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Charter Reports Second-Quarter Financial and Operating Results

Click here to view the Second Quarter Financial Addendum.

Double-Digit Pro Forma Revenue and Adjusted EBITDA Growth for the Third Consecutive Quarter

ST. LOUIS--(BUSINESS WIRE)--Aug. 2, 2007--Charter Communications, Inc. (NASDAQ: CHTR) (along with its subsidiaries, the "Company" or "Charter") today reported its second-quarter 2007 financial and operating results.

Highlights:

  • Second-quarter pro forma revenues of $1.498 billion grew 11.0% year over year and actual revenue grew 8.4%, driven by significant increases in telephone and high-speed Internet (HSI) revenues.
  • Second-quarter pro forma adjusted EBITDA of $539 million increased 10.9% year over year and actual adjusted EBITDA grew 8.9%. (Adjusted EBITDA is defined in the "Use of Non-GAAP Financial Metrics" section and is reconciled to net cash flows from operating activities in the addendum of this news release.)
  • Revenue generating units (RGUs) increased by 166,300 on a pro forma basis during the second quarter of 2007, the highest second-quarter RGU net gain in five years.
  • Average revenue per analog video customer (ARPU) increased 12.6% year over year, driven by increased sales of The Charter Bundle and advanced services growth.

"We are pleased with the results of the quarter - delivering our fourth consecutive quarter of double-digit pro forma revenue growth and our third consecutive quarter of double-digit pro forma adjusted EBITDA growth," said Neil Smit, President and Chief Executive Officer. "Charter's momentum in growing revenue generating units and delivering consistent operating results reflects a keen focus on our strategic priorities."

In addition to the actual results for the three and six months ended June 30, 2006 and 2007, we have provided in this release pro forma results for the three and six months ended June 30, 2006 and 2007. We believe these pro forma results facilitate meaningful analysis of the results of operations. Pro forma results in this release reflect (i) our sales of assets in 2006 and (ii) our sales of assets in early January 2007 and May 2007, as if they had occurred as of January 1, 2006. Pro forma income statements for the three and six months ended June 30, 2006 and June 30, 2007 and pro forma customer statistics as of March 31, 2007, December 31, 2006 and June 30, 2006 are provided in the addendum of this news release.

Key Operating Results

All of the following customer growth and ARPU statistics are presented on a pro forma basis. Charter added a net 166,300 RGUs during the second quarter of 2007 - the highest second-quarter net RGU additions in five years. As of June 30, 2007, Charter served approximately 5,679,900 customers. The Company's 11,526,300 RGUs were comprised of 5,376,800 analog video, 2,866,000 digital video, 2,583,200 HSI, and 700,300 telephone customers.

  • Telephone customers increased by approximately 127,700 in the second quarter of 2007, nearly double the 66,500 net additions in the year-ago quarter.
  • HSI customers increased by approximately 60,300, a 16% increase over second-quarter 2006 net additions of 51,900.
  • Digital video customers increased by approximately 7,600, compared to 23,800 net additions in the year-ago quarter.
  • Analog video customers decreased by approximately 29,300, essentially the same as the net loss in the second quarter of 2006.

Second-quarter 2007 total ARPU increased 12.6%, with video ARPU increasing 5.1% and HSI ARPU increasing 5.6%, as compared to the same period in 2006, driven by advanced services, upgrading customers to higher Internet speeds and programming tiers, as well as the strength of The Charter Bundle.

Strong telephone service growth continued in the second quarter with the addition of 127,700 customers, bringing the total to 700,300 - a significant increase from the 257,600 customers as of June 30, 2006. Charter Telephone(R) was available to approximately 7.6 million homes as of June 30, 2007. Charter will continue to focus on driving deeper penetration of telephone service and bundled service packages, while further expanding our telephone footprint. Charter expects telephone service to reach between 9.5 and 10 million homes passed by the end of 2008.

Second-Quarter Results - Pro Forma

Second-quarter pro forma revenues were $1.498 billion, an increase of $149 million, or 11.0% - Charter's fourth consecutive quarter of double-digit pro forma revenue growth. A significant portion of the increase resulted from increases in telephone and HSI revenues.

Pro forma telephone revenues increased to $80 million from $29 million a year ago. Pro forma HSI revenues increased $54 million, up 21.1% year over year. Pro forma video revenues increased $29 million, up 3.5% year over year. Pro forma commercial revenues increased $9 million, or 12.2%, as Charter continued to market video, HSI, and telephone services to small and medium-size businesses.

Second-quarter pro forma 2007 operating costs and expenses were $959 million, an increase of $96 million, or 11.1%. The Company's increased operating costs and expenses reflect annual programming rate increases partially offset by contractual changes, growth of the Company's telephone business and other advanced services, increased marketing expenditures to grow and retain customers, and expenditures in customer care and service capabilities to further improve the customer experience.

Pro forma operating expenses, which include programming, advertising sales, and service costs, increased 9.1% year over year. Selling, general, and administrative expenses increased by 15.6% compared to the year-ago quarter.

Pro forma adjusted EBITDA totaled $539 million for the second quarter of 2007, an increase of 10.9% compared to the year-ago quarter - Charter's third consecutive quarter of double-digit, year over year, pro forma adjusted EBITDA growth.

Pro forma net cash flows used in operating activities for the second quarter of 2007 were $149 million, compared to $21 million for the second quarter of 2006. The change is primarily the result of an increase in cash used by operating assets and liabilities and an increase in interest on cash-pay obligations, offset by revenues increasing faster than cash expenses.

