UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended June 30, 2004
[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

(Mark One)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-6590

COMMUNICATIONS

Cox Communications, Inc.

(Exact name of registrant as specified in its charter)


Delaware *(State or other jurisdiction of incorporation or organization)*		58-2112281 *(I.R.S. Employer Identification No.)*


1400 Lake Hearn Drive, Atlanta, Georgia *(Address of principal executive offices)*		30319 *(Zip Code)*

Registrant’s telephone number, including area code: (404) 843-5000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~~[X]~~þ No o ~~[ ]~~

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange ~~Act~~ Act Rule 12b-2). Yes ~~[X]~~ þ No ~~[ ]~~o

There were ~~604~~556,~~950~~170,~~345~~238 shares of Class A Common Stock, ~~and~~par value $0.01 per share, and 27,597,792 shares of Class C Common Stock , par value $0.01 per share, outstanding as of July 3130, ~~2004~~ 2005.

Cox Communications, Inc. ~~Form 10-Q For the Quarter Ended June 30, 2004~~

Form 10-Q
For the Three and Six Months Ended June 30, 2005

Table of Contents

	Page		~~Page~~
Part I – Financial Information	~~Part I – Financial Information~~
Item 1.	Condensed Consolidated Financial Statements			2
Item 1. Condensed Consolidated Financial Statements		2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk			28
Item 3. Quantitative and Qualitative Disclosures About Market Risk		30
Item 4.	Controls and Procedures			29
Item 4. Controls and Procedures		31
	Part II — Other Information
Part II – Other Information
Item 1.	Legal Proceedings			29
Item 1. Legal Proceedings		31
Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities			29
Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities		31
Item 3.	Defaults Upon Senior Securities			29
Item 3. Defaults Upon Senior Securities		32
Item 4.	Submission of Matters of a Vote of Security Holders			29
Item 4. Submission of Matters to a Vote of Security Holders		32
Item 5.	Other Information			30
Item 5. Other Information		32
Item 6.	Exhibits and Reports on Form 8-K			30
Item 6. Exhibits		32
EX-10.1 FIVE YEAR CREDIT AGREEMENT, DATED JUNE 4, 2004
EX-10.1 Cox Enterprises 2005 Unit Appreciation Plan
EX-10.2 SHARE CONVERSION AGREEMENT, DATED JUNE 23, 2004
EX-10.2 Form of Unit Appreciation Plan Summary Statement
EX-21 SUBSIDIARIES OF COX COMMUNICATIONS, INC.
EX-31.1 SECTION 302 CERTIFICATION OF THE CEO
EX-31.1 302 Certification of CEO
EX-31.2 SECTION 302 CERTIFICATION OF THE CFO
EX-31.2 302 Certification of CFO
EX-32.1 SETION 906 CERTIFICATION OF THE CEO AND THE CFO
EX-32.1 906 Certification of CEO and CFO

Preliminary Note

This quarterly report on Form 10-Q is for the three and six- month periods ended June 30, ~~2004~~ 2005. This quarterly report modifies and supersedes documents filed prior to this quarterly report. ~~In this quarterly report, “Cox,” refers to Cox Communications, Inc. and its subsidiaries, unless the context requires otherwise.~~ The SEC allows Cox to “incorporate by reference” information that Cox files with it, which means that Cox can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this quarterly report. In addition, information that Cox files with the SEC in the future will automatically ~~update~~ update and supersede information contained in this quarterly report. In this quarterly report, “Cox,” refers to Cox Communications, Inc. and its subsidiaries, unless the context requires otherwise.

Part I — Financial Information

Item 1. Condensed Consolidated Financial Statements

Cox Communications, Inc. ~~Condensed Consolidated Balance Sheets~~

	June 30			December 31
	2004			2003
	(unaudited)
	(Thousands of Dollars)
Assets
Current assets
Cash	$	75,368		$	83,841
Accounts and notes receivable, less allowance for doubtful accounts of $23,357 and $26,175		379,100			370,832
Amounts due from Cox Enterprises, Inc. (CEI)		10,871			—
Other current assets		147,316			131,106
Total current assets		612,655			585,779
Net plant and equipment		7,729,694			7,907,561
Investments		58,710			109,380
Intangible assets		16,029,591			15,697,495
Other noncurrent assets		76,720			117,361
Total assets	$	24,507,370		$	24,417,576
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued expenses	$	695,807		$	778,708
Other current liabilities		444,773			450,553
Current portion of long-term debt		527,211			48,344
Amounts due to CEI		—			3,980
Total current liabilities		1,667,791			1,281,585
Deferred income taxes		6,568,869			6,388,970
Other noncurrent liabilities		157,877			164,070
Long-term debt, less current portion		6,136,613			6,963,456
Total liabilities		14,531,150			14,798,081
Commitments and contingencies (Note 12)
Minority interest in equity of consolidated subsidiaries		140,091			139,519
Shareholders’ equity
Series A preferred stock — liquidation preference of $22.1375 per share, $1 par value; 10,000,000 shares of preferred stock authorized; shares issued and outstanding: 0 and 4,836,372		—			4,836
Class A common stock, $1 par value; 671,000,000 shares authorized; shares issued: 610,479,850 and 598,481,602; shares outstanding: 604,947,345 and 592,958,582		610,480			598,482
Class C common stock, $1 par value; 62,000,000 shares authorized; shares issued and outstanding: 27,597,792		27,598			27,598
Additional paid-in capital		4,790,123			4,545,635
Retained earnings		4,621,006			4,500,621
Accumulated other comprehensive (loss) income		(4	)		15,548
Class A common stock in treasury, at cost: 5,532,505 and 5,523,020 shares		(213,074	)		(212,744	)
Total shareholders’ equity		9,836,129			9,479,976
Total liabilities and shareholders’ equity	$	24,507,370		$	24,417,576

Condensed Consolidated Balance Sheets

See notes to condensed consolidated financial statements.


	June 30		December 31
	2005		2004
	*(unaudited)*
	(Thousands of Dollars)
Assets
Current assets
Cash	$	85,761	$	76,339
Accounts and notes receivable, less allowance for doubtful accounts of $24,605 and $26,482		421,204		394,540
Other current assets		191,859		136,386

Total current assets		698,824		607,265


Net plant and equipment		7,771,768		7,942,699
Investments		1,212,010		1,171,647
Intangible assets		19,284,204		19,329,452
Goodwill		106,889		106,889
Other noncurrent assets		70,787		95,789

Total assets	$	29,144,482	$	29,253,741


Liabilities and Shareholder’s equity
Current liabilities
Accounts payable and accrued expenses	$	880,507	$	797,553
Other current liabilities		282,767		339,742
Cash obligation to untendered shareholders		10,853		483,603
Current portion of long-term debt		54,922		59,962
Amounts due to Cox Enterprises, Inc. (CEI)		92,588		5,573

Total current liabilities		1,321,637		1,686,433


Deferred income taxes		8,284,725		8,326,574
Other noncurrent liabilities		127,477		148,733
Long-term debt, less current portion		13,236,536		12,965,773

Total liabilities		22,970,375		23,127,513


Commitments and contingencies (Note 11)

Shareholder’s equity
Class A common stock, $0.01 par value; 671,000,000 shares authorized; shares issued and outstanding: 556,170,238		5,562		5,562
Class C common stock, $0.01 par value; 62,000,000 shares authorized; shares issued and outstanding: 27,597,792		276		276
Additional paid-in capital		4,804,645		4,802,117
Retained earnings		1,363,512		1,318,218
Accumulated other comprehensive income		112		55

Total shareholder’s equity		6,174,107		6,126,228


Total liabilities and shareholder’s equity	$	29,144,482	$	29,253,741

2See notes to condensed consolidated financial statements.

~~Table of Contents~~2

CoxTable Communications, Inc. Condensed Consolidated Statements of Operations Contents

	Three Months						Six Months
	Ended June 30						Ended June 30
	2004			2003			2004			2003
	(unaudited)
	(Thousands of Dollars, excluding share data)
Revenues	$	1,595,240		$	1,423,939		$	3,135,597		$	2,790,221
Costs and expenses
Cost of services (excluding depreciation and amortization)		644,627			590,122			1,280,443			1,169,914
Selling, general and administrative expenses		334,576			301,702			671,884			608,738
Depreciation and amortization		397,114			364,274			789,180			748,594
Loss (gain) on sale of cable systems		5,021			(469	)		5,021			(469	)
Operating income		213,902			168,310			389,069			263,444
Interest expense		(95,591	)		(134,394	)		(192,203	)		(264,218	)
Loss on derivative instruments, net		(15	)		(24,197	)		(54	)		(26,700	)
Gain on investments, net		2,326			124,146			29,135			122,395
Equity in net losses of affiliated companies		(1,167	)		(4,354	)		(195	)		(6,518	)
(Loss) gain on extinguishment of debt		(7,006	)		3,896			(7,006	)		3,896
Other, net		(258	)		(616	)		(1,767	)		(957	)
Income before income taxes and minority interest		112,191			132,791			216,979			91,342
Income tax expense (benefit)		49,922			13,402			96,022			(1,096	)
Income before minority interest		62,269			119,389			120,957			92,438
Minority interest, net of tax		413			(1,644	)		(572	)		(3,914	)
Net income	$	62,682		$	117,745		$	120,385		$	88,524
Share data
Basic net income per share
Basic weighted-average shares outstanding		621,755,118			620,256,065			621,221,210			620,239,661
Basic net income per share	$	0.10		$	0.19		$	0.19		$	0.14
Diluted net income per share
Diluted weighted-average shares outstanding		633,386,628			629,728,659			633,327,627			629,693,126
Diluted net income per share	$	0.10		$	0.19		$	0.19		$	0.14

Cox Communications, Inc.

~~See~~Condensed ~~notes~~Consolidated toStatements ~~condensed~~of ~~consolidated financial statements.~~Operations


	Three Months						Six Months
	Ended June 30						Ended June 30
	2005			2004			2005			2004
	*(unaudited)*
	(Thousands of Dollars)
Revenues	$	1,776,653		$	1,595,240		$	3,480,713		$	3,135,597
Costs and expenses
Cost of services (excluding depreciation and amortization)		709,485			644,627			1,391,384			1,280,443
Selling, general and administrative expenses (excluding depreciation and amortization)		375,051			334,576			743,620			671,884
Depreciation and amortization		463,204			397,114			897,400			789,180
Loss on sale of cable systems		—			5,021			—			5,021

Operating income		228,913			213,902			448,309			389,069
Interest expense		(171,661	)		(95,591	)		(335,149	)		(192,203	)
Loss on derivative instruments, net		(48	)		(15	)		(78	)		(54	)
(Loss) gain on investments, net		(2,723	)		2,326			(2,721	)		29,135
Loss on extinguishment of debt		(13,019	)		(7,006	)		(13,019	)		(7,006	)
Other, net		(585	)		(258	)		(367	)		(1,767	)

Income before income taxes, minority interest and equity in net losses of affiliated companies		40,877			113,358			96,975			217,174
Income tax expense		21,061			50,359			49,375			96,065

Income before minority interest and equity in net losses of affiliated companies		19,816			62,999			47,600			121,109
Minority interest, net of tax		—			413			—			(572	)
Equity in net losses of affiliated companies, net of tax of $1,016, $436, $1,523 and $43, respectively		(1,534	)		(730	)		(2,306	)		(152	)

Net income	$	18,282		$	62,682		$	45,294		$	120,385

~~Table~~See ofnotes ~~Contents~~to condensed consolidated financial statements.

~~Cox Communications, Inc.~~3 ~~Condensed Consolidated Statement of Shareholders’ Equity~~

															Class A
												Accumulated			Common
	Series A			Common Stock				Additional				Other			Stock in
	Preferred							Paid-in		Retained		Comprehensive			Treasury,						Comprehensive
	Stock			Class A		Class C		Capital		Earnings		Income (Loss)			at Cost			Total			Income
	(unaudited)
	(Thousands of Dollars)
December 31, 2003	$	4,836		$	598,482	$	27,598	$	4,545,635	$	4,500,621	$	15,548		$	(212,744	)	$	9,479,976
Net income											120,385								120,385		$	120,385
Issuance of stock related to stock compensation plans (including tax benefit on stock options exercised of $1,942)					786				19,245										20,031
Shares surrendered in connection with vesting of restricted stock																(330	)		(330	)
Conversion of Series A Preferred Stock to Class A Common Stock		(4,836	)		11,212				225,243										231,619
Change in net accumulated unrealized gain on securities, net of tax													(15,552	)					(15,552	)		(15,552	)
Other comprehensive loss																						(15,552	)
Comprehensive income																					$	104,833
June 30, 2004	$	—		$	610,480	$	27,598	$	4,790,123	$	4,621,006	$	(4	)	$	(213,074	)	$	9,836,129

~~See~~Cox ~~notes~~Communication’s, ~~to condensed consolidated financial statements~~Inc.

4Condensed Consolidated Statement of Shareholder’s Equity


									Accumulated
					Additional				Other
	Common Stock				Paid-in		Retained		Comprehensive				Comprehensive
	Class A		Class C		Capital		Earnings		Income		Total		Income
	*(unaudited)*
	(Thousands of Dollars)
December 31, 2004	$	5,562	$	276	$	4,802,117	$	1,318,218	$	55	$	6,126,228
Net income								45,294				45,294	$	45,294

Expenses incurred pursuant to the going-private transaction paid by CEI on behalf of Cox						2,528						2,528

Other comprehensive income										57		57		57

Comprehensive income													$	45,351

June 30, 2005	$	5,562	$	276	$	4,804,645	$	1,363,512	$	112	$	6,174,107

~~Cox~~See ~~Communications,~~notes ~~Inc. Condensed~~to ~~Consolidated~~condensed ~~Statements~~consolidated offinancial ~~Cash Flows~~statements.

