to digital transmission. 
Specifically, the FCC is exploring whether to amend the signal carriage rules 
to accommodate the carriage of digital broadcast television signals. The 
Joint Venture is unable to predict the ultimate outcome of this proceeding or 
the impact of new carriage requirements on the operations of its cable 
systems.


                                     -14-

<PAGE>


          NONDUPLICATION OF NETWORK PROGRAMMING

          Cable television systems that have 1,000 or more customers must, 
upon the appropriate request of a local television station, delete the 
simultaneous or nonsimultaneous network programming of certain lower priority 
distant stations affiliated with the same network as the local station.

          DELETION OF SYNDICATED PROGRAMMING

          FCC regulations enable television broadcast stations that have 
obtained exclusive distribution rights for syndicated programming in their 
market to require a cable system to delete or "black out" such programming 
from certain other television stations which are carried by the cable system. 
The extent of such deletions will vary from market to market and cannot be 
predicted with certainty. However, it is possible that such deletions could 
be substantial and could lead the cable operator to drop a distant signal in 
its entirety.

          PROGRAM ACCESS

          The 1992 Cable Act contains provisions that are intended to foster 
the development of competition to traditional cable systems by regulating the 
access of competing multichannel video providers to vertically integrated, 
satellite-distributed cable programming services. Consequently, with certain 
limitations, the federal law generally precludes any satellite distributed 
programming service affiliated with a cable company from favoring an 
affiliated company over competitors; requires such programmers to sell their 
programming to other multichannel video providers; and limits the ability of 
such satellite program services to offer exclusive programming arrangements 
to their affiliates.

          FRANCHISE FEES

          Franchising authorities may impose franchise fees, but such 
payments cannot exceed 5% of a cable system's annual gross revenues. Under 
the 1996 Telecom Act, franchising authorities may not exact franchise fees 
from revenues derived from telecommunications services.

          RENEWAL OF FRANCHISES

          The 1984 Cable Act established renewal procedures and criteria 
designed to protect incumbent franchisees against arbitrary denials of 
renewal. While these formal procedures are not mandatory unless timely 
invoked by either the cable operator or the franchising authority, they can 
provide substantial protection to incumbent franchisees. Even after the 
formal renewal procedures are invoked, franchising authorities and cable 
operators remain free to negotiate a renewal outside the formal process. 
Nevertheless, renewal is by no means assured, as the franchisee must meet 
certain statutory standards. Even if a franchise is renewed, a franchising 
authority may impose new and more onerous requirements such as upgrading 
facilities and equipment, although the municipality must take into account 
the cost of meeting such requirements.

          The 1992 Cable Act makes several changes to the process under which 
a cable operator seeks to enforce his renewal rights, which could make it 
easier in some cases for a franchising authority to deny renewal. While a 
cable operator must still submit its request to commence renewal proceedings 
within thirty to thirty-six months prior to franchise expiration to invoke 
the formal renewal process, the request must be in writing and the 
franchising authority must commence renewal proceedings not later than six 
months after receipt of such notice. The four-month period for the 
franchising authority to grant or deny the renewal now runs from the 
submission of the renewal proposal, not the completion of the public 
proceeding. Franchising authorities may consider the "level" of programming 
service provided by a cable operator in deciding whether to renew. For 
alleged franchise violations occurring after December 29, 1984, franchising 
authorities are no longer precluded from denying renewal based on failure to 
substantially comply with the material terms of the franchise where the 
franchising authority has "effectively acquiesced" to such past violations. 
Rather, the franchising authority is estopped if, 


                                     -15-

<PAGE>

after giving the cable operator notice and opportunity to cure, it fails to 
respond to a written notice from the cable operator of its failure or 
inability to cure. Courts may not reverse a denial of renewal based on 
procedural violations found to be "harmless error."

          CHANNEL SET-ASIDES

          The 1984 Cable Act permits local franchising authorities to require 
cable operators to set aside certain channels for public, educational and 
governmental access programming. The 1984 Cable Act further requires cable 
television systems with thirty-six or more activated channels to designate a 
portion of their channel capacity for commercial leased access by 
unaffiliated third parties. While the 1984 Cable Act allowed cable operators 
substantial latitude in setting leased access rates, the 1992 Cable Act 
requires leased access rates to be set according to a formula determined by 
the FCC.

          COMPETING FRANCHISES

          The 1992 Cable Act prohibits franchising authorities from 
unreasonably refusing to grant franchises to competing cable television 
systems and permits franchising authorities to operate their own cable 
television systems without franchises.

          OWNERSHIP

          The 1996 Telecom Act repealed the 1984 Cable Act's prohibition 
against local exchange telephone companies ("LECs") providing video 
programming directly to customers within their local telephone exchange 
service areas. However, with certain limited exceptions, a LEC may not 
acquire more than a 10% equity interest in an existing cable system operating 
within the LEC's service area. The 1996 Telecom Act also authorized LECs and 
others to operate "open video systems". A recent judicial decision overturned 
various parts of the FCC's open video rules, including the FCC's restriction 
preventing local governmental authorities from requiring open video system 
operators to obtain a franchise. The Joint Venture expects the FCC to modify 
its open video rules to comply with the federal court's decision, but is 
unable to predict the impact any rule modifications may have on the Joint 
Venture's business and operations. See "Business-Competition."

          The 1984 Cable Act and the FCC's rules prohibit the common 
ownership, operation, control or interest in a cable system and a local 
television broadcast station whose predicted Grade B contour (a measure of a 
television station's signal strength as defined by the FCC's rules) covers 
any portion of the community served by the cable system. The 1996 Telecom Act 
eliminates the statutory ban and directs the FCC to review its rule within 
two years. Such a review is presently pending. Finally, in order to encourage 
competition in the provision of video programming, the FCC adopted a rule 
prohibiting the common ownership, affiliation, control or interest in cable 
television systems and wireless cable facilities having overlapping service 
areas, except in very limited circumstances. The 1992 Cable Act codified this 
restriction and extended it to co-located SMATV systems. Permitted 
arrangements in effect as of October 5, 1992 are grandfathered. The 1996 
Telecom Act exempts cable systems facing effective competition from the 
wireless cable and SMATV restriction. In addition, a cable operator can 
purchase a SMATV system serving the same area and technically integrate it 
into the cable system. The 1992 Cable Act permits states or local franchising 
authorities to adopt certain additional restrictions on the ownership of 
cable television systems.

          Pursuant to the 1992 Cable Act, the FCC has imposed limits on the 
number of cable systems which a single cable operator can own. In general, no 
cable operator can have an attributable interest in cable systems which pass 
more than 30% of all homes nationwide. Attributable interests for these 
purposes include voting interests of 5% or more (unless there is another 
single holder of more than 50% of the voting stock), officerships, 
directorships, general partnership interests and limited partnership 
interests (unless the limited partners have no material involvement in the 
limited partnership's business). These rules are under review by the


                                     -16-

<PAGE>

FCC. The FCC has stayed the effectiveness of these rules pending the 
outcome of the appeal from a U.S. District Court decision holding the 
multiple ownership limit provision of the 1992 Cable Act unconstitutional.

          The FCC has also adopted rules which limit the number of channels 
on a cable system which can be occupied by programming in which the entity 
which owns the cable system has an attributable interest. The limit is 40% of 
the first 75 activated channels.

          The FCC also recently commenced a rulemaking proceeding to examine, 
among other issues, whether any limitations on cable-DBS cross-ownership are 
warranted in order to prevent anticompetitive conduct in the video services 
market.

          FRANCHISE TRANSFERS

          The 1992 Cable Act requires franchising authorities to act on any 
franchise transfer request submitted after December 4, 1992 within 120 days 
after receipt of all information required by FCC regulations and by the 
franchising authority. Approval is deemed to be granted if the franchising 
authority fails to act within such period.

          TECHNICAL REQUIREMENTS

          The FCC has imposed technical standards applicable to the cable 
channels on which broadcast stations are carried, and has prohibited 
franchising authorities from adopting standards which are in conflict with or 
more restrictive than those established by the FCC. Those standards are 
applicable to all classes of channels which carry downstream National 
Television System Committee (the "NTSC") video programming. The FCC also has 
adopted additional standards applicable to cable television systems using 
frequencies in the 108-137 MHz and 225-400 MHz bands in order to prevent 
harmful interference with aeronautical navigation and safety radio services 
and has also established limits on cable system signal leakage. Periodic 
testing by cable operators for compliance with the technical standards and 
signal leakage limits is required and an annual filing of the results of 
these measurements is required. The 1992 Cable Act requires the FCC to 
periodically update its technical standards to take into account changes in 
technology. Under the 1996 Telecom Act, local franchising authorities may not 
prohibit, condition or restrict a cable system's use of any type of 
subscriber equipment or transmission technology.

          The FCC has adopted regulations to implement the requirements of 
the 1992 Cable Act designed to improve the compatibility of cable systems and 
consumer electronics equipment. Among other things, these regulations 
generally prohibit cable operators from scrambling their basic service tier. 
The 1996 Telecom Act directs the FCC to set only minimal standards to assure 
compatibility between television sets, VCRs and cable systems, and to rely on 
marketplace competition to best determine which features, functions, 
protocols, and product and service options meet the needs of consumers.

          Pursuant to the 1992 Cable Act, the FCC has adopted rules to assure 
the competitive availability to consumers of customers premises equipment, 
such as converters, used to access the services offered by cable television 
systems and other multichannel video programming distributions ("MVPD"). 
Pursuant to those rules, consumers are given the right to attach compatible 
equipment to the facilities of their MVPD so long as the equipment does not 
harm the network, does not interfere with the services purchased by other 
customers, and is not used to receive unauthorized services. As of July 1, 
2000, MVPDs (other than DBS operators) are required to separate security from 
non-security functions in the customer premises equipment which they sell or 
lease to their customers and offer their customers the option of using 
component security modules obtained from the MVPD with set-top units 
purchased or leased from retail outlets. As of January 1, 2005, MVPDs will be 
prohibited from distributing new set -top equipment integrating both security 
and non-security functions to their customers.


                                     -17-

<PAGE>

          POLE ATTACHMENTS

          The FCC currently regulates the rates and conditions imposed by 
certain public utilities for use of their poles unless state public service 
commissions are able to demonstrate that they regulate the rates, terms and 
conditions of cable television pole attachments. The state of Kentucky, in 
which the Joint Venture operates cable systems, has certified to the FCC that 
it regulates the rates, terms and conditions for pole attachments. In the 
absence of state regulation, the FCC administers such pole attachment rates 
through use of a formula which it has devised. The 1996 amendments to the 
Communications Act modified the FCC's pole attachment regulatory scheme by 
requiring the FCC to adopt new regulations. These regulations become 
effective in 2001 and govern the charges for pole attachments used by 
companies, including cable operators, that provide telecommunications 
services by immediately permitting certain providers of telecommunications 
services to rely upon the protections of the current law until the new rate 
formula becomes effective in 2001, and by requiring that utilities provide 
cable systems and telecommunications carriers with nondiscriminatory access 
to any pole, conduit or right-of-way controlled by the utility. In adopting 
its new attachment regulations, the FCC concluded, in part, that a cable 
operator providing Internet service on its cable system is not providing a 
telecommunications service for purposes of the new rules.

          The new rate formula adopted by the FCC and which is applicable for 
any party, including cable systems, which offer telecommunications services 
will result in significantly higher attachment rates for cable systems which 
choose to offer such services. Any resulting increase in attachment rates as 
a result of the FCC's new rate formula will be phased in over a five-year 
period in equal annual increments, beginning in February 2001. Several 
parties have requested the FCC to reconsider its new regulations and several 
parties have challenged the new rules in court. A federal district court 
recently upheld the constitutionality of the new statutory provision, and the 
utilities involved in that litigation have appealed the lower court's 
decision. The FCC also has initiated a proceeding to determine whether it 
should adjust certain elements of the current rate formula. If adopted, these 
adjustments could increase rates for pole attachments and conduit space. The 
Joint Venture is unable to predict the outcome of this current litigation or 
the ultimate impact of any revised FCC rate formula or of any new pole 
attachment rate regulations on its business and operations.

          OTHER MATTERS

          Other matters subject to FCC regulation include certain 
restrictions on a cable system's carriage of local sports programming; rules 
governing political broadcasts; customer service standards; obscenity and 
indecency; home wiring; equal employment opportunity; privacy; closed 
captioning; sponsorship identification; system registration; and limitations 
on advertising contained in nonbroadcast children's programming.

          COPYRIGHT

          Cable television systems are subject to federal copyright licensing 
covering carriage of broadcast signals. In exchange for making semi-annual 
payments to a federal copyright royalty pool and meeting certain other 
obligations, cable operators obtain a statutory license to retransmit 
broadcast signals. The amount of this royalty payment varies, depending on 
the amount of system revenues from certain sources, the number of distant 
signals carried, and the location of the cable system with respect to 
over-the-air television stations. Any future adjustment to the copyright 
royalty rates will be done through an arbitration process supervised by the 
U.S. Copyright Office.

          Cable operators are liable for interest on underpaid and unpaid 
royalty fees, but are not entitled to collect interest on refunds received 
for overpayment of copyright fees.

          Copyrighted music performed in programming supplied to cable 
television systems by pay cable networks (such as HBO) and basic cable 
networks (such as USA Network) is licensed by the networks through private 
agreements with the American Society of Composers and Publishers ("ASCAP") 
and BMI, Inc. ("BMI"), 


                                     -18-

<PAGE>

the two major performing rights organizations in the United States. As a 
result of extensive litigation, both ASCAP and BMI now offer "through to the 
viewer" licenses to the cable networks which cover the retransmission of the 
cable networks' programming by cable systems to their customers. Payment for 
music performed in programming offered on a per program basis remains 
unsettled. The Joint Venture recently participated in a settlement with BMI 
for payment of fees in connection with the Request pay-per-view network. 
Industry litigation of this issue with ASCAP is likely.