Six-Month Results - Pro Forma

Six months ended June 30, 2007 pro forma revenues were $2.921 billion, an increase of $286 million, or 10.9%, primarily related to increases in telephone and HSI revenues.

Pro forma telephone revenues increased to $143 million from $50 million a year ago. Pro forma HSI revenues increased $109 million, up 21.9% year over year. Pro forma video revenues increased $57 million, up 3.5% year over year. Pro forma commercial revenues increased $20 million, or 13.9%.

First-half 2007 pro forma operating costs and expenses were $1.887 billion, an increase of $175 million, or 10.2%, over the prior year. Increased operating costs and expenses reflect annual programming rate increases, growth of the Company's telephone business and other advanced services, increased marketing expenditures to grow and retain customers, and expenditures in customer care and service capabilities to further improve the customer experience.

Pro forma operating expenses for the six months ended June 30, 2007, which include programming, advertising sales, and service costs, increased 8.4% year over year, while selling, general, and administrative expenses increased by 14.2%.

Pro forma adjusted EBITDA totaled $1.034 billion for the first half of 2007, an increase of 12.0% compared to the first six months of last year.

Pro forma net cash flows from operating activities for the first half of 2007 were $116 million, compared to $164 million for the first half of 2006. The decrease is primarily the result of a decrease in cash provided by operating assets and liabilities and an increase in interest on cash-pay obligations, offset by revenues increasing faster than cash expenses.

Second-Quarter Results - Actual

Second-quarter revenues increased 8.4% and operating costs and expenses increased 8.1% compared to year-ago actual results.

Operating income from continuing operations increased to $200 million from $146 million in the second quarter of 2006, primarily due to revenue growth exceeding operating costs and expense growth by $44 million.

Net loss for the second quarter of 2007 was $360 million, or $0.98 per common share. For the second quarter of 2006, Charter reported a net loss of $382 million and loss per common share of $1.20. Net loss decreased primarily due to telephone and HSI customer growth, improved operational efficiencies, and a decrease in income from discontinued operations.

Expenditures for property, plant, and equipment for the second quarter of 2007 were $281 million, compared to second-quarter 2006 expenditures of $298 million. The slight decrease in capital expenditures primarily reflects year-over-year decreases in scalable infrastructure due to last year's aggressive roll-out of telephone infrastructure. As previously disclosed, Charter expects that approximately three-quarters of its projected $1.2 billion of 2007 capital expenditures will be directed toward success-based activity.

As of June 30, 2007, Charter had $19.6 billion in long-term debt and $81 million of cash on hand. Charter expects that cash on hand, cash flows from operating activities, and amounts available under its credit facilities will be adequate to meet its cash needs through 2008.

Six-Months Results - Actual

Revenues for the first six months of 2007 were $2.924 billion, an increase of 8.2% year over year. Operating costs and expenses were $1.888 billion, an increase of 7.3% compared to year-ago actual results.

Operating income from continuing operations increased to $356 million in the first half of 2007, compared to $138 million in the first half of 2006. Revenue growth exceeded operating costs and expense growth during the period by $92 million, and depreciation and amortization expenses declined by $25 million year over year. In addition, asset impairment charges of $99 million were recorded in the first half of 2006, while there were no such charges in the first half of 2007.

Net loss for the first half of 2007 was $741 million, or $2.02 per common share. For the first half of 2006, Charter reported a net loss of $841 million and loss per common share of $2.65.

Expenditures for property, plant, and equipment for the first half of 2007 were $579 million, compared to $539 million in the first half of 2006.

Net cash flows from operating activities for the first half of 2007 were $118 million, compared to $205 million for the first half of 2006. The decrease was primarily the result of a decrease in cash provided by operating assets and liabilities and an increase in interest on cash-pay obligations, offset by revenues increasing faster than cash expenses.

Use of Non-GAAP Financial Metrics

The Company uses certain measures that are not defined by GAAP to evaluate various aspects of its business. Adjusted EBITDA, pro forma adjusted EBITDA, and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net cash flows from operating activities reported in accordance with GAAP. These terms, as defined by Charter, may not be comparable to similarly titled measures used by other companies.

Adjusted EBITDA is defined as income from operations before special charges, depreciation and amortization, loss on sale or retirement of assets, asset impairment charges, and stock compensation expense. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of the Company's businesses as well as other non-cash or non-recurring items, and is unaffected by the Company's capital structure or investment activities. Adjusted EBITDA and pro forma adjusted EBITDA are liquidity measures used by Company management and its Board of Directors to measure the Company's ability to fund operations and its financing obligations. For this reason, it is a significant component of Charter's annual incentive compensation program. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the cash cost of financing for the Company. Company management evaluates these costs through other financial measures.

Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures.

The Company believes that adjusted EBITDA, pro forma adjusted EBITDA, and free cash flow provide information useful to investors in assessing Charter's ability to service its debt, fund operations, and make additional investments with internally generated funds. In addition, adjusted EBITDA generally correlates to the leverage ratio calculation under the Company's credit facilities or outstanding notes to determine compliance with the covenants contained in the facilities and notes (all such documents have been previously filed with the United States Securities and Exchange Commission). Adjusted EBITDA and pro forma adjusted EBITDA, as presented, include management fee expenses in the amounts of $34 million and $30 million for the three months ended June 30, 2007 and 2006, respectively, which expense amounts are excluded for the purposes of calculating compliance with leverage covenants.

