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Charter Reports Third-Quarter 2006 Financial and Operating Results

Click here to view the Third Quarter Financial Addendum.

ST. LOUIS--(BUSINESS WIRE)--Oct. 31, 2006--Charter Communications, Inc. (NASDAQ: CHTR) (along with its subsidiaries, the "Company" or "Charter") today reported its third-quarter 2006 financial results.

"During the third quarter we increased marketing spend targeting high-value relationships, and accelerated phone service launches to enable bundled service offerings and to generate improved revenue growth," said Neil Smit, president and chief executive officer. "We're building momentum, and I believe the operating improvements we've implemented over the past year, along with ongoing refinements to our geographic footprint, have positioned us for continued growth," said Mr. Smit.

  • Third-quarter revenues grew 10.9% year over year on a pro forma basis, primarily driven by strong high-speed Internet (HSI) and phone performance.


  • Quarterly adjusted EBITDA increased 6.9% compared to the third quarter of 2005 on a pro forma basis. (Pro forma 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.)


  • During the third quarter of 2006, Charter completed sales of geographically non-strategic cable operating systems (the "Third Quarter 2006 Asset Sales"), serving a total of 390,300 analog video customers, and signed an agreement to sell additional systems serving 33,000 analog video customers. Upon closing of the asset sale signed in the third quarter of 2006, Charter expects a 45% headend reduction and an increase in customers per headend of approximately 67% compared to year end 2005.


  • On a pro forma basis, bundled customers increased 19% compared to third quarter 2005 and revenue generating units (RGUs) increased 210,300 during the third quarter of 2006, a 20% increase compared to the 175,500 RGUs added in the third quarter of 2005.


  • Telephone customers climbed to 339,600 as of September 30, 2006, up more than 30% from June 30, 2006. Telephone homes passed grew to approximately 5.9 million as of September 30, 2006.

Pro forma results in this release reflect the Third Quarter 2006 Asset Sales, the acquisition in January 2006 and the sale in July 2005, as if they had occurred as of January 1, 2005, for the statement of operations data and other financial data, and as if such transactions had occurred as of the last day of the respective period for the operating data. Pro forma income statements for the three and nine months ended September 30, 2005 and 2006 and pro forma customer statistics are provided in the addendum of this news release.

Pro Forma Operating Results

Charter's consistent focus on targeted marketing, bundled service offerings, and continued deployment of telephone service drove RGU growth. As of the end of the third quarter 2006, 37% of Charter's customers subscribed to a bundled package, up from 31% a year ago. Charter added a net 210,300 RGUs during the third quarter on a pro forma basis including:

  • HSI customers increased by approximately 88,100.


  • Telephone customers increased by approximately 82,000.


  • Digital video customers increased by approximately 49,400.


  • Analog video customers decreased by approximately 9,200.

As of September 30, 2006, Charter served approximately 10,927,300 RGUs, comprised of 5,476,600 analog video, 2,767,900 digital video, 2,343,200 HSI, and 339,600 telephone customers.

Total average monthly revenue per video customer (ARPU) increased 11.9%, with video ARPU increasing 5.6% and HSI ARPU increasing 4.3%, for the third quarter of 2006, as compared to the same period in 2005.

Strong telephone growth continued, with total customers increasing over 30% since the second quarter of 2006. During the third quarter, Charter added 1.2 million telephone homes passed, bringing total phone homes passed to approximately 5.9 million as of September 30, 2006. The Company expects to pass between 6.5 million and 7 million homes with telephone service by year-end 2006. In markets where telephone service is available, customers take advantage of bundled offers, and Charter generally experiences higher customer retention, increased video and HSI customer growth rates, higher revenue per video customer, and improved customer satisfaction, as customers take advantage of Charter's bundled product offerings.

Third-Quarter Pro Forma Results

On a pro forma basis, third quarter revenues increased 10.9%, or $135 million, to $1.377 billion, resulting from both a larger customer base versus the prior year and increases in average revenue per customer. Pro forma HSI revenues increased 21.0%, up $46 million year over year, and telephone revenues more than tripled to $37 million from $11 million in the third quarter of 2005. Commercial and advertising revenues each increased by $10 million year over year on a pro forma basis, or 15.2% and 14.1%, respectively. Video revenues increased 4.5%, up $36 million year over year on a pro forma basis.

Third-quarter 2006 pro forma operating costs and expenses increased $105 million, or 13.0%, to $914 million, reflecting continued emphasis on building and accelerating rollout of our phone product and expenditures to support higher rates of customer growth and retention, as well as higher programming costs associated with annual rate increases and higher advanced services purchases.

Third-Quarter GAAP Results

These results include the operations of the assets sold in the third quarter of 2006. As discussed below, the operating results of the West Virginia and Virginia cable systems are included in discontinued operations.

Third-quarter 2006 revenues were $1.388 billion, a year over year increase of 9.7%, and operating costs and expenses from continuing operations increased 11.8%, to $921 million.

Operating income from continuing operations increased by $12 million year over year, to $66 million for the third quarter of 2006. Revenue growth exceeded operating costs and expense growth during the period by $26 million; depreciation and amortization expenses declined by $28 million year over year; and the year over year comparison benefited from the $19 million hurricane asset retirement loss in 2005. These improvements were partially offset by $60 million of asset impairment charges for systems that met the criteria of assets held for sale in the third quarter of 2006.