	Six Months
	Ended June 30
	2004			2003
	(unaudited)
	(Thousands of Dollars)
Cash flows from operating activities
Net income	$	120,385		$	88,524
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		789,180			748,594
Loss (gain) on sale of cable system		5,021			(469	)
Deferred income taxes		53,333			(232,527	)
Loss on derivative instruments, net		54			26,700
Loss (gain) on extinguishment of debt		7,006			(3,896	)
Write-off of debt issuance costs		—			36,063
Gain on investments, net		(29,135	)		(122,395	)
Equity in net losses of affiliated companies		195			6,518
Minority interest, net of tax		572			3,914
Other, net		6,138			77,870
(Increase) decrease in accounts and notes receivable		(9,510	)		20,245
(Increase) decrease in other assets		(17,040	)		33,829
Decrease in accounts payable and accrued expenses		(55,019	)		(91,874	)
Increase in taxes payable		18,178			231,290
Decrease in other liabilities		(31,938	)		(3,518	)
Net cash provided by operating activities		857,420			818,868
Cash flows from investing activities
Capital expenditures		(617,869	)		(662,892	)
Investments in affiliated companies		(15,827	)		(8,412	)
Proceeds from the sale of investments		70,230			161,739
(Increase) decrease in amounts due from CEI		(10,871	)		21,109
Proceeds from the sale of cable systems		53,076			822
Other, net		12,312			(5,234	)
Net cash used in investing activities		(508,949	)		(492,868	)
Cash flows from financing activities
Commercial paper (repayments) borrowings, net		(266,308	)		110,000
Proceeds from issuance of debt		—			596,154
Repayment of debt		(72,549	)		(1,124,971	)
Proceeds from exercise of stock options		2,154			2,535
(Decrease) increase in amounts due to CEI		(3,980	)		8,489
Premium paid on extinguishment of debt		—			(19,483	)
Other, net		(16,261	)		21,008
Net cash used in financing activities		(356,944	)		(406,268	)
Net decrease in cash		(8,473	)		(80,268	)
Cash at beginning of period		83,841			228,704
Cash at end of period	$	75,368		$	148,436

SeeTable notesof to condensed consolidated financial statements. Contents

5Cox Communications, Inc.

~~Table~~Condensed Consolidated Statements of ~~Contents~~Cash Flows

Cox Communications, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited)


	Six Months
	Ended June 30
	2005			2004
	*(unaudited)*
	(Thousands of Dollars)
Cash flows from operating activities
Net income	$	45,294		$	120,385
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		897,400			789,180
Loss on sale of cable system		—			5,021
Deferred income taxes		(39,914	)		53,333
Loss on derivative instruments, net		78			54
Loss on extinguishment of debt		13,019			7,006
Loss (gain) on investments, net		2,721			(29,135	)
Minority interest, net of tax		—			572
Equity in net losses of affiliated companies, net of tax		2,306			152
Other, net		1,651			6,181
Increase in accounts and notes receivable		(26,664	)		(9,510	)
Increase in other assets		(49,994	)		(17,040	)
Increase (decrease) in accounts payable and accrued expenses		25,129			(55,019	)
(Decrease) increase in taxes payable		(39,188	)		18,178
Decrease in other liabilities		(42,764	)		(31,938	)

Net cash provided by operating activities		789,074			857,420


Cash flows from investing activities
Capital expenditures		(661,183	)		(617,869	)
Investments in affiliated companies		(43,554	)		(15,827	)
Proceeds from the sale and exchange of investments		—			70,230
Increase in amounts due from CEI		—			(10,871	)
Proceeds from the sale of cable systems		—			53,076
Other, net		15,394			12,312

Net cash used in investing activities		(689,343	)		(508,949	)


Cash flows from financing activities
Revolving credit facilities borrowings, net		575,000			—
Commercial paper borrowings (repayments), net		111,938			(266,308	)
Repayment of debt		(460,021	)		(72,549	)
Payments to acquire Cox’s former public stock		(472,750	)		—
Proceeds from exercise of stock options		—			2,154
Increase (decrease) in amounts due to CEI		87,015			(3,980	)
Other, net		68,509			(16,261	)

Net cash used in financing activities		(90,309	)		(356,944	)


Net increase (decrease) in cash		9,422			(8,473	)
Cash at beginning of period		76,339			83,841

Cash at end of period	$	85,761		$	75,368

~~Quarter~~See ~~Ended~~notes ~~June 30,~~to ~~2004~~condensed consolidated financial statements.

~~1. Organization and Basis of Presentation~~5

CoxTable Communications, Inc. (Cox), an indirect 62.2% majority-owned subsidiary of Cox Enterprises, Inc. (CEI), is a multi-service broadband communications company serving approximately 6.6 million customers nationwide. Cox is the nation’s third-largest cable television provider and offers an array of broadband products and services to both residential and commercial customers in its markets. These services primarily include analog and digital video, high-speed Internet access and local and long-distance telephone. Cox operates in one operating segment, broadband communications. Contents

~~The accompanying unaudited interim condensed consolidated financial statements of~~ Cox have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. AccordinglyCommunications, ~~they do not include all of the information and footnote disclosures required by GAAP for complete financial statements~~Inc. ~~In the opinion~~ of management, all adjustments considered necessary for the fair presentation of the accompanying unaudited interim condensed consolidated financial statements have been made. All such adjustments are of a normal recurring nature. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Cox’s Annual Report on Form 10-K for the year ended December 31, 2003.

2.Notes ~~Summary~~to ofCondensed ~~Significant~~Consolidated ~~Accounting~~Financial ~~Policies~~Statements (Unaudited)

~~The following is a summary of certain significant accounting policies.~~ For athe ~~detailed~~Three ~~description of all of Cox’s significant accounting policies, see Note 2. “Summary of Significant Accounting Policies~~ and ~~Other~~Six ~~Items”~~Months ~~contained in~~Ended ~~Cox’s Annual Report on Form 10-K for the year ended December~~June 3130, ~~2003.~~2005

~~Use~~1. Organization and Basis of ~~Estimates~~Presentation

~~The~~Cox ~~preparation~~Communications, ofInc. ~~financial~~(Cox) ~~statements~~is ina ~~conformity~~multi-service ~~with~~broadband ~~GAAP~~communications ~~requires~~company serving ~~management~~approximately to6.7 million ~~make~~customers ~~estimates~~nationwide. ~~and~~Cox ~~assumptions~~is ~~that~~the ~~affect~~nation’s ~~the~~third-largest ~~reported~~cable ~~amounts~~television ofprovider ~~assets~~ and ~~liabilities~~offers ~~and~~an ~~disclosure~~array of ~~contingent~~broadband ~~assets~~products and ~~liabilities at~~services ~~the~~to ~~date~~both ofresidential ~~the financial statements~~ and ~~the reported amounts of revenues~~commercial ~~and~~customers ~~expenses~~in ~~during~~its ~~the reporting period~~markets. ~~Actual~~These ~~results~~services ~~could~~primarily ~~differ~~include ~~from those~~analog ~~estimates.~~and ~~The~~digital ~~results~~video, ~~of operations for the interim periods presented~~high-speed ~~are~~Internet ~~not~~access ~~necessarily~~and ~~indicative~~local ofand ~~the~~long-distance ~~results~~telephone. toCox beoperates ~~expected~~in ~~for~~one ~~the~~operating ~~year~~segment, ~~ending~~broadband ~~December 31, 2004 or any other interim period~~communications.

~~Asset~~ Prior ~~Retirement~~to ~~Obligations~~December 2004, Cox was an indirect, majority-owned subsidiary of Cox Enterprises, Inc. (CEI). In October 2004, CEI and two of its wholly-owned subsidiaries entered into an Agreement and Plan of Merger with Cox. Pursuant to this merger agreement, Cox and one of the CEI subsidiaries commenced a joint tender offer to purchase all of the shares of Cox Class A common stock not beneficially owned by CEI. In connection with the consummation of the joint tender offer and related follow-on merger, Cox was merged with a CEI subsidiary, with Cox as the surviving corporation. Accordingly, at December 31, 2004 and June 30, 2005, Cox was a wholly-owned subsidiary of CEI. In this report, the going-private transaction refers to the joint tender offer and the follow-on merger collectively.

OnThe ~~January 1,~~accompanying ~~2003,~~unaudited ~~Cox~~interim ~~adopted~~condensed ~~Statement~~consolidated offinancial ~~Financial~~statements ~~Accounting~~of ~~Standards~~Cox have ~~(SFAS) No. 143,~~been ~~Accounting~~prepared ~~for~~in ~~Asset~~accordance ~~Retirement~~with ~~Obligations,~~accounting ~~which~~principles ~~addresses financial~~generally ~~accounting~~accepted ~~and~~in ~~reporting~~the United States of America (GAAP) for ~~obligations~~interim ~~associated~~financial information and with the ~~retirement~~ ofinstructions ~~tangible~~to ~~long~~Form 10-~~lived~~Q ~~assets~~ and ~~the~~Article 10 ~~associated~~of ~~asset retirement costs~~Regulation S-X. ~~SFAS~~Accordingly, ~~No. 143~~they ~~requires~~do ~~that~~not ainclude ~~liability~~all beof ~~recognized~~the ~~for~~information anand ~~asset~~footnote ~~retirement~~disclosures ~~obligation~~required inby ~~the~~GAAP ~~period~~for incomplete ~~which~~financial itstatements. isIn ~~incurred~~the ifopinion aof ~~reasonable~~management, the ~~estimate~~unaudited ofinterim ~~fair~~condensed ~~value~~consolidated ~~can~~financial bestatements ~~made.~~reflect ~~Certain~~all ofadjustments ~~Cox’s~~considered necessary ~~franchise~~for ~~agreements~~the ~~and lease~~fair ~~agreements~~presentation ~~contain~~of ~~provisions~~the ~~requiring~~consolidated ~~Cox~~results toof ~~restore~~operations ~~facilities~~and orfinancial ~~remove~~position ~~equipment~~for in the ~~event~~interim ~~that~~periods ~~the~~presented. ~~franchise~~All orsuch ~~lease~~adjustments ~~agreement~~are isof ~~not renewed~~a normal recurring nature. These ~~Cox~~unaudited ~~expects~~interim tocondensed ~~continually~~consolidated ~~renew~~financial ~~its~~statements ~~franchise~~should ~~agreements~~be ~~and~~read ~~lease~~in conjunction ~~agreements~~with ~~related~~the toaudited ~~the~~consolidated ~~continued~~financial ~~operation~~statements ofand ~~its~~notes ~~broadband~~thereto ~~network,~~contained ~~and~~in ~~has~~Cox’s Annual ~~concluded~~Report ~~that~~on ~~the~~Form ~~related~~10-K, ~~franchise~~as ~~right~~amended, isfor anthe ~~indefinite-lived~~year ~~intangible~~ended December 31, 2004.

62. Summary of Significant Accounting Policies

~~Table~~ The following is a summary of ~~Contents~~certain significant accounting policies. For a detailed description of all of Cox’s significant accounting policies, see Note 2. “Summary of Significant Accounting Policies and Other Items” contained in Cox’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2004.

~~Cox~~Use ~~Communications,~~of ~~Inc.~~Estimates ~~Notes to Condensed Consolidated Financial Statements (Unaudited) – Continued~~

~~asset.~~ The ~~Accordingly,~~preparation ~~Cox~~of ~~has~~financial ~~concluded~~statements ~~that~~in ~~the~~conformity ~~timing~~with ofGAAP ~~the~~requires ~~settlement related~~management to ~~any~~make estimates ~~potential~~and ~~asset~~assumptions ~~retirement~~that ~~obligation~~affect ~~is indeterminate. Cox continually monitors~~ the ~~renewal~~reported ~~status~~amounts of ~~its~~assets ~~franchise~~and ~~agreements~~liabilities and ~~its~~disclosure ~~lease~~of ~~agreements.~~contingent Inassets and liabilities at the ~~unlikely~~date ~~event~~of ~~that~~the itfinancial isstatements ~~anticipated~~and ~~that~~the areported ~~franchise~~amounts ~~agreement~~of orrevenues ~~lease~~and ~~agreement~~expenses ~~containing~~during ~~such~~the areporting ~~provision~~period. ~~will~~Actual ~~not~~results becould differ from ~~renewed~~those ~~and~~estimates. ~~Cox~~The isresults ~~required~~of tooperations ~~remove~~for ~~its~~the ~~equipment~~interim ~~(and~~periods ~~accordingly~~presented ~~the~~are ~~timing~~not necessarily indicative of the ~~settlement~~results ~~related~~ to ~~any~~be ~~potential~~expected ~~asset~~for ~~retirement~~the ~~obligation~~year ~~can~~ending ~~be estimated)~~December 31, ~~Cox~~2005 ~~will~~or ~~record~~any another ~~estimated asset retirement obligation, if~~interim ~~material~~period.