Additional Information Available on Website

A slide presentation to accompany the second-quarter conference call will be available on the Investor & News Center of our website at www.charter.com in the "Presentations/Webcasts" section. Pro forma data, including disclosure concerning the pro forma data and the basis upon which it was calculated, for each quarter of 2006 and 2007 can also be found on the Investor & News Center in the "Pro Forma Information" section. The pro forma income statement for the three months and six months ended June 30, 2006 and 2007 and pro forma historical customer statistics are also provided in the addendum of this news release.

Conference Call

The Company will host a conference call on Thursday, August 2, 2007, at 9:00 a.m. Eastern Time (EDT) related to the contents of this release.

The conference call will be webcast live via the Company's website at www.charter.com. Access the webcast by clicking on "About Charter" at the top of the home page. Participants should go to the call link at least 10 minutes prior to the start time to register. The call will be archived on the website beginning two hours after its completion. Accompanying slides will also be available on the site.

Those participating via telephone should dial 888-233-1576. International participants should dial 706-643-3458.

A replay will be available at 800-642-1687 or 706-645-9291 beginning two hours after completion of the call through end of business August 10, 2007. The passcode for the replay is 2495577.

About Charter Communications(R)

Charter Communications, Inc. is a leading broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. More information about Charter can be found at www.charter.com.

Cautionary Statement Regarding Forward-Looking Statements:

This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), regarding, among other things, our plans, strategies and prospects, both business and financial. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under "Risk Factors" from time to time in our filings with the Securities and Exchange Commission ("SEC"). Many of the forward-looking statements contained in this quarterly report may be identified by the use of forward-looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated," "aim," "on track," "target," "opportunity" and "potential," among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this release are set forth in reports or documents that we file from time to time with the SEC, and include, but are not limited to:

  • the availability, in general, of funds to meet interest payment obligations under our debt and to fund our operations and necessary capital expenditures, either through cash flows from operating activities, further borrowings or other sources and, in particular, our ability to be able to provide under the applicable debt instruments such funds (by dividend, investment or otherwise) to the applicable obligor of such debt;
  • our ability to comply with all covenants in our indentures and credit facilities, any violation of which could trigger a default of our other obligations under cross-default provisions;
  • our ability to pay or refinance debt prior to or when it becomes due and/or refinance that debt through new issuances, exchange offers or otherwise, including restructuring our balance sheet and leverage position;
  • competition from other distributors, including incumbent telephone companies, direct broadcast satellite operators, wireless broadband providers and DSL providers;
  • difficulties in introducing and operating our telephone services, such as our ability to adequately meet customer expectations for the reliability of voice services, and our ability to adequately meet demand for installations and customer service;
  • our ability to sustain and grow revenues and cash flows from operating activities by offering video, high-speed Internet, telephone and other services, and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition;
  • our ability to obtain programming at reasonable prices or to adequately raise prices to offset the effects of higher programming costs;
  • general business conditions, economic uncertainty or slowdown; and
  • the effects of governmental regulation, including but not limited to local and state franchise authorities, on our business.

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We are under no duty or obligation to update any of the forward-looking statements after the date of this release.

            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
  UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA
        (DOLLARS IN MILLIONS, EXCEPT PER SHARE AND SHARE DATA)



                                       Three Months Ended June 30,
                                    ----------------------------------
                                        2007         2006
                                       Actual       Actual    % Change
                                    ------------ ------------ --------

REVENUES:
  Video                             $        859 $        853     0.7%
  High-speed Internet                        310          261    18.8%
  Telephone                                   80           29   175.9%
  Advertising sales                           76           79   (3.8%)
  Commercial                                  83           76     9.2%
  Other                                       91           85     7.1%
                                     -----------  -----------
    Total revenues                         1,499        1,383     8.4%
                                     -----------  -----------

COSTS AND EXPENSES:
  Operating (excluding depreciation
   and amortization) (a)                     647          611     5.9%
  Selling, general and
   administrative (excluding stock
   compensation expense) (b)                 312          276    13.0%
                                     -----------  -----------
    Operating costs and expenses             959          887     8.1%
                                     -----------  -----------

    Adjusted EBITDA                          540          496     8.9%
                                     -----------  -----------

    Adjusted EBITDA margin                 36.0%        35.9%
                                     -----------  -----------

  Depreciation and amortization              334          340
  Asset impairment charges                     -            -
  Stock compensation expense                   5            3
  Other operating expenses, net                1            7
                                     -----------  -----------

    Operating income from
     continuing operations                   200          146
                                     -----------  -----------

OTHER EXPENSES:
  Interest expense, net                    (471)        (475)
  Other expense, net                        (30)         (21)
                                     -----------  -----------
                                           (501)        (496)
                                     -----------  -----------

Loss from continuing operations
 before income taxes                       (301)        (350)

Income tax expense                          (59)         (52)
                                     -----------  -----------

Loss from continuing operations            (360)        (402)

Income from discontinued
 operations, net of tax                        -           20
                                     -----------  -----------

Net loss                            $      (360) $      (382)
                                     ===========  ===========

LOSS PER COMMON SHARE, BASIC AND
 DILUTED:
  Loss from continuing operations   $     (0.98) $     (1.27)
                                     ===========  ===========
  Net loss                          $     (0.98) $     (1.20)
                                     ===========  ===========

Weighted average common shares
 outstanding, basic and diluted      367,582,677  317,646,946
                                     ===========  ===========





                                        Six Months Ended June 30,
                                    ----------------------------------
                                        2007         2006
                                       Actual       Actual    % Change
                                    ------------ ------------ --------