Net loss applicable to common stock and loss per common share for the third quarter of 2006 were $133 million and 41 cents, respectively. For the third quarter of 2005, Charter reported net income applicable to common stock of $75 million, and earnings per common share were 24 cents and 9 cents on a basic and fully diluted basis, respectively. The $208 million change to net income (loss) applicable to common stock was primarily due to a $362 million lower gain on extinguishment of debt related to the September 2006 debt exchange compared to the gain related to the September 2005 debt exchanges and a $40 million increase in income tax expense, partially offset by a $196 million increase in income from discontinued operations.

Asset Sales

In the third quarter of 2006, the Company closed five separate sales of geographically non-strategic cable television systems, serving approximately 390,300 analog video customers, for a total of approximately $1 billion. In July 2006, Charter completed the sales of systems in West Virginia and Virginia, serving approximately 239,700 analog video customers, to Cebridge Acquisition Co., LLC (the "Cebridge transaction") and systems in Illinois and Kentucky, serving approximately 73,300 analog video customers, to NewWave Communications (the "NewWave transaction"). In September 2006, Charter completed the sale of systems in northern and southeastern Nevada, and in Colorado, New Mexico, and Utah, serving 43,000 analog video customers, to subsidiaries of Orange Broadband Holding Company, LLC (the "Orange transaction"). Additional sales were completed during the third quarter serving a total of 34,300 analog video customers in South Carolina, Oklahoma, Kansas, Missouri and Texas.

Charter recorded a gain on the sale related to the Cebridge transaction of approximately $200 million in the third quarter of 2006. The assets sold in the New Wave transaction and the Orange transaction were written down to fair value less estimated costs to sell, resulting in asset impairment charges during the first quarter of 2006 of approximately $99 million. The Company also recorded $60 million of asset impairment charges related to systems that met the criteria of assets held for sale during the third quarter of 2006.

Discontinued Operations

The results of operations for the West Virginia and Virginia cable systems, which were sold to Cebridge in July 2006, have been presented as discontinued operations, net of tax, for the three months and nine months ended September 30, 2006 and 2005, respectively. Charter has determined that these systems comprise operations and cash flows that, for financial reporting purposes, meet the criteria for discontinued operations in accordance with Generally Accepted Accounting Principles (GAAP). Income from discontinued operations, net of tax, for the third quarter of 2006 and 2005 was $200 million and $4 million, respectively. Income from discontinued operations for the three months and nine months ended September 30, 2006 and 2005 was $234 million and $33 million, respectively.

Liquidity

Net cash flows provided by operating activities for the third quarter of 2006 were $143 million, compared to net cash used in operating activities of $63 million for the year-ago quarter. The increase is primarily the result of the $261 million increase in cash provided by operating assets and liabilities, partially offset by an increase in interest on cash pay obligations of $57 million.

Net cash flows provided by operating activities for the nine months ended September 2006 were $348 million, compared to $118 million for the year-ago period. The increase is primarily the result of the $368 million increase in cash provided by operating assets and liabilities, partially offset by an increase in interest on cash pay obligations of $156 million.

Adjusted EBITDA totaled $467 million for the third quarter of 2006, an increase of 5.9%, compared with the year-ago quarter. Adjusted EBITDA totaled $1.411 billion for the nine months ended September 30, 2006, a 3.3% increase compared with the year-ago period.

Pro forma adjusted EBITDA totaled $463 million for the third quarter of 2006, an increase of 6.9%, compared with the year-ago quarter. Pro forma adjusted EBITDA totaled $1.389 billion for the nine months ended September 30, 2006, a 3.6% increase compared with the year-ago period.

Expenditures for property, plant, and equipment for the third quarter of 2006 were $256 million, compared to third-quarter 2005 expenditures of $273 million. The decrease in capital expenditures reflects decreases in spending on support capital and line extensions, partially offset by a year over year increase in spending for customer premise equipment. For the nine months ended September 30, 2006, capital expenditures were $795 million, compared to $815 million for the same year-ago period. Increases in spending on customer premise equipment and scalable infrastructure were offset by decreases in support capital and line extensions. During 2006, Charter expects capital expenditures to total approximately $1.1 billion.

Charter reported negative free cash flow of $234 million for the third quarter of 2006, compared to negative free cash flow of $198 million for the same year-ago quarter. Growth in revenues in excess of operating costs and expenses, and decreased capital expenditures, were offset by increased interest on cash-pay obligations. For the nine months ended September 30, 2006, Charter reported negative free cash flow of $639 million, compared to negative free cash flow of $524 million for the year-ago period. The increase was primarily driven by higher interest on cash-pay obligations, partially offset by revenue growth that exceeded growth in operating costs and expenses by $21 million and a $20 million decrease in capital expenditures.

As of September 30, 2006, Charter had $18.8 billion in long-term debt and $85 million of cash on hand. Charter's total potential availability under its credit facilities as of September 30, 2006 was approximately $1.6 billion, although the actual availability at that time was limited to $673 million due to covenant restrictions.