Stock Compensation Plans

At June 30, ~~2004~~2005, Cox had ~~two~~one stock-based compensation ~~plans~~plan for employees, a Long-Term Incentive Plan (LTIP) ~~and~~. anCox ~~Employee~~has ~~Stock~~not ~~Purchase~~made ~~Plan~~any ~~(ESPP), which~~awards ~~are~~under ~~more~~the ~~fully~~LTIP ~~described~~ in ~~Cox’s~~2005 ~~Annual~~and ~~Report~~does onnot ~~Form~~expect ~~10-K~~to ~~for~~make ~~the year~~awards ~~ended December 31, 2003. Cox accounts for these plans~~ under the ~~intrinsic value~~LTIP ~~method,~~in ~~which follows~~ the ~~recognition~~future. ~~and~~At ~~measurement principles of Accounting Principles Board (APB)~~June ~~Opinion No. 25~~30, ~~Accounting for Stock Issued to Employees~~2004, ~~and~~Cox ~~related~~had ~~interpretations. All options granted under~~ the LTIP ~~had~~ and an ~~exercise~~Employee ~~price~~Stock ~~equal~~Purchase Plan to(ESPP). orBoth ~~greater~~of ~~than~~these ~~the~~plans ~~market~~are ~~value~~more offully ~~the underlying~~described ~~Class A~~in ~~common~~Cox’s ~~stock~~Annual Report on ~~the~~Form ~~grant date; therefore~~10-K, ~~no employee~~as ~~compensation~~amended, ~~cost~~for ~~is reflected in net income with respect to options. Further,~~ the ~~ESPP~~year isended ~~a noncompensatory plan under APB Opinion No.~~December 2531, ~~and, as such, no compensation cost was recognized with respect to the ESPP~~2004. Cox ~~recognizes compensation~~accounted ~~cost~~for ~~related~~these toplans ~~restricted stock awards granted~~ under the ~~LTIP, as~~intrinsic ~~the exercise price of the awards is less than the market~~ value ofmethod, ~~the~~which ~~underlying Class A common stock on the grant date.~~

~~The following table illustrates the effect on net income and net income~~6 per share if Cox had applied the fair value recognition provisions of SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, and SFAS No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation:

	Three Months Ended
	June 30
	2004			2003
	(Thousands of Dollars,
	excluding per share data)
Net income, as reported	$	62,682		$	117,745
Add: Stock-based compensation, as reported, net of tax		1,319			559
Deduct: Total stock-based compensation determined under fair value based method for all awards, net of tax		(8,337	)		(6,654	)
Pro forma net income	$	55,664		$	111,650
Net income per share:
Basic net income per share – as reported	$	0.10		$	0.19
Basic net income per share – pro forma		0.09			0.18
Diluted net income per share – as reported	$	0.10		$	0.19
Diluted net income per share – pro forma		0.09			0.18

7Cox Communications, Inc.

~~Table~~Notes ofto ~~Contents~~Condensed Consolidated Financial Statements (Unaudited) — Continued

~~Cox~~follows ~~Communications~~the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, ~~Inc~~Accounting for Stock Issued to Employees, and related interpretations. All options granted ~~Notes~~under the LTIP had an exercise price equal to ~~Condensed~~or ~~Consolidated~~greater ~~Financial~~than ~~Statements~~the market value of the underlying Class A common stock, par value $1.00 per share (~~Unaudited~~former public stock), –on ~~Continued~~the grant date; therefore, no employee compensation cost was reflected in net income with respect to options. Further, the ESPP was a noncompensatory plan under APB Opinion No. 25, and, as such, no compensation cost was recognized with respect to the ESPP. Cox recognized compensation cost related to restricted stock awards granted under the LTIP, as the exercise price of the awards was less than the market value of the underlying former public stock on the grant date. There were no restricted stock awards outstanding during the six months ended June 30, 2005.

	Six Months Ended
	June 30
	2004			2003
	(Thousands of Dollars,
	excluding per share data)
Net income, as reported	$	120,385		$	88,524
Add: Stock-based compensation, as reported, net of tax		2,024			653
Deduct: Total stock-based compensation determined under fair value based method for all awards, net of tax		(15,101	)		(11,516	)
Pro forma net income	$	107,308		$	77,661
Net income per share:
Basic net income per share – as reported	$	0.19		$	0.14
Basic net income per share – pro forma		0.17			0.13
Diluted net income per share – as reported	$	0.19		$	0.14
Diluted net income per share – pro forma		0.17			0.12

The following table illustrates the effect on net income if Cox had applied the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, and SFAS No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants made in 2004: weighted average expected volatilities at each grant date averaging 22.9%, no payment of dividends, expected life of six years and weighted average risk-free interest rates calculated at each grant date and averaging 3.2%.

Recently Issued Accounting Pronouncements


	Three Months Ended
	June 30
	2005			2004
Net income, as reported	$	18,282		$	62,682
Add: Stock-based compensation, as reported		—			1,319
Deduct: Total stock-based compensation determined under fair value based method for all awards, net of tax		(50	)		(8,337	)

Pro forma net income	$	18,232		$	55,664

In March 2004, the Emerging Issues Task Force (EITF) ratified its consensus related to the application guidance within EITF Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. EITF Issue No. 03-1 applies to investments in debt and equity securities within the scope of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, and equity securities that are not subject to the scope of SFAS No. 115 and not accounted for under the equity method under APB Opinion 18 and related interpretations. EITF Issue No. 03-1 requires that a three-step model be applied in determining when an investment is considered impaired, whether that impairment is other than temporary and the measurement of an impairment loss. The recognition and measurement guidance within EITF Issue No. 03-1 will be applied by Cox to other-than-temporary impairment evaluations beginning July 1, 2004. The adoption of EITF Issue No. 03-1 is not expected to have a material impact on Cox’s financial position or results of operations.


	Six Months Ended
	June 30
	2005			2004
Net income, as reported	$	45,294		$	120,385
Add: Stock-based compensation, as reported		—			2,024
Deduct: Total stock-based compensation determined under fair value based method for all awards, net of tax		(5,854	)		(15,101	)

Pro forma net income	$	39,440		$	107,308

InOther ~~May 2004,~~Compensation ~~the Financial Accounting Standards Board issued FASB Staff~~Plans Position (FSP) 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act). FSP 106-2 provides accounting and disclosure guidance for employers who sponsor postretirement health care plans that provide prescription drug benefits and becomes effective for Cox on July 1, 2004. In accordance with FSP 106-2, Cox will begin to recognize the effects of the Act on July 1, 2004. The adoption of FSP 106-2 will not have a material impact on Cox’s financial position or results of operations.

~~Reclassifications~~ On March 17, 2005, Cox adopted the Cox Communications, Inc. 2005 Performance Plan. Each participant in the Performance Plan has been assigned a target award under the Performance Plan. The performance goal for the Performance Plan is the amount of Cox’s cumulative operating cash flow in excess of its cumulative capital expenditures measured over the measurement period. For this purpose, the measurement period generally covers the period from January 1, 2005 through December 31, 2009. Cox recognizes the related expense ratably over the service period. The maximum award payable under the Performance Plan is equal to 200% of a participant’s target award, and the maximum award payable under the Performance Plan to any participant who terminates employment other than for reason of retirement, disability, death or involuntary termination of employment solely as a result of the consummation of certain transactions in which assets are sold by Cox or its affiliates is equal to 100% of a participant’s target award. The minimum award payable under the Performance Plan is zero. The earned award then is multiplied by the participant’s vested percentage in the award based on continual

~~Certain amounts in the 2003 unaudited interim condensed consolidated~~7 ~~financial statements have been reclassified for comparative purposes with 2004.~~

3.Table Investmentsof Contents

	June 30		December 31
	2004		2003
	(Thousands of Dollars)
Investments stated at fair value:
Available-for-sale	$	243	$	66,376
Derivative instruments		1,216		1,269
Equity method investments		44,605		31,088
Investments stated at cost		12,646		10,647
Total investments	$	58,710	$	109,380

Cox Communications, Inc.

8Notes to Condensed Consolidated Financial Statements (Unaudited) — Continued

~~Table~~employment with Cox and its affiliates to determine the actual amount of ~~Contents~~the payment. If a participant’s employment is terminated on account of cause, then no benefit shall be paid under the Performance Plan. All distributions of awards under the Performance Plan will be in the form of a lump sum cash payment.

~~Investments~~ The ~~Stated~~cost atof ~~Fair~~awards ~~Value~~made under the Performance Plan is charged to selling, general and administrative expense over the applicable vesting periods. Amounts charged to expense by Cox under the Performance Plan were $10.6 million for the three months ended June 30, 2005.

~~The~~During ~~aggregate~~the ~~cost~~second quarter of ~~Cox’s~~2005, ~~investments~~certain ~~stated~~Cox atexecutives ~~fair~~and ~~value~~key atemployees ~~June 30,~~became ~~2004~~participants ~~and~~in ~~December 31,~~the ~~2003~~Cox ~~was~~Enterprises, $1Inc.~~7 million~~ ~~and~~Unit ~~$42.5 million,~~Appreciation ~~respectively. Gross~~Plan ~~unrealized~~(CEI ~~losses~~UAP). onThe ~~investments~~CEI ~~were~~UAP ~~nominal~~provides for aspayment of ~~June 30,~~benefits ~~2004.~~in ~~Gross unrealized~~the ~~gains~~form onof ~~investments~~cash ~~were~~to ~~$25.3 million~~certain asexecutives ofand ~~December 31,~~key ~~2003.~~employees generally five ~~For~~years after the ~~three~~date ~~and~~of ~~six~~award. ~~months~~Unit ~~ended~~benefits ~~June 30,~~are ~~2004,~~based ~~gross~~upon ~~realized~~the ~~gains~~excess, ~~on investments~~if ~~stated~~any, atof the fair value of ~~were~~a ~~$2.3 million~~share ~~and~~of ~~$29.1 million, respectively.~~Cox ~~For~~Enterprises’ ~~the~~common ~~three~~stock ~~and~~on ~~six~~the ~~months~~date ~~ended~~five ~~June 30,~~years ~~2003,~~after ~~gross~~the ~~realized~~effective date of ~~gains~~award ~~and~~over ~~losses~~a onbase ~~investments~~amount ~~stated~~as atof ~~fair~~the ~~value~~effective ~~were $124.5 million~~date ~~and~~of $0such award.~~4 million,~~ ~~respectively,~~Management ~~and~~determines fair values ~~$124.5 million~~by ~~and~~utilizing ~~$2.1 million,~~the ~~respectively.~~services ~~Derivative~~of ~~instruments~~independent ~~classified~~appraisers. ~~within~~The ~~investments are~~CEI ~~comprised~~UAP ofprovides ~~certain~~for ~~warrants~~a tomaximum ~~purchase~~unit benefit ~~shares~~of 150% of ~~publicly-traded~~the ~~and privately-held~~base ~~entities,~~amount asand ~~further~~benefits ~~described~~vest inover ~~Note~~the 6.five-year ~~“Derivative Instruments~~period ~~and~~following ~~Hedging~~the ~~Activities~~date of award.”

~~Sprint~~The ~~Corporation.~~cost Inof ~~March 2004,~~awards ~~Cox~~made ~~sold~~under ~~0.1 million~~the ~~shares~~CEI ~~of Sprint’s~~UAP ~~PCS~~is ~~Group~~charged ~~preferred~~to ~~stock~~selling, ~~for~~general ~~aggregate~~and ~~net~~administrative expense ~~proceeds~~over ofthe ~~approximately $56~~applicable vesting periods.~~9 million.~~ Amounts charged by Cox ~~recognized~~to aexpense ~~pre-tax~~under ~~gain~~the ofCEI UAP were $192.57 million onfor the ~~sale~~three ~~of these~~months ~~shares~~ended June 30, 2005.

InRecently ~~April 2004,~~Issued ~~Sprint~~Accounting ~~eliminated its PCS tracking stock by mandating the~~Pronouncements exchange of its PCS shares for shares of its FON common stock. Cox held certificates representing approximately 330,000 PCS shares and received approximately 165,000 FON shares in exchange for the certificates. In June 2004, Cox sold the FON shares for net proceeds of approximately $3.0 million. Cox recognized a pre-tax gain of approximately $2.3 million on the sale of these shares. As a result of the sale, Cox no longer holds any shares of Sprint stock.

~~Other~~ In June 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff Position FAS 143-1, Accounting for Electronic Equipment Waste Obligations, that provides guidance on how commercial users and producers of electronic equipment should recognize and measure asset retirement obligations associated with the European Directive 2002/96/EC on Waste Electrical and Electronic Equipment. The guidance in FAS 143-1 applies to the later of the company’s fiscal quarter ended June 30, 2005 or the date of the adoption of the law by the applicable European Union (EU) member country. The adoption of the FSP in the current quarter did not have a material effect on Cox’s unaudited Condensed Consolidated Financial Statements. Due to the fact that several major EU-member countries have not yet enacted country-specific laws, Cox cannot estimate the effect of applying this guidance in future periods.

~~During~~In June 2005, the ~~first~~Emerging ~~quarter~~Issues ofTask ~~2004,~~Force ~~Cox~~(EITF) ~~sold~~reached ~~certain~~consensus ~~other~~on ~~non~~Issue No. 04-~~strategic~~5, Determining Whether a General ~~investments~~Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights (EITF 04-5). EITF 04-5 provides a framework for determining ~~aggregate~~whether ~~net~~a ~~proceeds~~general partner controls and should consolidate a limited partnership or a similar entity in light of ~~approximately~~certain ~~$10~~rights held by the limited partners.~~3 million~~ The consensus also provides additional guidance on substantive rights. ~~Cox~~EITF 04-5 is effective after June 29, 2005 for all newly formed partnerships ~~recognized~~and afor any pre-~~tax~~existing ~~gain~~limited ofpartnerships $7that modify their partnership agreements after that date.3 EITF 04-5 must be adopted by January ~~million~~1, on2006 ~~the~~for ~~sale~~all other limited partnerships through a cumulative effect of ~~these~~a ~~investments~~change in accounting principle recorded in opening equity or it may be applied retrospectively by adjusting prior period financial statements. EITF 04-5 is not anticipated to have a material effect on Cox’s financial position or results of operations.