          Copyrighted music transmitted by cable systems themselves, E.G., on 
local origination channels or in advertisements inserted locally on cable 
networks, must also be licensed. Cable industry negotiations with ASCAP, BMI 
and SESAC, Inc. (a third and smaller performing rights organization) are in 
progress.

LOCAL REGULATION

          Because a cable television system uses local streets and 
rights-of-way, cable television systems generally are operated pursuant to 
nonexclusive franchises, permits or licenses granted by a municipality or 
other state or local government entity. Franchises generally are granted for 
fixed terms and in many cases are terminable if the franchise operator fails 
to comply with material provisions. Although the 1984 Cable Act provides for 
certain procedural protections, there can be no assurance that renewals will 
be granted or that renewals will be made on similar terms and conditions. 
Upon receipt of a franchise, the cable system owner usually is subject to a 
broad range of obligations to the issuing authority directly affecting the 
business of the system. The terms and conditions of franchises vary 
materially from jurisdiction to jurisdiction, and even from city to city 
within the same state, historically ranging from reasonable to highly 
restrictive or burdensome. The specific terms and conditions of a franchise 
and the laws and regulations under which it was granted directly affect the 
profitability of the cable television system. Cable franchises generally 
contain provisions governing charges for basic cable television services, 
fees to be paid to the franchising authority, length of the franchise term, 
renewal, sale or transfer of the franchise, territory of the franchise, 
design and technical performance of the system, use and occupancy of public 
streets and the number and types of cable services provided. The 1996 Telecom 
Act prohibits a franchising authority from either requiring or limiting a 
cable operator's provision of telecommunications services.

          The 1984 Cable Act places certain limitations on a franchising 
authority's ability to control the operation of a cable system operator, and 
the courts have from time to time reviewed the constitutionality of several 
general franchise requirements, including franchise fees and access channel 
requirements, often with inconsistent results. On the other hand, the 1992 
Cable Act prohibits exclusive franchises, and allows franchising authorities 
to exercise greater control over the operation of franchised cable television 
systems, especially in the area of customer service and rate regulation. 
Moreover, franchising authorities are immunized from monetary damage awards 
arising from regulation of cable television systems or decisions made on 
franchise grants, renewals, transfers and amendments.

          Existing federal regulations, copyright licensing and, in many 
jurisdictions, state and local franchise requirements, currently are the 
subject of a variety of judicial proceedings, legislative hearings and 
administrative and legislative proposals which could change, in varying 
degrees, the manner in which cable television systems operate. Neither the 
outcome of these proceedings nor their impact upon the cable television 
industry can be predicted at this time.


                                     -19-

<PAGE>

ITEM 2.   PROPERTIES

          The Joint Venture owns or leases parcels of real property for 
signal reception sites (antenna towers and headends), microwave facilities 
and business offices, and owns or leases its service vehicles. The Joint 
Venture believes that its properties, both owned and leased, are in good 
condition and are suitable and adequate for the Joint Venture's business 
operations.

          The Joint Venture owns substantially all of the assets related to 
its cable television operations, including its program production equipment, 
headend (towers, antennas, electronic equipment and satellite earth 
stations), cable plant (distribution equipment, amplifiers, customer drops 
and hardware), converters, test equipment and tools and maintenance equipment.

ITEM 3.   LEGAL PROCEEDINGS

          The Partnership is periodically a party to various legal 
proceedings. Such legal proceedings are ordinary and routine litigation 
proceedings that are incidental to the Partnership's business and management 
believes that the outcome of all pending legal proceedings will not, in the 
aggregate, have a material adverse effect on the financial condition of the 
Partnership.

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

          None.


                                     -20-

<PAGE>

                                   PART II

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

LIQUIDITY

          While the Partnership's equity securities, which consist of units 
of limited partnership interests, are publicly held, there is no established 
public trading market for the units and it is not expected that a market will 
develop in the future. The approximate number of equity security holders of 
record was 1,626 as of December 31, 1998. In addition to restrictions on the 
transferability of units contained in the partnership agreement, the 
transferability of units may be affected by restrictions on resales imposed 
by federal or state law.

          Pursuant to documents filed with the Securities and Exchange 
Commission on February 12, 1999, Madison Liquidity Investors 104, LLC 
("Madison") initiated a tender offer to purchase up to approximately 9.9% of 
the outstanding units for $75 per unit. On February 25, 1999, the Partnership 
filed a Recommendation Statement on Schedule 14D-9 and distributed a letter 
to unitholders recommending that unitholders reject Madison's offer.

DISTRIBUTIONS

          The amended partnership agreement generally provides that all cash 
distributions (as defined) be allocated 1% to the general partners and 99% to 
the limited partners until the limited partners have received aggregate cash 
distributions equal to their original capital contributions ("Capital 
Payback"). The partnership agreement also provides that all Partnership 
profits, gains, operational losses, and credits (all as defined) be allocated 
1% to the general partners and 99% to the limited partners until the limited 
partners have been allocated net profits equal to the amount of cash flow 
required for Capital Payback. After the limited partners have received cash 
flow equal to their initial investments, the general partners will only 
receive a 1% allocation of cash flow from sale or liquidation of a system 
until the limited partners have received an annual simple interest return of 
at least 10% of their initial investments less any distributions from 
previous system sales or refinancing of systems. Thereafter, the respective 
allocations will be made 20% to the general partners and 80% to the limited 
partners. Any losses from system sales or exchanges shall be allocated first 
to all partners having positive capital account balances (based on their 
respective capital accounts) until all such accounts are reduced to zero and 
thereafter to the Corporate General Partner. All allocations to individual 
limited partners will be based on their respective limited partnership 
ownership interests.

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

          The policy of the Corporate General Partner (although there is no 
contractual obligation to do so) is to cause the Partnership to make cash 
distributions on a quarterly basis throughout the operational life of the 
Partnership, assuming the availability of sufficient cash flow from the Joint 
Venture operations. The amount of such distributions, if any, will vary from 
quarter to quarter depending upon the Joint Venture's results of operations 
and the Corporate General Partner's determination of whether otherwise 
available funds are needed for the Joint Venture's ongoing working capital 
and liquidity requirements. However, on February 22, 1994, the FCC announced 
significant amendments to its rules implementing certain provisions of the 
1992 


                                     -21-

<PAGE>

Cable Act. Compliance with these rules has had a negative impact on the 
Partnership's revenues and cash flow.

          The Partnership began making periodic cash distributions to limited 
partners from operations in February 1988 and continued through March 1990. 
The distributions were funded primarily from distributions received by the 
Partnership from the Joint Venture. No distributions were made during 1996, 
1997 or 1998.

          The Partnership's ability to pay distributions in the future, the 
actual level of any such distributions and the continuance of distributions 
if commenced, will depend on a number of factors, including the amount of 
cash flow from operations, projected capital expenditures, provision for 
contingent liabilities, availability of bank refinancing, regulatory or 
legislative developments governing the cable television industry, and growth 
in customers. Some of these factors are beyond the control of the 
Partnership, and consequently, no assurances can be given regarding the level 
or timing of future distributions, if any. The Joint Venture's Facility does 
not restrict the payment of distributions to partners by the Partnership 
unless an event of default exists thereunder or the Joint Venture's ratio of 
debt to cash flow is greater than 4 to 1. However, because management 
believes it is critical to conserve cash and borrowing capacity to fund 
anticipated capital expenditures, the Partnership does not anticipate a 
resumption of distributions to unitholders at this time. See Item 7., 
"Management's Discussion and Analysis of Financial Condition and Results of 
Operations."


                                     -22-

<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA

          Set forth below is selected financial data of the Partnership and 
of the Joint Venture for the five years ended December 31, 1998. This data 
should be read in conjunction with the Partnership's and Joint Venture's 
financial statements included in Item 8 hereof and "Management's Discussion 
and Analysis of Financial Condition and Results of Operations" included in 
Item 7.

I. THE PARTNERSHIP

<TABLE>
<CAPTION>
                                                                              Year Ended December 31,
                                                ---------------------------------------------------------------------------------
OPERATIONS STATEMENT DATA                           1994             1995             1996             1997             1998
                                                -------------    -------------    -------------    -------------    -------------
<S>                                             <C>              <C>              <C>              <C>              <C>
  Costs and expenses                            $     (49,800)   $     (32,000)   $     (27,100)   $     (34,400)   $     (21,800)
  Interest expense                                     (1,700)            (500)           ( 500)          (1,300)          (1,700)
  Equity in net income (loss) of joint
    venture                                          (642,500)        (555,100)        (311,000)         (41,100)         272,000
                                                -------------    -------------    -------------    -------------    -------------
  Net income (loss)                             $    (694,000)   $    (587,600)   $    (338,600)   $     (76,800)   $     248,500
                                                -------------    -------------    -------------    -------------    -------------
                                                -------------    -------------    -------------    -------------    -------------

PER UNIT OF LIMITED
  PARTNERSHIP INTEREST:

  Net income (loss)                             $      (11.50)   $       (9.73)   $       (5.61)   $       (1.27)   $        4.12
                                                -------------    -------------    -------------    -------------    -------------
                                                -------------    -------------    -------------    -------------    -------------

OTHER OPERATING DATA
  Net cash used in operating activities         $     (45,700)   $     (57,100)   $     (10,400)   $     (39,400)   $     (30,800)
  Net cash provided by investing
    activities                                         79,100            9,000           31,500           30,000           28,500
</TABLE>

<TABLE>
<CAPTION>
                                                                               As of December 31,
                                                ---------------------------------------------------------------------------------
BALANCE SHEET DATA                                  1994             1995             1996             1997             1998
                                                -------------    -------------    -------------    -------------    -------------
<S>                                             <C>              <C>              <C>              <C>              <C>
  Total assets                                  $   5,259,800    $   4,663,400    $   4,326,200     $  4,245,700    $   4,486,900
  General partners' deficit                           (71,800)         (77,700)         (81,100)         (81,900)         (79,400)
  Limited partners' capital                         5,306,000        4,724,300        4,389,100        4,313,100        4,559,100
</TABLE>


                                     -23-

<PAGE>

II. ENSTAR CABLE OF CUMBERLAND VALLEY

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                ---------------------------------------------------------------------------------
OPERATIONS STATEMENT DATA                           1994             1995             1996             1997             1998
                                                -------------    -------------    -------------    -------------    -------------
<S>                                             <C>              <C>              <C>              <C>              <C>
  Revenues                                      $   6,173,900    $   6,241,700    $   6,728,900    $   7,217,900    $   7,075,400
  Costs and expenses                               (3,657,600)      (3,526,300)      (3,881,000)      (4,127,100)      (4,018,600)
  Depreciation and amortization                    (3,158,600)      (3,104,900)      (2,841,600)      (2,672,700)      (2,085,200)
                                                -------------    -------------    -------------    -------------    -------------
  Operating income (loss)                            (642,300)        (389,500)           6,300          418,100          971,600
  Interest expense                                   (664,800)        (779,300)        (699,400)        (578,600)        (257,300)
  Interest income                                      22,100           58,600           71,100           78,300           45,300
  Casualty loss                                       --               --               --               --              (215,600)
                                                -------------    -------------    -------------    -------------    -------------

  Net income (loss)                             $  (1,285,000)   $  (1,110,200)   $    (622,000)   $     (82,200)   $     544,000
                                                -------------    -------------    -------------    -------------    -------------
                                                -------------    -------------    -------------    -------------    -------------

  Distributions paid to venturers               $     158,200    $      18,000    $      63,000    $      60,000    $      57,000
                                                -------------    -------------    -------------    -------------    -------------
                                                -------------    -------------    -------------    -------------    -------------

OTHER OPERATING DATA
  Net cash provided by operating
  activities                                    $   1,882,400    $   2,045,900    $   2,750,200    $   2,939,300    $   2,890,500
  Net cash used in investing activities              (773,300)      (1,996,800)        (673,000)        (622,200)      (1,794,300)
  Net cash used in financing activities              (205,600)         (18,000)        (763,000)      (3,661,000)      (1,661,800)
  EBITDA(1)                                         2,516,300        2,715,400        2,847,900        3,090,800        3,056,800
  EBITDA to revenues                                    40.8%            43.5%            42.3%            42.8%            43.2%
  Total debt to EBITDA                                   2.7x             2.5x             2.1x             0.8x             0.3x
  Capital expenditures                          $     763,400    $   1,975,800    $     662,100    $     610,800    $   1,768,700
</TABLE>

<TABLE>
<CAPTION>
                                                                               As of December 31,
                                                ---------------------------------------------------------------------------------
BALANCE SHEET DATA                                  1994             1995             1996             1997             1998
                                                -------------    -------------    -------------    -------------    -------------
<S>                                             <C>              <C>              <C>              <C>              <C>
  Total assets                                  $  18,232,200    $  17,049,700    $  15,832,600    $  12,392,100    $  11,229,800
  Total debt                                        6,767,200        6,767,200        6,067,200        2,600,000        1,000,000
  Venturers' capital                               10,401,200        9,273,000        8,588,000        8,445,800        8,932,800
</TABLE>
---------------------
          (1) EBITDA is calculated as operating income before depreciation 
and amortization. Based on its experience in the cable television industry, 
the Joint Venture believes the EBITDA and related measures of cash flow serve 
as important financial analysis tools for measuring and comparing cable 
television companies in several areas, such as liquidity, operating 
performance and leverage. In addition, the covenants in the primary debt 
instrument of the Joint Venture use EBITDA-derived calculations as a measure 
of financial performance. EBITDA is not a measurement determined under GAAP 
and does not represent cash generated from operating activities in accordance 
with GAAP. EBITDA should not be considered by the reader as an alternative to 
net income as an indicator of the Joint Venture's financial performance or as 
an alternative to cash flows as a measure of liquidity. In addition, the 
Joint Venture's definition of EBITDA may not be identical to similarly titled 
measures used by other companies.