Debt and Convertible Note Exchanges

In September 2006, Charter Communications Holdings, LLC ("Charter Holdings") and its wholly owned subsidiaries, CCH I, LLC ("CCH I") and CCH II, LLC ("CCH II"), completed the exchange of approximately $797 million in total principal amount of outstanding debt securities of Charter Holdings. Holders of Charter Holdings notes due in 2009-2010 tendered $308 million principal amount of notes for $250 million principal amount of new 10.25% CCH II notes due 2013 and $37 million principal amount of 11% CCH I notes due 2015. Holders of Charter Holdings notes due 2011-2012 tendered $490 million principal amount of notes for $425 million principal amount of 11% CCH I notes due 2015. Also in September 2006, CCHC, LLC ("CCHC") and CCH II completed the exchange of $450 million principal amount of Charter's outstanding 5.875% senior convertible notes due 2009 for $188 million in cash, 45 million shares of Charter's Class A common stock, and $146 million principal amount of 10.25% CCH II notes due 2010.

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, un-levered free cash flow, 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, non-cash depreciation and amortization, loss on sale or retirement of assets, asset impairment charges, and option 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 and intangible assets recognized in business combinations 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.

Un-levered free cash flow is defined as adjusted EBITDA less purchases of property, plant and equipment. The Company believes this is an important measure, as it takes into account the period costs associated with capital expenditures used to upgrade, extend and maintain Charter's plant, without regard to the Company's leverage structure.

Free cash flow is defined as un-levered free cash flow less interest on cash pay obligations. It can also be computed as net cash flows from operating activities, less capital expenditures and cash special charges, adjusted for the change in operating assets and liabilities, net of dispositions. As such, it is unaffected by fluctuations in working capital levels from period to period.

The Company believes that adjusted EBITDA, pro forma adjusted EBITDA, un-levered free cash flow 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, are reduced for management fees in the amounts of $31 million and $33 million for the three months ended September 30, 2006 and 2005, respectively, which amounts are added back for the purposes of calculating compliance with leverage covenants. As of September 30, 2006, Charter and its subsidiaries are in compliance with their debt covenants and expect to remain in compliance for the next 12 months.

Additional Information Available on Website

A slide presentation to accompany the third quarter conference call will be available on the Investor and 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 in 2005 and the first three quarters of 2006 can also be found on the Investor and News Center in the "Pro Forma Information" section. Pro forma income statements for the three months and nine months ended September 30, 2005 and 2006 and pro forma customer statistics are also provided in the addendum of this news release.

Conference Call

The Company will host a conference call on Tuesday, October 31, 2006, 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 www.charter.com. Access the webcast by clicking on "Investor and News Center" at the bottom left 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 midnight November 7, 2006. The passcode for the replay is 6981456.

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(R) video entertainment programming, Charter High-Speed(TM) Internet access service, and Charter Telephone(TM) services. 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. The Company will not undertake to revise forward-looking projections to reflect events after this date. 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. 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," 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 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 would result in a violation of the applicable facility or indenture and could trigger a default of other obligations under cross-default provisions;


  • our ability to pay or refinance debt prior to or when it becomes due and/or to take advantage of market opportunities and market windows to refinance that debt through new issuances, exchange offers or otherwise, including restructuring our balance sheet and leverage position;


  • 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 a stable customer base, particularly in the face of increasingly aggressive competition from other service providers;


  • our ability to obtain programming at reasonable prices or to pass programming cost increases on to our customers;


  • general business conditions, economic uncertainty or slowdown; and


  • the effects of governmental regulation, including but not limited to local 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 DATA)



                                  Three Months Ended September 30,
                               ---------------------------------------
                                  2006           2005
                                  Actual         Actual     % Change
                               ------------  -------------- ----------

REVENUES:
   Video                      $        836  $          811        3.1%
   High-speed Internet                 267             222       20.3%
   Telephone                            37               9      311.1%
   Advertising sales                    81              72       12.5%
   Commercial                           78              68       14.7%
   Other                                89              83        7.2%
                               ------------  --------------
      Total revenues                 1,388           1,265        9.7%
                               ------------  --------------

COSTS AND EXPENSES:
   Programming                         371             343        8.2%
   Service                             216             196       10.2%
   Advertising sales                    28              25       12.0%
   General and administrative          250             223       12.1%
   Marketing                            56              37       51.4%
                               ------------  --------------
      Operating costs and
       expenses                        921             824       11.8%
                               ------------  --------------

      Adjusted EBITDA                  467             441        5.9%
                               ------------  --------------

      Adjusted EBITDA margin          33.6%           34.9%
                               ------------  --------------

   Depreciation and
    amortization                       334             362
   Asset impairment charges             60               -
   Loss on sale of assets,
    net                                  2               1
   Option compensation
    expense, net                         3               3
   Hurricane asset retirement
    loss                                 -              19
   Special charges, net                  2               2
                               ------------  --------------

      Operating income from
       continuing operations            66              54
                               ------------  --------------

OTHER INCOME AND (EXPENSES):
   Interest expense, net              (466)           (462)
   Gain (loss) on derivative
    instruments and hedging
    activities, net                     (3)             17
   Gain on extinguishment of
    debt                               128             490
   Other, net                            6              (3)
                               ------------  --------------
                                      (335)             42
                               ------------  --------------

Income (loss) from continuing
 operations before income
 taxes                                (269)             96

Income tax expense                     (64)            (24)
                               ------------  --------------

Income (loss) from continuing
 operations                           (333)             72

Income (loss) from
 discontinued operations, net
 of tax                                200               4
                               ------------  --------------

Net income (loss)                     (133)             76

Dividends on preferred stock
 - redeemable                            -              (1)
                               ------------  --------------

Net income (loss) applicable
 to common stock              $       (133) $           75
                               ============  ==============