~~Cox~~In ~~has~~May 2005, ~~several~~the ~~other~~FASB ~~fair~~issued ~~value~~SFAS No. 154, ~~equity~~Accounting Changes and ~~cost~~Error ~~method~~Corrections—a replacement ~~investments~~of ~~that~~APB Opinion No. 20 and FASB Statement No. 3 (SFAS No. 154). This Statement replaces ~~were~~APB ~~not~~Opinion No. 20, ~~individually~~Accounting orChanges and FASB Statement No. 3, Reporting Accounting Changes in Interim ~~the~~Financial ~~aggregate~~Statements, ~~significant~~and changes the requirements for the accounting for and reporting of a change in ~~relation~~accounting principle. SFAS No. 154 applies to all voluntary changes in an accounting principle. It also applies to changes required by an accounting pronouncement in the unusual ~~Condensed~~instance ~~Consolidated~~that ~~Balance~~the ~~Sheets~~pronouncement atdoes ~~June~~not include specific transition provisions. SFAS No. ~~30,~~154 ~~2004~~is effective for accounting changes and error corrections occurring in fiscal years beginning after December 3115, ~~2003~~2005. The adoption of

~~4. Intangible Assets~~8

OnTable January 1, 2002, Cox adopted SFAS No. 142, Goodwill and Other Intangible Assets, which requires that goodwill and certain intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually. Cox has determined that its franchise value intangible assets have an indefinite useful life. Cox assesses franchise value for impairment under SFAS No. 142 by utilizing a residual approach whereby Cox measures the implied fair value of each franchise value intangible asset subject to the same unit of accounting by deducting from the fair value of each cable system cluster the fair value of the cable system cluster’s other net assets, including previously unrecognized intangible assets. In performing an impairment test in accordance with SFAS No. 142, Cox considers the guidance contained in EITF Issue No. 02-17, Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination, whereby Cox considers assumptions that marketplace participants would consider, such as expectations of future contract renewals and other benefits related to the intangible asset, when measuring the fair value of the cable system cluster’s other net assets. The January 2003 impairment test in accordance with SFAS No. 142 resulted in a non-cash impairment charge of approximately $25.0 million, which is classified within amortization expense in Cox’s Condensed Consolidated Statements of Operations for the six months ended June 30, 2003. Cox completed its next impairment test in accordance with SFAS No. 142 in August 2003. The August 2003 test indicated no impairment of franchise value. Contents

9Cox Communications, Inc.

~~Table~~Notes ofto ~~Contents~~Condensed Consolidated Financial Statements (Unaudited) — Continued

~~Cox~~SFAS ~~Communications, Inc~~No. ~~Notes~~ 154 is not anticipated to ~~Condensed~~have ~~Consolidated~~a ~~Financial~~material ~~Statements~~effect ~~(Unaudited)~~on –Cox’s ~~Continued~~financial position or results of operations.

~~Summarized~~In ~~below~~March 2005, ~~are~~the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47). FIN 47 clarifies that the ~~carrying~~term ~~value~~“conditional ~~and~~asset ~~accumulated~~retirement obligation” ~~amortization~~as used in FASB Statement No. 143, Accounting for Asset Retirement Obligations, refers to a legal obligation of an entity to perform an asset retirement activity in which the timing ~~intangible~~and/or ~~assets~~method of settlement are conditional on a future event that ~~continue~~may toor may not be ~~amortized~~within ~~under~~the control ~~SFAS~~of Nothe entity. ~~142~~ Such an obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. Accordingly, asan ~~well~~entity asis required to recognize a liability for the fair value of a conditional asset retirement obligation if the ~~carrying~~fair value of ~~those~~the ~~intangible~~liability ~~assets,~~can ~~which~~be ~~are~~reasonably estimated. FIN 47 is effective for Cox no ~~longer~~later ~~amortized:~~than December 31, 2005. Cox is currently assessing the impact of FIN 47 on its consolidated financial statements.

	June 30, 2004						December 31, 2003
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Value		Amortization		Value		Value		Amortization		Value
	(Thousands of Dollars)
Intangible assets subject to amortization	$	58,148	$	19,752	$	38,396	$	58,526	$	21,855	$	36,671
Franchise value						15,991,195						15,660,824
Total intangible assets					$	16,029,591					$	15,697,495

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets—an amendment of APB Opinion No. 29 (SFAS No. 153). The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions (APB No. 29), is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in APB Opinion No. 29, however, included certain exceptions to that principle. SFAS No. 153 amends APB Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. SFAS No. 153 is effective for such exchange transactions occurring in fiscal periods beginning after June 15, 2005. The adoption of SFAS No. 153 is not anticipated to have a material effect on Cox’s financial position or results of operations.

5 In December 2004, the FASB issued SFAS No. 123 ~~Debt~~(Revised), Share-Based Payment (SFAS 123 (R)). This statement replaces SFAS No. 123 and supersedes APB Opinion No. 25. SFAS No. 123 (R) requires companies to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees and to record compensation cost for all stock awards granted after the required effective date and to awards modified, repurchased, or cancelled after that date. In addition, Cox is required to record compensation expense (as previous awards continue to vest) for the unvested portion of previously granted awards that remain outstanding at the date of adoption. As issued, SFAS No. 123 (R) would have been effective for interim periods beginning after June 15, 2005. In April 2005, the Securities and Exchange Commission (SEC) amended the compliance date for SFAS No. 123 (R) to the beginning of the next fiscal year that begins after June 15, 2005. Cox is currently assessing the impact of this statement on its consolidated financial statements.

	June 30		December 31
	2004		2003
	(Thousands of Dollars)
Revolving credit facilities	$	—	$	—
Commercial paper		37,000		302,283
Medium-term notes		364,393		364,359
Notes and debentures		6,023,315		6,078,904
Exchangeable subordinated debentures		18,831		26,138
Capitalized lease obligations		198,367		217,992
Other		21,918		22,124
		6,663,824		7,011,800
Less current portion		527,211		48,344
Total long-term debt	$	6,136,613	$	6,963,456

3. Going-Private Transaction

~~See~~On ~~Note~~December 8, 6.2004, ~~“Derivative~~the ~~Instruments~~going-private ~~and~~transaction ~~Hedging~~was ~~Activities”~~completed, ~~for~~and Cox became a wholly ~~discussion~~owned subsidiary of ~~the~~CEI. ~~accounting~~The ~~for~~aggregate ~~certain~~purchase ~~derivative~~price ~~instruments~~(exclusive ~~embedded~~of inestimated fees and expenses) was approximately $8.4 billion. The purchase price was funded by both CEI and Cox. Of the total ~~exchangeable~~$8.4 billion, ~~subordinated~~CEI ~~debentures~~paid approximately $1.5 billion, ~~which~~with ~~have~~Cox ~~been~~paying ~~classified~~the asremaining aapproximate ~~component~~$6.9 ofbillion, ~~debt~~which inwas ~~the~~funded ~~Condensed~~primarily ~~Consolidated~~through ~~Balance~~borrowings ~~Sheets~~under atlines ~~June 30,~~of ~~2004~~credit and the issuance of ~~December 31,~~senior ~~2003~~notes of varying maturities.

~~Revolving~~ Approximately ~~Credit~~50.2 million ~~Facilities~~shares of common stock were not tendered and, consequently, the tender offer were converted into the right to receive $34.75 per share in cash, without interest, and cancelled as part of the merger that followed the closing of the tender offer. As of June 30, 2005, Cox had a remaining cash obligation to purchase the untendered shares and shares with respect to which appraisal rights had been perfected of approximately $10.9 million, which is reflected as Cash obligation to untendered shareholders in the accompanying condensed consolidated balance sheet.

~~In June 2004, Cox entered into a new five-year revolving bank credit~~9 facility with a capacity of $1.25 billion, which will be available through June 4, 2009. This new credit facility replaces Cox’s $900.0 million 364-day and $900.0 million five-year revolving bank credit facilities. At Cox’s election, the interest rate on the credit agreement is based on London Interbank Offered Rate (LIBOR), the certificate of deposit rate plus varying percentages or an alternate base rate. The credit agreement also imposes a commitment fee on the unused portion of the total amount available based on a ratio of debt to operating cash flow, a measure of performance not calculated in accordance with GAAP, and a utilization fee based on the level of borrowing. Cox had no borrowings outstanding under any of its credit agreements at June 30, 2004 and December 31, 2003.

10 Table of Contents

~~Table~~Cox ofCommunications, ~~Contents~~Inc.

~~Cox Communications, Inc.~~ Notes to Condensed Consolidated Financial Statements (Unaudited) –— Continued

~~Notes~~ CEI elected to apply push-down basis accounting with respect to shares acquired in the going-private transaction. Accordingly, the aggregate $8.4 billion purchase price has been “pushed-down” to the condensed consolidated financial statements of Cox. As a result, the net tangible and ~~Debentures~~intangible assets of Cox at June 30, 2005 and December 31, 2004 have been stepped-up to fair value to the extent of the 37.96% minority interest acquired in the going-private transaction pursuant to the purchase method of accounting for business combinations. These initial purchase price allocations were based on preliminary estimated fair values of the net tangible and intangible assets as of the acquisition date and may be adjusted within one year of the purchase date for changes in estimates of the fair value of assets acquired and liabilities assumed based on the results of an ongoing independent appraisal process expected to be completed during 2005.

In accordance with the terms of the indenture governing Cox’s convertible senior notes due 2021, Cox became obligated to purchase for cash convertible notes tendered and not withdrawn before the close of business on February 23, 20044. ~~Cox repurchased $19.0 million aggregate principal amount at maturity of~~Investments the convertible notes that had been properly tendered and not withdrawn, for aggregate cash consideration of $13.9 million, which represented the accreted value of the repurchased notes. As a result, no convertible notes remain outstanding.

Exchangeable Subordinated Debentures


	June 30		December 31
	2005		2004
	(Thousands of Dollars)
Investments stated at fair value:
Available-for-sale	$	433	$	339
Derivative instruments		152		939
Equity method investments		1,200,346		1,159,290
Investments stated at cost		11,079		11,079


Total investments	$	1,212,010	$	1,171,647

InInvestments ~~2003,~~Stated Cox purchased approximately 99% of its outstanding exchangeable subordinated debentures due 2029 (PRIZES), approximately 99% of its outstanding 3% exchangeable subordinated debentures due 2030 (Premium PHONES) and approximately 97% of its outstanding exchangeable subordinated discount debentures due 2029 (Discount Debentures) pursuant to cash tender offers. In June 2004, Cox redeemed all remaining outstanding PRIZES and Premium PHONES for aggregate cash consideration of $14.7 million. Exchangeable subordinated debentures at ~~June 30,~~Fair ~~2004 were comprised of $62.3~~Value ~~million aggregate principal amount at maturity of Discount Debentures.~~

~~Interest~~ The ~~Rate~~aggregate ~~Swaps~~cost of Cox’s investments stated at fair value at June 30, 2005 and December 31, 2004 was $0.4 million and $1.6 million. Gross unrealized gains on investments were $0.1 million at June 30, 2005 and December 31, 2004.

~~Cox~~Gross ~~utilizes~~realized ~~interest~~gains ~~rate~~and ~~swap~~losses agreements to manage its exposure to changes in interest rates associated with certain of its fixed-rate debt obligations whereby these fixed-rate debt obligations are effectively converted into floating-rate debt obligations. The variable rates with respect to Cox’s interest rate swaps are adjusted quarterly or semi-annually based on ~~LIBOR. The~~investments ~~notional amounts with respect to the interest rate swaps do not quantify risk, but~~ are ~~used~~as ~~in the determination of cash settlements under the interest~~follows: rate swap agreements. Cox is exposed to a credit loss in the event of nonperformance by the counterparties; however, these counterparties are major financial institutions, rated investment grade or better. Accordingly, Cox does not anticipate nonperformance by the counterparties. For a further discussion regarding Cox’s accounting for interest rate swaps, see Note 6. “Derivative Instruments and Hedging Activities.”

The following table summarizes the notional amounts, weighted-average interest rate data and maturities for Cox’s interest rate swap agreements at June 30, 2004 and December 31, 2003:


	Three Months Ended				Six Months Ended
	June 30				June 30
	2005		2004		2005		2004
	(Thousands of Dollars)
Realized gains	$	—	$	2,326	$	2	$	29,135
Realized losses		2,723		—		2,723		—

	June 30			December 31
	2004			2003
Notional amount (in thousands)	$	1,750,000		$	1,750,000
Weighted-average fixed interest rate received		7.38	%		7.38	%
Weighted-average floating interest rate paid		3.76	%		3.27	%
Maturity		2004 – 2009			2004 – 2009

Derivative instruments classified within investments are comprised of certain warrants to purchase shares of publicly-traded and privately-held entities, as further described in Note 7. “Derivative Instruments and Hedging Activities.”

