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Charter Reports Second Quarter 2010 Financial and Operating Results

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Strong growth from Internet, phone, commercial services and advertising drives improved results
 

ST. LOUIS, Aug 04, 2010 /PRNewswire via COMTEX/ --

Charter Communications, Inc. (along with its subsidiaries, the "Company" or "Charter") today reported financial and operating results for the three and six months ended June 30, 2010.

Second Quarter Highlights:

  • Compared with the prior year, second quarter revenues grew 4.9% on a pro forma(1) basis and 4.8% on an actual basis, driven by increases in Internet, phone and commercial customers and improved advertising sales.
  • Total average monthly revenue per basic video customer (ARPU) for the second quarter increased 9.4% year-over-year to $124.06, driven by increased sales of The Charter Bundle and advanced services.
  • Second quarter adjusted EBITDA(2) grew 1.3% year-over-year on both a pro forma and actual basis, and net loss attributable to Charter shareholders was reduced to $81 million in the second quarter of 2010 compared to $112 million in the second quarter of 2009.
  • Free cash flow(2) for the first six months of 2010 was $332 million and cash flows from operating activities were $981 million.
  • Internet customer additions doubled compared to the second quarter of 2009, and we continue to reinforce our competitive superiority through expanded DOCSIS 3.0 availability.

    (1) Pro forma results are described below in the "Use of Non-GAAP
     Financial Metrics" section and are provided in the addendum of this
     news release.
    (2) Adjusted EBITDA and free cash flow are defined in the "Use of Non-
     GAAP Financial Metrics" section and are reconciled to consolidated net
     income (loss) and net cash flows from operating activities,
     respectively, in the addendum of this news release.


"We're pleased with our second quarter results as Charter continues to enhance our products; drive deeper Internet, digital and bundled penetration; and invest for future growth," said Mike Lovett, President and Chief Executive Officer. "We're confident that our strategy to strengthen our product and service capabilities while expanding our commercial offerings will further improve our position for long-term success."

Key Operating Results

All of the following customer and ARPU statistics are presented on a pro forma basis. Charter served approximately 12.9 million revenue generating units (RGUs) as of June 30, 2010, an increase of 423,900 RGUs, or about 3.4%, over the prior year. Approximately 59.3% of Charter's residential customers subscribe to a bundle, compared to 55.4% a year ago. Charter's ARPU for the second quarter of 2010 was $124.06, an increase of 9.4% compared to second quarter 2009, primarily as a result of strong triple play and advanced services growth.

Second quarter 2010 customer highlights included the following:

  • Digital video customers increased by approximately 25,500 and basic video customers decreased by approximately 76,600 during the second quarter. Year to date 2010 digital customer additions are six times greater than year ago net additions due to product and service enhancements. Video ARPU was $68.90 for the second quarter of 2010, up 4.8% year-over-year as we continue to increase digital, high definition and digital video recorder (DVR) penetration.
  • Internet customers grew by approximately 21,900 during the second quarter of 2010, more than doubling net additions in the second quarter of 2009. Internet ARPU of $42.20 increased approximately 1.9% compared to the year-ago quarter, as consumer demand for higher Internet speeds and home networking continues.
  • Second quarter 2010 net gains of phone customers were approximately 35,200. Phone penetration reached 15.9% as of June 30, 2010. Phone ARPU of $41.74 decreased approximately 4.2%.

As of June 30, 2010, Charter served approximately 5.3 million customers, and the Company's 12.9 million RGUs were comprised of 4.7 million basic video, 3.3 million digital video, 3.2 million Internet and 1.7 million phone customers.

Second Quarter Results - Actual and Pro Forma

Second quarter revenues were $1.770 billion, up 4.9%, on a pro forma basis and $1.771 billion, up 4.8%, on an actual basis, compared to the year-ago quarter, as the Company continued to grow its Internet, phone, commercial and ad sales businesses.

Second quarter 2010 video revenues were $932 million, essentially flat with the year-ago quarter, as digital and advanced services revenue growth was offset by a decline in basic video customers. Internet revenues were $402 million, up 9.5% year-over-year due to an increased number of customers and ARPU growth. Telephone revenues for the 2010 second quarter were $206 million, a 10.8% increase over second quarter 2009, as growth in the triple play bundle continues. Commercial revenues rose to $121 million, a 10.0% increase year-over-year, reflecting increased sales of the Charter Business Bundle and customer growth. Advertising sales revenues were $72 million for the second quarter of 2010, a 16.1% increase compared to the second quarter of 2009, as a result of improvements across all sectors, primarily the political, automotive and furniture sectors.

Operating costs and expenses totaled $1.124 billion, an increase of 7.0% for the second quarter of 2010, on a pro forma basis and $1.125 billion, an increase of 6.9% on an actual basis, compared to the year-ago period, primarily due to increases in programming expenses, labor costs and expenses related to investments in our commercial business and strategic bandwidth initiatives. Programming expenses increased as a result of annual rate increases while labor costs increased as a result of increases in activity related to our strategic investments and RGU growth.

Adjusted EBITDA for the second quarter of 2010 totaled $646 million, an increase of 1.3% compared to the pro forma and actual results for the year-ago period.

Charter reported $254 million of income from operations in the second quarter of 2010, compared to $301 million in the second quarter of 2009. Income from operations declined as a result of increased amortization related to customer relationships resulting from fresh start accounting.

Net loss attributable to Charter shareholders was $81 million in the second quarter of 2010, compared to a loss of $112 million in the second quarter of 2009. The improvement resulted primarily from a reduction in reorganization costs related to Charter's restructuring in 2009 offset by the decline in income from operations in 2010, the elimination of net loss allocated to non-controlling interest and a loss on extinguishment of debt. Charter reported net loss per common share of $0.72 in the second quarter of 2010, compared with a loss of $0.30 during the same period last year. The increase in loss per common share is a result of a decrease in the number of shares outstanding as a result of recapitalization upon emergence from Chapter 11 proceedings under the U.S. Bankruptcy Code.