EARNINGS (LOSS) PER SHARE:
   Income (loss) from
    continuing operations,
    basic                     $      (1.02) $         0.23
                               ============  ==============
   Income (loss) from
    continuing operations,
    diluted                   $      (1.02) $         0.08
                               ============  ==============
   Net income (loss), basic   $      (0.41) $         0.24
                               ============  ==============
   Net income (loss), diluted $      (0.41) $         0.09
                               ============  ==============

Weighted average common
 shares outstanding, basic     326,910,632     316,214,740
                               ============  ==============
Weighted average common
 shares outstanding, diluted   326,910,632   1,012,591,842
                               ============  ==============



                                   Nine Months Ended September 30,
                               ---------------------------------------
                                  2006           2005
                                  Actual         Actual     % Change
                               ------------  -------------- ----------

REVENUES:
   Video                      $      2,520  $        2,434        3.5%
   High-speed Internet                 773             647       19.5%
   Telephone                            86              23      273.9%
   Advertising sales                   228             207       10.1%
   Commercial                          227             196       15.8%
   Other                               257             239        7.5%
                               ------------  --------------
      Total revenues                 4,091           3,746        9.2%
                               ------------  --------------

COSTS AND EXPENSES:
   Programming                       1,126           1,021       10.3%
   Service                             624             552       13.0%
   Advertising sales                    80              72       11.1%
   General and administrative          714             633       12.8%
   Marketing                           136             102       33.3%
                               ------------  --------------
      Operating costs and
       expenses                      2,680           2,380       12.6%
                               ------------  --------------

      Adjusted EBITDA                1,411           1,366        3.3%
                               ------------  --------------

      Adjusted EBITDA margin          34.5%           36.5%
                               ------------  --------------

   Depreciation and
    amortization                     1,024           1,092
   Asset impairment charges            159              39
   Loss on sale of assets,
    net                                  2               5
   Option compensation
    expense, net                        10              11
   Hurricane asset retirement
    loss                                 -              19
   Special charges, net                 12               4
                               ------------  --------------

      Operating income from
       continuing operations           204             196
                               ------------  --------------

OTHER INCOME AND (EXPENSES):
   Interest expense, net            (1,409)         (1,333)
   Gain (loss) on derivative
    instruments and hedging
    activities, net                      8              43
   Gain on extinguishment of
    debt                               101             498
   Other, net                           12              12
                               ------------  --------------
                                    (1,288)           (780)
                               ------------  --------------

Income (loss) from continuing
 operations before income
 taxes                              (1,084)           (584)

Income tax expense                    (124)            (80)
                               ------------  --------------

Income (loss) from continuing
 operations                         (1,208)           (664)

Income (loss) from
 discontinued operations, net
 of tax                                234              33
                               ------------  --------------

Net income (loss)                     (974)           (631)

Dividends on preferred stock
 - redeemable                            -              (3)
                               ------------  --------------

Net income (loss) applicable
 to common stock              $       (974) $         (634)
                               ============  ==============

EARNINGS (LOSS) PER SHARE:
   Income (loss) from
    continuing operations,
    basic                     $      (3.77) $        (2.16)
                               ============  ==============
   Income (loss) from
    continuing operations,
    diluted                   $      (3.77) $        (2.16)
                               ============  ==============
   Net income (loss), basic   $      (3.04) $        (2.06)
                               ============  ==============
   Net income (loss), diluted $      (3.04) $        (2.06)
                               ============  ==============

Weighted average common
 shares outstanding, basic     320,680,698     307,761,930
                               ============  ==============
Weighted average common
 shares outstanding, diluted   320,680,698     307,761,930
                               ============  ==============
            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
  UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA
             (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)



                                  Three Months Ended September 30,
                               ---------------------------------------
                                   2006           2005
                               Pro Forma (a)  Pro Forma (a)  % Change
                               -------------  -------------- ---------

REVENUES:
   Video                      $         830  $          794       4.5%
   High-speed Internet                  265             219      21.0%
   Telephone                             37              11     236.4%
   Advertising sales                     81              71      14.1%
   Commercial                            76              66      15.2%
   Other                                 88              81       8.6%
                               -------------  --------------
      Total revenues                  1,377           1,242      10.9%
                               -------------  --------------

COSTS AND EXPENSES:
   Programming                          368             336       9.5%
   Service                              214             193      10.9%
   Advertising sales                     28              24      16.7%
   General and administrative           248             219      13.2%
   Marketing                             56              37      51.4%
                               -------------  --------------
      Operating costs and
       expenses                         914             809      13.0%
                               -------------  --------------

      Adjusted EBITDA                   463             433       6.9%
                               -------------  --------------

      Adjusted EBITDA margin           33.6%           34.9%
                               -------------  --------------

   Depreciation and
    amortization                        332             354
   Asset impairment charges              20               -
   Loss on sale of assets,
    net                                   -               1
   Option compensation
    expense, net                          3               3
   Hurricane asset retirement
    loss                                  -              19
   Special charges, net                   2               2
                               -------------  --------------

      Operating income from
       operations                       106              54
                               -------------  --------------

OTHER INCOME AND (EXPENSES):
   Interest expense, net               (466)           (452)
   Gain (loss) on derivative
    instruments and hedging
    activities, net                      (3)             17
   Gain on extinguishment of
    debt                                128             490
   Other, net                             6              (3)
                               -------------  --------------
                                       (335)             52
                               -------------  --------------

Income (loss) before income
 taxes                                 (229)            106