AsSprint aCorporation. ~~result~~In ofMarch 2004, ~~the~~Cox ~~settlements~~sold ~~under~~0.1 million ~~Cox~~shares of Sprint Corporation’s ~~interest~~PCS Group ~~rate~~(Sprint ~~swap~~PCS) ~~agreements, interest~~preferred ~~expense~~stock ~~was~~for ~~reduced~~aggregate bynet ~~$15.7 million~~proceeds ~~and~~of approximately $3356.89 million,. ~~respectively,~~Cox ~~during~~recognized ~~the~~a ~~three~~pre-tax ~~and~~gain ~~six~~of ~~months ended June 30, 2004, and~~ $1519.25 million ~~and $29.0 million,~~on ~~respectively, during~~ the ~~same~~sale ~~periods~~of inthese ~~the prior year~~shares.

6 In April 2004, Sprint eliminated its PCS tracking stock by mandating the exchange of its PCS shares for shares of its FON common stock. ~~Derivative~~Cox ~~Instruments~~held approximately 330,000 PCS shares and ~~Hedging~~received approximately ~~Activities~~165,000 FON shares in the mandatory exchange. In June 2004, Cox sold the FON shares for net proceeds of approximately $3.0 million. Cox recognized a pre-tax gain of approximately $2.3 million on the sale of these shares. As a result of the sale, Cox no longer holds any shares of Sprint stock.

~~Cox accounts for derivative instruments in accordance with SFAS No. 133,~~10 which requires all freestanding and embedded derivative instruments to be measured at fair value and recognized on the balance sheet as either assets or liabilities. In addition, all derivative instruments used in hedging relationships must be designated, reassessed and accounted for as either fair value hedges or cash flow hedges pursuant to the provisions of SFAS No. 133.

11 Table of Contents

~~Table~~Cox ofCommunications, ~~Contents~~Inc.

~~Cox Communications, Inc.~~ Notes to Condensed Consolidated Financial Statements (Unaudited) –— Continued

~~Cox~~Equity ~~does~~Method ~~not hold or issue derivative instruments for trading purposes and~~Investments is not a party to leveraged instruments. From time to time, however, Cox uses derivative instruments to manage its exposure to changes in the fair value of certain of its assets or liabilities or to manage its exposure to changes in interest rates or equity prices. These derivative instruments are designated and accounted for by Cox as hedges of the underlying exposure being managed, as prescribed by SFAS No. 133. In addition, upon adoption of SFAS No. 133, certain of Cox’s debt instruments and investments contained embedded or freestanding derivatives, as defined. Cox has not designated these embedded and freestanding derivatives as hedges under SFAS No. 133 and, as such, changes in their fair value are being recognized in earnings as derivative gains or losses. Cox’s use of derivative instruments may result in short-term gains or losses and may increase volatility in its earnings.

~~The~~TV ~~credit~~Works, ~~risks~~LLC ~~associated~~(formerly ~~with~~known ~~Cox’s~~as ~~derivative~~Double ~~financial~~C ~~instruments~~Technologies, LLC). During the second quarter of ~~are~~2005, ~~controlled~~Cox ~~through~~contributed $43.0 million to TV Works, LLC, representing a 33% ownership interest in the entity, ~~evaluation~~which is majority owned and ~~monitoring~~controlled ofby Comcast Corporation. With the ~~creditworthiness~~contribution offrom ~~the~~Cox ~~counterparties.~~as ~~The~~well ~~counterparties~~as ~~are~~contributions ~~major~~from ~~financial~~Comcast ~~institutions~~Corporation, ~~rated~~TV Works, LLC completed its purchase of ~~investment~~substantially ~~grade~~all orof ~~better.~~the ~~Accordingly,~~North ~~Cox~~American ~~does~~assets ~~not~~of ~~anticipate nonperformance~~Liberate byTechnologies ~~the~~as ~~counterparties~~well as assets from other strategic companies.

~~Cox~~Discovery ~~recorded~~Communications, ~~nominal~~Inc. ~~pre-tax~~The ~~losses~~principal onbusinesses ~~derivative~~of ~~instruments~~Discovery ~~during~~are the ~~three~~advertiser-supported ~~and~~basic ~~six~~cable ~~months~~networks ~~ended~~The ~~June 30~~Discovery Channel, ~~2004~~The ~~and~~Learning ~~pre-tax~~Channel, ~~losses~~Animal Planet onNetwork, ~~derivative instruments~~The ofTravel ~~$24.2 million~~Channel and ~~$26.7 million~~Discovery ~~during~~Europe ~~the three~~ and ~~six~~the ~~months ended~~retail ~~June 30,~~businesses ~~2003,~~of ~~respectively~~Discovery. ~~Derivative adjustments made in accordance~~com. ~~with~~In ~~SFAS~~2000, ~~No. 133~~Cox ~~have~~ceased ~~historically~~applying ~~had~~the aequity ~~material~~method ~~impact~~ on ~~reported indebtedness.~~its Asinvestment ain ~~result~~Discovery ofas Cox’s ~~purchase~~cumulative proportionate share of ~~its~~equity ~~exchangeable~~in ~~subordinated debentures,~~ net ~~settlement~~losses ofexceeded ~~its~~the ~~zero-coupon~~carrying ~~debt~~amount ~~and sale~~ of ~~Sprint~~the ~~PCS~~investment. ~~stock~~As of ~~during~~June 30, ~~2003~~2005, ~~SFAS~~Cox ~~No. 133~~has ~~adjustments~~not ~~did~~resumed ~~not~~applying ~~significantly~~the ~~impact~~equity ~~reported indebtedness~~method aton ~~June 30,~~its ~~2004~~investment orin ~~December 31~~Discovery, ~~2003.~~as Cox’s ~~The~~proportionate ~~following~~share ~~is a detail~~ of ~~Cox’s~~equity ~~loss~~in onnet ~~derivative~~income ~~instruments~~has ~~for~~not ~~the~~exceeded ~~three~~its ~~and~~share ~~six~~of ~~months~~net ~~ended~~losses ~~June~~not ~~30,~~recognized ~~2004~~during ~~and~~the ~~2003~~period ~~followed~~in bywhich athe ~~summary~~equity ofmethod ~~Cox’s~~has ~~derivative~~been ~~instruments~~suspended.

	Three Months Ended					Six Months Ended
	June 30					June 30
	2004		2003			2004			2003
	(Millions of Dollars)
Zero-coupon debt	$	—	$	(24.5	)	$	—		$	(22.9	)
Exchangeable subordinated debentures		—		0.4			—			0.6
Stock purchase warrants		—		(0.1	)		(0.1	)		(4.4	)
Total loss on derivative instruments, net	$	—	$	(24.2	)	$	(0.1	)	$	(26.7	)

As part of the going-private transaction and the related push-down basis accounting pursuant to the purchase method of accounting for business combinations, as further described in Note 3. “Going-Private Transaction,” Cox’s investment in Discovery was stepped-up to fair value to the extent of the 37.96% minority interest acquired in the going-private transaction. Accordingly, a purchase price adjustment of approximately $1.1 billion is reflected in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2005 and December 31, 2004.

~~Interest Rate Swap Agreements~~Other

~~Cox~~During ~~utilizes~~the ~~interest~~first ~~rate~~quarter ~~swap agreements designed to assist Cox in maintaining a mix~~ of ~~fixed~~2004, ~~and floating rate debt by converting a portion of existing fixed rate debt into a floating rate obligation.~~ Cox ~~has~~sold ~~designated and~~certain ~~accounted for its interest rate swap agreements as fair value hedges whereby the fair value of the related interest rate swap agreements are classified as a component of~~ other ~~assets with the corresponding fixed~~non-~~rate debt~~strategic ~~obligations~~investments ~~being classified as a component of debt in the Condensed Consolidated Balance Sheets. Cox has assumed no ineffectiveness with regard to these interest rate swap agreements as the agreements qualify~~ for ~~the short-cut~~ ~~method~~aggregate ofnet ~~accounting~~proceeds ~~for fair value hedges~~ of ~~debt instruments,~~approximately ~~as prescribed by SFAS No~~$10.3 ~~133~~million. Cox’s ~~interest~~recognized ~~rate swap agreements approximated~~ a ~~derivative~~pre-tax ~~asset~~gain of $217.0 3 million ~~and~~on ~~$61.2 million at~~the ~~June 30,~~sale ~~2004~~of ~~and~~these ~~December 31, 2003, respectively~~investments.

~~Zero-Coupon~~ Cox ~~Debt~~has several other fair value, equity and cost method investments that were not, individually or in the aggregate, significant in relation to the Condensed Consolidated Balance Sheets at June 30, 2005 and December 31, 2004.

~~In August 2003, Cox terminated its series of prepaid forward contracts to sell up to 19.~~5 ~~million shares of its Sprint PCS common stock~~. ~~Prior~~Intangible ~~to the~~Assets termination, these contracts met the definition of a hybrid instrument, as prescribed by SFAS No. 133. These hybrid instruments were comprised of a zero-coupon debt instrument, as the host contract, and an embedded derivative, which derived its value, in part, based on

12 On January 1, 2002, Cox adopted SFAS No. 142, Goodwill and Other Intangible Assets, which requires that goodwill and certain intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually. Cox has determined that its franchise value intangible assets have an indefinite useful life.

~~Table~~ Prior to September 2004, Cox assessed franchise value for impairment under SFAS No. 142 by utilizing a residual approach whereby Cox measured the implied fair value of ~~Contents~~each franchise value intangible asset subject to the same unit of accounting by deducting from the fair value of each cable system cluster the fair value of the cable system cluster’s other net assets, including previously unrecognized intangible assets. In performing an impairment test in accordance with SFAS No. 142, Cox considers the guidance contained in Emerging Issues Task Force Issue No. 02-17, Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination, whereby Cox considers assumptions that marketplace participants would consider, such as expectations of future contract renewals and other benefits related to the intangible asset, when measuring the fair value of the cable system cluster’s other net assets.

~~Cox~~ In ~~Communications~~September 2004, ~~Inc.~~the SEC announced that a direct value method should be used to determine ~~Notes~~the fair value of all intangible assets required to ~~Condensed~~be ~~Consolidated~~recognized ~~Financial~~under ~~Statements~~SFAS ~~(Unaudited)~~No. 141, –Business Combinations, ~~Continued~~and

~~the trading price of Sprint PCS~~11 common stock. Cox did not designate these embedded derivatives as a hedge of its investment in Sprint PCS common stock. As a result, changes in the fair value of these embedded derivatives were recognized in earnings and classified within gain (loss) on derivative instruments in Cox’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2003.

ExchangeableTable Subordinatedof Debentures Contents

~~Prior to June 2004,~~ Cox ~~had three series of exchangeable subordinated debentures~~Communications, ~~referred to as PRIZES, Premium Phones, and Discount Debentures~~Inc. In June 2004, Cox purchased all remaining outstanding PRIZES and Premium Phones; as a result, the only remaining exchangeable subordinated debentures are the Discount Debentures. The exchangeable subordinated debentures meet the definition of a hybrid instrument, as prescribed by SFAS No. 133. These hybrid instruments are comprised of an exchangeable subordinated debt instrument, as the host contract, and an embedded derivative, which derives its value, in part, based on the trading price of Sprint PCS common stock, U.S. Treasury rates and Cox’s credit spreads. Cox has not designated these embedded derivatives as a hedge of its investment in Sprint PCS common stock. As a result, changes in the fair value of these embedded derivatives are recognized in earnings and classified within gain (loss) on derivative instruments in the Condensed Consolidated Statements of Operations. The aggregate fair value of these embedded derivatives approximated a derivative obligation of $0 at June 30, 2004 and December 31, 2003.

~~Stock~~Notes ~~Purchase~~to ~~Warrants~~Condensed Consolidated Financial Statements (Unaudited) — Continued

~~Cox~~that ~~holds~~registrants ~~warrants~~should apply a direct value method to ~~purchase~~such ~~equity~~assets ~~securities~~acquired ofin ~~certain~~business ~~publicly-traded~~combinations ~~and~~completed ~~privately-held~~after ~~entities~~September 29, 2004. ~~Warrants~~Further, ~~that~~registrants ~~can~~who behad ~~exercised and~~applied ~~settled~~the byresidual method to the ~~delivery~~valuation of ~~net~~intangible ~~shares~~assets ~~such~~for ~~that~~purposes ~~Cox~~of ~~pays~~impairment notesting ~~cash~~were ~~upon~~required to ~~exercise~~perform ~~are~~a ~~deemed~~transition ~~freestanding~~impairment ~~derivative~~test ~~instruments,~~using asa ~~prescribed~~direct byvalue ~~SFAS No. 133.~~method ~~Cox~~on ~~has~~all ~~not~~intangible ~~designated~~assets ~~net~~that ~~share~~had been ~~warrants~~previously asvalued ~~hedging~~using ~~instruments; accordingly,~~the ~~changes~~residual inmethod ~~the~~under ~~fair~~SFAS ~~value~~No. 142 ofno ~~these~~later ~~warrants~~than ~~are~~the ~~recognized~~beginning inof ~~earnings~~their ~~and~~first ~~classified~~fiscal ~~within~~year ~~gain~~beginning ~~(loss)~~after December on15, ~~derivative~~2004. ~~instruments~~Impairments inof ~~the~~intangible assets ~~Condensed~~recognized ~~Consolidated~~upon ~~Statements~~application of ~~Operations.~~a ~~The~~direct ~~aggregate fair~~ value ~~of these~~method ~~warrants~~by ~~approximated~~entities apreviously ~~derivative~~applying ~~asset~~the ~~of $1.2 million and $1.3 million~~residual ~~at June 30~~method, ~~2004~~including ~~and~~the ~~December 31,~~related ~~2003,~~deferred ~~respectively~~tax effects, ~~and~~were ~~has~~to ~~been~~be ~~classified~~ reported as a ~~component~~cumulative effect of ~~investments~~a change in ~~the~~accounting ~~Condensed Consolidated Balance Sheets~~principle.