                                     -24-


<PAGE>

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

INTRODUCTION

          The 1992 Cable Act required the FCC to, among other things, implement
extensive regulation of the rates charged by cable television systems for basic
and programming service tiers, installation, and customer premises equipment
leasing. Compliance with those rate regulations has had a negative impact on the
Joint Venture's revenues and cash flow. The 1996 Telecom Act substantially
changed the competitive and regulatory environment for cable television and
telecommunications service providers. Among other changes, the 1996 Telecom Act
provides that the regulation of CPST rates will terminate on March 31, 1999.
There can be no assurance as to what, if any, further action may be taken by the
FCC, Congress or any other regulatory authority or court, or the effect thereof
on the Joint Venture's business. Accordingly, the Joint Venture's historical
financial results as described below are not necessarily indicative of future
performance.

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

          All of the Partnership's cable television business operations are
conducted through its participation as a partner with a 50% interest in Enstar
Cable of Cumberland Valley. The Partnership participates equally with its
affiliated partner (Enstar Income/Growth Program Five-B, L.P.) under the Joint
Venture Agreement with respect to capital contributions, obligations and
commitments, and results of operations. Accordingly in considering the financial
condition and results of operations of the Partnership, consideration must also
be made of those matters as they relate to the Joint Venture. The following
discussion reflects such consideration and provides a separate discussion for
each entity.

RESULTS OF OPERATIONS

          THE PARTNERSHIP

          All of the Partnership's cable television business operations, which
began in January 1988, are conducted through its participation as a partner in
the Joint Venture. The Joint Venture distributed an aggregate of $31,500,
$30,000 and $28,500 to the Partnership, representing the Partnership's pro rata
(I.E., 50%) share of the cash flow distributed from the Joint Venture's
operations, during 1996, 1997 and 1998, respectively. The Partnership did not
pay distributions to its partners during 1996, 1997 or 1998.

          THE JOINT VENTURE

          1998 COMPARED TO 1997

          The Joint Venture's revenues decreased from $7,217,900 to $7,075,400,
or by 2.0%, for the year ended December 31, 1998 as compared to 1997. Of the
$142,500 decrease, $227,300 was due to decreases in the number of subscriptions
for basic, premium, tier and equipment rental services and $15,200 was due to
decreases in other revenue producing items including installation revenue. These
decreases were partially offset by an increase of $100,000 due to increases in
regulated service rates that were implemented by the Joint Venture in 1997. As
of December 31, 1998, the Joint Venture had approximately 16,200 basic
subscribers and 2,800 premium service units.


                                     -25-


<PAGE>

          Service costs decreased from $2,553,400 to $2,494,000, or by 2.3%, for
the year ended December 31, 1998 as compared to 1997. Service costs represent
costs directly attributable to providing cable services to customers. The
decrease was principally due to increases in the capitalization of labor and
overhead costs resulting from replacement of portions of the Joint Venture's
Monticello, Kentucky system, which sustained storm damage in February 1998.

          General and administrative expenses decreased from $920,800 to
$884,700, or by 3.9%, for the year ended December 31, 1998 as compared to 1997,
primarily due to decreases in marketing and bad debt expenses.

          Management fees and reimbursed expenses decreased from $652,900 to
$639,900, or by 2.0%, for the year ended December 31, 1998 as compared to 1997.
Management fees decreased in direct relation to decreased revenues as described
above. Reimbursable expenses decreased primarily as a result of lower allocated
personnel costs.

          Depreciation and amortization expense decreased from $2,672,700 to
$2,085,200, or by 22.0%, for the year ended December 31, 1998 as compared to
1997, due to the effect of certain tangible assets becoming fully depreciated
and certain intangible assets becoming fully amortized.

          Operating income increased from $418,100 to $971,600 for the year
ended December 31, 1998 as compared to 1997, primarily due to decreases in
depreciation and amortization expense.

          Interest expense decreased from $578,600 to $257,300, or by 55.5%, for
the year ended December 31, 1998 as compared to 1997, primarily due to lower
average borrowings in 1998.

          Interest income decreased from $78,300 to $45,300, or by 42.1%, for
the year ended December 31, 1998 as compared to 1997, due to lower average cash
balances available for investment.

          The Joint Venture recognized a $215,600 casualty loss during the first
quarter of 1998 related to storm damage sustained in its Monticello system.

          Due to the factors described above, the Joint Venture generated net
income of $544,000 for the year ended December 31, 1998 as compared with a net
loss of $82,200 for the year ended December 31, 1997.

          EBITDA is calculated as operating income before depreciation and
amortization. See footnote 1 to "Selected Financial Data." EBITDA as a
percentage of revenues increased from 42.8% during 1997 to 43.2% in 1998. The
increase was primarily caused by increases in capitalization of labor and
overhead costs related to replacement of damaged assets. EBITDA decreased from
$3,090,800 to $3,056,800, or by 1.1%, as a result.

          1997 COMPARED TO 1996

          The Joint Venture's revenues increased from $6,728,900 to $7,217,900,
or by 7.3%, for the year ended December 31, 1997 as compared to 1996. Of the
$489,000 increase, $575,100 was due to increases in regulated service rates that
were implemented by the Joint Venture in the second, third and fourth quarters
of 1996 and the fourth quarter of 1997, $94,700 was due to the July 1, 1996
restructuring of The Disney Channel from a premium channel to a tier channel and
$30,800 was due to increases in other revenue producing items including
installation revenue and charges for franchise fees the Joint Venture passed
through to its customers. These increases were partially offset by a decrease of
$211,600 due to decreases in the number of subscriptions for basic, premium,
tier and equipment rental services. As of December 31, 1997, the Joint Venture
had approximately 17,000 basic subscribers and 2,800 premium service units.


                                     -26-


<PAGE>

          Service costs increased from $2,394,700 to $2,553,400, or by 6.6%, for
the year ended December 31, 1997 as compared to 1996. Service costs represent
costs directly attributable to providing cable services to customers. The
increase was principally due to increases in programming expense and franchise
fees, and decreases in capitalization of labor and overhead costs resulting from
fewer capital projects in 1997. The increase in programming fees was primarily
due to higher rates charged by program suppliers. Franchise fees increased in
direct relation to the increase in revenues as discussed above.

          General and administrative expenses increased from $877,700 to
$920,800, or by 4.9%, for the year ended December 31, 1997 as compared to 1996,
primarily due to increases in bad debt expense and marketing expense, partially
offset by lower insurance costs.

          Management fees and reimbursed expenses increased from $608,600 to
$652,900, or by 7.3%, for the year ended December 31, 1997 as compared to 1996.
Management fees increased in direct relation to increased revenues as described
above. Reimbursable expenses increased primarily as a result of higher allocated
personnel costs resulting from staff additions and wage increases.

          Depreciation and amortization expense decreased from $2,841,600 to
$2,672,700, or by 5.9%, for the year ended December 31, 1997 as compared to
1996, due to the effect of certain intangible assets becoming fully amortized.

          Operating income increased from $6,300 to $418,100 for the year ended
December 31, 1997 as compared to 1996, primarily due to increases in revenues
and decreases in depreciation and amortization expense.

          Interest expense decreased from $699,400 to $578,600, or by 17.3%, for
the year ended December 31, 1997 as compared to 1996, due to a decrease in
average borrowings.

          Interest income increased from $71,100 to $78,300, or by 10.1%, for
the year ended December 31, 1997 as compared to 1996, due to a change in
investment policy that yielded a greater return on invested cash.

          Due to the factors described above, the Joint Venture's net loss
decreased from $622,000 to $82,200, or by 86.8%, for the year ended December 31,
1997 as compared to 1996.

          EBITDA is calculated as operating income before depreciation and
amortization. See footnote 1 to "Selected Financial Data." EBITDA as a
percentage of revenues increased from 42.3% during 1996 to 42.8% in 1997. The
increase was primarily caused by increased revenues. EBITDA increased from
$2,847,900 to $3,090,800, or by 8.5%, as a result.

          DISTRIBUTIONS MADE BY THE CUMBERLAND VALLEY JOINT VENTURE

          The Joint Venture distributed $63,000, $60,000 and $57,000 equally
between its two partners during 1996, 1997 and 1998, respectively.

LIQUIDITY AND CAPITAL RESOURCES

          The Partnership's primary objective, having invested its net offering
proceeds in the Joint Venture, is to distribute to its partners distributions of
cash flow received from the Joint Venture's operations and proceeds from the
sale of the Joint Venture's cable systems, if any, after providing for expenses,
debt service and capital requirements relating to the expansion, improvement and
upgrade of such cable systems.


                                     -27-


<PAGE>

          Based on its belief that the market for cable systems has generally
improved, the Corporate General Partner is evaluating strategies for liquidating
the Partnership. These strategies include the potential sale of substantially
all of the Partnership's assets to third parties and/or affiliates of the
Corporate General Partner, and the subsequent liquidation of the Partnership.
The Corporate General Partner expects to complete its evaluation within the next
several months and intends to advise unitholders promptly if it believes that
commencing a liquidating transaction would be in the best interests of
unitholders.

          The Joint Venture relies upon the availability of cash generated from
operations and possible borrowings to fund its ongoing expenses, debt service
and capital requirements. The Joint Venture is required to upgrade its system in
Campbell County, Tennessee under a provision of its franchise agreement. Upgrade
expenditures are budgeted at a total estimated cost of approximately $470,000.
The upgrade began in 1998 and $82,800 had been incurred as of December 31, 1998.
The franchise agreement requires the project be completed by October 2000.
Additionally, the Joint Venture expects to upgrade its systems in surrounding
communities at a total estimated cost of approximately $500,000 beginning in
2000. The Joint Venture spent approximately $1,361,400 in 1998 to replace and
upgrade cable plant in Kentucky that sustained storm damage in February 1998. As
discussed below, such losses were not covered by insurance. The Joint Venture
also spent $324,500 in the year ended December 31, 1998 for other equipment and
plant upgrades. The Joint Venture is budgeted to spend approximately $1,257,000
in 1999 for plant extensions, new equipment and system upgrades, including its
upgrades in Tennessee.

          The Partnership believes that cash generated by operations of the
Joint Venture, together with available cash and proceeds from borrowings, will
be adequate to fund capital expenditures, debt service and other liquidity
requirements in 1999 and beyond. As a result, the Joint Venture intends to use
its cash for such purposes.

          The Joint Venture is party to a loan agreement with Enstar Finance
Company, LLC ("EFC"), a subsidiary of the Corporate General Partner. The loan
agreement provides for a revolving loan facility of $9,181,000 (the "Facility").
The Joint Venture prepaid $1,600,000 of its outstanding borrowings during 1998
such that total outstanding borrowings under the Facility were $1,000,000 at
December 31, 1998. The Joint Venture's management expects to increase borrowings
under the Facility in the future for system upgrades and other liquidity
requirements.

          The Joint Venture's Facility matures on August 31, 2001, at which time
all amounts then outstanding are due in full. Borrowings bear interest at the
lender's base rate (7.75% at December 31, 1998) plus 0.625%, or at an offshore
rate plus 1.875%. Under certain circumstances, the Joint Venture is required to
make mandatory prepayments, which permanently reduce the maximum commitment
under the Facility. The Facility contains certain financial tests and other
covenants including, among others, restrictions on incurrence of indebtedness,
investments, sales of assets, acquisitions and other covenants, defaults and
conditions. The Partnership believes the Joint Venture was in compliance with
the covenants at December 31, 1998.

          The Facility does not restrict the payment of distributions to
partners by the Partnership unless an event of default exists thereunder or the
Joint Venture's ratio of debt to cash flow is greater than 4 to 1. The
Partnership believes it is critical for the Joint Venture to conserve cash and
borrowing capacity to fund its anticipated capital expenditures. Accordingly,
the Joint Venture does not anticipate an increase in distributions to the
Partnership in order to fund distributions to unitholders at this time.

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


                                     -28-


<PAGE>

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

          Approximately 94% of the Joint Venture's subscribers are served by its
system in Monticello, Kentucky and neighboring communities. Significant damage
to the system due to seasonal weather conditions or other events could have a
material adverse effect on the Joint Venture's liquidity and cash flows. In
February 1998, the Joint Venture's Monticello, Kentucky system sustained damage
as a result of an ice storm. As of December 31, 1998, the Joint Venture had
spent $1,361,400 to replace and upgrade the damaged system. The Joint Venture
continues to purchase insurance coverage in amounts its management views as
appropriate for all other property, liability, automobile, workers' compensation
and other types of insurable risks.

          During the fourth quarter of 1998, FCLP, on behalf of the Corporate
General Partner, continued its identification and evaluation of the Joint
Venture's Year 2000 business risks and its exposure to computer systems, to
operating equipment which is date sensitive and to the interface systems of its
vendors and service providers. The evaluation has focused on identification and
assessment of systems and equipment that may fail to distinguish between the
year 1900 and the year 2000 and, as a result, may cease to operate or may
operate improperly when dates after December 31, 1999 are introduced.

          Based on a study conducted in 1997, FCLP concluded that certain of the
Joint Venture's information systems were not Year 2000 compliant and elected to
replace such software and hardware with applications and equipment certified by
the vendors as Year 2000 compliant. FCLP installed a number of the new systems
in January 1999. The remaining systems are expected to be installed by mid-1999.
The total anticipated cost, including replacement software and hardware, will be
borne by FCLP. FCLP is utilizing internal and external resources to install the
new systems. FCLP does not believe that any other significant information
technology ("IT") projects affecting the Partnership or Joint Venture have been
delayed due to efforts to identify and address Year 2000 issues.

          Additionally, FCLP has continued to inventory the Joint Venture's
operating and revenue generating equipment to identify items that need to be
upgraded or replaced and has surveyed cable equipment manufacturers to determine
which of their models require upgrade or replacement to become Year 2000
compliant. Identification and evaluation, while ongoing, are substantially
completed and a plan is being developed to remediate non-compliant equipment
prior to January 1, 2000. FCLP expects to complete its planning process by the
end of May 1999. Upgrade or replacement, testing and implementation will be
performed thereafter. The cost of such replacement or remediation, currently
estimated at $4,200, is not expected to have a material effect on the Joint
Venture's financial position or results of operations. The Joint Venture had not
incurred any costs related to the Year 2000 project as of December 31, 1998.
FCLP plans to inventory, assess, replace and test equipment with embedded
computer chips in a separate segment of its project, presently scheduled for the
second half of 1999.

