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CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
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<PAGE>   66
     GENERAL.  Many existing computer systems and applications and other control
devices and embedded computer chips use only two digits, rather than four, to
identify a year in the date field, failing to consider the impact of the
upcoming change in the century. As a result, such systems, applications,
devices, and chips could create erroneous results or might fail altogether
unless corrected to properly interpret data related to the year 2000 and beyond.
These errors and failures may result, not only from a date recognition problem
in the particular part of a system failing but also as systems, applications,
devices and chips receive erroneous or improper data from third-parties
suffering from the year 2000 problem. In addition, two interacting systems,
applications, devices or chips, each of which has individually been fixed so
that it will properly handle the year 2000 problem, could nonetheless suffer
"integration failure" because their methods of dealing with the problem is not
     These problems are expected to increase in frequency and severity as the
year 2000 approaches. This issue impacts our owned or licensed computer systems
and equipment used in connection with internal operations, including:
     - information processing and financial reporting systems;
     - customer billing systems;
     - customer service systems;
     - telecommunication transmission and reception systems; and
     - facility systems.
     THIRD PARTIES.  We also rely directly and indirectly, in the regular course
of business, on the proper operation and compatibility of third party systems.
The year 2000 problem could cause these systems to fail, err, or become
incompatible with our systems.
     If we or a significant third party on which we rely fails to become year
2000 ready, or if the year 2000 problem causes our systems to become internally
incompatible or incompatible with such third party systems, our business could
suffer from material disruptions, including the inability to process
transactions, send invoices, accept customer orders or provide customers with
our cable services. We could also face similar disruptions if the year 2000
problem causes general widespread problems or an economic crisis. We cannot now
estimate the extent of these potential disruptions.
     STATE OF READINESS.  We are addressing the Year 2000 problem with respect
to our internal operations in three stages:
     (1) conducting an inventory and evaluation of our systems, components, and
         other significant infrastructure to identify those elements that
         reasonably could be expected to be affected by the year 2000 problems.
         This initiative has been completed;
     (2) remediating or replacing equipment that will fail to operate properly
         in the year 2000. We plan to be finished with the remediation by
         September 1999; and
     (3) testing of the remediation and replacement conducted in stage two. We
         plan to complete all testing by September 1999.
     Much of our assessment efforts in stage one have involved, and depend on,
inquiries to third party service providers, who are the suppliers and vendors of
various parts or components of our systems. Certain of these third parties that
have certified the readiness of their products will not certify their
interoperability within our fully integrated systems. We cannot assure you that
these technologies of third parties, on which we rely, will be year 2000 ready
or will on a timely basis converted into year 2000 compliant systems compatible
with our systems. Moreover, because a full test of our systems, on an integrated
basis, would require a complete shut down of our operations, it is not
practicable to conduct such testing. However, we are utilizing a third party, in
cooperation with other cable operators, to test a "mock-up" of our major billing