Expenditures for property, plant and equipment for the second quarter of 2010 increased to $339 million, compared to second quarter 2009 expenditures of $271 million, as a result of strategic investments including DOCSIS 3.0; bandwidth reclamation projects, such as switched digital video (SDV) launches; and investments made to move into new commercial segments.

Free cash flow for the second quarter of 2010 was $127 million, compared to $175 million in the same period last year. The decrease in free cash flow is primarily due to increases in capital investments to enhance our residential and commercial products and service capabilities.

Net cash flows from operating activities for the second quarter of 2010 were $451 million, compared to $438 million in the second quarter of 2009.

Year to Date Results - Actual and Pro Forma

Pro Forma revenues for the six months ended June 30, 2010 were $3.504 billion, up 4.7% year-over-year, and actual revenues for the six months ended June 30, 2010 were $3.506 billion, up 4.6% year-over-year.

Operating costs and expenses totaled $2.221 billion, an increase of 6.1% for the six months ended June 30, 2010, on a pro forma basis and $2.223 billion, an increase of 6.0%, on an actual basis, compared to the year-ago period.

Adjusted EBITDA for the six months ended June 30, 2010 totaled $1.283 billion, an increase of 2.4%, on a pro forma basisand 2.3% on an actual basis, compared to the year-ago period.

Charter reported $505 million of income from operations for the six months ended June 30, 2010, compared to $635 million for the first six months of 2009.

Net loss attributable to Charter shareholders was $57 million for the six months ended June 30, 2010, compared to a loss of $317 million for the first six months of 2009. Charter reported net loss per common share of $0.51 for the six months ended June 30, 2010, compared to a loss of $0.84 in the same period last year.

Expenditures for property, plant and equipment for the six months ended June 30, 2010 were $649 million, compared to $540 million in the same period last year. The Company expects capital spending for the full year to be approximately $1.2 billion, and intends to deploy SDV to more than 60% of its footprint and DOCSIS 3.0 to approximately half of its footprint by year end 2010.

Free cash flow for the first six months of 2010 was $332 million, compared to $66 million in the same period last year. The increase in free cash flow is primarily due to decreases in interest expense and cash reorganization items and increases in RGU growth, partially offset by increases in investments to enhance our residential and commercial products and service capabilities.

Net cash flows from operating activities for the first six months of 2010 were $981 million, compared to $625 million in the first six months of 2009. The increase in cash flows from operating activities is primarily due to reduced interest expense and cash reorganization costs.

Total principal amount of debt was approximately $12.7 billion as of June 30, 2010. At the end of the second quarter, the Company had availability under its revolving credit facility of approximately $800 million.

Recent Events

The Company recently announced that Craig A. Jacobson has been appointed to the Board of Directors (the "Board"). Mr. Jacobson will serve as a member of the Audit Committee of the Board, joining David C. Merritt and Christopher M. Temple. With the appointment of Mr. Jacobson to the Audit Committee of the Board, Charter believes that it satisfies the requirements for listing its Class A common stock on the NASDAQ Stock Market and expects to complete the listing process in the coming weeks.

Conference Call

The Company will host a conference call on Wednesday, August 4, 2010 at 9:00 a.m. Eastern Time (ET) related to the contents of this release.

The conference call will be webcast live via the Company's website at charter.com. The webcast can be accessed by selecting "Investor & News Center" from the lower menu on the home page. The call will be archived in the "Investor & News Center" in the "Financial Information" section on the left beginning two hours after completion of the call. Participants should go to the call link no later than 10 minutes prior to the start time to register.

Those participating via telephone should dial 866-726-7983 no later than 10 minutes prior to the call. International participants should dial 706-758-7055. The conference ID code for the call is 85580395.

A replay of the call will be available at 800-642-1687 or 706-645-9291 beginning two hours after the completion of the call through the end of business on August 18, 2010. The conference ID code for the replay is 85580395.

Additional Information Available on Website

A slide presentation to accompany the conference call will be available on the "Investor & News Center" of our website at charter.com in the "Financial Information" section. A trending schedule containing historical customer and financial data can also be found in the "Financial Information" section.

Use of Non-GAAP Financial Metrics

The Company uses certain measures that are not defined by Generally Accepted Accounting Principles ("GAAP") to evaluate various aspects of its business. Adjusted EBITDA, adjusted EBITDA less capital expenditures and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net income (loss) or 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 reconciled to consolidated net income (loss) and free cash flow is reconciled to net cash flows from operating activities in the addendum of this news release.

Adjusted EBITDA is defined as consolidated net loss plus net interest expense, income taxes, depreciation and amortization, reorganization items, stock compensation expense, loss on extinguishment of debt, and other expenses, such as special charges and loss on sale or retirement of assets. 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 special items, and is unaffected by the Company's capital structure or investment activities. Adjusted EBITDA less capital expenditures is defined as Adjusted EBITDA minus purchases of property, plant and equipment. Adjusted EBITDA and adjusted EBITDA less capital expenditures are used by management and the Company's Board to evaluate the performance of the Company's business. For this reason, they are significant components of Charter's annual incentive compensation program. However, these measures are limited in that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the cash cost of financing. Management evaluates these costs through other financial measures.

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

The Company believes that adjusted EBITDA and free cash flow provide information useful to investors in assessing Charter's performance and its 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, as presented, includes management fee expenses in the amount of $36 million and $34 million for the three months ended June 30, 2010 and 2009, respectively, which expense amounts are excluded for the purposes of calculating compliance with leverage covenants.

In addition to the actual results for the three and six months ended June 30, 2010 and 2009, we have provided pro forma results in this release for the three and six months ended June 30, 2010 and 2009. We believe these pro forma results facilitate meaningful analysis of the results of operations. Pro forma results in this release reflect certain sales of cable systems in 2009 and 2010 as if they occurred as of January 1, 2009. Pro forma statements of operations for the three and six months ended June 30, 2010 and 2009; and pro forma customer statistics as of December 31, 2009 and June 30, 2009; are provided in the addendum of this news release.