Income tax expense                      (53)            (23)
                               -------------  --------------

Net income (loss)                      (282)             83

Dividends on preferred stock
 - redeemable                             -              (1)
                               -------------  --------------

Net income (loss) applicable
 to common stock              $        (282) $           82
                               =============  ==============

EARNINGS (LOSS) PER SHARE:
   Basic                      $       (0.86) $         0.26
                               =============  ==============
   Diluted                    $       (0.86) $         0.09
                               =============  ==============

Weighted average common
 shares outstanding, basic      326,272,226     316,214,740
                               =============  ==============
Weighted average common
 shares outstanding, diluted    326,272,226   1,012,591,842
                               =============  ==============






                                   Nine Months Ended September 30,
                               ---------------------------------------
                                   2006           2005
                               Pro Forma (a)  Pro Forma (a)  % Change
                               -------------  -------------- ---------

REVENUES:
   Video                      $       2,478  $        2,383       4.0%
   High-speed Internet                  763             639      19.4%
   Telephone                             86              28     207.1%
   Advertising sales                    225             204      10.3%
   Commercial                           220             190      15.8%
   Other                                252             233       8.2%
                               -------------  --------------
      Total revenues                  4,024           3,677       9.4%
                               -------------  --------------

COSTS AND EXPENSES:
   Programming                        1,105           1,000      10.5%
   Service                              612             544      12.5%
   Advertising sales                     78              70      11.4%
   General and administrative           705             621      13.5%
   Marketing                            135             101      33.7%
                               -------------  --------------
      Operating costs and
       expenses                       2,635           2,336      12.8%
                               -------------  --------------

      Adjusted EBITDA                 1,389           1,341       3.6%
                               -------------  --------------

      Adjusted EBITDA margin           34.5%           36.5%
                               -------------  --------------

   Depreciation and
    amortization                      1,013           1,080
   Asset impairment charges              20               -
   Loss on sale of assets,
    net                                   -               5
   Option compensation
    expense, net                         10              10
   Hurricane asset retirement
    loss                                  -              19
   Special charges, net                  12               4
                               -------------  --------------

      Operating income from
       operations                       334             223
                               -------------  --------------

OTHER INCOME AND (EXPENSES):
   Interest expense, net             (1,383)         (1,312)
   Gain (loss) on derivative
    instruments and hedging
    activities, net                       8              43
   Gain on extinguishment of
    debt                                101             498
   Other, net                            12              12
                               -------------  --------------
                                     (1,262)           (759)
                               -------------  --------------

Income (loss) before income
 taxes                                 (928)           (536)

Income tax expense                     (132)            (78)
                               -------------  --------------

Net income (loss)                    (1,060)           (614)

Dividends on preferred stock
 - redeemable                             -              (3)
                               -------------  --------------

Net income (loss) applicable
 to common stock              $      (1,060) $         (617)
                               =============  ==============

EARNINGS (LOSS) PER SHARE:
   Basic                      $       (3.31) $        (2.00)
                               =============  ==============
   Diluted                    $       (3.31) $        (2.00)
                               =============  ==============

Weighted average common
 shares outstanding, basic      320,466,343     307,761,930
                               =============  ==============
Weighted average common
 shares outstanding, diluted    320,466,343     307,761,930
                               =============  ==============




(a) Pro forma results reflect the acquisition of cable systems in
 January 2006 and the sales of cable systems in July 2005 and certain
 sales of cable systems in the third quarter of 2006 as if they
 occurred as of January 1, 2005 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 dispositions of assets because those
 transactions did not materially impact Charter's adjusted EBITDA.
 However, all transactions completed in July 2005, January 2006 and
 the third quarter of 2006 have been reflected in the operating
 statistics. The pro forma data are 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.

September 30, 2006. Pro forma revenues were reduced by $11 million and
 $67 million for the three and nine months ended September 30, 2006,
 respectively. Pro forma operating costs and expenses were reduced by
 $7 million and $45 million for the three and nine months ended
 September 30, 2006, respectively. Pro forma net loss was increased by
 $149 million and $86 million for the three and nine months ended
 September 30, 2006, respectively.

September 30, 2005. Pro forma revenues were reduced by $23 million and
 $69 million for the three and nine months ended September 30, 2005,
 respectively. Pro forma operating costs and expenses were reduced by
 $15 million and $44 million for the three and nine months ended
 September 30, 2005, respectively. Pro forma net income was increased
 by $7 million for the three months ended September 30, 2005. Pro
 forma net loss was reduced by $17 million for the nine months ended
 September 30, 2005.

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)



                                           September 30,  December 31,
                                               2006          2005
                                           -------------  ------------

                 ASSETS

CURRENT ASSETS:
  Cash and cash equivalents               $          85  $         21
  Accounts receivable, net of allowance
   for doubtful accounts                            186           214
  Prepaid expenses and other current
   assets                                            90            92
                                           -------------  ------------
    Total current assets                            361           327
                                           -------------  ------------

INVESTMENT IN CABLE PROPERTIES:
  Property, plant and equipment, net              5,263         5,840
  Franchises, net                                 9,221         9,826
                                           -------------  ------------
    Total investment in cable properties,
     net                                         14,484        15,666
                                           -------------  ------------

OTHER NONCURRENT ASSETS:                            353           438
                                           -------------  ------------
    Total assets                          $      15,198  $     16,431
                                           =============  ============

  LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Accounts payable and accrued expenses   $       1,360  $      1,191
                                           -------------  ------------
    Total current liabilities                     1,360         1,191
                                           -------------  ------------

LONG-TERM DEBT                                   18,799        19,388

NOTE PAYABLE - RELATED PARTY                         55            49

DEFERRED MANAGEMENT FEES - RELATED PARTY             14            14

OTHER LONG-TERM LIABILITIES                         602           517

MINORITY INTEREST                                   191           188

PREFERRED STOCK - REDEEMABLE                          4             4

SHAREHOLDERS' DEFICIT                            (5,827)       (4,920)
                                           -------------  ------------
     Total liabilities and shareholders'
      deficit                             $      15,198  $     16,431
                                           =============  ============
            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
           UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (DOLLARS IN MILLIONS)


                                                   Nine Months Ended
                                                      September 30,
                                                  --------------------
                                                    2006       2005
                                                  ---------  ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                       $    (974) $    (631)
  Adjustments to reconcile net loss to net cash
   flows from operating activities:
    Depreciation and amortization                    1,032      1,134
    Asset impairment charges                           159         39
    Noncash interest expense                           108        188
    Deferred income taxes                              123         71
    (Gain) loss on sale of assets, net                (198)         5
    Option compensation expense, net                    10         11
    Gain on derivative instruments and hedging
     activities, net                                    (8)       (43)
    Gain on extinguishment of debt                    (101)      (504)
    Other, net                                         (12)         7
  Changes in operating assets and liabilities,
   net of effects from acquisitions and
   dispositions:
    Accounts receivable                                 46         (3)
    Prepaid expenses and other assets                   23         85
    Accounts payable, accrued expenses and other       140       (241)
                                                  ---------  ---------
      Net cash flows from operating activities         348        118
                                                  ---------  ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, plant and equipment          (795)      (815)
  Change in accrued expenses related to capital
   expenditures                                          4         36
  Proceeds from sale of assets, including cable
   systems                                             988         38
  Purchase of cable system                             (42)         -
  Purchase of investments                                -         (3)
  Proceeds from investments                             42         17
  Other, net                                            (1)        (2)
                                                  ---------  ---------
      Net cash flows from investing activities         196       (729)
                                                  ---------  ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings of long-term debt                       5,970        897
  Repayments of long-term debt                      (6,846)    (1,141)
  Proceeds from issuance of debt                       440        294
  Payments for debt and equity issuance costs          (44)       (67)
                                                  ---------  ---------
      Net cash flows from financing activities        (480)       (17)
                                                  ---------  ---------

NET INCREASE (DECREASE) IN CASH AND CASH
 EQUIVALENTS                                            64       (628)
CASH AND CASH EQUIVALENTS, beginning of period          21        650
                                                  ---------  ---------
CASH AND CASH EQUIVALENTS, end of period         $      85  $      22
                                                  =========  =========

CASH PAID FOR INTEREST                           $   1,121  $   1,170
                                                  =========  =========

NONCASH TRANSACTIONS:
  Issuance of debt by CCH I Holdings, LLC        $       -  $   2,423
                                                  =========  =========
  Issuance of debt by CCH I, LLC                 $     419  $   3,686
                                                  =========  =========
  Issuance of debt by CCH II, LLC                $     410  $       -
                                                  =========  =========
  Issuance of debt by Charter Communications
   Operating, LLC                                $      37  $     333
                                                  =========  =========
  Retirement of Charter Communications Holdings,
   LLC debt                                      $    (796) $  (7,000)
                                                  =========  =========
  Retirement of Renaissance Media Group LLC debt $     (37) $       -
                                                  =========  =========
  Issuance of Class A common stock               $      68  $       -
                                                  =========  =========
  Retirement of convertible notes                $    (255) $       -
                                                  =========  =========
            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
              UNAUDITED SUMMARY OF OPERATING STATISTICS



                                                            Actual
                                                        --------------
                                                         September 30,
                                                           2006 (a)
                                                        --------------

Customer Summary:
Customer Relationships:
  Residential (non-bulk) analog video customers (b)         5,216,900
  Multi-dwelling (bulk) and commercial unit customers
   (c)                                                        259,700
                                                        --------------
    Total analog video customers (b) (c)                    5,476,600

  Non-video customers (b)                                     289,700
                                                        --------------
    Total customer relationships (d)                        5,766,300
                                                        ==============

  Pro forma average monthly revenue per analog video
   customer (e)                                         $       83.76

  Bundled customers (f)                                     2,124,600

Revenue Generating Units:
  Analog video customers (b) (c)                            5,476,600
  Digital video customers (g)                               2,767,900
  Residential high-speed Internet customers (h)             2,343,200
  Residential telephone customers (i)                         339,600
                                                        --------------
    Total revenue generating units (j)                     10,927,300
                                                        ==============

Video Cable Services:
Analog Video:
  Estimated homes passed (k)                               11,811,400
  Analog video customers (b)(c)                             5,476,600
  Estimated penetration of analog video homes passed (b)
   (c) (k) (l)                                                     46%
  Pro forma average monthly analog revenue per analog
   video customer (m)                                   $       38.22
  Analog video customers quarterly net gain (loss) (b)
   (c) (n)                                                     (9,200)