REVENUES:
  Video                             $      1,697 $      1,684     0.8%
  High-speed Internet                        606          506    19.8%
  Telephone                                  142           49   189.8%
  Advertising sales                          139          147   (5.4%)
  Commercial                                 164          149    10.1%
  Other                                      176          168     4.8%
                                     -----------  -----------
    Total revenues                         2,924        2,703     8.2%
                                     -----------  -----------

COSTS AND EXPENSES:
  Operating (excluding depreciation
   and amortization) (a)                   1,278        1,215     5.2%
  Selling, general and
   administrative (excluding stock
   compensation expense) (b)                 610          544    12.1%
                                     -----------  -----------
    Operating costs and expenses           1,888        1,759     7.3%
                                     -----------  -----------

    Adjusted EBITDA                        1,036          944     9.7%
                                     -----------  -----------

    Adjusted EBITDA margin                 35.4%        34.9%
                                     -----------  -----------

  Depreciation and amortization              665          690
  Asset impairment charges                     -           99
  Stock compensation expense                  10            7
  Other operating expenses, net                5           10
                                     -----------  -----------

    Operating income from
     continuing operations                   356          138
                                     -----------  -----------

OTHER EXPENSES:
  Interest expense, net                    (935)        (943)
  Other expense, net                        (34)         (10)
                                     -----------  -----------
                                           (969)        (953)
                                     -----------  -----------

Loss from continuing operations
 before income taxes                       (613)        (815)

Income tax expense                         (128)         (60)
                                     -----------  -----------

Loss from continuing operations            (741)        (875)

Income from discontinued
 operations, net of tax                        -           34
                                     -----------  -----------

Net loss                            $      (741) $      (841)
                                     ===========  ===========

LOSS PER COMMON SHARE, BASIC AND
 DILUTED:
  Loss from continuing operations   $     (2.02) $     (2.76)
                                     ===========  ===========
  Net loss                          $     (2.02) $     (2.65)
                                     ===========  ===========

Weighted average common shares
 outstanding, basic and diluted      366,855,427  317,531,492
                                     ===========  ===========



(a) Operating expenses include programming, service, and advertising
 sales expenses.

(b) Selling, general and administrative expenses include general and
 administrative and marketing expenses.

Adjusted EBITDA is a non-GAAP term. See page 7 of this addendum for
 the reconciliation of adjusted EBITDA to net cash flows from
 operating activities as defined by GAAP.

            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
  UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA
        (DOLLARS IN MILLIONS, EXCEPT PER SHARE AND SHARE DATA)



                                       Three Months Ended June 30,
                                    ----------------------------------
                                        2007         2006
                                     Pro Forma    Pro Forma
                                         (a)          (a)     % Change
                                    ------------ ------------ --------

REVENUES:
  Video                             $        858 $        829     3.5%
  High-speed Internet                        310          256    21.1%
  Telephone                                   80           29   175.9%
  Advertising sales                           76           77   (1.3%)
  Commercial                                  83           74    12.2%
  Other                                       91           84     8.3%
                                     -----------  -----------
    Total revenues                         1,498        1,349    11.0%
                                     -----------  -----------

COSTS AND EXPENSES:
  Operating (excluding depreciation
   and amortization) (b)                     647          593     9.1%
  Selling, general and
   administrative (excluding stock
   compensation expense) (c)                 312          270    15.6%
                                     -----------  -----------
    Operating costs and expenses             959          863    11.1%
                                     -----------  -----------

    Adjusted EBITDA                          539          486    10.9%
                                     -----------  -----------

    Adjusted EBITDA margin                 36.0%        36.0%
                                     -----------  -----------

  Depreciation and amortization              333          339
  Stock compensation expense                   5            3
  Other operating expenses, net                1            7
                                     -----------  -----------

    Operating income from
     operations                              200          137
                                     -----------  -----------

OTHER EXPENSES:
  Interest expense, net                    (471)        (459)
  Other expense, net                        (30)         (21)
                                     -----------  -----------
                                           (501)        (480)
                                     -----------  -----------

Loss before income taxes                   (301)        (343)

Income tax expense                          (59)         (51)
                                     -----------  -----------

Net loss                            $      (360) $      (394)
                                     ===========  ===========


LOSS PER COMMON SHARE, BASIC AND
 DILUTED:                           $     (0.98) $     (1.24)
                                     ===========  ===========

Weighted average common shares
 outstanding, basic and diluted      367,582,677  317,646,946
                                     ===========  ===========





                                        Six Months Ended June 30,
                                    ----------------------------------
                                        2007         2006
                                     Pro Forma    Pro Forma
                                         (a)          (a)     % Change
                                    ------------ ------------ --------

REVENUES:
  Video                             $      1,695 $      1,638     3.5%
  High-speed Internet                        606          497    21.9%
  Telephone                                  143           50   186.0%
  Advertising sales                          138          144   (4.2%)
  Commercial                                 164          144    13.9%
  Other                                      175          162     8.0%
                                     -----------  -----------
    Total revenues                         2,921        2,635    10.9%
                                     -----------  -----------

COSTS AND EXPENSES:
  Operating (excluding depreciation
   and amortization) (b)                   1,277        1,178     8.4%
  Selling, general and
   administrative (excluding stock
   compensation expense) (c)                 610          534    14.2%
                                     -----------  -----------
    Operating costs and expenses           1,887        1,712    10.2%
                                     -----------  -----------