About Charter

Charter Communications, Inc. (OTC Bulletin Board: CCMM) is a leading broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter TV(TM) video entertainment programming, Charter Internet(TM) access, and Charter Phone(TM). Charter Business(R) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, business telephone, video and music entertainment services and wireless backhaul. Charter's advertising sales and production services are sold under the Charter Media(R) brand. More information about Charter can be found at 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 release 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," "tentative," "positioning" 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 other reports or documents that we file from time to time with the SEC, and include, but are not limited to:

  • our ability to sustain and grow revenues and cash flows from operating activities by offering video, high-speed Internet, telephone and other services to residential and commercial customers, and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition and the difficult economic conditions in the United States;
  • the impact of competition from other distributors, including but not limited to incumbent telephone companies, direct broadcast satellite operators, wireless broadband providers, and digital subscriber line ("DSL") providers and competition from video provided over the Internet;
  • general business conditions, economic uncertainty or downturn, high unemployment levels and the significant downturn in the housing sector and overall economy;
  • our ability to obtain programming at reasonable prices or to raise prices to offset, in whole or in part, the effects of higher programming costs (including retransmission consents);
  • our ability to adequately deliver customer service;
  • the effects of governmental regulation on our business;
  • the availability and access, in general, of funds to meet our debt obligations, prior to or when they become due, and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) cash flows from operating activities, (iii) access to the capital or credit markets including through new issuances, exchange offers or otherwise, especially given recent volatility and disruption in the capital and credit markets, or (iv) other sources and our ability to fund debt obligations (by dividend, investment or otherwise) to the applicable obligor of such debt; and
  • our ability to comply with all covenants in our indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a default of our other obligations under cross-default provisions.

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)



                                          Successor   Predecessor
                                        Actual Three  Actual Three
                                        Months Ended  Months Ended
                                           June 30,      June 30,     %
                                             2010          2009     Change
                                          ---------     ---------   ------

    REVENUES:
       Video (a)                                $932          $928     0.4%
       High-speed Internet                       402           367     9.5%
       Telephone (a)                             206           186    10.8%
       Commercial                                121           110    10.0%
       Advertising sales                          72            62    16.1%
       Other (a)                                  38            37     2.7%
          Total revenues                       1,771         1,690     4.8%
                                               -----         -----

    COSTS AND EXPENSES:
       Operating (excluding
        depreciation and
        amortization) (b)                        766           715     7.1%
       Selling, general and
        administrative (excluding
        stock
    compensation expense) (c)                    359           337     6.5%
                                                 ---           ---
          Operating costs and
           expenses                            1,125         1,052     6.9%
                                               -----         -----

          Adjusted EBITDA                        646           638     1.3%
                                                 ---           ---

          Adjusted EBITDA margin                36.5%         37.8%
                                                ----          ----

       Depreciation and
        amortization                             380           329
       Stock compensation expense                  5             6
       Other operating (income)
        expenses, net                              7             2
                                                 ---           ---

         Income from operations                  254           301
                                                 ---           ---

    OTHER INCOME (EXPENSES):
       Interest expense, net
        (excluding unrecorded
             contractual interest
              expense of $206 and $215
              for the
             three and six months ended
              June 30, 2009,
              respectively)                     (219)         (216)
       Reorganization items, net                  (1)         (184)
       Loss on extinguishment of
        debt                                     (34)            -
       Other income (expense), net                 2             -
                                                 ---           ---
                                                (252)         (400)
                                                ----          ----

    Income (loss) before income
     taxes                                         2           (99)

    Income tax expense                           (83)          (60)
                                                 ---           ---

    Consolidated net loss                        (81)         (159)

    Less:  Net loss -
     noncontrolling interest                       -            47
                                                 ---           ---

    Net loss -Charter
     shareholders                               $(81)        $(112)
                                                ====         =====

    Loss per common share,
     basic and diluted:
    Net loss -Charter
     shareholders:                            $(0.72)       $(0.30)
                                              ======        ======

    Weighted average common
     shares outstanding, basic
     and diluted                         113,110,882   378,982,037
                                         ===========   ===========




                                          Successor    Predecessor
                                         Actual Six     Actual Six
                                        Months Ended  Months Ended
                                           June 30,                    %
                                             2010     June 30, 2009  Change
                                          ---------   -------------  ------

    REVENUES:
       Video (a)                              $1,858         $1,856     0.1%
       High-speed Internet                       797            727     9.6%
       Telephone (a)                             404            363    11.3%
       Commercial                                239            217    10.1%
       Advertising sales                         131            116    12.9%
       Other (a)                                  77             73     5.5%
          Total revenues                       3,506          3,352     4.6%
                                               -----          -----

    COSTS AND EXPENSES:
       Operating (excluding
        depreciation and
        amortization) (b)                      1,517          1,428     6.2%
       Selling, general and
        administrative (excluding
        stock
    compensation expense) (c)                    706            670     5.4%
                                                 ---            ---
          Operating costs and
           expenses                            2,223          2,098     6.0%
                                               -----          -----

          Adjusted EBITDA                      1,283          1,254     2.3%
                                               -----          -----

          Adjusted EBITDA margin                36.6%          37.4%
                                                ----           ----

       Depreciation and
        amortization                             749            650
       Stock compensation expense                 10             17
       Other operating (income)
        expenses, net                             19            (48)
                                                 ---            ---

         Income from operations                  505            635
                                                 ---            ---

    OTHER INCOME (EXPENSES):
       Interest expense, net
        (excluding unrecorded
             contractual interest
              expense of $206 and $215
              for the
             three and six months ended
              June 30, 2009,
              respectively)                     (423)          (679)
       Reorganization items, net                  (5)          (325)
       Loss on extinguishment of
        debt                                     (35)             -
       Other income (expense),
        net                                        3             (3)
                                                 ---            ---
                                                (460)        (1,007)
                                                ----         ------

    Income (loss) before
     income taxes                                 45           (372)

    Income tax expense                          (102)          (121)
                                                ----           ----

    Consolidated net loss                        (57)          (493)

    Less:  Net loss -
     noncontrolling interest                       -            176
                                                 ---            ---

    Net loss -Charter
     shareholders                               $(57)         $(317)
                                                ====          =====

    Loss per common share,
     basic and diluted:
    Net loss -Charter
     shareholders:                            $(0.51)        $(0.84)
                                              ======         ======

    Weighted average common
     shares outstanding, basic
     and diluted                         113,066,173    378,541,155
                                         ===========    ===========




    (a)  Certain prior year amounts have been reclassified to conform
    with the 2010 presentation, including the reflection of
    franchise fees, equipment rental and video customer installations
    revenue as video revenue, and telephone regulatory
    fees as telephone revenue, rather than other revenue.