7 Consistent with this SEC position, Cox began applying a direct value method to determine the fair value of its indefinite-lived intangible assets comprised of cable franchise rights, acquired prior to September 29, 2004. ~~Net~~During ~~Income~~the ~~Per~~fourth ~~Share~~quarter of 2004, Cox performed a transition impairment test, which resulted in a charge of approximately $2.0 billion ($1.2 billion, net of tax).

~~The~~Also ~~following~~during ~~table~~the ~~reconciles~~fourth quarter of 2004, Cox revised its marketplace assumption surrounding its estimated cost of capital as a result of the ~~numerator~~going-private ~~and~~transaction. In accordance with SFAS No. 142, Cox performed an impairment test, which along with the ~~denominator~~revised estimated cost of ~~the~~capital, ~~basic~~included ~~and~~a ~~diluted~~revised ~~per~~long-range ~~share~~operating ~~computations~~forecast. ~~for~~As ~~net~~a ~~income~~result ~~for~~of the ~~three~~impairment ~~and~~test, ~~six~~Cox ~~months~~recognized ~~ended~~an ~~June~~impairment charge of approximately $2.4 30billion related to its cable franchise rights, ~~2004~~as ~~and~~calculated ~~2003:~~using a direct value method.

13 As part of the going-private transaction and the related push-down basis accounting pursuant to the purchase method of accounting for business combinations, as further described in Note 3. “Going-Private Transaction,” Cox recorded customer relationship, trade name and goodwill intangibles. The trade name intangible asset, which represents the value associated with the Cox name, is deemed to have an indefinite useful life.

~~Table~~ Customer relationship intangible assets, which represent the value attributable to Cox customers, are deemed to have a finite useful life of ~~Contents~~six years. Cox’s other intangible assets that have a finite useful life are comprised primarily of non-compete agreements, contractual rights and cable franchise renewal costs. These intangible assets are amortized on a straight-line basis over the term of the related agreement. Cox evaluates the useful lives of its finite lived intangible assets each reporting period to determine whether events or circumstances warrant revised estimates of useful lives.

~~Cox~~ Summarized ~~Communications,~~below ~~Inc.~~are the carrying value and accumulated amortization of intangible assets that ~~Notes~~continue to ~~Condensed~~be ~~Consolidated~~amortized ~~Financial~~under ~~Statements~~SFAS ~~(Unaudited)~~No. 142, –as ~~Continued~~well as the carrying value of those intangible assets, which are no longer amortized:

	Three Months		Six Months
	June 30, 2005						December 31, 2004
	Ended		Ended
	Gross				Net		Gross				Net
	June 30, 2004		June 30, 2004
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	(Thousands of Dollars,
	Value		Amortization		Value		Value		Amortization		Value
	excluding per share data)
					(Thousands of Dollars)
Net income (A)	$	62,682	$	120,385
Intangible assets subject to amortization	$	669,274	$	85,297	$	583,976	$	659,967	$	30,743	$	629,224
Basic weighted-average shares outstanding (B)		621,755		621,221
Trade name						380,844						380,844
Effect of dilutive securities:
Franchise value						18,319,384						18,319,384
Restricted stock		1,231		1,249
Intangible assets					$	19,284,204						19,329,452
Employee stock purchase plan		51		77
Goodwill					$	106,889					$	106,889
Convertible preferred stock		10,350		10,781
Diluted weighted-average shares outstanding (C)		633,387		633,328
Net Income per share
Basic net income per share (A/B)	$	0.10	$	0.19
Diluted net income per share (A/C)	$	0.10	$	0.19

	Three Months		Six Months
	Ended		Ended
	June 30, 2003		June 30, 2003
	(Thousands of Dollars,
	excluding per share data)
Net income (A)	$	117,745	$	88,524
Basic weighted-average shares outstanding (B)		620,256		620,240
Effect of dilutive securities:
Employee stock purchase plan		84		64
Convertible preferred stock		9,389		9,389
Diluted weighted-average shares outstanding (C)		629,729		629,693
Net income per share
Basic net income per share (A/B)	$	0.19	$	0.14
Diluted net income per share (A/C)	$	0.19	$	0.14

ForTable the three and six months ended June 30, 2004, 19.0 million Class A common shares related to employee stock-based compensation plans were not included in the computation of diluted net income per share because such effects would have been antidilutive for the period. Contents

~~For~~Cox ~~the three and six months ended June 30~~Communications, ~~2003, 15~~Inc.~~7 million Class A~~ common shares related to employee stock-based compensation plans and convertible senior notes were not included in the computation of diluted net income per share because such effects would have been antidilutive for the period.

InNotes June 2004, all 4,836,372 issued and outstanding shares of Cox’s Series A convertible preferred stock were converted into 11,212,121 shares of Cox’s Class A common stock, in accordance with the terms of the Series A convertible preferred stock. Cox issued the Series A convertible preferred stock in October 1998 in conjunction with its acquisition of a cable system located in Las Vegas, Nevada. In accordance with SFAS No. 141, Cox recorded additional franchise value of $367.6 million, which includes the related deferred tax effects, representing the appreciation realized upon conversion of the Series A convertible preferred stock as contingent purchase price related to ~~the~~ ~~acquisition.~~Condensed ~~Upon~~Consolidated ~~conversion,~~Financial ~~all~~Statements of(Unaudited) ~~the~~— ~~issued and outstanding shares of~~Continued ~~Series A convertible preferred stock were retired.~~

86. ~~Transactions with Affiliated Companies~~Debt

Cox receives day-to-day cash management services from CEI, with settlements of outstanding balances between Cox and CEI occurring periodically at market interest rates. The amounts due to CEI are generally due on demand and represent the net balance of the intercompany transactions. The amount due from CEI at June 30, 2004 was $10.9 million and the amount due to CEI at December 31, 2003 was $4.0 million. The interest rate was 1.3% at June 30, 2004 and December 31, 2003, respectively. Included in amounts due (to)/from CEI are the following transactions:


	June 30		December 31
	2005		2004
	(Thousands of Dollars)
Revolving credit facilities	$	2,225,000	$	1,650,000
Commercial paper		210,933		96,142
Term loan		2,000,000		2,000,000
Medium-term notes		264,463		264,429
Notes and debentures		8,370,085		8,765,359
Exchangeable subordinated debentures		—		19,546
Capitalized lease obligations		200,515		209,576
Other		20,462		20,683

		13,291,458		13,025,735
Less current portion		54,922		59,962


Total long-term debt	$	13,236,536	$	12,965,773

14 See Note 7. “Derivative Instruments and Hedging Activities” for a discussion of the accounting for certain derivative instruments embedded in the exchangeable subordinated debentures, which have been classified as a component of debt in the Condensed Consolidated Balance Sheets at June 30, 2005 and December 31, 2004.

~~Table~~Revolving ofCredit ~~Contents~~Facilities

In June 2004, Cox ~~Communications~~entered into a new five-year, ~~Inc~~unsecured revolving bank credit facility with a capacity of $1.25 billion which will be available through June 4, 2009. This credit facility ~~Notes~~replaced Cox’s $900.0 million 364-day and $900.0 million five-year revolving bank credit facilities. In December 2004, Cox entered into a second five-year, unsecured revolving bank credit facility with a capacity of $1.5 billion. Also in December 2004, Cox amended and restated its June 2004 facility to ~~Condensed~~conform ~~Consolidated~~the ~~Financial~~terms ~~Statements~~with the new facility. At Cox’s election, the interest rate on the credit agreements is based on London Interbank Offered Rate (~~Unaudited~~LIBOR), –the ~~Continued~~Federal funds rate or an alternate base rate. The credit agreements also impose commitment fees on the unused portion of the total amounts available based on Cox’s corporate credit ratings. At June 30, 2005, Cox had outstanding borrowings of $1.2 billion and $1.0 billion under the $1.5 billion facility and the $1.25 billion facility, respectively. At December 31, 2004, Cox had outstanding borrowings of $907.5 million and $742.5 million under the $1.5 billion facility and the $1.25 billion facility, respectively. At June 30, 2005 and December 31, 2004, Cox was in compliance with the covenants of its credit facilities.

	(Thousands of Dollars)
Intercompany due to CEI, December 31, 2003	$	(3,980	)
Cash transferred to CEI		170,032
Net operating expense reimbursements		(155,181	)
Intercompany due from CEI, June 30, 2004	$	10,871

Exchangeable Subordinated Debentures

9 On April 20, 2005, Cox redeemed all remaining outstanding exchangeable subordinated discount debentures, referred to as Discount Debentures, for aggregate cash consideration of $32.5 million; as ~~Retirement~~a ~~Plans~~result, Cox had no remaining exchangeable subordinated debentures outstanding at June 30, 2005.

~~The~~Interest ~~following~~Rate ~~table provides a detail of the components of net periodic~~Swaps ~~benefit cost for the three and six months ended June 30, 2004 and 2003:~~

	Three Months Ended June 30
	2004						2003
	Pension			Other			Pension			Other
	Benefits			Benefits			Benefits			Benefits
Service cost	$	8,714		$	1,404		$	6,385		$	1,075
Interest cost		5,650			916			4,337			699
Expected return on plan assets		(7,408	)		(445	)		(4,855	)		—
Prior service cost amortization		59			—			54			—
Actuarial (gain) loss amortization		1,037			27			392			(22	)
Net periodic benefit cost	$	8,052		$	1,902		$	6,313		$	1,752

Cox utilizes interest rate swap agreements to manage its exposure to changes in interest rates associated with certain of its fixed-rate debt obligations whereby these fixed-rate debt obligations are effectively converted into floating-rate debt obligations. The variable rates with respect to Cox’s interest rate swaps are adjusted quarterly or semi-annually based on LIBOR. The notional amounts with respect to the interest rate swaps do not quantify risk, but are used in the determination of cash settlements under the interest rate swap agreements. Cox is exposed to a credit loss in the event of nonperformance by the counterparties;

	Six Months Ended June 30
	2004						2003
	Pension			Other			Pension			Other
	Benefits			Benefits			Benefits			Benefits
Service cost	$	15,907		$	2,742		$	12,770		$	2,150
Interest cost		10,921			1,693			8,674			1,398
Expected return on plan assets		(13,199	)		(746	)		(9,710	)		—
Prior service cost amortization		118			—			108			—
Actuarial (gain) loss amortization		1,932			102			784			(44	)
Net periodic benefit cost	$	15,679		$	3,791		$	12,626		$	3,504

CoxTable contributedof its total planned 2003 plan year contributions for the funded pension plans during 2003. Due to this accelerated contribution, Cox does not anticipate additional contributions during 2004 for the funded pension plans. Contents

Cox ~~contributed $2.4 million on January 7~~Communications, ~~2004 into its account to fund post-retirement welfare benefits~~Inc. ~~Additional contributions, if any, will be~~ ~~determined later in 2004.~~

~~10.~~Notes ~~Financial~~to ~~Instruments~~Condensed ~~with~~Consolidated ~~Characteristics~~Financial ofStatements ~~both~~(Unaudited) ~~Liabilities~~— ~~and Equity~~Continued

~~In May 2003~~however, ~~the~~these ~~Financial~~counterparties ~~Accounting~~are major ~~Standards~~financial ~~Board (FASB) issued SFAS No. 150~~institutions, ~~Accounting~~rated ~~for~~investment ~~Certain~~grade ~~Financial~~or ~~Instruments with Characteristics of both Liabilities and Equity~~better. ~~SFAS~~Accordingly, ~~No. 150~~Cox ~~establishes~~does ~~standards for~~not ~~classification~~anticipate ~~and~~nonperformance ~~measurement~~ by anthe ~~issuer of certain financial instruments with characteristics of both liabilities and equity~~counterparties. ~~The~~For ~~statement requires that an issuer classify~~ a ~~financial~~further ~~instrument that is within its scope as a~~discussion ~~liability~~regarding ~~(or~~Cox’s ~~asset~~accounting infor ~~some~~interest ~~circumstances);~~rate ~~however~~swaps, ~~the~~see ~~FASB~~Note ~~indefinitely deferred~~7. ~~the~~“Derivative ~~effective~~Instruments ~~date of this statement as it relates to certain~~and ~~mandatorily~~Hedging ~~redeemable non-~~Activities.”

15 The following table summarizes the notional amounts, weighted average interest rate data and maturities for Cox’s interest rate swap agreements at June 30, 2005 and December 31, 2004:


	June 30			December 31
	2005			2004
Notional amount (in thousands)	$	1,000,000		$	1,375,000
Weighted average fixed interest rate received		7.35	%		7.35	%
Weighted average floating interest rate paid		5.35	%		4.37	%
Maturity		2005 – 2009			2005 – 2009

As a result of the settlements under Cox’s ~~Communications~~interest rate swap agreements, ~~Inc.~~interest expense was ~~Notes~~reduced (as compared to ~~Condensed~~Cox’s ~~Consolidated~~fixed ~~Financial~~rate ~~Statements~~obligations ~~(Unaudited~~absent the swap agreements) –by ~~Continued~~$6.0 million and $14.0 million, respectively, during the three and six months ended June 30, 2005, and by $15.7 million and $33.8 million, respectively, during the same periods in the prior year.