    Adjusted EBITDA                        1,034          923    12.0%
                                     -----------  -----------

    Adjusted EBITDA margin                 35.4%        35.0%
                                     -----------  -----------

  Depreciation and amortization              664          680
  Stock compensation expense                  10            7
  Other operating expenses, net                5           10
                                     -----------  -----------

    Operating income from
     operations                              355          226
                                     -----------  -----------

OTHER EXPENSES:
  Interest expense, net                    (935)        (916)
  Other expense, net                        (34)         (10)
                                     -----------  -----------
                                           (969)        (926)
                                     -----------  -----------

Loss before income taxes                   (614)        (700)

Income tax expense                         (109)         (79)
                                     -----------  -----------

Net loss                            $      (723) $      (779)
                                     ===========  ===========


LOSS PER COMMON SHARE, BASIC AND
 DILUTED:                           $     (1.97) $     (2.46)
                                     ===========  ===========

Weighted average common shares
 outstanding, basic and diluted      366,855,427  317,531,492
                                     ===========  ===========



(a) Pro forma results reflect certain sales of cable systems in the
 third quarter of 2006, January 2007 and May 2007 as if they occurred
 as of January 1, 2006. The pro forma statements of operations do not
 include adjustments for financing transactions completed by Charter
 during the periods presented or certain other dispositions of assets
 because those transactions did not significantly impact Charter's
 adjusted EBITDA. However, all transactions completed in the third
 quarter of 2006, January 2007 and May 2007 have been reflected in the
 operating statistics. The pro forma data is based on information
 available to Charter as of the date of this document and certain
 assumptions that we believe are reasonable under the circumstances.
The financial data required allocation of certain revenues and
 expenses and such information has been presented for comparative
 purposes and is not intended to provide any indication of what our
 actual financial position, or results of operations would have been
 had the transactions described above been completed on the dates
 indicated or to project our results of operations for any future
 date.

(b) Operating expenses include programming, service, and advertising
 sales expenses.

(c) Selling, general and administrative expenses include general and
 administrative and marketing expenses.

June 30, 2007. Pro forma revenues were reduced by $1 million and $3
 million for the three and six months ended June 30, 2007,
 respectively. Pro forma operating costs and expenses were reduced by
 $0 and $1 million for the three and six months ended June 30, 2007,
 respectively. Pro forma net loss was reduced by $0 and $18 million
 for the three and six months ended June 30, 2007, respectively.

June 30, 2006. Pro forma revenues were reduced by $34 million and $68
 million for the three and six months ended June 30, 2006,
 respectively. Pro forma operating costs and expenses were reduced by
 $24 million and $47 million for the three and six months ended June
 30, 2006, respectively. Pro forma net loss was increased by $12
 million and was reduced by $62 million for the three and six months
 ended June 30, 2006, respectively.

Adjusted EBITDA is a non-GAAP term. See page 7 of this addendum for
 the reconciliation of adjusted EBITDA to net cash flows from
 operating activities as defined by GAAP.

            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
                UNAUDITED CONSOLIDATED BALANCE SHEETS
                        (DOLLARS IN MILLIONS)


                                              June 30,    December 31,
                                                2007          2006
                                            ------------  ------------

                  ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                $          81 $          60
  Accounts receivable, net of allowance for
   doubtful accounts                                 224           195
  Prepaid expenses and other current assets           58            84
                                            ------------  ------------
    Total current assets                             363           339
                                            ------------  ------------

INVESTMENT IN CABLE PROPERTIES:
  Property, plant and equipment, net               5,121         5,217
  Franchises, net                                  9,201         9,223
                                            ------------  ------------
    Total investment in cable properties,
     net                                          14,322        14,440
                                            ------------  ------------

OTHER NONCURRENT ASSETS                              366           321
                                            ------------  ------------
Total assets                               $      15,051 $      15,100
                                            ============  ============

   LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Accounts payable and accrued expenses    $       1,258 $       1,298
                                            ------------  ------------
    Total current liabilities                      1,258         1,298
                                            ------------  ------------

LONG-TERM DEBT                                    19,576        19,062

NOTE PAYABLE - RELATED PARTY                          61            57

DEFERRED MANAGEMENT FEES - RELATED PARTY              14            14

OTHER LONG-TERM LIABILITIES                          792           692

MINORITY INTEREST                                    195           192

PREFERRED STOCK - REDEEMABLE                           4             4

SHAREHOLDERS' DEFICIT                            (6,849)       (6,219)
                                            ------------  ------------
    Total liabilities and shareholders'
     deficit                               $      15,051 $      15,100
                                            ============  ============

            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
           UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (DOLLARS IN MILLIONS)


                                                      Six Months Ended
                                                          June 30,
                                                      ----------------
                                                        2007     2006
                                                      -------  -------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                           $  (741) $  (841)
  Adjustments to reconcile net loss to net cash
   flows from operating activities:
    Depreciation and amortization                        665      698
    Asset impairment charges                               -       99
    Noncash interest expense                              30       87
    Deferred income taxes                                123       60
    Other, net                                            34       17
  Changes in operating assets and liabilities, net
   of effects from acquisitions and dispositions:
    Accounts receivable                                  (29)      30
    Prepaid expenses and other assets                     26       29
    Accounts payable, accrued expenses and other          10       26
                                                      -------  -------
      Net cash flows from operating activities           118      205
                                                      -------  -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, plant and equipment            (579)    (539)
  Change in accrued expenses related to capital
   expenditures                                          (39)      (9)
  Other, net                                              31       (5)
                                                      -------  -------
    Net cash flows from investing activities            (587)    (553)
                                                      -------  -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings of long-term debt                         7,247    5,830
  Repayments of long-term debt                        (6,727)  (5,858)
  Proceeds from issuance of debt                           -      440
  Payments for debt issuance costs                       (33)     (29)
  Other, net                                               3        -
                                                      -------  -------
    Net cash flows from financing activities             490      383
                                                      -------  -------