          FCLP has continued to survey the Joint Venture's significant third
party vendors and service suppliers to determine the extent to which the Joint
Venture's interface systems are vulnerable should those third parties fail to
solve their own Year 2000 problems on a timely basis. Among the most significant
service providers upon which the Joint Venture relies are programming suppliers,
power and telephone companies, various banking institutions and the Joint
Venture's customer billing service. A majority of these service suppliers either
have not responded to FCLP's inquiries regarding their Year 2000 compliance
programs or have responded that they are unsure if they will become compliant on
a timely basis. Consequently, there can be no assurance that the systems of
other companies on which the Joint Venture must rely will be Year 2000 compliant
on a timely basis.


                                     -29-


<PAGE>

          FCLP expects to develop a contingency plan in 1999 to address possible
situations in which various systems of the Joint Venture, or of third parties
with which the Joint Venture does business, are not compliant prior to January
1, 2000. Considerable effort will be directed toward distinguishing between
those contingencies with a greater probability of occurring from those whose
occurrence is considered remote. Moreover, such a plan will necessarily focus on
systems whose failure poses a material risk to the Joint Venture's results of
operations and financial condition.

          The Joint Venture's most significant Year 2000 risk is an interruption
of service to subscribers, resulting in a potentially material loss of revenues.
Other risks include impairment of the Joint Venture's ability to bill and/or
collect payment from its customers, which could negatively impact its liquidity
and cash flows. Such risks exist primarily due to technological operations
dependent upon third parties and to a much lesser extent to those under the
control of the Joint Venture. Failure to achieve Year 2000 readiness in either
area could have a material adverse impact on the Joint Venture and consequently
on the Partnership. The Joint Venture is unable to estimate the possible effect
on its results of operations, liquidity and financial condition should its
significant service suppliers fail to complete their readiness programs prior to
the Year 2000. Depending on the supplier, equipment malfunction or type of
service provided, as well as the location and duration of the problem, the
effect could be material. For example, if a cable programming supplier
encounters an interruption of its signal due to a Year 2000 satellite
malfunction, the Joint Venture will be unable to provide the signal to its cable
subscribers, which could result in a loss of revenues, although the Joint
Venture would attempt to provide its customers with alternative program services
for the period during which it could not provide the original signal. Due to the
number of individually owned and operated channels the Joint Venture carries for
its subscribers, and the packaging of those channels, the Joint Venture is
unable to estimate any reasonable dollar impact of such interruption.

          1998 VS. 1997

          The Partnership used $8,600 less cash in operating activities during
the year ended December 31, 1998 than in 1997. Partnership expenses used $12,200
less cash in 1998. Changes in accounts payable used $3,600 more cash in 1998 due
to differences in the timing of payments. Cash from investing activities
decreased by $1,500 due to decreased distributions from the Joint Venture.

          1997 VS. 1996

          The Partnership used $29,000 more cash in operating activities during
the year ended December 31, 1997 than in 1996. The change was primarily due to a
$15,800 reduction in the collection of non recurring receivables from affiliates
during 1997 as compared to 1996. Partnership expenses used $8,100 more cash
during 1997 than in 1996. Cash from investing activities decreased by $1,500 due
to decreased distributions from the Joint Venture.

NEW ACCOUNTING PRONOUNCEMENT

          In 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5, "Reporting on Costs of Start-Up Activities." The new
standard, which becomes effective for the Partnership on January 1, 1999,
requires costs of start-up activities to be expensed as incurred. The
Partnership believes that adoption of this standard will not have an impact on
the Partnership's financial position or results of operations.

INFLATION

          Certain of the Joint Venture's expenses, such as those for equipment
repair and replacement, billing and marketing, generally increase with
inflation. However, the Partnership does not believe that its financial results
have been, or will be, adversely affected by inflation in a material way,
provided that the 


                                     -30-


<PAGE>

Joint Venture is able to increase its service rates
periodically, of which there can be no assurance. See "Legislation and
Regulation."

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

          The Joint Venture is exposed to financial market risks, including
changes in interest rates from its long-term debt arrangements. Under its
current policies, the Joint Venture does not use interest rate derivative
instruments to manage exposure to interest rate changes. An increase in interest
rates of 1% in 1998 would have increased the Joint Venture's interest expense
for the year ended December 31, 1998 by approximately $18,300 with a
corresponding decrease to its net income. 

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          The financial statements and related financial information required to
be filed hereunder are indexed on Page F-1.

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

          Not applicable.


                                     -31-


<PAGE>

                                  PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          The General Partners of the Partnership may be considered, for certain
purposes, the functional equivalents of directors and executive officers. The
Corporate General Partner is Enstar Communications Corporation, and Robert T.
Graff, Jr. is the Individual General Partner. As part of Falcon Cablevision's
September 30, 1988 acquisition of the Corporate General Partner, Falcon
Cablevision received an option to acquire Mr. Graff's interest as Individual
General Partner of the Partnership and other affiliated cable limited
partnerships that he previously co-sponsored with the Corporate General Partner,
and Mr. Graff received the right to cause Falcon Cablevision to acquire such
interests. These arrangements were modified and extended in an amendment dated
September 10, 1993 pursuant to which, among other things, the Corporate General
Partner obtained the option to acquire Mr. Graff's interest in lieu of the
purchase right described above which was originally granted to Falcon
Cablevision. Since its incorporation in Georgia in 1982, the Corporate General
Partner has been engaged in the cable/telecommunications business, both as a
general partner of 15 limited partnerships formed to own and operate cable
television systems and through a wholly-owned operating subsidiary. As of
December 31, 1998 the Corporate General Partner managed cable television systems
with approximately 91,000 basic subscribers.

          On September 30, 1998, FHGLP acquired ownership of the Corporate
General Partner from Falcon Cablevision. FHGI is the sole general partner of
FHGLP. FHGLP controls the general partners of 15 limited partnerships which
operate under the Enstar name (including the Partnership). Although these
limited partnerships are affiliated with FHGLP, their assets are owned by legal
entities separate from the Partnership.

          Set forth below is certain general information about the Directors and
Executive Officers of the Corporate General Partner:

<TABLE>
<CAPTION>

NAME                                POSITION
----                                --------
<S>                                 <C>
Marc B. Nathanson                   Director, Chairman of the Board and Chief Executive Officer

Frank J. Intiso                     Director, President and Chief Operating Officer

Stanley S. Itskowitch               Director, Executive Vice President and General Counsel

Michael K. Menerey                  Director, Executive Vice President, Chief Financial Officer and Secretary

Joe A. Johnson                      Executive Vice President - Operations

Thomas J. Hatchell                  Executive Vice President - Operations

Abel C. Crespo                      Vice President, Corporate Controller
</TABLE>

MARC B. NATHANSON, 53, has been Chairman of the Board and Chief Executive
Officer of FHGI and its predecessors since 1975, and prior to September 19, 1995
also served as President. He has been Chairman of the Board and Chief Executive
Officer of Enstar Communications Corporation since October 1988, and also served
as its President prior to September 1995. Prior to 1975, Mr. Nathanson was Vice
President of Marketing for Teleprompter Corporation, then the largest cable
operator in the United States. He also held executive positions with Warner
Cable and Cypress Communications Corporation. He is a former President of the
California Cable Television Association and a member of Cable Pioneers. He is
currently a director of the National Cable Television Association ("NCTA") and
will Chair its 1999 National Convention. At the 1986 NCTA convention, Mr.
Nathanson was honored by being named the recipient of the Vanguard Award for
outstanding contributions to the growth and development of the cable television
industry. Mr. Nathanson is a 30-year veteran of the cable television industry.
He is a founder of the Cable Television Administration and Marketing Society
("CTAM") and the Southern California Cable Television Association. Mr. Nathanson
is an Advisory Board member of TVA, (Brazil) and also Chairman of the Board and
Chief Executive Officer of Falcon International 


                                     -32-


<PAGE>

Communications, LLC. Mr. Nathanson was appointed by President Clinton on 
November 1, 1998 as Chair of the Board of Governors for the International 
Bureau of Broadcasting which oversees Voice of America, Radio/TV Marti, Radio 
Free Asia, Radio Free Europe and Radio Liberty. Mr. Nathanson is a trustee of 
the Annenburg School of Communications at the University of Southern 
California and a member of the Board of Visitors of the Anderson School of 
Management at UCLA. In addition, he serves on the Board of the UCLA 
Foundation and the UCLA Center for Communications Policy and is on the Board 
of Governors of AIDS Project Los Angeles and Cable Positive.

FRANK J. INTISO, 52, was appointed President and Chief Operating Officer of FHGI
in September 1995. Between 1982 and September 1995, Mr. Intiso held the
positions of Executive Vice President and Chief Operating Officer, with
responsibility for the day-to-day operations of all cable television systems
under the management of Falcon. He has been President and Chief Operating
Officer of Enstar Communications Corporation since September 1995, and between
October 1988 and September 1995 held the positions of Executive Vice President
and Chief Operating Officer. Mr. Intiso has a Masters Degree in Business
Administration from UCLA and is a Certified Public Accountant. He currently
serves as Immediate Past Chair of the California Cable Television Association
and is on the boards of the Cable Advertising Bureau, Cable in the Classroom,
and the California Cable Television Association. He is a member of the American
Institute of Certified Public Accountants, the American Marketing Association,
the American Management Association and the Southern California Cable Television
Association.

STANLEY S. ITSKOWITCH, 60, has been a Director of FHGI and its predecessors 
since 1975. He served as Senior Vice President and General Counsel of FHGI 
from 1987 to 1990 and has been Executive Vice President and General Counsel 
since February 1990. Mr. Itskowitch has been Executive Vice President and 
General Counsel of Enstar Communications Corporation since October 1988. He 
has been President and Chief Executive Officer of F.C. Funding, Inc. 
(formerly Fallek Chemical Company), which is a marketer of chemical products, 
since 1980. He is a Certified Public Accountant and a former tax partner in 
the New York office of Touche Ross & Co. (now Deloitte & Touche LLP). He has 
a J.D. Degree and an L.L.M. Degree in Tax from New York University School of 
Law. Mr. Itskowitch is also Executive Vice President and General Counsel of 
Falcon International Communications, LLC.

MICHAEL K. MENEREY, 47, has been Executive Vice President, Chief Financial
Officer and Secretary of FHGI and Enstar Communications Corporation since
February 1998 and was Chief Financial Officer and Secretary of FHGI and its
predecessors between 1984 and 1998 and of Enstar Communications Corporation
since October 1988. Mr. Menerey is a Certified Public Accountant and is a member
of the American Institute of Certified Public Accountants and the California
Society of Certified Public Accountants, and he was formerly associated with BDO
Seidman.

JOE A. JOHNSON, 54, has been Executive Vice President of Operations of FHGI
since September 1995, and was a Divisional Vice President of FHGI between 1989
and 1992. He has been Executive Vice President-Operations of Enstar
Communications Corporation since January 1996. From 1982 to 1989, he held the
positions of Vice President and Director of Operations for Sacramento Cable
Television, Group W Cable of Chicago and Warner Amex. From 1975 to 1982, Mr.
Johnson held Cable System and Regional Manager positions with Warner Amex and
Teleprompter. Mr. Johnson is also a member of the Cable Pioneers.

THOMAS J. HATCHELL, 49, has been Executive Vice President of Operations of FHGI
and Enstar Communications Corporation since February 1998. From October 1995 to
February 1998, he was Senior Vice President of Operations of Falcon
International Communications, L.P. and its predecessor company and was a Senior
Vice President of FHGI from January 1992 to September 1995. Mr. Hatchell was a
Divisional Vice President of FHGI between 1989 and 1992. From 1981 to 1989, he
served as Vice President and Regional Manager for the San Luis Obispo,
California region owned by an affiliate of FHGI. He was Vice President of
Construction of an affiliate of FHGI from June 1980 to June 1981.


                                     -33-


<PAGE>

ABEL C. CRESPO, 39, has been Vice President, Corporate Controller of
FHGI and Enstar Communications Corporation since March 1999. He previously had
served as Controller since January 1997. Mr. Crespo joined Falcon in December
1984, and has held various accounting positions during that time. Mr. Crespo
holds a Bachelor of Science degree in Business Administration from California
State University, Los Angeles.

OTHER OFFICERS OF FALCON

          The following sets forth certain biographical information with
respect to certain additional members of FHGI management.

LYNNE A. BUENING, 45, has been Vice President of Programming of FHGI since
November 1993. From 1989 to 1993, she served as Director of Programming for
Viacom Cable, a division of Viacom International Inc. Prior to that, Ms. Buening
held programming and marketing positions in the cable, broadcast and newspaper
industries.

OVANDO COWLES, 45, has been Vice President of Advertising Sales and Production
of FHGI since January 1992. From 1988 to 1991, he served as Director of
Advertising Sales and Production at Cencom Cable Television in Pasadena,
California. From 1985 to 1988, he was an Advertising Sales Account Executive at
Choice TV, an affiliate of FHGI.

HOWARD J. GAN, 52, has been Vice President of Regulatory Affairs of FHGI and its
predecessors since 1988. Prior to joining FHGI, he was General Counsel at
Malarkey-Taylor Associates, a Washington, D.C.-based telecommunications
consulting firm, from 1986 to 1988, and was Vice President and General Counsel
at CTIC Associates from 1978 to 1983. In addition, he was an attorney and an
acting Branch Chief of the Federal Communications Commission's Cable Television
Bureau from 1973 to 1978.