Digital Video:
  Estimated digital video homes passed (k)                 11,774,800
  Digital video customers (g)                               2,767,900
  Estimated penetration of digital homes passed (g) (k)
   (l)                                                             24%
  Digital penetration of analog video customers (b) (c)
   (g) (o)                                                         51%
  Digital set-top terminals deployed                        3,946,000
  Pro forma average incremental monthly digital revenue
   per digital video customer (m)                       $       28.96
  Digital video customers quarterly net gain (loss) (g)
   (n)                                                         49,400

Non-Video Cable Services:
High-Speed Internet Services:
  Estimated high-speed Internet homes passed (k)           10,763,300
  Residential high-speed Internet customers (h)             2,343,200
  Estimated penetration of high-speed Internet homes
   passed (h) (k) (l)                                              22%
  Pro forma average monthly high-speed Internet revenue
   per high-speed Internet customer (m)                 $       38.60
  Residential high-speed Internet customers quarterly
   net gain (loss) (h) (n)                                     88,100

Telephone Services:
  Estimated telephone homes passed (k)                      5,892,000
  Residential telephone customers (i)                         339,600
  Pro foma average monthly telephone revenue per
   telephone customer (m)                               $       42.40
  Residential telephone customers quarterly net gain (i)
   (n)                                                         82,000



                                    Approximate Pro forma as of
                             -----------------------------------------
                               June 30,    December 31,  September 30,
                               2006 (a)      2005 (a)      2005 (a)
                             ------------ ------------- --------------

Customer Summary:
Customer Relationships:
  Residential (non-bulk)
   analog video customers
   (b)                         5,234,700     5,262,900      5,277,400
  Multi-dwelling (bulk) and
   commercial unit customers
   (c)                           251,100       243,900        246,100
                             ------------ ------------- --------------
    Total analog video
     customers (b) (c)         5,485,800     5,506,800      5,523,500

  Non-video customers (b)        284,600       258,700        245,000
                             ------------ ------------- --------------
    Total customer
     relationships (d)         5,770,400     5,765,500      5,768,500
                             ============ ============= ==============

  Pro forma average monthly
   revenue per analog video
   customer (e)              $     81.92  $      76.27  $       74.86

  Bundled customers (f)        2,028,700     1,856,100      1,785,600

Revenue Generating Units:
  Analog video customers (b)
   (c)                         5,485,800     5,506,800      5,523,500
  Digital video customers
   (g)                         2,718,500     2,638,500      2,588,700
  Residential high-speed
   Internet customers (h)      2,255,100     2,097,700      2,023,900
  Residential telephone
   customers (i)                 257,600       136,000        104,700
                             ------------ ------------- --------------
    Total revenue generating
     units (j)                10,717,000    10,379,000     10,240,800
                             ============ ============= ==============

Video Cable Services:
Analog Video:
  Estimated homes passed (k)  11,770,600    11,643,900     11,450,000
  Analog video customers
   (b)(c)                      5,485,800     5,506,800      5,523,500
  Estimated penetration of
   analog video homes passed
   (b) (c) (k) (l)                    47%           47%            48%
  Pro forma average monthly
   analog revenue per analog
   video customer (m)        $     38.29  $      37.45  $       37.84
  Analog video customers
   quarterly net gain (loss)
   (b) (c) (n)                   (30,700)      (16,700)       (10,100)

Digital Video:
  Estimated digital video
   homes passed (k)           11,723,500    11,588,300     11,391,100
  Digital video customers
   (g)                         2,718,500     2,638,500      2,588,700
  Estimated penetration of
   digital homes passed (g)
   (k) (l)                            23%           23%            23%
  Digital penetration of
   analog video customers
   (b) (c) (g) (o)                    50%           48%            47%
  Digital set-top terminals
   deployed                    3,874,800     3,740,700      3,668,000
  Pro forma average
   incremental monthly
   digital revenue per
   digital video customer
   (m)                       $     29.09  $      26.60  $       26.12
  Digital video customers
   quarterly net gain (loss)
   (g) (n)                        23,500        49,800         68,900

Non-Video Cable Services:
High-Speed Internet
 Services:
  Estimated high-speed
   Internet homes passed (k)  10,665,700    10,543,500     10,268,600
  Residential high-speed
   Internet customers (h)      2,255,100     2,097,700      2,023,900
  Estimated penetration of
   high-speed Internet homes
   passed (h) (k) (l)                 21%           20%            20%
  Pro forma average monthly
   high-speed Internet
   revenue per high-speed
   Internet customer (m)     $     38.30  $      36.55  $       37.01
  Residential high-speed
   Internet customers
   quarterly net gain (loss)
   (h) (n)                        52,000        73,800         94,600

Telephone Services:
  Estimated telephone homes
   passed (k)                  4,658,500     2,918,000      2,365,400
  Residential telephone
   customers (i)                 257,600       136,000        104,700
  Pro foma average monthly
   telephone revenue per
   telephone customer (m)    $     43.19  $      39.38  $       39.27
  Residential telephone
   customers quarterly net
   gain (i) (n)                   66,500        31,300         22,100
Pro forma results reflect the acquisition of cable systems in January
 2006 and the sales of cable systems in July 2005 and the third
 quarter of 2006 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 dispositions of assets because those transactions did not
 materially impact Charter's adjusted EBITDA. However, all
 transactions completed in July 2005, January 2006 and the third
 quarter of 2006 have been reflected in the operating statistics.

At June 30, 2006, actual 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.

At December 31, 2005, actual analog video customers, digital video
 customers, high-speed Internet customers and telephone customers were
 5,884,500, 2,796,600, 2,196,400 and 121,500, respectively.