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

    (c)  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 consolidated net income
    (loss) 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)




                                         Successor     Predecessor
                                         Pro Forma       Pro Forma
                                           Three           Three
                                       Months Ended   Months Ended
                                       June 30, 2010   June 30, 2009    %
                                            (a)             (a)       Change
                                       -------------   -------------  ------

    REVENUES:
       Video (b)                                $931            $926     0.5%
       High-speed Internet                       402             367     9.5%
       Telephone (b)                             206             186    10.8%
       Commercial                                121             110    10.0%
       Advertising sales                          72              62    16.1%
       Other (b)                                  38              37     2.7%
          Total revenues                       1,770           1,688     4.9%
                                               -----           -----

    COSTS AND EXPENSES:
       Operating (excluding
        depreciation and
        amortization) (c)                        765             714     7.1%
       Selling, general and
        administrative
        (excluding stock
    compensation expense) (d)                    359             336     6.8%
                                                 ---             ---
          Operating costs and
           expenses                            1,124           1,050     7.0%
                                               -----           -----

          Adjusted EBITDA                        646             638     1.3%
                                                 ---             ---

          Adjusted EBITDA margin                36.5%           37.8%
                                                ----            ----

       Depreciation and
        amortization                             380             328
       Stock compensation
        expense                                    5               6
       Other operating (income)
        expenses, net                              7               2
                                                 ---             ---

         Income from operations                  254             302
                                                 ---             ---

    OTHER INCOME (EXPENSES):
       Interest expense, net
        (excluding unrecorded
             contractual interest
              expense of $206 and $215
              for the
             three and six months
              ended June 30, 2009,
              respectively)                     (219)           (216)
       Reorganization items, net                  (1)           (184)
       Loss on extinguishment of
        debt                                     (34)              -
       Other income (expense),
        net                                        2               -
                                                 ---             ---
                                                (252)           (400)
                                                ----            ----

    Income (loss) before
     income taxes                                  2             (98)

    Income tax expense                           (80)            (60)
                                                 ---             ---

    Consolidated net loss                        (78)           (158)

    Less:  Net loss -
     noncontrolling interest                       -              47
                                                 ---             ---

    Net loss -Charter
     shareholders                               $(78)          $(111)
                                                ====           =====

    Loss per common share,
     basic and diluted:
    Net loss -Charter
     shareholders:                            $(0.69)         $(0.30)
                                              ======          ======

    Weighted average common
     shares outstanding,
     basic and diluted                   113,110,882     378,982,037
                                         ===========     ===========




                                         Successor    Predecessor
                                         Pro Forma
                                            Six      Pro Forma Six
                                       Months Ended  Months Ended
                                          June 30,    June 30, 2009    %
                                          2010 (a)         (a)       Change
                                         ---------    -------------  ------

    REVENUES:
       Video (b)                             $1,856          $1,851     0.3%
       High-speed Internet                      797             727     9.6%
       Telephone (b)                            404             363    11.3%
       Commercial                               239             217    10.1%
       Advertising sales                        131             116    12.9%
       Other (b)                                 77              73     5.5%
          Total revenues                      3,504           3,347     4.7%
                                              -----           -----

    COSTS AND EXPENSES:
       Operating (excluding
        depreciation and
        amortization) (c)                     1,516           1,425     6.4%
       Selling, general and
        administrative
        (excluding stock
    compensation expense) (d)                   705             669     5.4%
                                                ---             ---
          Operating costs and
           expenses                           2,221           2,094     6.1%
                                              -----           -----

          Adjusted EBITDA                     1,283           1,253     2.4%
                                              -----           -----

          Adjusted EBITDA margin               36.6%           37.4%
                                               ----            ----

       Depreciation and
        amortization                            749             649
       Stock compensation
        expense                                  10              17
       Other operating (income)
        expenses, net                            19             (50)
                                                ---             ---

         Income from operations                 505             637
                                                ---             ---

    OTHER INCOME (EXPENSES):
       Interest expense, net
        (excluding unrecorded
             contractual interest
              expense of $206 and $215
              for the
             three and six months
              ended June 30, 2009,
              respectively)                    (423)           (679)
       Reorganization items, net                 (5)           (325)
       Loss on extinguishment of
        debt                                    (35)              -
       Other income (expense),
        net                                       3              (3)
                                                ---             ---
                                               (460)         (1,007)
                                               ----          ------

    Income (loss) before
     income taxes                                45            (370)

    Income tax expense                          (99)           (121)
                                                ---            ----

    Consolidated net loss                       (54)           (491)

    Less:  Net loss -
     noncontrolling interest                      -             176
                                                ---             ---

    Net loss -Charter
     shareholders                              $(54)          $(315)
                                               ====           =====

    Loss per common share,
     basic and diluted:
    Net loss -Charter
     shareholders:                           $(0.48)         $(0.83)
                                             ======          ======

    Weighted average common
     shares outstanding,
     basic and diluted                  113,066,173     378,541,155
                                        ===========     ===========




    (a)  Pro forma results reflect certain sales of cable systems in 2009 and
    2010 as if they occurred as of January 1, 2009.  The pro
    forma statements of operations do not include adjustments for financing
    transactions completed by Charter during the periods
    presented or certain other dispositions or acquisitions of assets because
    those transactions did not significantly impact Charter's
    revenue and operating costs and expenses.  However, all transactions
    completed in 2009 and 2010 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)  Certain prior year amounts have been reclassified to conform with the
    2010 presentation, including the reflection of franchise fees,
    equipment rental and video customer installations revenue as video
    revenue, and telephone regulatory fees as telephone revenue, rather
    than other revenue.