R.W. ("SKIP") HARRIS, 51, has been Vice President of Marketing of FHGI
since June 1991. Mr. Harris was National Director of Affiliate Marketing for The
Disney Channel from 1985 to 1991. He was also a sales manager, regional
marketing manager and director of marketing for Cox Cable Communications from
1978 to 1985.

MARTIN B. SCHWARTZ, 39, has been Vice President of Corporate
Development of FHGI since March 1999. Mr. Schwartz joined Falcon in November
1989 and has held various finance, planning and corporate development positions
during that time, most recently that of Director of Corporate Development. Mr.
Schwartz has a Masters Degree in Business Administration from UCLA.

JOAN SCULLY, 63, has been Vice President of Human Resources of FHGI and its
predecessors since May 1988. From 1987 to May 1988, she was self-employed as a
management consultant to cable and transportation companies. She served as
Director of Human Resources of a Los Angeles-based cable company from 1985
through 1987. Prior to that time, she served as a human resource executive in
the entertainment and aerospace industries. Ms. Scully holds a Masters Degree in
Human Resources Management from Pepperdine University.

RAYMOND J. TYNDALL, 51, has been Vice President of Engineering of FHGI since
October 1989. From 1975 to September 1989, he held various technical positions
with Choice TV and its predecessors. From 1967 to 1975, he held various
technical positions with Sammons Communications. He is a certified National
Association of Radio and Television Engineering ("NARTE") engineer in lightwave,
microwave, satellite and broadband and is a member of the Cable Pioneers.

          In addition, FHGI has six Divisional Vice Presidents who are based in
the field. They are G. William Booher, Daniel H. DeLaney, Ron L. Hall, Ronald S.
Hren, Michael E. Kemph and Michael D. Singpiel.


                                     -34-


<PAGE>

          Each director of the Corporate General Partner is elected to a
one-year term at the annual shareholder meeting to serve until the next annual
shareholder meeting and thereafter until his respective successor is elected and
qualified. Officers are appointed by and serve at the discretion of the
directors of the Corporate General Partner.

ITEM 11.  EXECUTIVE COMPENSATION

MANAGEMENT FEE

          The Partnership has a management agreement (the "Management
Agreement") with Enstar Cable Corporation, a wholly owned subsidiary of the
Corporate General Partner (the "Manager"), pursuant to which Enstar Cable
Corporation manages the Joint Venture's systems and provides all operational
support for the activities of the Partnership and Joint Venture. For these
services, the Manager receives a management fee of 4% of gross revenues,
excluding revenues from the sale of cable television systems or franchises,
calculated and paid monthly. In addition, the Joint Venture is required to
distribute 1% of its gross revenues to the Corporate General Partner in respect
of its interest as the Corporate General Partner of the Partnership. The
Management Agreement also requires the Partnership to indemnify the Manager
(including its officers, employees, agents and shareholders) against loss or
expense, absent negligence or deliberate breach by the Manager of the Management
Agreement. The Management Agreement is terminable by the Partnership upon sixty
(60) days written notice to the Manager. The Manager has engaged FCLP to provide
certain management services for the Joint Venture and pays FCLP a portion of the
management fees it receives in consideration of such services and reimburses
FCLP for expenses incurred by FCLP on its behalf. Additionally, the Joint
Venture receives certain system operating management services from affiliates of
the Manager in lieu of directly employing personnel to perform such services.
The Joint Venture reimburses the affiliates for its allocable share of their
operating costs. The Corporate General Partner also performs certain supervisory
and administrative services for the Partnership, for which it is reimbursed.

          For the fiscal year ended December 31, 1998, the Manager charged the
Joint Venture management fees of approximately $283,000 and reimbursed expenses
of $286,100. In addition, the Joint Venture paid the Corporate General Partner
approximately $70,800 in respect of its 1% special interest. The Joint Venture
also reimbursed affiliates approximately $664,600 for system operating
management services. Certain programming services are purchased through FCLP.
The Joint Venture paid FCLP approximately $1,376,700 for these programming
services for fiscal year 1998.

PARTICIPATION IN DISTRIBUTIONS

          The General Partners are entitled to share in distributions from, and
profit and losses in, the Partnership. See Item 5, "Market for Registrant's
Equity Securities and Related Security Holder Matters."


                                     -35-


<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          As of March 1, 1999, the only persons known by the Partnership to own
beneficially or that may be deemed to own beneficially more than 5% of the units
were:


<TABLE>
<CAPTION>

                                                   NAME AND ADDRESS                  AMOUNT AND NATURE OF         PERCENT
           TITLE OF CLASS                        OF BENEFICIAL OWNER                 BENEFICIAL OWNERSHIP         OF CLASS
-------------------------------------    -------------------------------------    ---------------------------    -----------
<S>                                      <C>                                      <C>                            <C>
Units of Limited Partnership             Everest Cable Investors LLC                       3,560(1)                 6.0%
   Interest                              199 South Los Robles Ave.,
                                         Suite 440
                                         Pasadena, CA  91101

Units of Limited Partnership             Madison/AG Partnership Value                      3,301(2)                 5.5%
   Interest                                 Partners II
                                         ISA Partnership Liquidity Investors
                                         Grammercy Park Investments, LP
                                         P.O. Box 7533
                                         Incline Village, NV  89452
</TABLE>

(1) As reported to the Partnership by its transfer agent, Gemisys Corporation.

(2) As reported in a Schedule 13G dated February 18, 1999 and filed with the
Securities and Exchange Commission by Madison/AG Partnership Value Partners II
("AG II"), ISA Partnership Liquidity Investors ("ISA") and Grammercy Park
Investments, LP ("Grammercy Park") as members of a group. The Schedule 13G
states that AG II has sole voting and dispositive power with respect to 2,969
units, that ISA has sole voting and dispositive power with respect to 272 units
and that Grammercy Park has sole voting and dispositive power with respect to 60
units.

          The Corporate General Partner is a wholly-owned subsidiary of FHGLP.
FHGI owns a 10.6% interest in, and is the general partner of, FHGLP. As of March
3, 1999, the common stock of FHGI was owned as follows: 78.5% by Falcon Cable
Trust, a grantor trust of which Marc B. Nathanson is trustee and he and members
of his family are beneficiaries; 20% by Greg A. Nathanson; and 1.5% by Stanley
S. Itskowitch. Greg A. Nathanson is Marc B. Nathanson's brother.


                                     -36-

<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CONFLICTS OF INTEREST

          On September 30, 1998, FHGLP acquired ownership of Enstar 
Communications Corporation from Falcon Cablevision and FCLP assumed the 
management services operations of FHGLP. FCLP now manages the operations of 
the partnerships of which Enstar Communications Corporation is the Corporate 
General Partner, including the Partnership. FCLP began receiving management 
fees and reimbursed expenses which had previously been paid by the 
Partnership, as well as other affiliated entities, to FHGLP. The day-to-day 
management of FCLP is substantially the same as that of FHGLP, which serves 
as the managing partner of FCLP.

          Certain members of management of the Corporate General Partner have 
also been involved in the management of other cable ventures. FCLP may enter 
into other cable ventures, including ventures similar to the Partnership.

          The Partnership and the Joint Venture rely upon the Corporate 
General Partner and certain of its affiliates to provide general management 
services, system operating services, supervisory and administrative services 
and programming. See Item 11., "Executive Compensation." The Joint Venture is 
also party to a loan agreement with a subsidiary of the Corporate General 
Partner. See Item 7., "Management's Discussion and Analysis of Financial 
Condition and Results of Operations-Liquidity and Capital Resources."

          Conflicts of interest involving acquisitions and dispositions of 
cable television systems could adversely affect Unitholders. For instance, 
the economic interests of management in other affiliated partnerships are 
different from those in the Partnership and this may create conflicts 
relating to which acquisition opportunities are preserved for which entities.

          These affiliations subject FCLP, FHGLP and the Corporate General 
Partner and their management to certain conflicts of interest. Such conflicts 
of interest relate to the time and services management will devote to the 
Partnership's affairs and to the acquisition and disposition of cable 
television systems. Management or its affiliates may establish and manage 
other entities which could impose additional conflicts of interest.

          FCLP, FHGLP and the Corporate General Partner will resolve all 
conflicts of interest in accordance with their fiduciary duties.

FIDUCIARY RESPONSIBILITY AND INDEMNIFICATION OF THE GENERAL PARTNERS

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


                                     -37-

<PAGE>

          The partnership agreement provides that the General Partners will 
be indemnified by the Partnership for acts performed within the scope of 
their authority under the partnership agreement if such general partners 
(i) acted in good faith and in a manner that it reasonably believed to be in, 
or not opposed to, the best interests of the Partnership and the partners, 
and (ii) had no reasonable grounds to believe that their conduct was 
negligent. In addition, the partnership agreement provides that the General 
Partners will not be liable to the Partnership or its limited partners for 
errors in judgment or other acts or omissions not amounting to negligence or 
misconduct. Therefore, limited partners will have a more limited right of 
action than they would have absent such provisions. In addition, the 
Partnership maintains, at its expense and in such reasonable amounts as the 
Corporate General Partner shall determine, a liability insurance policy which 
insures the Corporate General Partner, FHGI and its affiliates (which include 
FCLP), officers and directors and such other persons as the Corporate General 
Partner shall determine, against liabilities which they may incur with 
respect to claims made against them for certain wrongful or allegedly 
wrongful acts, including certain errors, misstatements, misleading 
statements, omissions, neglect or breaches of duty. To the extent that the 
exculpatory provisions purport to include indemnification for liabilities 
arising under the Securities Act of 1933, it is the opinion of the Securities 
and Exchange Commission that such indemnification is contrary to public 
policy and therefore unenforceable.


                                     -38-

<PAGE>

                                    PART IV

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

<TABLE>

<S>      <C>
(a)      1. Financial Statements

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

(a)      2. Financial Statement Schedules

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

(a)      3. Exhibits

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

(b)         Reports on Form 8-K

            None.

</TABLE>


                                     -39-

<PAGE>

                                  SIGNATURES

          Pursuant to the requirements of Section 13 or 15 (d) of the 
Securities Exchange Act of 1934, the Registrant has duly caused this report 
to be signed on its behalf by the undersigned, thereunto duly authorized, on 
March 29, 1999.

                                       ENSTAR INCOME/GROWTH PROGRAM FIVE-A, L.P.
                                       By:  Enstar Communications Corporation,
                                            Corporate General Partner


                                            By: /s/ Marc B. Nathanson
                                                --------------------------------
                                                Marc B. Nathanson
                                                Chairman of the Board and
                                                 Chief Executive Officer

          Pursuant to the requirements of the Securities Exchange Act of 
1934, this report has been signed by the following persons on behalf of the 
Registrant and in the capacities indicated on the 29th day of March 1999.

<TABLE>
<CAPTION>

             Signatures                                   Title(*)
      -------------------------      --------------------------------------------------
      <S>                            <C>
      /s/ Marc B. Nathanson          Chairman of the Board and Chief Executive Officer
      -------------------------        (Principal Executive Officer)
      Marc B. Nathanson


      /s/ Michael K. Menerey         Executive Vice President, Chief Financial Officer,
      -------------------------        Secretary and Director
      Michael K. Menerey               (Principal Financial and Accounting Officer)


      /s/ Frank J. Intiso            President, Chief Operating Officer
      -------------------------        and Director
      Frank J. Intiso


      /s/ Stanley S. Itskowitch      Executive Vice President, General Counsel
      -------------------------        and Director
      Stanley S. Itskowitch

</TABLE>

(*) Indicates position(s) held with Enstar Communications Corporation, the 
Corporate General Partner of the Registrant.


                                     -40-

<PAGE>

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                                  Page
                                                            ----------------------------------------------
                                                            Enstar Income/Growth          Enstar Cable of
                                                            Program Five-A, L.P.         Cumberland Valley
                                                            --------------------         -----------------
<S>                                                         <C>                          <C>
Reports of Independent Auditors                                     F-2                        F-10

Balance Sheets - December 31, 1997
  and 1998                                                          F-3                        F-11

Financial Statements for each of
  the three years in the period
  ended December 31, 1998:

    Statements of Operations                                        F-4                        F-12

    Statements of Partnership/
      Venturers' Capital (Deficit)                                  F-5                        F-13

    Statements of Cash Flows                                        F-6                        F-14

Notes to Financial Statements                                       F-7                        F-15

</TABLE>


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


                                      F-1

<PAGE>

                        REPORT OF INDEPENDENT AUDITORS



Partners
Enstar Income/Growth Program Five-A, L.P. (A Georgia Limited Partnership)


We have audited the accompanying balance sheets of Enstar Income/Growth 
Program Five-A, L.P. (A Georgia Limited Partnership) as of December 31, 1997 
and 1998, and the related statements of operations, partnership capital 
(deficit), and cash flows for each of the three years in the period ended 
December 31, 1998. These financial statements are the responsibility of the 
Partnership's management. Our responsibility is to express an opinion on 
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Enstar Income/Growth Program 
Five-A, L.P. at December 31, 1997 and 1998, and the results of its operations 
and its cash flows for each of the three years in the period ended December 
31, 1998, in conformity with generally accepted accounting principles.


                                            /s/ ERNST & YOUNG LLP


Los Angeles, California
March 12, 1999


                                      F-2

<PAGE>

                   ENSTAR INCOME/GROWTH PROGRAM FIVE-A, L.P.

                                BALANCE SHEETS

                   -----------------------------------------
                   -----------------------------------------

<TABLE>
<CAPTION>

                                                            December 31,
                                                ------------------------------------
                                                      1997                1998
                                                ----------------    ----------------
<S>                                             <C>                 <C>
ASSETS:

  Cash                                             $   22,800           $   20,500

  Equity in net assets of joint venture             4,222,900            4,466,400
                                                ----------------    ----------------
                                                   $4,245,700           $4,486,900
                                                ----------------    ----------------
                                                ----------------    ----------------

                       LIABILITIES AND PARTNERSHIP CAPITAL

LIABILITIES:

  Accounts payable                                 $   14,500           $    5,300

  Due to affiliates                                      -                   1,900
                                                ----------------    ----------------
        TOTAL LIABILITIES                              14,500                7,200
                                                ----------------    ----------------

PARTNERSHIP CAPITAL (DEFICIT):

  General partners                                    (81,900)             (79,400)

  Limited partners                                  4,313,100            4,559,100
                                                ----------------    ----------------
        TOTAL PARTNERSHIP CAPITAL                   4,231,200            4,479,700
                                                ----------------    ----------------
                                                   $4,245,700           $4,486,900
                                                ----------------    ----------------
                                                ----------------    ----------------

</TABLE>

                See accompanying notes to financial statements.