At September 30, 2005, actual analog video customers, digital video
 customers, high-speed Internet customers and telephone customers were
 5,906,300, 2,749,400, 2,120,000 and 89,900, 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
 September 30, 2006, June 30, 2006, December 31, 2005 and September
 30, 2005, "customers" include approximately 51,200, 55,900, 50,500
 and 49,300 persons whose accounts were over 60 days past due in
 payment, approximately 11,300, 14,300, 14,300 and 9,900 persons whose
 accounts were over 90 days past due in payment and approximately
 6,200, 8,900, 7,400 and 6,000 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 289,700, 284,600,
 258,700 and 245,000 customer relationships at September 30, 2006,
 June 30, 2006, December 31, 2005 and September 30, 2005,
 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 terminals. Included in "digital video customers"
 on September 30, 2006, June 30, 2006, December 31, 2005 and September
 30, 2005 are approximately 6,700, 8,400, 8,600 and 8,900 customers,
 respectively, that receive digital video service directly through
 satellite transmission.

(h) "Residential high-speed Internet customers" represent those
 customers who subscribe to our high-speed Internet service. At
 September 30, 2006, June 30, 2006, December 31, 2005 and September
 30, 2005, approximately 2,079,000, 1,996,400, 1,860,000 and 1,798,800
 of these high-speed Internet customers, respectively, receive video
 and/or telephone services from us and are included within the
 respective statistics above.

(i) "Residential telephone customers" include all households receiving
 telephone service. As of September 30, 2006, June 30, 2006, December
 31, 2005 and September 30, 2005, approximately 314,000, 233,500,
 116,600 and 86,900 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) "Quarterly net gain (loss)" represents the 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 Ended  Nine Months Ended
                                  September 30,       September 30,
                               ------------------- -------------------
                                 2006      2005      2006      2005
                                Actual    Actual    Actual    Actual
                               --------- --------- --------- ---------

Adjusted EBITDA from
 continuing and discontinued
 operations (a)                $    467  $    463  $  1,457  $  1,436
Less: Purchases of property,
 plant and equipment               (256)     (273)     (795)     (815)
                               --------- --------- --------- ---------

Un-levered free cash flow           211       190       662       621

Less: Interest on cash pay
 obligations (b)                   (445)     (388)   (1,301)   (1,145)
                               --------- --------- --------- ---------

Free cash flow                     (234)     (198)     (639)     (524)

Purchases of property, plant
 and equipment                      256       273       795       815
Special charges, net                 (2)        -       (12)       (4)
Other, net                           (1)       (1)       (5)      (10)
Change in operating assets and
 liabilities                        124      (137)      209      (159)
                               --------- --------- --------- ---------

Net cash flows from operating
 activities                    $    143  $    (63) $    348  $    118
                               ========= ========= ========= =========


                               Three Months Ended  Nine Months Ended
                                  September 30,       September 30,
                               ------------------- -------------------
                                 2006      2005      2006      2005
                               Pro forma Pro forma Pro forma Pro forma
                                  (c)       (c)       (c)       (c)
                               --------- --------- --------- ---------

Adjusted EBITDA (a)            $    463  $    433  $  1,389  $  1,341
Less: Purchases of property,
 plant and equipment               (254)     (264)     (777)     (788)
                               --------- --------- --------- ---------

Un-levered free cash flow           209       169       612       553

Less: Interest on cash pay
 obligations (b)                   (445)     (378)   (1,275)   (1,124)
                               --------- --------- --------- ---------

Free cash flow                     (236)     (209)     (663)     (571)

Purchases of property, plant
 and equipment                      254       264       777       788
Special charges, net                 (2)        -       (12)       (4)
Other, net                           (1)       (1)       (5)      (10)
Change in operating assets and
 liabilities                        124      (137)      209      (159)
                               --------- --------- --------- ---------

Net cash flows from operating
 activities                    $    139  $    (83) $    306  $     44
                               ========= ========= ========= =========


(a) Adjusted EBITDA is calculated from page 1 of the addendum by
 taking revenue from continuing operations less operating costs and
 expenses from continuing operations plus adjusted EBITDA from
 discontinued operations.

(b) 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.

(c) Pro forma results reflect the acquisition of cable systems in
 January 2006 and the sales of systems in July 2005 and certain sales
 of cable systems in the third quarter of 2006 as if they occurred as
 of January 1, 2005 for all periods presented.

The above schedules are presented in order to reconcile adjusted
 EBITDA, un-levered free cash flows and free cash flows, all 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
                    UNAUDITED CAPITAL EXPENDITURES
                        (DOLLARS IN MILLIONS)



                                Three Months Ended  Nine Months Ended
                                   September 30,       September 30,
                                ------------------  ------------------
                                 2006      2005      2006      2005
                                --------  --------  --------  --------

Customer premise equipment (a) $    120  $     94  $    378  $    322
Scalable infrastructure (b)          49        49       146       138
Line extensions (c)                  23        37        82       114
Upgrade/Rebuild (d)                  13        13        36        35
Support capital (e)                  51        80       153       206
                                --------  --------  --------  --------

  Total capital expenditures   $    256  $    273  $    795  $    815
                                ========  ========  ========  ========



(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 terminals 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:
Anita Lamont, 314-543-2215
or
Analysts:
Mary Jo Moehle, 314/543-2397

SOURCE: Charter Communications, Inc.