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

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

    June 30, 2010  Pro forma revenues, operating costs and expenses and net
    loss were reduced by $1 million, $1 million and $3 million,
    respectively, for the three months ended June 30, 2010.  Pro forma
    revenues, operating costs and expenses and net loss were reduced by
    $2 million, $2 million and $3 million, respectively, for the six months
    ended June 30, 2010.

    June 30, 2009  Pro forma revenues, operating costs and expenses and net
    loss were reduced by $2 million, $2 million, and $1 million,
    respectively, for the three months ended June 30, 2009.  Pro forma
    revenues, operating costs and expenses and net loss were reduced by
    $5 million, $4 million and $2 million, respectively, for the six months
    ended June 30, 2009.

    Adjusted EBITDA is a non-GAAP term.  See page 7 of this addendum for the
    reconciliation of adjusted EBITDA to consolidated net
    income (loss) as defined by GAAP.


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

                                                           June  December
                                                            30,     31,
                                                            2010      2009
                                                            ----      ----

                           ASSETS

    CURRENT ASSETS:
       Cash and cash equivalents                             $40      $709
       Restricted cash and cash equivalents                   27        45
       Accounts receivable, net of allowance for
        doubtful accounts                                    249       248
       Prepaid expenses and other current assets              57        69
                                                             ---       ---
             Total current assets                            373     1,071
                                                             ---     -----

    INVESTMENT IN CABLE PROPERTIES:
       Property, plant and equipment, net                  6,902     6,833
       Franchises, net                                     5,269     5,272
       Customer relationships, net                         2,167     2,335
       Goodwill                                              951       951
                                                             ---       ---
             Total investment in cable properties, net    15,289    15,391
                                                          ------    ------

    OTHER NONCURRENT ASSETS                                  345       196
                                                             ---       ---

            Total assets                                 $16,007   $16,658
                                                         =======   =======

            LIABILITIES AND SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES:
       Accounts payable and accrued expenses              $1,014      $898
       Current portion of long-term debt                       -        70
                                                             ---       ---
             Total current liabilities                     1,014       968
                                                           -----       ---

    LONG-TERM DEBT                                        12,657    13,252

    OTHER LONG-TERM LIABILITIES                              692       520

    TEMPORARY EQUITY                                          12         1

    SHAREHOLDERS' EQUITY:
       Charter shareholders' equity                        1,632     1,915
       Noncontrolling interest                                 -         2
                                                             ---       ---
         Total shareholders' equity                        1,632     1,917
                                                           -----     -----

              Total liabilities and shareholders' equity $16,007   $16,658
                                                         =======   =======


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



                                                 Three Months Ended
                                                 ------------------
                                                 Successor    Predecessor
                                                  June 30,      June 30,
                                                    2010          2009
                                                 ---------     ---------
    CASH FLOWS FROM OPERATING ACTIVITIES:
       Consolidated net loss                           $(81)        $(159)
       Adjustments to reconcile net loss to
        net cash flows from operating
        activities:
          Depreciation and amortization                 380           329
          Noncash interest expense                       18            11
          Noncash reorganization items, net               -            23
          Loss on extinguishment of debt                 31             -
          Deferred income taxes                          82            57
      Other, net                                          5             7
       Changes in operating assets and
        liabilities, net of effects from
        dispositions
          Accounts receivable                           (26)          (27)
          Prepaid expenses and other assets              12            34
          Accounts payable, accrued expenses and
           other                                         30           163
                                                        ---           ---
              Net cash flows from operating
               activities                               451           438
                                                        ---           ---

    CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of property, plant and
        equipment                                      (339)         (271)
       Change in accrued expenses related to
        capital expenditures                             15             8
       Other, net                                         1            (4)
                                                        ---           ---
              Net cash flows from investing
               activities                              (323)         (267)
                                                       ----          ----

    CASH FLOWS FROM FINANCING ACTIVITIES:
       Borrowings of long-term debt                   1,625             -
       Repayments of long-term debt                  (1,773)          (17)
       Repayment of preferred stock                    (138)            -
       Payments for debt issuance costs                 (28)            -
       Other, net                                        (1)            2
                                                        ---           ---
              Net cash flows from financing
               activities                              (315)          (15)
                                                       ----           ---

    NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                  (187)          156
    CASH AND CASH EQUIVALENTS, beginning
     of period                                          254           836
                                                        ---           ---
    CASH AND CASH EQUIVALENTS, end of
     period                                             $67          $992
                                                        ===          ====

    CASH PAID FOR INTEREST                             $185          $310
                                                       ====          ====


                                                 Six Months Ended
                                                 ----------------
                                                 Successor   Predecessor
                                                  June 30,     June 30,
                                                     2010        2009
                                                 ---------    ---------
    CASH FLOWS FROM OPERATING ACTIVITIES:
       Consolidated net loss                           $(57)       $(493)
       Adjustments to reconcile net loss to
        net cash flows from operating
        activities:
          Depreciation and amortization                 749          650
          Noncash interest expense                       36           26
          Noncash reorganization items, net               -          131
          Loss on extinguishment of debt                 32            -
          Deferred income taxes                          98          116
      Other, net                                         11           23
       Changes in operating assets and
        liabilities, net of effects from
        dispositions
          Accounts receivable                            (1)           7
          Prepaid expenses and other assets              12          (44)
          Accounts payable, accrued expenses and
           other                                        101          209
                                                        ---          ---
              Net cash flows from operating
               activities                               981          625
                                                        ---          ---

    CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of property, plant and
        equipment                                      (649)        (540)
       Change in accrued expenses related to
        capital expenditures                              -          (19)
       Other, net                                        (4)           -
                                                        ---          ---
              Net cash flows from investing
               activities                              (653)        (559)
                                                       ----         ----