~~controlling interests in consolidated limited-life subsidiaries~~7. ~~For~~Derivative ~~all~~Instruments ~~periods~~and ~~presented,~~Hedging ~~Cox consolidated a 75% majority-owned~~Activities ~~interest in a limited-life partnership. The estimated liquidation value of the 25% minority interest was approximately $177.0 million as of June 30, 2004.~~

11 Cox does not hold or issue derivative instruments for trading purposes and is not a party to leveraged instruments. ~~Supplemental~~From ~~Financial~~time ~~Information~~to time, however, Cox uses derivative instruments to manage its exposure to changes in the fair value of certain of its assets or liabilities or to manage its exposure to changes in interest rates or equity prices. These derivative instruments are designated and accounted for by Cox as hedges of the underlying exposure being managed, as prescribed by SFAS No. 133. In addition, upon adoption of SFAS No. 133, certain of Cox’s debt instruments and investments contained embedded or freestanding derivatives, as defined. Cox has not designated these embedded and freestanding derivatives as hedges under SFAS No. 133 and, as such, changes in their fair value are being recognized in earnings as derivative gains or losses.

	June 30		December 31
	2004		2003
	(Thousands of Dollars)
Other current assets
Inventory	$	62,898	$	49,137
Prepaid assets		42,273		37,600
Deferred income tax asset		34,393		34,393
Other		7,752		9,976
Total other current assets	$	147,316	$	131,106
Other current liabilities
Deposits and advances	$	95,335	$	92,008
Income tax payable		232,161		232,161
Other		117,277		142,619
Total other current liabilities	$	444,773	$	450,553

The credit risks associated with Cox’s derivative financial instruments are controlled through the evaluation and monitoring of the creditworthiness of the counterparties. The counterparties are major financial institutions, rated investment grade or better. Accordingly, Cox does not anticipate nonperformance by the counterparties.

	Six Months Ended
	June 30
	2004		2003
	(Thousands of Dollars)
Significant non-cash transactions
Conversion of Series A preferred stock to Class A common stock	$	367,648	$	—
Additional cash flow information
Cash paid for interest	$	188,611	$	192,975
Cash paid for income taxes		24,981		1,116

As of June 30, 2005, Cox’s derivative financial instruments were primarily comprised of interest rate swap agreements. Cox utilizes these interest rate swaps to assist Cox in maintaining a mix of fixed and floating rate debt by converting a portion of existing fixed rate debt into a floating rate obligation. Cox has designated and accounted for its interest rate swap agreements as fair value hedges whereby the fair value of the related interest rate swap agreements are classified as a component of other assets as of June 30, 2005 and December 31, 2004 with the corresponding fixed-rate debt obligations being

~~12. Commitments and Contingencies~~14

InTable connection with certain of Cox’s recent acquisitions and other transactions, Cox has provided certain indemnities to the respective counterparties with respect to future claims that may arise from state or federal taxing authorities. The nature and terms of these indemnities vary by transaction and generally remain in force through the requisite statutory review periods. In addition, the events or circumstances that would require Cox to perform under these indemnities are transaction and circumstance specific. As of June 30, 2004, Cox believes the likelihood that it will be required to perform under these indemnities is remote and that the maximum potential future payments that Cox could be required to make under these indemnifications are not determinable at this time, as any future payments would be dependent on the type and extent of the related claims, and all available defenses, which are not reasonably estimable. Cox has not historically incurred any material costs related to performance under these types of indemnities. Contents

Cox’s ~~subsidiary Cox~~ Communications ~~Louisiana L.L.C. (Cox Louisiana) is a defendant in a putative subscriber class action suit in Louisiana state court filed on November 5~~, ~~1997~~Inc. ~~The suit challenges the propriety of late fees~~ charged by Cox Louisiana in the greater New Orleans area to customers who fail to pay for services in a timely manner. The suit seeks injunctive relief and damages under certain claimed state law causes of action. On March 29, 2004, the parties entered into a settlement agreement, which does

16Notes to Condensed Consolidated Financial Statements (Unaudited) — Continued

~~Table~~classified as a component of ~~Contents~~debt in the Condensed Consolidated Balance Sheets. Cox has assumed no ineffectiveness with regard to these interest rate swap agreements as the agreements qualify for the short-cut method of accounting for fair value hedges of debt instruments, as prescribed by SFAS No. 133. Cox’s interest rate swap agreements approximated a derivative asset of $2.1 million and $16.4 million at June 30, 2005 and December 31, 2004, respectively.

~~Cox Communications, Inc~~8. ~~Notes~~ toTransactions ~~Condensed~~with ~~Consolidated~~Affiliated ~~Financial Statements (Unaudited) – Continued~~Companies

~~not~~ Cox ~~have~~receives aday-to-day ~~material~~cash management services from CEI, with settlements of outstanding ~~impact~~balances onbetween Cox’s ~~operations~~and orCEI ~~liquidity.~~occurring ~~This~~periodically ~~settlement~~at ~~has~~market ~~been~~interest ~~submitted~~rates. The amounts due to CEI are generally due on demand and represent the ~~court~~net ~~for~~balance ~~final~~of ~~approval~~the intercompany transactions. The amount due to CEI from Cox was $92.6 million and $5.6 million at June 30, 2005 and December 31, 2004, respectively. The interest rate was 3.5% and 2.4% at June 30, 2005 and December 31, 2004, respectively. Included in amounts due from CEI are the following transactions:

On November 14, 2000, GTE.NET, L.L.C. d/b/a Verizon Internet Solutions and Verizon Select Services, Inc. filed suit against Cox in the United States District Court for the Southern District of California. Verizon alleged that Cox has violated various sections of the Communications Act of 1934 by allegedly refusing to provide Verizon with broadband telecommunications service and interconnection, among other things. On November 29, 2000, Verizon amended its complaint to add CoxCom, Inc. (CoxCom), a subsidiary of Cox, as an additional defendant. On January 8, 2002, Verizon filed a second amended complaint, dropping its claims for interconnections and damages. Verizon seeks various forms of relief, including declaratory and injunctive relief. On January 29, 2002, the Court granted defendants’ motion to stay the case on primary jurisdiction grounds. Cox and CoxCom intend to defend this action vigorously. The outcome cannot be predicted at this time.


	(Thousands of Dollars)
Intercompany due to CEI, December 31, 2004	$	5,573
Cash transferred to CEI		(211,002	)
Net operating expense reimbursements		298,017


Intercompany due to CEI, June 30, 2005	$	92,588

~~Cox @Home, Inc~~9., aRetirement ~~wholly-owned subsidiary of Cox, is a stockholder of At~~Plans Home Corporation, also called Excite@Home, formerly a provider of high-speed Internet access and content services, which filed for bankruptcy protection in September 2001. On September 24, 2002, a committee of bondholders of Excite@Home sued Cox, Cox @Home and Comcast Corporation, among others, in the United States District Court for the District of Delaware. The suit alleges the realization of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934 from purported transactions relating to Excite@Home common stock involving Cox, Comcast and AT&T Corp., and purported breaches of fiduciary duty. The suit seeks disgorgement of short-swing profits allegedly received by the Cox and Comcast defendants totaling at least $600.0 million, damages for breaches of fiduciary duties in an unspecified amount, attorney’s fees, pre-judgment interest and post-judgment interest. On November 12, 2002, Cox, Cox @Home, and David Woodrow filed a motion to dismiss or transfer the action for improper venue or, in the alternative, to transfer the action pursuant to 28 U.S.C. Sec. 1404. On September 30, 2003, the Delaware District Court ordered the action transferred to the United States District Court for the Southern District of New York. On December 22, 2003, Cox and Cox@Home filed a motion to dismiss, or, in the alternative, for judgment on the pleadings, with respect to the Section 16(b) claim. That motion is pending. Cox and Cox @Home intend to defend this action vigorously. The outcome cannot be predicted at this time.

~~Jerrold~~The ~~Schaffer~~following ~~and~~table ~~Kevin~~provides J. Yourman, on May 26, 2000 and May 30, 2000, respectively, filed class action lawsuits in the Superior Court of California, San Mateo County, on behalf of themselves and all other stockholders of Excite@Home as of March 28, 2000, seeking (a~~) to~~ ~~enjoin~~detail ~~consummation~~ of a March 28, 2000 letter agreement among Excite@Home’s principal investors, including Cox, and (b) unspecified compensatory damages. Cox and David Woodrow, Cox’s former Executive Vice President, Business Development, among others, are named defendants in both lawsuits. Mr. Woodrow formerly served on the ~~Excite@Home board~~components of ~~directors.~~net ~~The~~periodic ~~plaintiffs~~benefit ~~assert~~cost ~~that~~for the ~~defendants breached~~ ~~purported~~three ~~fiduciary duties of care, candor~~ and ~~loyalty~~six tomonths ~~the~~ended plaintiffs by entering into the letter agreement and/or taking certain actions to facilitate the consummation of the transactions contemplated by the letter agreement. On February 26, 2001, the Court stayed both actions, which had been previously consolidated, on grounds of forum non-conveniens. A related suit styled Linda Ward, et al. v. At Home Corporation (No. 418233) was filed on September 6, 2001, in the same court. On February 7, 2002, the Court consolidated the Ward action with the Schaffer/Yourman action, thereby also staying the Ward action. On June 1830, ~~2002,~~ ~~the~~2005 ~~court granted plaintiffs’ motion to lift the stay~~ and ~~authorized~~2004: discovery to proceed regarding Cox’s pending motion to dismiss for lack of personal jurisdiction. On September 10, 2002, the United States Bankruptcy Court for the Northern District of California in the Excite@Home bankruptcy proceeding held that the claims in the suits were derivative and, thus, constituted the exclusive property of the Excite@Home bankruptcy estate. The Bankruptcy Court thereafter ordered the plaintiffs to dismiss the suits. Plaintiffs subsequently appealed the Bankruptcy Court’s decision to the United States District Court for the Northern District of California. On September 29, 2003, the District Court affirmed the order of the Bankruptcy Court. On October 27, 2003, plaintiffs filed a notice of appeal of the District Court’s decision to the United States Court of Appeals for the Ninth Circuit. Cox intends to defend this action vigorously. The outcome cannot be predicted at this time.


	Three Months Ended June 30
	2005						2004
	Pension			Other			Pension			Other
	Benefits			Benefits			Benefits			Benefits
				(Thousands of Dollars)
Service cost	$	8,972		$	1,576		$	8,714		$	1,404
Interest cost		6,141			951			5,650			916
Expected return on plan assets		(7,087	)		(415	)		(7,408	)		(445	)
Prior service cost amortization		35			—			59			—
Actuarial loss amortization		438			17			1,037			27

Net periodic benefit cost	$	8,499		$	2,129		$	8,052		$	1,902

~~Table of Contents~~15

CoxTable Communications,of Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) – Continued Contents

~~On April 26, 2002, Frieda and Michael Eksler filed an amended complaint~~ ~~naming Cox as a defendant in a putative class action lawsuit in the United~~\ States District Court for the Southern District of New York against AT&T Corp. and certain former officers and directors of Excite@Home, among others. Cox was served on May 10, 2002. This case has been consolidated with a related case captioned Semen Leykin v. AT&T Corp., et al., and another related case, and an amended complaint in the consolidated case, naming Cox as a defendant, was filed and served on November 7, 2002. The putative class includes persons who purchased and held shares of Excite@Home common stock between the time period March 28, 2000 and September 28, 2001. The complaint asserts a claim against Cox as an alleged “controlling person” of Excite@Home under Section 20(a) of the Securities Exchange Act for violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. The suit seeks from Cox unspecified monetary damages, statutory compensation and other relief. In addition, a claim against Cox’s former Executive Vice President, David Woodrow, who formerly served on Excite@Home’s board of directors, is asserted for breach of purported fiduciary duties. The suit seeks from Woodrow unspecified monetary and punitive damages. On February 11, 2003, Cox and Woodrow filed a dispositive motion to dismiss on various grounds, including failure to state a claim. On September 17, 2003, the District Court granted the motion in part and denied it in part. Specifically, the Court dismissed several purported statements by Excite@Home as bases for potential liability because they were merely generalized expressions of confidence and optimism constituting “puffery,” dismissed the fiduciary duty claim against Mr. Woodrow as pre-empted by the federal securities laws, and denied the motions as to the remaining allegations of the complaint. On October 7, 2003, Cox and Mr. Woodrow sought reconsideration of a portion of the Court’s order. On December 24, 2003, the plaintiffs moved to certify a class of persons who purchased Excite@Home stock between March 28, 2000 and September 28, 2001, or held such stock as of April 28, 2000. This motion is pending. On February 17, 2004, the Court granted plaintiffs leave to file a motion to amend the complaint to add an additional claim for relief against all defendants under Section 14(a) of the Securities Exchange Act in connection with an allegedly false or misleading proxy statement issued by Excite@Home. On February 24, 2004, the Court granted Cox’s and Mr. Woodrow’s motion for reconsideration and dismissed plaintiffs’ allegations that Cox and Mr. Woodrow were “control persons” with respect to primary violations of Rule 10b-5 alleged to have occurred after August 28, 2000. On April 5, 2004, Cox and certain other defendants jointly filed a motion to dismiss the Section 14(a) cause of action that was added in plaintiffs’ amended complaint, and briefing of that motion has concluded. Cox intends to defend this action vigorously. The outcome cannot be predicted at this time.