                                      F-3

<PAGE>

                   ENSTAR INCOME/GROWTH PROGRAM FIVE-A, L.P.

                           STATEMENTS OF OPERATIONS

                   -----------------------------------------
                   -----------------------------------------

<TABLE>
<CAPTION>

                                                                                   Year Ended December 31,
                                                                        --------------------------------------------
                                                                            1996            1997            1998
                                                                        ------------    ------------    ------------
<S>                                                                     <C>             <C>             <C>
OPERATING EXPENSES:
  General and administrative expenses                                    $ (27,100)       $(34,400)      $(21,800)
                                                                        ------------    ------------    ------------

INTEREST EXPENSE                                                              (500)         (1,300)        (1,700)
                                                                        ------------    ------------    ------------

        Loss before equity in net income (loss) of joint venture           (27,600)        (35,700)       (23,500)


EQUITY IN NET INCOME (LOSS) OF JOINT VENTURE                              (311,000)        (41,100)       272,000
                                                                        ------------    ------------    ------------

NET INCOME (LOSS)                                                        $(338,600)       $(76,800)      $248,500
                                                                        ------------    ------------    ------------
                                                                        ------------    ------------    ------------

Net income (loss) allocated to General Partners                          $  (3,400)       $   (800)      $  2,500
                                                                        ------------    ------------    ------------
                                                                        ------------    ------------    ------------

Net income (loss) allocated to Limited Partners                          $(335,200)       $(76,000)      $246,000
                                                                        ------------    ------------    ------------
                                                                        ------------    ------------    ------------

NET INCOME (LOSS) PER UNIT OF LIMITED
  PARTNERSHIP INTEREST                                                   $   (5.61)       $  (1.27)      $   4.12
                                                                        ------------    ------------    ------------
                                                                        ------------    ------------    ------------

WEIGHTED AVERAGE LIMITED PARTNERSHIP
  UNITS OUTSTANDING DURING THE YEAR                                         59,766          59,766         59,766
                                                                        ------------    ------------    ------------
                                                                        ------------    ------------    ------------

</TABLE>

                See accompanying notes to financial statements.


                                      F-4

<PAGE>

                   ENSTAR INCOME/GROWTH PROGRAM FIVE-A, L.P.

                  STATEMENTS OF PARTNERSHIP CAPITAL (DEFICIT)

                  -------------------------------------------
                  -------------------------------------------

<TABLE>
<CAPTION>

                                         General           Limited
                                         Partners          Partners          Total
                                      --------------    --------------    -----------
<S>                                   <C>               <C>               <C>
PARTNERSHIP CAPITAL (DEFICIT),
  January 1, 1996                       $(77,700)         $4,724,300      $4,646,600

        Net loss for year                 (3,400)           (335,200)       (338,600)
                                      --------------    --------------    -----------

PARTNERSHIP CAPITAL (DEFICIT),
  December 31, 1996                      (81,100)          4,389,100       4,308,000

        Net loss for year                   (800)            (76,000)        (76,800)
                                      --------------    --------------    -----------

PARTNERSHIP CAPITAL (DEFICIT),
  December 31, 1997                      (81,900)          4,313,100       4,231,200

        Net income for year                2,500             246,000         248,500
                                      --------------    --------------    -----------

PARTNERSHIP CAPITAL (DEFICIT),
  December 31, 1998                     $(79,400)         $4,559,100      $4,479,700
                                      --------------    --------------    -----------
                                      --------------    --------------    -----------

</TABLE>

                See accompanying notes to financial statements.


                                      F-5

<PAGE>

                   ENSTAR INCOME/GROWTH PROGRAM FIVE-A, L.P.

                           STATEMENTS OF CASH FLOWS

                   -----------------------------------------
                   -----------------------------------------

<TABLE>
<CAPTION>

                                                                                   Year Ended December 31,
                                                                        --------------------------------------------
                                                                            1996            1997            1998
                                                                        ------------    ------------    ------------
<S>                                                                     <C>             <C>             <C>
Cash flows from operating activities:
  Net income (loss)                                                      $(338,600)      $(76,800)       $ 248,500
  Adjustments to reconcile net income (loss) to net cash
     used in operating activities:
       Equity in net income (loss) of joint venture                        311,000         41,100         (272,000)
       Increase (decrease) from changes in:
         Due from affiliates                                                15,800           -                -
         Accounts payable and due to affiliates                              1,400         (3,700)          (7,300)
                                                                        ------------    ------------    ------------

             Net cash used in operating activities                         (10,400)       (39,400)         (30,800)
                                                                        ------------    ------------    ------------

Cash flows from investing activities:
  Distributions from joint venture                                          31,500         30,000           28,500
                                                                        ------------    ------------    ------------

Net increase (decrease) in cash                                             21,100         (9,400)          (2,300)

Cash at beginning of year                                                   11,100         32,200           22,800
                                                                        ------------    ------------    ------------

Cash at end of year                                                      $  32,200       $ 22,800        $  20,500
                                                                        ------------    ------------    ------------
                                                                        ------------    ------------    ------------

</TABLE>

                See accompanying notes to financial statements.


                                      F-6

<PAGE>

                   ENSTAR INCOME/GROWTH PROGRAM FIVE-A, L.P.

                         NOTES TO FINANCIAL STATEMENTS

                   -----------------------------------------
                   -----------------------------------------

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

FORM OF PRESENTATION

          Enstar Income/Growth Program Five-A, L.P. is a Georgia limited 
partnership (the "Partnership") whose principal business is derived from its 
50% ownership interest in the operations of Enstar Cable of Cumberland 
Valley, a Georgia general partnership (the "Joint Venture"). The financial 
statements include the operations of the Partnership and its equity ownership 
interest in the Joint Venture. The separate financial statements of the Joint 
Venture are included on pages F-10 to F-21 of this report on Form 10-K, and 
should be read in conjunction with these financial statements.

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

INVESTMENT IN JOINT VENTURE

          The Partnership's investment and share of the income or loss in a 
Joint Venture is accounted for on the equity method of accounting.

INCOME TAXES

          The Partnership pays no income taxes as an entity. All of the 
income, gains, losses, deductions and credits of the Partnership are passed 
through to the general partners and the limited partners. Nominal taxes are 
assessed by certain state jurisdictions. The basis in the Partnership's 
assets and liabilities differs for financial and tax reporting purposes. At 
December 31, 1998, the book basis of the Partnership's investment in the 
Joint Venture exceeds its tax basis by $2,124,200.

          The accompanying financial statements, which are prepared in 
accordance with generally accepted accounting principles, differ from the 
financial statements prepared for tax purposes due to the different treatment 
of various items as specified in the Internal Revenue Code. The net effect of 
these accounting differences is that the Partnership's net income for 1998 in 
the financial statements is $248,500 as compared to its tax loss of $254,800 
for the same period. The difference is principally due to timing differences 
in depreciation and amortization expense reported by the Joint Venture.

COSTS OF START-UP ACTIVITIES

          In 1998, the American Institute of Certified Public Accountants 
issued Statement of Position 98-5, "Reporting on Costs of Start-Up Activities." 
The new standard, which becomes effective for the Partnership on January 1, 
1999, requires costs of start-up activities to be expensed as incurred. The 
Partnership believes that adoption of this standard will not have an impact 
on the Partnership's financial position or results of operations.


                                      F-7

<PAGE>

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

EARNINGS PER UNIT OF LIMITED PARTNERSHIP INTEREST

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

USE OF ESTIMATES

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

NOTE 2 - PARTNERSHIP MATTERS

          The Partnership was formed on September 4, 1986 to acquire, construct
or improve, develop, and operate cable television systems in various locations
in the United States. The partnership agreement provides for Enstar
Communications Corporation (the "Corporate General Partner") and Robert T.
Graff, Jr. to be the general partners and for the admission of limited partners
through the sale of interests in the Partnership.

          On September 30, 1988, Falcon Cablevision, a California limited
partnership, purchased all of the outstanding capital stock of the Corporate
General Partner. On September 30, 1998, Falcon Holding Group, L.P., a Delaware
limited partnership ("FHGLP"), acquired ownership of the Corporate General
Partner from Falcon Cablevision. Simultaneously with the closing of that
transaction, FHGLP contributed all of its existing cable television system
operations to Falcon Communications, L.P. ("FCLP"), a California limited
partnership and successor to FHGLP. FHGLP serves as the managing partner of
FCLP. The Corporate General Partner has contracted with FCLP to provide
corporate management services for the Partnership.

          The Partnership was formed with an initial capital contribution of
$1,100 comprising $1,000 from the Corporate General Partner and $100 from the
initial limited partner. Sale of interests in the Partnership began in January
1987, and the initial closing took place in March 1987. The Partnership
continued to raise capital until $15,000,000 (the maximum) was sold in July
1987.

          The amended partnership agreement generally provides that all cash
distributions (as defined) be allocated 1% to the general partners and 99% to
the limited partners until the limited partners have received aggregate cash
distributions equal to their original capital contributions ("Capital Payback").
The amended partnership agreement also provides that all partnership profits,
gains, operational losses, and credits (all as defined) be allocated 1% to the
general partners and 99% to the limited partners until the limited partners have
been allocated net profits equal to the amount of cash flow required for Capital
Payback. After the limited partners have received cash flow equal to their
initial investments, the general partners will only receive a 1% allocation of
cash flow from sale or liquidation of a system until the limited partners have
received an annual simple interest return of at least 10% of their initial
investments less any distributions from previous system sales or refinancing of
systems. Thereafter, the respective allocations will be made


                                     F-8
<PAGE>


NOTE 2 - PARTNERSHIP MATTERS (CONTINUED)

20% to the general partners and 80% to the limited partners. Any
losses from system sales or exchanges shall be allocated first to all partners
having positive capital account balances (based on their respective capital
accounts) until all such accounts are reduced to zero and thereafter to the
Corporate General Partner. All allocations to individual limited partners will
be based on their respective limited partnership ownership interests.

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

          The Partnership's operating expenses and distributions to partners are
funded primarily from distributions received from the Joint Venture.

          The amended partnership agreement limits the amount of debt the
Partnership may incur.

NOTE 3 - EQUITY IN NET ASSETS OF JOINT VENTURE

          The Partnership and an affiliate partnership, Enstar Income/Growth
Program Five-B, L.P., (collectively, the "Venturers") each own 50% of the Joint
Venture. The Joint Venture was initially funded through capital contributions
made by each Venturer during 1988 totaling $11,821,000 in cash and $750,000 in
capitalized system acquisition and related costs. Each Venturer shares equally
in the profits and losses of the Joint Venture. The Joint Venture incurred
losses of $622,000 and $82,200 in 1996 and 1997, respectively, and income of
$544,000 in 1998, of which losses of $311,000 and $41,100 and income of $272,000
were allocated to the Partnership.

NOTE 4 - TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES

          The Partnership has a management and service agreement (the
"Agreement") with a wholly owned subsidiary of the Corporate General Partner
(the "Manager") for a monthly management fee of 5% of gross receipts as defined,
from the operations of the Partnership. The Partnership did not own or operate
any cable television operations in 1996, 1997 or 1998 other than through its
investment in the Joint Venture. No management fees were paid by the Partnership
during 1996, 1997 and 1998.

          The Agreement also provides that the Partnership will reimburse the
Manager for direct expenses incurred on behalf of the Partnership and for the
Partnership's allocable share of operational costs associated with services
provided by the Manager. No reimbursable expenses were incurred on behalf of the
Partnership during 1996, 1997 or 1998.

NOTE 5 - COMMITMENTS

          The Partnership, together with Enstar Income/Growth Program Five-B,
L.P. has guaranteed the debt of the Joint Venture.


                                     F-9
<PAGE>

                        REPORT OF INDEPENDENT AUDITORS

To the Venturers of
Enstar Cable of Cumberland Valley  (A Georgia General Partnership)

We have audited the accompanying balance sheets of Enstar Cable of Cumberland
Valley (A Georgia General Partnership) as of December 31, 1997 and 1998, and the
related statements of operations, venturers' capital, and cash flows for each of
the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the Joint Venture's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Enstar Cable of Cumberland
Valley at December 31, 1997 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.



                                       /s/  ERNST & YOUNG LLP


Los Angeles, California
March 12, 1999


                                     F-10
<PAGE>

                       ENSTAR CABLE OF CUMBERLAND VALLEY

                                 BALANCE SHEETS

                       ---------------------------------
                       ---------------------------------
<TABLE>
<CAPTION>
                                                                                       December 31,
                                                                           ---------------------------------
                                                                                1997               1998
                                                                           ---------------    ---------------
<S>                                                                        <C>                <C>
ASSETS:
   Cash and cash equivalents                                               $    1,081,200     $      515,600

   Accounts receivable, less allowance of $21,900 and
     $14,700 for possible losses                                                  188,100            171,700

   Prepaid expenses and other assets                                              235,200            191,200

   Property, plant and equipment, less accumulated
     depreciation and amortization                                              8,874,900          8,997,100

   Franchise cost, net of accumulated amortization
     of $10,343,800 and $6,785,000                                              1,884,900          1,256,000

   Deferred loan costs and other deferred charges, net                            127,800             98,200
                                                                           --------------     --------------
                                                                           $   12,392,100     $   11,229,800
                                                                           --------------     --------------
                                                                           --------------     --------------

                                           LIABILITIES AND VENTURERS' CAPITAL

LIABILITIES:
   Accounts payable                                                        $      904,000     $       659,000
   Due to affiliates                                                              442,300             638,000
   Note payable - affiliate                                                     2,600,000           1,000,000
                                                                           ---------------    ---------------
     TOTAL LIABILITIES                                                          3,946,300           2,297,000
                                                                           ---------------    ---------------
COMMITMENTS AND CONTINGENCIES

VENTURERS' CAPITAL:
   Enstar Income/Growth Program Five-A, L.P.                                    4,222,900           4,466,400
   Enstar Income/Growth Program Five-B, L.P.                                    4,222,900           4,466,400
                                                                           ---------------    ---------------
     TOTAL VENTURERS' CAPITAL                                                   8,445,800           8,932,800
                                                                           ---------------    ---------------
                                                                           $    12,392,100    $    11,229,800
                                                                           ---------------    ---------------
                                                                           ---------------    ---------------
</TABLE>

               See accompanying notes to financial statements.