    CASH FLOWS FROM FINANCING ACTIVITIES:
       Borrowings of long-term debt                   1,625            -
       Repayments of long-term debt                  (2,440)         (34)
       Repayment of preferred stock                    (138)           -
       Payments for debt issuance costs                 (59)           -
       Other, net                                        (3)           -
                                                        ---          ---
              Net cash flows from financing
               activities                            (1,015)         (34)
                                                     ------          ---

    NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                  (687)          32
    CASH AND CASH EQUIVALENTS, beginning of
     period                                             754          960
                                                        ---          ---
    CASH AND CASH EQUIVALENTS, end of
     period                                             $67         $992
                                                        ===         ====

    CASH PAID FOR INTEREST                             $337         $531
                                                       ====         ====


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


                                                         Approximate as of
                                                         -----------------
                                                               Actual
                                                               ------
                                                              June 30,
                                                              2010 (a)
                                                              --------

    Customer Summary:
    Customer Relationships:
      Residential (non-bulk) basic video customers (b)           4,466,600
      Multi-dwelling (bulk) and commercial unit
       customers (c)                                               249,900
                                                                   -------
          Total basic video customers                            4,716,500

      Non-video customers (b)                                      538,900
                                                                   -------
          Total customer relationships (d)                       5,255,400
                                                                 =========

      Pro forma average monthly revenue per basic video
       customer (e)                                                $124.06
      Pro forma average monthly video revenue per basic
       video customer (f)                                           $68.90

      Residential bundled customers (g)                          2,969,800

    Revenue Generating Units:
      Basic video customers (b) (c)                              4,716,500
      Digital video customers (h)                                3,337,500
      Residential high-speed Internet customers (i)              3,187,900
      Residential telephone customers (j)                        1,658,100
                                                                 ---------
          Total revenue generating units (k)                    12,900,000
                                                                ==========

    Total Video Services:
      Estimated homes passed (l)                                11,989,900
      Basic video customers  (b)(c)                              4,716,500
      Estimated penetration of basic homes passed (b)
       (c) (l) (m)                                                    39.3%
      Pro forma basic video customers quarterly net loss
       (b) (c) (n)                                                 (76,600)

      Digital video customers (h)                                3,337,500
      Digital penetration of basic video customers (b)
       (c) (h) (o)                                                    70.8%
      Digital set-top terminals deployed                         4,974,800
      Pro forma digital video customers quarterly net
       gain (h) (n)                                                 25,500

    High-Speed Internet Services:
      Estimated high-speed Internet homes passed (l)            11,468,300
      Residential high-speed Internet customers (i)              3,187,900
      Estimated penetration of high-speed Internet
       homes passed (i) (l) (m)                                       27.8%
      Pro forma average monthly high-speed Internet
       revenue per high-speed Internet customer (f)                 $42.20
      Pro forma high-speed Internet customers quarterly
       net gain (i) (n)                                             21,900

    Telephone Services:
      Estimated telephone homes passed (l)                      10,434,800
      Residential telephone customers (j)                        1,658,100
      Estimated penetration of telephone homes passed
       (i) (l) (m)                                                    15.9%
      Pro forma average monthly telephone revenue per
       telephone customer (f)                                       $41.74
      Pro forma telephone customers quarterly net gain
       (j) (n)                                                      35,200




                                                         Approximate as of
                                                         -----------------
                                                             Pro Forma
                                                             ---------
                                                             March 31,
                                                              2010 (a)
                                                              --------

    Customer Summary:
    Customer Relationships:
      Residential (non-bulk) basic video customers (b)           4,540,700
      Multi-dwelling (bulk) and commercial unit
       customers (c)                                               252,400
                                                                   -------
          Total basic video customers                            4,793,100

      Non-video customers (b)                                      518,200
                                                                   -------
          Total customer relationships (d)                       5,311,300
                                                                 =========

      Pro forma average monthly revenue per basic video
       customer (e)                                                $120.55
      Pro forma average monthly video revenue per basic
       video customer (f)                                           $67.90

      Residential bundled customers (g)                          2,965,800

    Revenue Generating Units:
      Basic video customers (b) (c)                              4,793,100
      Digital video customers (h)                                3,312,000
      Residential high-speed Internet customers (i)              3,166,000
      Residential telephone customers (j)                        1,622,900
                                                                 ---------
          Total revenue generating units (k)                    12,894,000
                                                                ==========

    Total Video Services:
      Estimated homes passed (l)                                11,940,000
      Basic video customers  (b)(c)                              4,793,100
      Estimated penetration of basic homes passed (b)
       (c) (l) (m)                                                    40.1%
      Pro forma basic video customers quarterly net loss
       (b) (c) (n)                                                 (23,300)

      Digital video customers (h)                                3,312,000
      Digital penetration of basic video customers (b)
       (c) (h) (o)                                                    69.1%
      Digital set-top terminals deployed                         4,934,000
      Pro forma digital video customers quarterly net
       gain (h) (n)                                                 95,800

    High-Speed Internet Services:
      Estimated high-speed Internet homes passed (l)            11,424,500
      Residential high-speed Internet customers (i)              3,166,000
      Estimated penetration of high-speed Internet
       homes passed (i) (l) (m)                                       27.7%
      Pro forma average monthly high-speed Internet
       revenue per high-speed Internet customer (f)                 $42.31
      Pro forma high-speed Internet customers quarterly
       net gain (i) (n)                                            103,700

    Telephone Services:
      Estimated telephone homes passed (l)                      10,363,900
      Residential telephone customers (j)                        1,622,900
      Estimated penetration of telephone homes passed
       (i) (l) (m)                                                    15.7%
      Pro forma average monthly telephone revenue per
       telephone customer (f)                                       $41.68
      Pro forma telephone customers quarterly net gain
       (j) (n)                                                      66,900




                                                Approximate as of
                                                -----------------
                                                    Pro Forma
                                                    ---------
                                                 December
                                                    31,          June 30,
                                                 2009 (a)        2009 (a)
                                                 --------        --------

    Customer Summary:
    Customer Relationships:
      Residential (non-bulk) basic video
       customers (b)                             4,555,700       4,662,100
      Multi-dwelling (bulk) and commercial
       unit customers (c)                          260,700         257,200
                                                   -------         -------
          Total basic video customers            4,816,400       4,919,300

