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Pending Acquisitions, as defined below) to acquire cable systems, serving a
total of approximately 1.3 million customers. Pro Forma for Marcus and pro forma
for the Pending Acquisitions, our revenues and EBITDA for 1998 would have been
$1.7 billion and $755 million, respectively. We have also entered into a letter
of intent to acquire cable systems with approximately 12,000 additional
customers. Pro forma for the Pending Acquisitions and the acquisition currently
subject to a letter of intent, the Company serves approximately 3.6 million
customers. As we acquire and integrate these and other cable systems in the
future, we believe that the implementation of our operating philosophy will
provide meaningful opportunities to enhance the operating results of such
     Paul G. Allen, our principal owner and one of the computer industry's
visionaries, has long believed that the broadband capabilities of cable systems
facilitate the convergence of cable television, computers and
telecommunications. Mr. Allen believes that this convergence, which he calls the
"Wired World," will rely on the cable platform to deliver an array of new
services, such as digital video programming, high-speed Internet access,
Internet protocol telephony and electronic commerce. Because of cable's ability
to provide all of these services, we believe that individuals and businesses
will view cable as an important service.
                               BUSINESS STRATEGY
     Our business strategy is to grow our customer base and increase our
operating cash flow by: (i) maximizing customer satisfaction; (ii) implementing
decentralized operations with centralized financial controls; (iii) pursuing
strategic acquisitions; (iv) upgrading our systems; (v) emphasizing innovative
marketing; and (vi) offering new products and services.
     MAXIMIZING CUSTOMER SATISFACTION.  To maximize customer satisfaction, we
operate our business to provide reliable, high-quality service offerings,
superior customer service and attractive programming choices at reasonable
rates. We have implemented stringent internal customer service standards which
we believe meet or exceed those established by the National Cable Television
Association. In 1998, J.D. Power and Associates ranked the Charter Companies
third among major cable system operators in overall customer satisfaction. We
believe that our customer service efforts have contributed to our superior
customer growth, increased acceptance of our new and enhanced service offerings
and increased strength of the Charter brand name.
CONTROLS.  Our local cable systems are organized into seven operating regions. A
regional management team oversees local system operations in each region. We
believe that a strong management presence at the local system level increases
our ability to respond to customer needs and programming preferences, improves
our customer service, reduces the need for a large centralized corporate staff,
fosters good relations with local governmental authorities and strengthens
community relations. Our regional management teams work closely with senior
management in our corporate office to develop budgets and coordinate marketing,
programming, purchasing and engineering activities. In order to attract and
retain high quality managers at the local and regional operating levels, we
provide a high degree of operational autonomy and accountability and cash and
equity-based performance compensation. We have committed to adopt a plan to
distribute to members of corporate management and to key regional and
system-level management personnel equity-based incentive compensation based on
10% of our equity value on a fully diluted basis.