NET INCREASE IN CASH AND CASH EQUIVALENTS                 21       35
CASH AND CASH EQUIVALENTS, beginning of period            60       21
                                                      -------  -------
CASH AND CASH EQUIVALENTS, end of period             $    81  $    56
                                                      =======  =======

CASH PAID FOR INTEREST                               $   918  $   791
                                                      =======  =======

NONCASH TRANSACTIONS:
  Cumulative adjustment to Accumulated Deficit for
   the adoption of FIN 48                            $    56  $     -
                                                      =======  =======
  Issuance of debt by Charter Communications
   Operating, LLC                                    $     -  $    37
                                                      =======  =======
  Retirement of Renaissance Media Group LLC debt     $     -  $   (37)
                                                      =======  =======

            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
              UNAUDITED SUMMARY OF OPERATING STATISTICS


                                          Approximate
                          --------------------------------------------
                            Actual            Pro Forma as of
                          ----------- --------------------------------
                           June 30,   March 31,   Dec. 31,   June 30,
                           2007 (a)    2007 (a)   2006 (a)   2006 (a)
                          ----------- ---------- ---------- ----------
Customer Summary:
Customer Relationships:
  Residential (non-bulk)
   analog video customers
   (b)                      5,107,800  5,137,700  5,130,700  5,190,400
  Multi-dwelling (bulk)
   and commercial unit
   customers (c)              269,000    268,400    259,000    249,400
                          ----------- ---------- ---------- ----------
    Total analog video
     customers (b) (c)      5,376,800  5,406,100  5,389,700  5,439,800

  Non-video customers (b)     303,100    300,900    295,800    281,200
                          ----------- ---------- ---------- ----------
    Total customer
     relationships (d)      5,679,900  5,707,000  5,685,500  5,721,000
                          =========== ========== ========== ==========

  Pro forma average
   monthly revenue per
   analog video customer
   (e)                         $92.53     $88.03     $86.59     $82.18
  Pro forma average
   monthly video revenue
   per analog video
   customer (m)                $55.38     $54.04     $52.92     $52.69

  Bundled customers (f)     2,386,500  2,314,900  2,190,300  2,027,600

Revenue Generating Units:
  Analog video customers
   (b) (c)                  5,376,800  5,406,100  5,389,700  5,439,800
  Digital video customers
   (g)                      2,866,000  2,858,400  2,793,500  2,703,300
  Residential high-speed
   Internet customers (h)   2,583,200  2,522,900  2,399,300  2,252,500
  Telephone customers (i)     700,300    572,600    445,800    257,600
                          ----------- ---------- ---------- ----------
    Total revenue
     generating units (j)  11,526,300 11,360,000 11,028,300 10,653,200
                          =========== ========== ========== ==========

Video Cable Services:
Analog Video:
  Estimated homes passed
   (k)                     11,729,100 11,697,300 11,686,000 11,606,100
  Analog video customers
   (b)(c)                   5,376,800  5,406,100  5,389,700  5,439,800
  Estimated penetration of
   analog video homes
   passed (b) (c) (k) (l)         46%        46%        46%        47%
  Pro forma analog video
   customers quarterly net
   gain (loss) (b) (c) (n)   (29,300)     16,400   (41,600)   (29,400)

Digital Video:
  Estimated digital video
   homes passed (k)        11,632,200 11,591,500 11,550,500 11,432,100
  Digital video customers
   (g)                      2,866,000  2,858,400  2,793,500  2,703,300
  Estimated penetration of
   digital homes passed
   (g) (k) (l)                    25%        25%        24%        24%
  Digital penetration of
   analog video customers
   (b) (c) (g) (o)                53%        53%        52%        50%
  Digital set-top
   terminals deployed       4,117,800  4,093,800  4,002,200  3,854,300
  Pro forma digital video
   customers quarterly net
   gain (g) (n)                 7,600     64,900     40,600     23,800

Non-Video Cable Services:
High-Speed Internet
 Services:
  Estimated high-speed
   Internet homes passed
   (k)                     10,887,800 10,848,400 10,832,000 10,661,800
  Residential high-speed
   Internet customers (h)   2,583,200  2,522,900  2,399,300  2,252,500
  Estimated penetration of
   high-speed Internet
   homes passed (h) (k)
   (l)                            24%        23%        22%        21%
  Pro forma average
   monthly high-speed
   Internet revenue per
   high-speed Internet
   customer (m)                $40.45     $40.04     $39.02     $38.30
  Pro forma high-speed
   Internet customers
   quarterly net gain (h)
   (n)                         60,300    123,600     58,800     51,900

Telephone Services:
  Estimated telephone
   homes passed (k)         7,649,100  7,264,000  6,799,300  4,658,500
  Telephone customers (i)     700,300    572,600    445,800    257,600
  Estimated penetration of
   telephone homes passed
   (h) (k) (l)                     9%         8%         7%         6%
  Pro forma average
   monthly telephone
   revenue per telephone
   customer (m)                $42.06     $42.06     $42.25     $43.12
  Pro forma telephone
   customers quarterly net
   gain (i) (n)               127,700    126,800    106,200     66,500


Pro forma operating statistics reflect the sales of cable systems in
 the third quarter of 2006, January 2007 and May 2007 as if such
 transactions had occurred as of the last day of the respective period
 for all periods presented. The pro forma statements of operations do
 not include adjustments for financing transactions completed by
 Charter during the periods presented or certain other dispositions of
 assets because those transactions did not significantly impact
 Charter's adjusted EBITDA. However, all transactions completed in the
 third quarter of 2006, January 2007 and May 2007 have been reflected
 in the operating statistics.