      Non-video customers (b)                      493,100         431,500
                                                   -------         -------
          Total customer relationships (d)       5,309,500       5,350,800
                                                 =========       =========

      Pro forma average monthly revenue per
       basic video customer (e)                    $117.53         $113.39
      Pro forma average monthly video revenue
       per basic video customer (f)                 $66.34          $65.74

      Residential bundled customers (g)          2,889,500       2,821,700

    Revenue Generating Units:
      Basic video customers (b) (c)              4,816,400       4,919,300
      Digital video customers (h)                3,216,200       3,150,100
      Residential high-speed Internet
       customers (i)                             3,062,300       2,958,100
      Residential telephone customers (j)        1,556,000       1,448,600
                                                 ---------       ---------
          Total revenue generating units (k)    12,650,900      12,476,100
                                                ==========      ==========

    Total Video Services:
      Estimated homes passed (l)                11,887,800      11,817,300
      Basic video customers  (b)(c)              4,816,400       4,919,300
      Estimated penetration of basic homes
       passed (b) (c) (l) (m)                         40.5%           41.6%
      Pro forma basic video customers quarterly
       net loss (b) (c) (n)                        (56,700)        (73,000)

      Digital video customers (h)                3,216,200       3,150,100
      Digital penetration of basic video
       customers (b) (c) (h) (o)                      66.8%           64.0%
      Digital set-top terminals deployed         4,791,600       4,598,400
      Pro forma digital video customers
       quarterly net gain (h) (n)                   43,300          (5,800)

    High-Speed Internet Services:
      Estimated high-speed Internet homes
       passed (l)                               11,360,200      11,236,200
      Residential high-speed Internet
       customers (i)                             3,062,300       2,958,100
      Estimated penetration of high-speed
       Internet homes passed (i) (l) (m)              27.0%           26.3%
      Pro forma average monthly high-speed
       Internet revenue per high-speed
       Internet customer (f)                        $41.48          $41.41
      Pro forma high-speed Internet customers
       quarterly net gain (i) (n)                   51,800          10,600

    Telephone Services:
      Estimated telephone homes passed (l)      10,312,700      10,163,100
      Residential telephone customers (j)        1,556,000       1,448,600
      Estimated penetration of telephone homes
       passed (i) (l) (m)                             15.1%           14.3%
      Pro forma average monthly telephone
       revenue per telephone customer (f)           $42.54          $43.57
      Pro forma telephone customers quarterly
       net gain (j) (n)                             56,200          52,300




    Pro forma operating statistics reflect the sales and acquisitions of
    cable systems in 2009 and 2010 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 or acquisitions of assets
    because those transactions did not significantly impact Charter's
    revenue and operating costs and expenses.
    However, all transactions completed in 2009 and 2010 have been
    reflected in the operating statistics.

    At March 31, 2010 actual basic video customers, digital video
    customers, high-speed Internet customers and telephone customers
    were 4,800,600, 3,313,900,
    3,166,000, and 1,622,900, respectively.

    At December 31, 2009, actual basic video customers, digital video
    customers, high-speed Internet customers and telephone customers
    were 4,824,000, 3,218,100,
    3,062,300, and 1,556,000, respectively.

    At June 30, 2009, actual basic video customers, digital video
    customers, high-speed Internet customers and telephone customers
    were 4,929,900, 3,152,000,
    2,957,700, and 1,448,600, respectively.

    See footnotes to unaudited summary of operating statistics

    (a) Our billing systems calculate the aging of customer accounts
    based on the monthly billing cycle for each account.  On that basis,
    at June 30, 2010,
    March 31, 2010, December 31, 2009, and June 30, 2009 customers
    include approximately 20,800, 16,200, 25,900, and 37,200 persons,
    respectively,
    whose accounts were over 60 days past due in payment, approximately
    2,500, 1,600, 3,500, and 6,200 persons, respectively, whose accounts
    were
    over 90 days past due in payment and approximately 1,300, 1,700,
    2,200, and 2,900 persons, respectively, whose accounts were over
    120 days past due in payment.

    (b)  "Basic video customers" include all residential customers who
    receive video services (including those who also purchase high-
    speed Internet and
    telephone services) but excludes approximately 538,900, 518,200,
    493,100, and 431,500 customer relationships at June 30, 2010, March
    31, 2010,
    December 31, 2009, and June 30, 2009, respectively, who receive high-
    speed Internet service only, telephone service only, or both high-
    speed
    Internet service and telephone service and who are only counted as
    high-speed Internet customers or telephone customers.

    (c)  Included within "basic video customers" are those in commercial
    and multi-dwelling structures, which are calculated on an
    equivalent bulk
    unit ("EBU") basis.  EBUs are calculated by dividing the bulk price
    charged to accounts in an area by the published rate charged to non-
    bulk residential
    customers in that market for the comparable tier of service.  This
    EBU method of estimating basic video customers is consistent with
    the methodology
    used in determining costs paid to programmers and is consistent with
    the methodology used by other multiple system operators (MSOs).  As
    we increase
    our published video rates 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 the
    publicly traded cable operators, including Charter.

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

    (f) "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.

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

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

    (i)  "Residential high-speed Internet customers" represent those
    residential customers who subscribe to our high-speed Internet
    service.  At June 30, 2010,
    March 31, 2010, December 31, 2009, and June 30, 2009, approximately
    2,789,900, 2,784,000, 2,705,300, and 2,644,800 of these high-speed
    Internet
    customers, respectively, receive video and/or telephone services
    from us and are included within the respective statistics above.

    (j)  "Residential telephone customers" represent those residential
    customers who subscribe to our telephone service.  As of June 30,
    2010,
    March 31, 2010, December 31 2009, and June 30, 2009 approximately
    1,613,600, 1,580,000, 1,508,200, and 1,412,300 of these telephone
    customers, respectively, receive video and/or high-speed Internet
    services from us and are included within the respective statistics
    above.

    (k)  "Revenue generating units" represent the sum total of all basic
    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 basic 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.