                                     F-11
<PAGE>

                          ENSTAR CABLE OF CUMBERLAND VALLEY

                               STATEMENTS OF OPERATIONS

                          ---------------------------------
                          ---------------------------------
<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                       ---------------------------------------------------
                                                                            1996              1997              1998
                                                                       ---------------    --------------    --------------
<S>                                                                    <C>                <C>               <C>
REVENUES                                                               $   6,728,900      $   7,217,900     $   7,075,400
                                                                       ---------------    --------------    --------------

OPERATING EXPENSES:
   Service costs                                                           2,394,700          2,553,400         2,494,000
   General and administrative expenses                                       877,700            920,800           884,700
   General Partner management fees
      and reimbursed expenses                                                608,600            652,900           639,900
   Depreciation and amortization                                           2,841,600          2,672,700         2,085,200
                                                                       ---------------    --------------    --------------
                                                                           6,722,600          6,799,800         6,103,800
                                                                       ---------------    --------------    --------------
      Operating income                                                         6,300            418,100           971,600
                                                                       ---------------    --------------    --------------
OTHER INCOME (EXPENSE):
   Interest expense                                                         (699,400)          (578,600)         (257,300)
   Interest income                                                            71,100             78,300            45,300
   Casualty loss                                                                   -                  -          (215,600)
                                                                       ---------------    --------------    --------------
                                                                            (628,300)          (500,300)         (427,600)
                                                                       ---------------    --------------    --------------
NET INCOME (LOSS)                                                      $    (622,000)     $     (82,200)    $     544,000
                                                                       ---------------    --------------    --------------
                                                                       ---------------    --------------    --------------
</TABLE>

                 See accompanying notes to financial statements.


                                    F-12
<PAGE>

                          ENSTAR CABLE OF CUMBERLAND VALLEY

                           STATEMENTS OF VENTURERS' CAPITAL

                          ---------------------------------
                          ---------------------------------
<TABLE>
<CAPTION>
                                                           Enstar Income/         Enstar Income/
                                                               Growth                 Growth
                                                              Program                Program
                                                            Five-A, L.P.           Five-B, L.P.             Total
                                                          ------------------    -------------------   -------------------
<S>                                                       <C>                   <C>                   <C>
BALANCE, January 1, 1996                                  $       4,636,500     $       4,636,500     $       9,273,000

    Distributions to venturers                                      (31,500)              (31,500)              (63,000)
    Net loss for year                                              (311,000)             (311,000)             (622,000)
                                                          ------------------    -------------------   -------------------

BALANCE, December 31, 1996                                        4,294,000             4,294,000             8,588,000

    Distributions to venturers                                      (30,000)              (30,000)              (60,000)
    Net loss for year                                               (41,100)              (41,100)              (82,200)
                                                          ------------------    -------------------   -------------------

BALANCE, December 31, 1997                                        4,222,900             4,222,900             8,445,800

    Distributions to venturers                                      (28,500)              (28,500)              (57,000)
    Net income for year                                             272,000               272,000               544,000
                                                          ------------------    -------------------   -------------------

BALANCE, December 31, 1998                                $       4,466,400     $       4,466,400     $       8,932,800
                                                          ------------------    -------------------   -------------------
                                                          ------------------    -------------------   -------------------
</TABLE>

                 See accompanying notes to financial statements.


                                      F-13
<PAGE>

                          ENSTAR CABLE OF CUMBERLAND VALLEY

                               STATEMENTS OF CASH FLOWS

                          ---------------------------------
                          ---------------------------------
<TABLE>
<CAPTION>
                                                                                        Year Ended December 31,
                                                                          ----------------------------------------------------
                                                                              1996               1997               1998
                                                                          --------------    ---------------    ---------------
<S>                                                                       <C>               <C>                <C>
Cash flows from operating activities:
   Net income (loss)                                                      $     (622,000)   $      (82,200)    $      544,000
   Adjustments to reconcile net income (loss) to
     net cash provided by operating activities:
       Depreciation and amortization                                           2,841,600         2,672,700          2,085,200
       Amortization of deferred loan costs                                        52,200           156,200             34,600
       Casualty loss                                                                   -                 -            215,600
       Increase (decrease) from changes in:
         Accounts receivable, prepaid expenses and other assets                  310,500            23,700             60,400
         Accounts payable and due to affiliates                                  167,900           168,900            (49,300)
                                                                          --------------    ---------------    ---------------
               Net cash provided by operating activities                       2,750,200         2,939,300          2,890,500
                                                                          --------------    ---------------    ---------------

Cash flows from investing activities:
   Capital expenditures                                                         (662,100)         (610,800)        (1,768,700)
   Increase in intangible assets                                                 (10,900)          (11,400)           (25,600)
                                                                          --------------    ---------------    ---------------
               Net cash used in investing activities                            (673,000)         (622,200)        (1,794,300)
                                                                          --------------    ---------------    ---------------
Cash flows from financing activities:
   Distributions to venturers                                                    (63,000)          (60,000)           (57,000)
   Repayment of debt                                                            (700,000)       (6,067,200)                 -
   Borrowings from affiliate                                                           -         2,600,000                  -
   Repayment of borrowings from affiliate                                              -                 -         (1,600,000)
   Deferred loan costs                                                                 -          (133,800)            (4,800)
                                                                          --------------    ---------------    ---------------
               Net cash used in financing activities                            (763,000)       (3,661,000)        (1,661,800)
                                                                          --------------    ---------------    ---------------
Net increase (decrease) in cash and cash equivalents                           1,314,200        (1,343,900)          (565,600)

Cash and cash equivalents at beginning of year                                 1,110,900         2,425,100          1,081,200
                                                                          --------------    ---------------    ---------------
Cash and cash equivalents at end of year                                  $    2,425,100    $    1,081,200     $      515,600
                                                                          --------------    ---------------    ---------------
                                                                          --------------    ---------------    ---------------
</TABLE>

                 See accompanying notes to financial statements.


                                     F-14
<PAGE>

                        ENSTAR CABLE OF CUMBERLAND VALLEY

                          NOTES TO FINANCIAL STATEMENTS

                        ---------------------------------
                        ---------------------------------

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

FORM OF PRESENTATION

          Enstar Cable of Cumberland Valley, a Georgia general partnership (the
"Joint Venture"), owns and operates cable systems in rural areas of Kentucky,
Tennessee and Missouri.

          The financial statements do not give effect to any assets that Enstar
Income/Growth Program Five-A, L.P. and Enstar Income/Growth Program Five-B, L.P.
(the "Venturers") may have outside of their interest in the Joint Venture, nor
to any obligations, including income taxes, of the Venturers.

CASH EQUIVALENTS

          For purposes of the statements of cash flows, the Joint Venture
considers all highly liquid debt instruments purchased with an initial maturity
of three months or less to be cash equivalents.

          Cash equivalents at December 31, 1996 include $2,311,000 of short-term
investments in commercial paper.

PROPERTY, PLANT, EQUIPMENT AND DEPRECIATION AND AMORTIZATION

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

<TABLE>
          <S>                                         <C>
          Cable television systems                       5-15 years
          Vehicles                                          3 years
          Furniture and equipment                         5-7 years
          Leasehold improvement                       Life of lease
</TABLE>

          In 1998, the Joint Venture revised the estimated useful life of its
existing plant assets in a Tennessee franchise area from 15 years to
approximately 12.5 years. The Partnership implemented the reduction as a result
of a system upgrade that is required to be completed by October 2000 as provided
for in the franchise agreement. The impact of this change in the life of the
assets was to increase depreciation expense by approximately $36,500 in 1998.

FRANCHISE COST

          The excess of cost over the fair values of tangible assets and
customer lists of cable television systems acquired represents the cost of
franchises. In addition, franchise cost includes capitalized costs incurred in
obtaining new franchises and the renewal of existing franchises. These costs are
amortized using the straight-line method over the lives of the franchises,
ranging up to 15 years. The Joint Venture periodically evaluates the
amortization periods of these intangible assets to determine whether events or
circumstances warrant revised estimates of useful lives. Costs relating to
unsuccessful franchise applications are charged to expense when it is determined
that the efforts to obtain the franchise will not be successful.


                                     F-15








<PAGE>

                        ENSTAR CABLE OF CUMBERLAND VALLEY

                          NOTES TO FINANCIAL STATEMENTS

                        ---------------------------------
                        ---------------------------------

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

FRANCHISE COST (CONTINUED)

The Joint Venture is in the process of negotiating the renewal of expired 
franchise agreements for nine of the Joint Venture's 19 franchises.

DEFERRED LOAN COSTS AND OTHER DEFERRED CHARGES

          Costs related to obtaining new loan agreements are capitalized and 
amortized to interest expense over the life of the related loan. Other 
deferred charges are amortized using the straight-line method over two years.

RECOVERABILITY OF ASSETS

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

REVENUE RECOGNITION

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

INCOME TAXES

          As a partnership, the Joint Venture pays no income taxes. All of 
the income, gains, losses, deductions and credits of the Joint Venture are 
passed through to the Joint Venturers. Nominal taxes are assessed by certain 
state jurisdictions. The basis in the Joint Venture's assets and liabilities 
differs for financial and tax reporting purposes. At December 31, 1998, the 
book basis of the Joint Venture's net assets exceeds its tax basis by 
$4,248,400.

          The accompanying financial statements, which are prepared in 
accordance with generally accepted accounting principles, differ from the 
financial statements prepared for tax purposes due to the different treatment 
of various items as specified in the Internal Revenue Code. The net effect of 
these accounting differences is that the Joint Venture's net income for 1998 
in the financial statements is $544,000 as compared to its tax loss of 
$462,500 for the same period. The difference is principally due to timing 
differences in depreciation and amortization expense.


                                     F-16

<PAGE>

                        ENSTAR CABLE OF CUMBERLAND VALLEY

                          NOTES TO FINANCIAL STATEMENTS

                        ---------------------------------
                        ---------------------------------

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

COSTS OF START-UP ACTIVITIES

          In 1998, the American Institute of Certified Public Accountants 
issued Statement of Position 98-5, "Reporting on Costs of Start-Up Activities." 
The new standard, which becomes effective for the Joint Venture on January 1, 
1999, requires costs of start-up activities to be expensed as incurred. The 
Joint Venture believes that adoption of this standard will not have an impact 
on the Joint Venture's financial position or results of operations.

ADVERTISING COSTS

          All advertising costs are expensed as incurred.

USE OF ESTIMATES

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

NOTE 2 - JOINT VENTURE MATTERS

          The Joint Venture was formed under the terms of a general partnership 
agreement (the "partnership agreement") effective January 11, 1988 between 
Enstar Income/Growth Program Five-A, L.P. and Enstar Income/Growth Program 
Five-B, L.P., which are two limited partnerships sponsored by Enstar 
Communications Corporation (the "Corporate General Partner"). The Joint 
Venture was formed to pool the resources of the two limited partnerships to 
acquire, own, operate and dispose of certain cable television systems.

          On September 30, 1988, Falcon Cablevision, a California limited 
partnership, purchased all of the outstanding capital stock of the Corporate 
General Partner. On September 30, 1998, Falcon Holding Group, L.P., a 
Delaware limited partnership ("FHGLP"), acquired ownership of the Corporate 
General Partner from Falcon Cablevision. Simultaneously with the closing of 
that transaction, FHGLP contributed all of its existing cable television 
system operations to Falcon Communications, L.P. ("FCLP"), a California 
limited partnership and successor to FHGLP. FHGLP serves as the managing 
partner of FCLP. The Corporate General Partner has contracted with FCLP and 
its affiliates to provide management services for the Joint Venture.

          Under the terms of the partnership agreement, the Venturers share 
equally in profits, losses, allocations and assets. Capital contributions, as 
required, are also made equally.


                                     F-17

<PAGE>

                        ENSTAR CABLE OF CUMBERLAND VALLEY

                          NOTES TO FINANCIAL STATEMENTS

                        ---------------------------------
                        ---------------------------------

NOTE 3 - PROPERTY, PLANT AND EQUIPMENT

          Property, plant and equipment consist of:

<TABLE>
<CAPTION>

                                                                 December 31,
                                                     ------------------------------------
                                                           1997                1998
                                                     ----------------    ----------------
<S>                                                  <C>                 <C>
Cable television systems                               $ 19,259,300        $ 20,338,200
Vehicles, furniture and equipment and leasehold
  improvements                                              694,100             713,300
                                                     ----------------    ----------------

                                                         19,953,400          21,051,500
Less accumulated depreciation
  and amortization                                      (11,078,500)        (12,054,400)
                                                     ----------------    ----------------

                                                       $  8,874,900        $  8,997,100
                                                     ----------------    ----------------
                                                     ----------------    ----------------

</TABLE>

NOTE 4 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

          The following methods and assumptions were used to estimate the fair 
value of each class of financial instruments for which it is practicable to 
estimate that value:

CASH AND CASH EQUIVALENTS

          The carrying amount approximates fair value due to the short maturity 
of these instruments.