At March 31, 2007 analog video customers, digital video customers,
 high-speed Internet customers and telephone customers were 5,415,400,
 2,862,900, 2,525,900 and 572,600, respectively.

At December 31, 2006 analog video customers, digital video customers,
 high-speed Internet customers and telephone customers were 5,433,300,
 2,808,400, 2,402,200 and 445,800, respectively.

At June 30, 2006 analog video customers, digital video customers,
 high-speed Internet customers and telephone customers were 5,876,100,
 2,889,000, 2,375,100 and 257,600, respectively.

See footnotes to unaudited summary of operating statistics on page 6
 of this addendum.
(a) "Customers" include all persons our corporate billing records show
 as receiving service (regardless of their payment status), except for
 complimentary accounts (such as our employees). In addition, at June
 30, 2007, March 31, 2007, December 31, 2006 and June 30, 2006,
 "customers" include approximately 33,600, 31,700, 35,700 and 55,900
 persons whose accounts were over 60 days past due in payment,
 approximately 4,000, 4,100, 6,000 and 14,300 persons whose accounts
 were over 90 days past due in payment and approximately 1,700, 2,000,
 2,700 and 8,900 of which were over 120 days past due in payment,
 respectively.

(b) "Analog video customers" include all customers who receive video
 services (including those who also purchase high-speed Internet and
 telephone services) but excludes approximately 303,100, 300,900,
 295,800 and 281,200 customer relationships at June 30, 2007, March
 31, 2007, December 31, 2006 and June 30, 2006, respectively, who
 receive high-speed Internet service only or telephone service only
 and who are only counted as high-speed Internet customers or
 telephone customers.

(c) Included within "analog video customers" are those in commercial
 and multi-dwelling structures, which are calculated on an equivalent
 bulk unit ("EBU") basis. EBU is calculated for a system by dividing
 the bulk price charged to accounts in an area by the most prevalent
 price charged to non-bulk residential customers in that market for
 the comparable tier of service. The EBU method of estimating analog
 video customers is consistent with the methodology used in
 determining costs paid to programmers and has been used consistently.
 As we increase our effective analog video prices to residential
 customers without a corresponding increase in the prices charged to
 commercial service or multi-dwelling customers, our EBU count will
 decline even if there is no real loss in commercial service or multi-
 dwelling customers.

(d) "Customer relationships" include the number of customers that
 receive one or more levels of service, encompassing video, Internet
 and telephone services, without regard to which service(s) such
 customers receive. This statistic is computed in accordance with the
 guidelines of the National Cable & Telecommunications Association
 (NCTA) that have been adopted by eleven publicly traded cable
 operators, including Charter.

(e) "Pro forma average monthly revenue per analog video customer" is
 calculated as total quarterly pro forma revenue divided by three
 divided by average pro forma analog video customers during the
 respective quarter.

(f) "Bundled customers" include customers receiving a combination of
 at least two different types of service, including Charter's video
 service, high-speed Internet service or telephone. "Bundled
 customers" do not include customers who only subscribe to video
 service.

(g) "Digital video customers" include all households that have one or
 more digital set-top boxes or cable cards deployed. Included in
 "digital video customers" on June 30, 2007, March 31, 2007, December
 31, 2006 and June 30, 2006 are approximately 3,200, 3,500, 4,700 and
 6,500 customers, respectively, that receive digital video service
 directly through satellite transmission.

(h) "Residential high-speed Internet customers" represent those
 residential customers who subscribe to our high-speed Internet
 service. At June 30, 2007, March 31, 2007, December 31, 2006 and June
 30, 2006, approximately 2,310,000, 2,246,700, 2,130,700 and 1,995,400
 of these high-speed Internet customers, respectively, receive video
 and/or telephone services from us and are included within the
 respective statistics above.

(i) "Telephone customers" include all customers receiving telephone
 service. As of June 30, 2007, March 31, 2007, December 31, 2006 and
 June 30, 2006, approximately 670,400, 547,900, 418,600 and 233,500 of
 these telephone customers, respectively, receive video and/or high-
 speed Internet services from us and are included within the
 respective statistics above.

(j) "Revenue generating units" represent the sum total of all analog
 video, digital video, high-speed Internet and telephone customers,
 not counting additional outlets within one household. For example, a
 customer who receives two types of service (such as analog video and
 digital video) would be treated as two revenue generating units, and
 if that customer added on high-speed Internet service, the customer
 would be treated as three revenue generating units. This statistic is
 computed in accordance with the guidelines of the NCTA that have been
 adopted by eleven publicly traded cable operators, including Charter.

(k) "Homes passed" represent our estimate of the number of living
 units, such as single family homes, apartment units and condominium
 units passed by our cable distribution network in the areas where we
 offer the service indicated. "Homes passed" exclude commercial units
 passed by our cable distribution network. These estimates are updated
 for all periods presented when estimates change.

(l) "Penetration" represents customers as a percentage of homes passed
 for the service indicated.