    (l)  "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.

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

    (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 basic video customers" represents the
    number of digital video customers as a percentage of basic video
    customers.

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




                                 Actual Three Months Ended
                                 -------------------------
                             Successor           Predecessor
                              June 30,             June 30,
                                   2010                 2009
                             ---------            ---------

    Consolidated net
     loss                          $(81)               $(159)
            Interest
    Plus:   expense, net           219                  216
      Income tax expense            83                   60
      Depreciation and
       amortization                380                  329
      Stock compensation
       expense                       5                    6
      Reorganization
       items, net                    1                  184
      Loss on
       extinguishment of
       debt                         34                    -
      Other, net                     5                    2
                                   ---                  ---

    Adjusted EBITDA (b)            646                  638
            Purchases of
            property,
            plant and
    Less:   equipment             (339)                (271)
                                 -----

    Adjusted EBITDA
     less capital
     expenditures                 $307                 $367
                                  ====                 ====



    Net cash flows from
     operating
     activities                   $451                 $438
            Purchases of
            property,
            plant and
    Less:   equipment             (339)                (271)
      Change in accrued
       expenses related
       to capital
       expenditures                 15                    8
                                   ---                  ---

    Free cash flow                $127                 $175
                                  ====                 ====



                                       Actual Six Months Ended
                                       -----------------------
                                       Successor      Predecessor
                                        June 30,        June 30,
                                          2010            2009
                                       ---------       ---------

    Consolidated net loss                    $(57)          $(493)
    Plus:  Interest expense, net             423             679
      Income tax expense                      102             121
      Depreciation and amortization           749             650
      Stock compensation expense              10              17
      Reorganization items, net                5             325
      Loss on extinguishment of debt          35               -
      Other, net                              16             (45)
                                             ---             ---

    Adjusted EBITDA (b)                    1,283           1,254
            Purchases of property,
    Less:   plant and equipment             (649)           (540)


    Adjusted EBITDA less capital
     expenditures                           $634            $714
                                            ====            ====



    Net cash flows from operating
     activities                             $981            $625
            Purchases of property,
    Less:   plant and equipment             (649)           (540)
      Change in accrued expenses
       related to capital expenditures         -             (19)
                                             ---             ---

    Free cash flow                          $332             $66
                                            ====             ===



                                      Pro Forma Three Months
                                             Ended (a)
                                      ----------------------
                                Successor           Predecessor
                                 June 30,             June 30,
                                      2010             2009
                                ---------            ---------

    Consolidated net
     loss                            $(78)               $(158)
            Interest expense,
    Plus:   net                       219                  216
      Income tax expense               80                   60
      Depreciation and
       amortization                   380                  328
      Stock compensation
       expense                          5                    6
      Reorganization
       items, net                       1                  184
      Loss on
       extinguishment of
       debt                            34                    -
      Other, net                        5                    2
                                      ---                  ---

    Adjusted EBITDA (b)               646                  638
            Purchases of
            property, plant and
    Less:   equipment                (339)                (271)
                                    -----

    Adjusted EBITDA
     less capital
     expenditures                    $307                 $367
                                     ====                 ====



    Net cash flows from
     operating
     activities                      $451                 $438
            Purchases of
            property, plant and
    Less:   equipment                (339)                (271)
      Change in accrued
       expenses related
       to capital
       expenditures                    15                    8
                                      ---                  ---

    Free cash flow                   $127                 $175
                                     ====                 ====


                                Pro Forma Six Months Ended
                                            (a)
                                --------------------------
                            Successor           Predecessor
                             June 30,             June 30,
                                  2010            2009
                            ---------            ---------

    Consolidated net loss         $(54)               $(491)
            Interest
    Plus:   expense, net          423                  679
      Income tax expense           99                  121
      Depreciation and
       amortization               749                  649
      Stock compensation
       expense                     10                   17
      Reorganization items,
       net                          5                  325
      Loss on
       extinguishment of
       debt                        35                    -
      Other, net                   16                  (47)
                                  ---                  ---

    Adjusted EBITDA (b)         1,283                1,253
            Purchases of
            property, plant
    Less:   and equipment        (649)                (540)


    Adjusted EBITDA less
     capital expenditures        $634                 $713
                                 ====                 ====



    Net cash flows from
     operating activities        $981                 $624
            Purchases of
            property, plant
    Less:   and equipment        (649)                (540)
      Change in accrued
       expenses related to
       capital expenditures         -                  (19)
                                  ---                  ---

    Free cash flow               $332                  $65
                                 ====                  ===


    (a)  Pro forma results reflect certain sales of cable systems in 2009
    and 2010 as if they occurred as of January 1, 2009.

    (b) See page 1 of this addendum for detail of the components included
    within adjusted EBITDA.

    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 Ended
                                       ------------------
                                Successor           Predecessor
                                 June 30,             June 30,
                                   2010                 2009
                                ---------            ---------

    Customer premise
     equipment (a)                    $140                 $141
    Scalable
     infrastructure (b)                108                   50
    Line extensions (c)                 22                   17
    Upgrade/Rebuild (d)                  7                    9
    Support capital (e)                 62                   54
                                       ---                  ---

       Total capital
        expenditures (f)              $339                 $271
                                      ====                 ====


                                       Six Months Ended
                                       ----------------
                               Successor           Predecessor
                                June 30,             June 30,
                                  2010                 2009
                               ---------            ---------

    Customer premise
     equipment (a)                   $296                 $308
    Scalable
     infrastructure (b)               195                   95
    Line extensions (c)                38                   31
    Upgrade/Rebuild (d)                16                   14
    Support capital (e)               104                   92
                                      ---                  ---

       Total capital
        expenditures (f)             $649                 $540
                                     ====                 ====


    (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 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).

    (f) Total capital expenditures includes $34 million and $19 million
    of capital expenditures related to
    commercial services for the three months ended June 30, 2010 and
    2009, respectively, and $52
     million and $35 million for the six months ended June 30, 2010 and
     2009, respectively.

SOURCE Charter Communications, Inc.