NOTE PAYABLE - AFFILIATE

          The carrying amount approximates fair value due to the variable rate 
nature of the note payable.

NOTE 5 - NOTE PAYABLE - AFFILIATE

          On September 30, 1997, the Joint Venture refinanced its existing 
debt with a credit facility from a subsidiary of the Corporate General 
Partner, Enstar Finance Company, LLC ("EFC"). EFC obtained a secured bank 
facility of $35 million from two agent banks in order to obtain funds that 
would in turn be advanced to the Joint Venture and certain of the other 
partnerships managed by the Corporate General Partner. The Joint Venture 
entered into a loan agreement with EFC for a revolving loan facility (the 
"Facility") of $9,181,000 of which $2,600,000 was advanced to the Joint 
Venture at closing. Such funds together with available cash were used to 
repay the Joint Venture's previous note payable balance of $4,067,200 and 
related accrued interest. Outstanding borrowings at December 31, 1998 were 
$1,000,000.

          The Joint Venture's Facility matures on August 31, 2001, at which 
time all amounts then outstanding are due in full. Borrowings bear interest 
at the lender's base rate (7.75% at December 31, 1998) plus 0.625%, or at an 
offshore rate plus 1.875%. The Joint Venture is permitted to prepay amounts 
outstanding under the Facility at any time without penalty, and is able to 
reborrow throughout the term of the Facility up to the maximum commitment 
then available so long as no event of default exists. If the Joint Venture 
has "excess cash flow" (as defined in its loan agreement) and has leverage, 
as defined, in excess of 


                                     F-18

<PAGE>

                        ENSTAR CABLE OF CUMBERLAND VALLEY

                          NOTES TO FINANCIAL STATEMENTS

                        ---------------------------------
                        ---------------------------------

NOTE 5 - NOTE PAYABLE - AFFILIATE (CONTINUED)

4.25 to 1, or receives proceeds from sales of its assets in excess of a 
specified amount, the Joint Venture is required to make mandatory prepayments 
under the Facility. Such prepayments permanently reduce the maximum commitment 
under the Facility. The Joint Venture is also required to pay a commitment 
fee of 0.5% per annum on the unused portion of its Facility, and an annual 
administrative fee. Advances by EFC under its partnership loan facilities are 
independently collateralized by individual partnership borrowers so that no 
partnership is liable for advances made to other partnerships. Borrowings 
under the Joint Venture's Facility are collateralized by substantially all 
assets of the Joint Venture and are guaranteed by the Venturers. At closing, 
the Joint Venture paid to EFC a $93,400 facility fee. This represented the 
Joint Venture's pro rata portion of a similar fee paid by EFC to its lenders. 
In connection with the refinancing, the Joint Venture wrote off $113,200 in 
deferred loan costs during 1997 relating to the former bank credit agreement.

          The Facility contains certain financial tests and other covenants 
including, among others, restrictions on incurrence of indebtedness, 
investments, sales of assets, acquisitions and other covenants, defaults and 
conditions. The Facility does not restrict the payment of distributions to 
partners by the Partnership unless an event of default exists thereunder or 
the Joint Venture's ratio of debt to cash flow is greater than 4 to 1. The 
Corporate General Partner believes the Joint Venture was in compliance with 
the covenants at December 31, 1998.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

          The Joint Venture leases buildings and tower sites associated with 
the systems under operating leases expiring in various years through 2002.

          Future minimum rental payments under non-cancelable leases that 
have remaining terms in excess of one year as of December 31, 1998 are as 
follows:

<TABLE>
<CAPTION>

          Year                             Amount
          ----                             -------
          <S>                              <C>
          1999                             $13,600
          2000                              13,100
          2001                              13,000
          2002                               5,300
                                           -------
                                           $45,000
                                           -------
                                           -------

</TABLE>

          Rentals, other than pole rentals, charged to operations approximated 
$49,400, $52,100 and $50,100 in 1996, 1997 and 1998, respectively, while pole 
rental expense approximated $105,900, $105,100 and $115,400 in 1996, 1997 and 
1998, respectively.

          Other commitments include approximately $387,200 at December 31, 
1998 to complete the upgrade of the Joint Venture's Campbell County, Tennessee 
system. The Joint Venture also expects to upgrade its systems in surrounding 
communities at an additional cost of approximately $500,000 beginning in 2000.


                                     F-19

<PAGE>

NOTE 6 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

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

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

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

          Approximately 94% of the Joint Venture's subscribers are served by 
its system in Monticello, Kentucky and neighboring communities. Significant 
damage to the system due to seasonal weather conditions or other events could 
have a material adverse effect on the Joint Venture's liquidity and cash 
flows. The Joint Venture's Monticello, Kentucky cable system sustained damage 
due to an ice storm on February 3, 1998. The cost of replacing and upgrading 
the damaged assets amounted to approximately $1,361,400 and resulted in a 
casualty loss of $215,600. The cost of repairs was funded from available cash 
reserves and operating cash flow. The Joint Venture continues to purchase 
insurance coverage in amounts its management views as appropriate for all 
other property, liability, automobile, workers' compensation and other types 
of insurable risks.

NOTE 7 - TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES

          The Joint Venture has a management and service agreement (the 
"Agreement") with a wholly owned subsidiary of the Corporate General Partner 
(the "Manager") for a monthly management fee of 4% of gross receipts, as 
defined, from the operations of the Joint Venture. Management fee expense 
approximated $269,100, $288,700 and $283,000 in 1996, 1997 and 1998, 
respectively. In addition, the Joint Venture is required to distribute 1% of 
its gross revenues to the Corporate General Partner in respect of its interest 
as the Corporate General Partner of the Partnership. This fee approximated 
$67,300, $72,200 and $70,800 in 1996, 1997 and 1998, respectively.


                                     F-20

<PAGE>

NOTE 7 - TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES (CONTINUED)

          The Joint Venture also reimburses the Manager for direct expenses 
incurred on behalf of the Joint Venture and for the Venture's allocable share 
of operational costs associated with services provided by the Manager. All 
cable television properties managed by the Corporate General Partner and its 
subsidiaries are charged a proportionate share of these expenses. The Corporate 
General Partner has contracted with FCLP and its affiliates to provide 
management services for the Joint Venture. Corporate office allocations and 
district office expenses are charged to the properties served based primarily 
on the respective percentage of basic customers or homes passed (dwelling units 
within a system) within the designated service areas. The total amounts charged 
to the Joint Venture for these services approximated $272,200, $292,000 and 
$286,100 during 1996, 1997 and 1998, respectively.

          The Joint Venture also receives certain system operating management 
services from affiliates of the Corporate General Partner in addition to the 
Manager, due to the fact that there are no such employees directly employed by 
the Joint Venture. The Joint Venture reimburses the affiliates for the Joint 
Venture's allocable share of the affiliates' operational costs. The total 
amount charged to the Joint Venture for these costs approximated $580,100, 
$565,000 and $664,600 in 1996, 1997 and 1998, respectively. No management fee 
is payable to the affiliates by the Joint Venture and there is no duplication 
of reimbursed expenses and costs paid to the Manager.

          Substantially all programming services have been purchased through 
FCLP. FCLP, in the normal course of business, purchases cable programming 
services from certain program suppliers owned in whole or in part by affiliates 
of an entity that became a general partner of FCLP on September 30, 1998. 
Such purchases of programming services are made on behalf of the Joint 
Venture and the other partnerships managed by the Corporate General Partner 
as well as for FCLP's own cable television operations. FCLP charges the Joint 
Venture for these costs based on an estimate of what the Corporate General 
Partner could negotiate for such programming services for the 15 partnerships 
managed by the Corporate General Partner as a group. The Joint Venture 
recorded programming fee expense of $1,257,300, $1,332,100 and $1,376,700 in 
1996, 1997 and 1998, respectively. Programming fees are included in service 
costs in the statements of operations.

          In the normal course of business, the Joint Venture pays interest 
and principal to EFC.

NOTE 8 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

          Cash paid for interest amounted to $703,400, $547,900 and $265,900 
in 1996, 1997 and 1998, respectively.


                                     F-21

<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT
NUMBER    DESCRIPTION
-------   -----------
<S>       <C>
3         Second Amended and Restated Agreement of Limited Partnership of Enstar
          Income/Growth Program Five-A, L.P., dated as of August 1, 1988(2)

10.1      Amended and Restated Partnership Agreement of Enstar Cable of Cumberland
          Valley, dated as of April 28, 1988(2)

10.2      Management Agreement between Enstar Income/Growth Program Five-A, L.P., and
          Enstar Cable Corporation(1)

10.3      Management Agreement between Enstar Cable of Cumberland Valley and Enstar
          Cable Corporation, as amended(2)

10.4      Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for the City of Cumberland,
          Kentucky(1)

10.5      Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for the City of Greensboro,
          Kentucky(1)

10.6      Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for the City of Jellico,
          Tennessee(1)

10.7      Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for the City of Liberty,
          Kentucky(1)

10.8      Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for the City of Monticello,
          Kentucky(1)

10.9      Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for the City of Russell Springs,
          Kentucky(1)

10.10     Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for McCreary County, Kentucky(1)

10.11     Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for Whitley County, Kentucky(1)

10.12     Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for Campbell County, Tennessee(1)

10.13     Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for Russell County, Kentucky(2)

10.14     Franchise ordinance and related documents thereto granting a non-exclusive
          community antenna television system franchise for Wayne County, Kentucky(2)

10.15     Service Agreement between Enstar Communications Corporation, Enstar Cable
          Corporation and Falcon Holding Group, Inc. dated as of October 1, 1988(3)

10.16     Amendment No. 2 to Revolving Credit and Term Loan Agreement dated April 29,
          1988 between Enstar Cable of Cumberland Valley and Rhode Island Hospital Trust
          National Bank, dated March 26, 1990.(4)

10.17     Amendment No. 3 to Revolving Credit and Term Loan Agreement dated April 29,
          1988 between Enstar Cable of Cumberland Valley and Rhode Island Hospital Trust
          National Bank, dated December 27, 1990.(4)


                                      E-1

<PAGE>

10.18     Amendment No. 4 to Revolving Credit and Term Loan Agreement dated
          April 29, 1988 between Enstar Cable of Cumberland Valley and Rhode
          Island Hospital Trust National Bank, dated March 25, 1992.(5)

10.19     Amendment No. 5 to Revolving Credit and Term Loan Agreement dated
          April 29, 1988 between Enstar Cable of Cumberland Valley and Rhode
          Island Hospital Trust National Bank, dated February 16, 1993.(6)

10.20     Amendment No. 6 to Revolving Credit and Term Loan Agreement dated
          April 29, 1988 between Enstar Cable of Cumberland Valley and Rhode
          Island Hospital Trust National Bank, dated March 23, 1993.(6)

10.21     Asset Purchase Agreement and related documents by and between Enstar
          Cable of Cumberland Valley and W.K. Communications, Inc., dated as of
          April 23, 1993.(6)

10.22     Loan Agreement between Enstar Cable of Cumberland Valley and
          Kansallis-Osake-Pankki dated December 9, 1993.(8)

10.23     Amendment to Loan Agreement dated December 9, 1993 between Enstar
          Cable of Cumberland Valley and Merita Bank Ltd., Successor in Interest
          to Kansallis-Osake-Pankki, dated December 15, 1995.(9)

10.24     First amendment to the second amended and restated agreement of
          Limited Partnership of Enstar Income/Growth Program Five-A, L.P.,
          dated August 26, 1997.(9)

10.25     Loan Agreement between Enstar Cable of Cumberland Valley and Enstar
          Finance Company, LLC dated September 30, 1997.(9)

10.26     Amendment No. 1 to the Loan Agreement dated September 30, 1997 between
          Enstar Cable of Cumberland Valley and Enstar Finance Company, LLC dated
          September 30, 1997.(10)

10.27     Franchise Agreement granting a non-exclusive community antenna
          television system franchise for Campbell County, Tennessee.(10)

10.28     Resolution No. 97120901 of the fiscal court of McCreary County,
          Kentucky extending the Cable Television Franchise of Enstar Cable of
          Cumberland. Adopted December 9, 1997.(10)

21.1      Subsidiaries: Enstar Cable of Cumberland Valley.

</TABLE>


                                      E-2

<PAGE>

                                 EXHIBIT INDEX

                              FOOTNOTE REFERENCES

<TABLE>

<S>     <C>
(1)     Incorporated by reference to the exhibits to the Registrant's Annual Report
        on Form 10-K, File No. 0-16779 for the fiscal year ended December 31, 1987.

(2)     Incorporated by reference to the exhibits to the Registrant's Annual Report
        on Form 10-K, File No. 0-16779 for the fiscal year ended December 31, 1988.

(3)     Incorporated by reference to the exhibits to the Registrant's Annual Report
        on Form 10-K, File No. 0-16779 for the fiscal year ended December 31, 1989.

(4)     Incorporated by reference to the exhibits to the Registrant's Annual Report
        on Form 10-K, File No. 0-16779 for the fiscal year ended December 31, 1990.

(5)     Incorporated by reference to the exhibits to the Registrant's Annual Report
        on Form 10-K, File No. 0-16779 for the fiscal year ended December 31, 1991.

(6)     Incorporated by reference to the exhibits to the Registrant's Quarterly
        Report on Form 10-Q, File No. 0-16779 for the quarter ended March 31, 1993.

(7)     Incorporated by reference to the exhibits to the Registrant's Annual Report
        on Form 10-K, File No. 0-16779 for the fiscal year ended December 31, 1993.

(8)     Incorporated by reference to the exhibits to the Registrant's Annual Report
        on Form 10-K, File No. 0-16779 for the fiscal year ended December 31, 1995.

(9)     Incorporated by reference to the exhibits to the Registrant's Quarterly
        Report on Form 10-Q, File No. 0-16779 for the quarter ended September 30, 1997.

(10)    Incorporated by reference to the exhibits to the Registrant's Annual Report
        on Form 10-K, File No. 0-16779 for the fiscal year ended December 31, 1997.

</TABLE>


                                      E-3