(m) "Pro forma average monthly revenue per customer" represents
 quarterly pro forma revenue for the service indicated divided by
 three divided by the number of pro forma customers for the service
 indicated during the respective quarter.

(n) "Pro forma quarterly net gain (loss)" represents the pro forma net
 gain or loss in the respective quarter for the service indicated.

(o) "Digital penetration of analog video customers" represents the
 number of digital video customers as a percentage of analog video
 customers.

            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
    UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
                        (DOLLARS IN MILLIONS)


                                          Three Months   Six Months
                                           Ended June     Ended June
                                               30,            30,
                                          ------------- --------------
                                           2007   2006   2007    2006
                                          Actual Actual Actual  Actual
                                          ------ ------ ------- ------

Net cash flows from operating activities  $(148) $  (4) $  118  $ 205
Less: Purchases of property, plant and
 equipment                                 (281)  (298)   (579)  (539)
Less: Change in accrued expenses related
 to capital expenditures                     (7)    (2)    (39)    (9)
                                          ------ ------ ------- ------

Free cash flow                             (436)  (304)   (500)  (343)

Interest on cash pay obligations (a)        452    440     905    856
Purchases of property, plant and
 equipment                                  281    298     579    539
Change in accrued expenses related to
 capital expenditures                         7      2      39      9
Other, net                                   18      9      20     14
Change in operating assets and
 liabilities                                218     74      (7)   (85)
                                          ------ ------ ------- ------

Adjusted EBITDA from continuing and
 discontinued operations (b)              $ 540  $ 519  $1,036  $ 990
                                          ====== ====== ======= ======


                                          Three Months   Six Months
                                           Ended June     Ended June
                                               30,            30,
                                          ------------- --------------
                                           2007   2006   2007    2006
                                           Pro    Pro    Pro     Pro
                                           forma  forma  forma   forma
                                            (c)    (c)    (c)     (c)
                                          ------ ------ ------- ------

Net cash flows from operating activities  $(149) $ (21) $  116  $ 164
Less: Purchases of property, plant and
 equipment                                 (281)  (290)   (579)  (523)
Less: Change in accrued expenses related
 to capital expenditures                     (7)    (2)    (39)    (9)
                                          ------ ------ ------- ------

Free cash flow                             (437)  (313)   (502)  (368)

Interest on cash pay obligations (a)        452    424     905    830
Purchases of property, plant and
 equipment                                  281    290     579    523
Change in accrued expenses related to
 capital expenditures                         7      2      39      9
Other, net                                   18      9      20     14
Change in operating assets and
 liabilities                                218     74      (7)   (85)
                                          ------ ------ ------- ------

Adjusted EBITDA (b)                       $ 539  $ 486  $1,034  $ 923
                                          ====== ====== ======= ======


(a) Interest on cash pay obligations excludes accretion of original
 issue discounts on certain debt securities and amortization of
 deferred financing costs that are reflected as interest expense in
 our consolidated statements of operations.

(b) See page 1 of this addendum for detail of the components included
 within adjusted EBITDA. Adjusted EBITDA from continuing and
 discontinued operations of $519 million and $990 million for the
 three and six months ended June 30, 2006, respectively, includes $23
 million and $46 million of adjusted EBITDA recorded in discontinued
 operations in our consolidated statements of operations.

(c) Pro forma results reflect certain sales of cable systems in the
 third quarter of 2006, January 2007 and May 2007 as if they occurred
 as of January 1, 2006.

The above schedules are presented in order to reconcile adjusted
 EBITDA and free cash flows, both non-GAAP measures, to the most
 directly comparable GAAP measures in accordance with Section 401(b)
 of the Sarbanes-Oxley Act.

            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
                         CAPITAL EXPENDITURES
                        (DOLLARS IN MILLIONS)


                                     Three Months    Six Months Ended
                                     Ended June 30,       June 30,
                                   ----------------- -----------------
                                     2007     2006     2007     2006
                                   -------- -------- -------- --------

Customer premise equipment (a)     $    128 $    128 $    289    $ 258
Scalable infrastructure (b)              51       63      100       97
Line extensions (c)                      25       33       49       59
Upgrade/Rebuild (d)                      12       14       24       23
Support capital (e)                      65       60      117      102
                                   -------- -------- -------- --------

   Total capital expenditures      $    281 $    298 $    579    $ 539
                                   ======== ======== ======== ========


(a) Customer premise equipment includes costs incurred at the customer
 residence to secure new customers, revenue units and additional
 bandwidth revenues. It also includes customer installation costs in
 accordance with SFAS No. 51 and customer premise equipment (e.g.,
 set-top boxes and cable modems, etc.).

(b) Scalable infrastructure includes costs, not related to customer
 premise equipment or our network, to secure growth of new customers,
 revenue units and additional bandwidth revenues or provide service
 enhancements (e.g., headend equipment).

(c) Line extensions include network costs associated with entering new
 service areas (e.g., fiber/coaxial cable, amplifiers, electronic
 equipment, make-ready and design engineering).

(d) Upgrade/rebuild includes costs to modify or replace existing
 fiber/coaxial cable networks, including betterments.

(e) Support capital includes costs associated with the replacement or
 enhancement of non-network assets due to technological and physical
 obsolescence (e.g., non-network equipment, land, buildings and
 vehicles).

CONTACT:
Charter Communications, Inc.
Media Relations:
Anita Lamont, 314-543-2215

Analysts:
Mary Jo Moehle, 314-543-2397