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InvestorsNovember 2, 2000

Charter Communications Reports Continued Revenue, OCF, and Customer Growth in Third Quarter 2000 Financial Results

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ST. LOUIS--(BUSINESS WIRE)--Nov. 2, 2000--

Aggressive Digital Video Deployment Contributes to 20% OCF Growth

Charter Communications, Inc. (Nasdaq:CHTR) today reported continued growth in revenues, operating cash flow (OCF), and basic, digital and data customers for the three months ended September 30, 2000, compared to pro forma year-ago results.

Third Quarter Highlights

Pro forma revenues increased 13.9% to $842.9 million and pro forma operating cash flow increased 20.2% to $400.6 million for the third quarter of 2000 compared to the pro forma results for the third quarter of 1999. Charter added over 55,000 basic cable customers during the third quarter, contributing to a year-to-year increase of approximately 2.3% compared to the pro forma customer level of 6,178,800 at September 30, 1999. Year-to-date, the company has added 124,600 new basic customers, an annualized organic growth rate of

  • 2.7%. At September 30, 2000, Charter served 6,318,300 basic cable customers.

For "same-store" cable systems owned by Charter during the third quarter of both 2000 and 1999, revenues and system operating cash flow grew 12.8% and 19.5%, respectively. These systems represented 2,671,000 customers at September 30, 2000, reflecting a 2.3% growth rate in basic customers compared to a year ago.

"I'm very proud to report these outstanding operating results which clearly show that the Charter management team has seamlessly integrated all of our acquisitions. We're in an excellent position to achieve all of our stated goals for the year, enabling us to be an industry leader in overall financial performance," said Jerry Kent, President and CEO. "I'm especially pleased with our basic customer growth, and consumer acceptance of our advanced video and data services, including Charter Digital Cable(TM)and CharterPipeline(TM)."

Rebuild and Upgrade of Infrastructure Already Paying Dividends

Mr. Kent said Charter remains on schedule in its $3.5 billion project to build what is recognized as one of the most robust broadband infrastructures in the industry. "By the end of this year, about 70% of our customers will be served by upgraded plant. And by the end of the year 2002, nearly 93% of our customers will be served by 750 megahertz plant or greater, providing full, two-way interactive capability," Mr. Kent added.

The acceleration of Charter's infrastructure rebuild has allowed it to be more aggressive in the rollout of advanced services. "We began the year 2000 with about 155,000 digital customers. Original projections were to average 10,000 digital installations per week throughout the year," Mr. Kent said. "We revised that goal during the second quarter to 12,000 digital installations per week because our accelerated upgrade allowed us to be even more aggressive in our sales and marketing of digital cable."

Mr. Kent said consumer response during the third quarter to Charter's innovative Digital Summer Sizzle promotion prompted still further upward revision to year-end digital projections. "In the third quarter alone, we added some 279,000 Charter Digital Cable customers, averaging 21,500 installations per week, bringing our total at September 30, 2000 to 653,800 customers. As a result, revised digital sales projections indicate we could end the year with more than 900,000 digital customers."

Charter ended the quarter with 184,600 data customers, a 24% increase over the prior quarter. "Charter Pipeline installations averaged over 2,700 customers per week throughout the third quarter, about 200 more installations per week than we projected at the beginning of the year," Mr. Kent said.

Recent Developments

Charter launched video-on-demand (VOD) technology to about 167,000 homes in the Pasadena area of its Los Angeles Region in October, with planned rollout to 275,000 homes by year-end. "VOD accommodates the busy lifestyles of our customers by providing immediate/real-time selection of hundreds of Hollywood movies with full VCR functionality," Mr. Kent said. "With the ease of a remote control, they can stop, start, pause and replay their selections over a 24 hour period from the comfort of their home, without a round trip to the video rental store." Charter already provides VOD technology to some 7,000 customers in the Greater Atlanta Area and plans additional launches throughout the year 2001.

A joint venture with Motorola, Inc.'s Broadband Communications Sector, ReplayTV, Inc. and Vulcan Ventures Inc. to develop and integrate digital video recording (DVR) capabilities in advanced digital set-top terminals was also announced in October. Mr. Kent said the venture, code named Project DISCO, will initially focus on creating a set-top based DVR platform designed to store video, audio and Internet content, creating a more robust platform for future services and allowing new applications to reside on the advanced digital set-top terminal. "It's our goal for Project DISCO to be to the digital platform what the VCR is to analog television," Mr. Kent said.

Charter recently issued $650 million of Convertible Senior Notes due 2005. The company also plans to sell an additional $100 million of Notes on November 3, 2000, pursuant to an option granted to the initial purchasers of the Notes. Mr. Kent said, "I sincerely appreciate all the support and enthusiastic response from the investors in allowing us to upsize a $450 million offering to $750 million. This is further validation that the market recognizes we are executing across all aspects of our business." Mr. Kent said the net proceeds of the Notes were and will be used to repay a portion of amounts outstanding under a $1 billion bridge loan.

Looking Ahead

Mr. Kent said operating cash flow growth for the fourth quarter of 2000 is expected to exceed the third quarter growth rate. He said the company expects to end the year with over 900,000 digital cable customers and approximately 225,000 data customers.

With 6.3 million customers, Charter Communications, a Wired World company(TM), is among the nation's largest broadband communications companies. Charter offers an array of advanced broadband services including digital video programming services under the Charter Digital Cable(TM) brand; and high-speed Internet access via Charter Pipeline (TM). Charter's Class A common stock is traded on the Nasdaq National Market under the ticker symbol "CHTR." More information about Charter can be found on the Internet at

Charter will conduct a conference call to discuss their operating results on Thursday, November 2, 2000, at 11:00 AM Eastern Time. The call will be available live via webcast {}. The call will be available on the "Investor" portion of the website, via "About Charter." 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.

Statements in this press release regarding Charter Communications' business that are not historical facts may be "forward-looking statements." These forward-looking statements include specific projections regarding Charter's operating cash flow in the fourth quarter of 2000 as well as projections regarding growth in digital cable and high-speed Internet subscribers and expected launches of VOD service. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from any such forward-looking statements are identified in the reports and documents Charter files from time to time with the U.S. Securities and Exchange Commission.

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CONTACT: Charter Communications Inc., St. Louis
Anita Lamont, 314/543-2215
Mary Jo Moehle, 314/543-2397