~~On July 3, 2003, Leo James filed a putative class action lawsuit against~~ Cox ~~and David Woodrow~~Communications, ~~among others, in the United States District Court for the Southern District of New York~~Inc. ~~Cox was served on October 27, 2003. Mr.~~ James is represented by the same attorneys who represent the individuals who were previously designated lead plaintiffs in the Leykin action described above. The complaint in the James action asserts claims substantially similar to the operative allegations in the Leykin action described above. Accordingly, the sole count against Cox asserts a claim against Cox as an alleged “controlling person” of Excite@Home under Section 20(a) of the Securities Exchange Act for violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder and seeks from Cox unspecified monetary damages, statutory compensation and other relief. On November 17, 2003, Cox and certain other defendants jointly filed a motion to dismiss the James action on the grounds that, among other things, it was duplicative of the Leykin action. That motion is pending. Cox intends to defend the action vigorously. The outcome cannot be predicted at this time.

~~On June 14,~~Notes ~~2004,~~to ~~Acacia~~Condensed ~~Media~~Consolidated ~~Technologies~~Financial ~~Corporation~~Statements ~~filed a lawsuit against Cox and Hospitality Network, Inc.,~~ (~~a wholly-owned subsidiary of Cox~~Unaudited) ~~among~~ ~~others,~~— ~~in the United States District Court for the Northern District of~~Continued California asserting claims for patent infringement. Specifically, the complaint alleges that Cox and Hospitality Network have infringed Acacia Media’s U.S. Patent Nos. 5,132,992, 5,550, 863, and 6,144,702 and that Cox has also infringed certain Acacia Media patents. The complaint seeks preliminary and permanent injunctive relief and damages in an unspecified amount. On June 18, 2004, prior to being served with the Acacia Media Complaint, CoxCom, Inc. and Hospitality Network filed a lawsuit against Acacia Media in the United States District Court for the Northern District of Georgia seeking a declaratory judgment that the Acacia Media patents are invalid and that CoxCom and Hospitality Network are not infringing those patents. On July 7, 2004, Acacia Media filed an amended complaint to its


	Six Months Ended June 30
	2005						2004
	Pension			Other			Pension			Other
	Benefits			Benefits			Benefits			Benefits
				(Thousands of Dollars)
Service cost	$	17,944		$	3,152		$	15,907		$	2,742
Interest cost		12,282			1,902			10,921			1,693
Expected return on plan assets		(14,174	)		(831	)		(13,199	)		(746	)
Prior service cost amortization		68			—			118			—
Actuarial loss amortization		795			27			1,932			102

Net periodic benefit cost	$	16,915		$	4,250		$	15,679		$	3,791

~~Table~~ In December 2004, Cox contributed $10.0 million of ~~Contents~~its overall 2004 minimum required contribution; the remaining $28.8 million will be contributed during 2005. Cox expects to contribute $6.0 million to its other postretirement benefit plans during 2005.

~~Cox Communications, Inc~~10. ~~Notes~~ toSupplemental ~~Condensed Consolidated~~ Financial ~~Statements (Unaudited) – Continued~~Information

lawsuit to add CoxCom as a defendant. The deadline for Cox, CoxCom and Hospitality Network to answer or otherwise respond to the amended complaint is August 13, 2004. The deadline for Acacia Media to answer or otherwise respond to CoxCom and Hospitality Network’s complaint is July 28, 2004. Cox, CoxCom and Hospitality Network intend to defend the action vigorously. The outcome cannot be predicted at this time.


	June 30		December 31
	2005		2004
	(Thousands of Dollars)
Other current assets
Inventory	$	95,416	$	68,221
Prepaid assets		59,767		31,974
Deferred income tax asset		33,988		33,988
Other		2,688		2,203

Total other current assets	$	191,859	$	136,386


Other current liabilities
Deposits and advances	$	110,867	$	103,800
Income tax payable		82,529		121,269
Other		89,371		114,673

Total other current liabilities	$	282,767	$	339,742

Nine purported class action lawsuits have been filed naming Cox and each of its directors as defendants. Eight of the lawsuits also name Cox Enterprises, Inc. (CEI) as a defendant. The complaints allege, among other things, that the defendants have breached their fiduciary duties to the stockholders of Cox in connection with CEI’s proposal to acquire the outstanding publicly held minority interest in Cox. The complaints also seek variously the certification of a class of Cox stockholders, preliminary and permanent injunctive relief prohibiting the defendants from proceeding with CEI’s proposal or requiring them to take certain actions with respect to CEI’s proposal, an accounting or compensatory damages (except in one instance), attorneys’ fees and costs, and other relief, and in certain complaints, rescission or other damages in the event CEI’s proposal is consummated.


	Six Months Ended
	June 30
	2005		2004
	(Thousands of Dollars)
Significant non-cash transactions
Conversion of Series A preferred stock to Class A common stock	$	—	$	365,635
Additional cash flow information
Cash paid for interest	$	298,812	$	188,611
Cash paid for income taxes		130,033		24,981

~~On August 2, 2004, the following lawsuits were filed in the Delaware Court of Chancery: Smith v~~11. ~~Cox~~Commitments Communications Inc. et al.; Wilson v. Cox Enterprises Inc., et al.; Steiner v. Cox Communications Inc., et al.; Guerin v. Cox Enterprises Inc. et al.; Eastside Investors LLP v. Cox Communications Inc., et al.; and ~~Hill v. Cox~~Contingencies Communications Inc. et al. On August 3, 2004, an additional action captioned Schaefer v. Cox Communications, Inc., et al. was filed in the Delaware Court of Chancery. The outcome of these actions cannot be predicted at this time.

~~Also on~~In ~~August 2,~~connection ~~2004,~~with ~~two~~certain ~~other~~of ~~purported~~Cox’s ~~shareholders~~acquisitions ofand other transactions, Cox ~~also~~has provided ~~filed~~certain ~~lawsuits~~indemnities into the ~~Superior~~respective ~~Court~~counterparties ofwith ~~Fulton~~respect ~~County,~~to ~~Georgia;~~future ~~Brody v.~~claims ~~Cox~~that ~~Communications,~~may ~~Inc.,~~arise from etstate ~~al.;~~or ~~and~~federal ~~Golombuski~~taxing vauthorities. ~~Kennedy,~~The ~~et al.~~nature Inand ~~addition~~terms toof ~~the~~these ~~allegations~~indemnities ~~set~~vary ~~forth~~by transaction ~~above,~~and ~~the~~generally ~~complaint~~remain in ~~the~~ ~~Golombuski~~force ~~action~~through ~~also~~the ~~alleges~~requisite ~~derivative~~statutory ~~claims~~review onperiods. ~~behalf of Cox~~In ~~for corporate waste~~addition, ~~abuse~~the ofevents ~~control,~~or ~~breach~~circumstances ofthat ~~fiduciary~~would ~~duty~~require ~~and unjust~~Cox ~~enrichment.~~to ~~The~~perform ~~outcome~~under of these ~~actions~~indemnities ~~cannot be predicted~~are attransaction ~~this~~and ~~time~~circumstance specific. As of June 30,

~~Cox and~~16 its subsidiaries are parties to various other legal proceedings that are ordinary and incidental to their businesses. Management does not expect that any of these other currently pending legal proceedings will have a material adverse impact on Cox’s consolidated financial position, results of operations or cash flows.

13. SubsequentTable Event of Contents

~~On August 2, 2004,~~ Cox ~~received Cox Enterprises’ proposal to acquire the outstanding~~Communications, ~~publicly-held minority interest in Cox~~Inc. ~~Cox’s Board of Directors will appoint a special committee of independent directors to~~ ~~review Cox Enterprises’ proposal.~~

19Notes to Condensed Consolidated Financial Statements (Unaudited) — Continued

~~Table~~2005, Cox believes the likelihood that it will be required to perform under these indemnities is remote and that the maximum potential future payments that Cox could be required to make under these indemnifications are not determinable at this time, as any future payments would be dependent on the type and extent of ~~Contents~~the related claims, and all available defenses, which are not reasonably estimable. Cox has not historically incurred any material costs related to performance under these types of indemnities.

~~Item~~ On 2November 14, 2000, GTE.NET, ~~Management’s~~L.L.C. ~~Discussion~~d/b/a Verizon Internet Solutions and ~~Analysis~~Verizon Select Services, Inc. filed suit against Cox in the United States District Court for the Southern District of ~~Financial~~California. ~~Condition~~Verizon alleged that Cox has violated various sections of the Communications Act of 1934 by allegedly refusing to provide Verizon with broadband telecommunications service and interconnection, ~~Results~~among other things. On November 29, 2000, Verizon amended its complaint to add CoxCom, Inc. (CoxCom), a subsidiary of ~~Operations~~Cox, as an additional defendant. On January 8, 2002, Verizon filed a second amended complaint, dropping its claims for interconnections and damages. Verizon seeks various forms of relief, including declaratory and injunctive relief. On January 29, 2002, the District Court granted defendants’ motion to stay the case on primary jurisdiction grounds. Following the decision in NCTA v. Brand X, 125 S. Ct. 2688 (June 27, 2005), Verizon voluntarily moved to dismiss without prejudice, and on July 15, 2005, the court accepted the dismissal.

~~The~~On September 24, ~~following~~2002, ~~discussion~~a ~~should~~committee beof ~~read~~bondholders of At Home Corporation, also called Excite@Home, formerly a provider of high-speed Internet access and content services, which filed for bankruptcy protection in ~~conjunction~~September 2001, ~~with~~sued ~~the~~Cox, Cox @Home and Comcast Corporation, among ~~accompanying~~others, ~~unaudited~~in ~~condensed~~the ~~consolidated~~United ~~financial~~States ~~statements~~District Court for the District of Delaware. The suit alleged the ~~three~~realization of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934 from purported transactions relating to Excite@Home common stock involving Cox, Comcast and ~~six~~AT&T Corp., and purported breaches of fiduciary duty. The suit seeks disgorgement of short-~~month~~swing ~~periods~~profits allegedly ~~ended~~received ~~June~~by the Cox and Comcast defendants totaling at least $600.0 million, damages for breaches of fiduciary duties in an unspecified amount, attorney’s fees, pre-judgment interest and post-judgment interest. On November 12, 2002, Cox, Cox @Home, and David Woodrow filed a motion to dismiss or transfer the action for improper venue or, in the alternative, to transfer the action pursuant to 28 U.S.C. Sec. 1404. On September 30, 2003, the Delaware District Court ordered the action transferred to the United States District Court for the Southern District of New York. On December 22, 2003, Cox and Cox @Home filed a motion to dismiss, or, in the alternative, for judgment on the pleadings, with respect to the Section 16(b) claim. On August 12, 2004, the court granted Cox’s and ~~2003~~Cox @Home’s motion and dismissed the Section 16(b) claim. Cox and Cox @Home, among others, subsequently entered into an agreement with Excite@Home tolling the statute of limitations on the remaining claim for purported breach of fiduciary duty, and on December 3, 2004, the court dismissed that claim without prejudice. On January 4, 2005, plaintiff noticed its appeal of the dismissal of the Section 16(b) claim to the United States Court of the Appeals for the Second Circuit. Briefing on the appeal has been completed. On July 25, 2005, Excite@Home provided Cox and Cox @Home notice of termination of the tolling agreement applicable to Excite@Home’s claim for purported breach of fiduciary duty against Cox and Cox @Home. Excite@Home’s counsel also has informed counsel for Cox that Excite@Home intends to re-file the breach of fiduciary duty claim against Cox and Cox @Home. Cox and Cox @Home intend to defend this action vigorously. The outcome cannot be predicted at this time.

~~Results~~ Jerrold Schaffer and Kevin J. Yourman, on May 26, 2000 and May 30, 2000, respectively, filed class action lawsuits in the Superior Court of ~~Operations~~California, San Mateo County, on behalf of themselves and all other stockholders of Excite@Home as of March 28, 2000, seeking (a) to enjoin consummation of a March 28, 2000 letter agreement among Excite@Home’s principal investors, including Cox, and (b) unspecified compensatory damages. Cox and David Woodrow, Cox’s former Executive Vice President, Business Development, among others, are named defendants in both lawsuits. Mr. Woodrow formerly served on the Excite@Home board of directors. The plaintiffs assert that the defendants breached purported fiduciary duties of care, candor and loyalty to the plaintiffs by entering into the letter agreement and/or taking certain actions to facilitate the consummation of the transactions contemplated by the letter agreement. On February 26, 2001, the Court stayed both actions, which had been previously consolidated, on grounds of

~~Three Months Ended June 30, 2004 Compared with Three Months Ended June 30, 2003~~17

TheTable followingof table sets forth summarized consolidated financial information for the three months ended June 30, 2004 and 2003. Contents

	Three Months Ended
	June 30
	2004			2003			$ Change			% Change
	(Thousands of Dollars)
Revenues	$	1,595,240		$	1,423,939		$	171,301			12	%
Cost of services		644,627			590,122			54,505			9	%
Selling, general and administrative expenses		334,576			301,702			32,874			11	%
Depreciation and amortization		397,114			364,274			32,840			9	%
Loss (gain) on sale of cable systems		5,021			(469	)		5,490		NM
Operating income		213,902			168,310			45,592			27	%
Interest expense		(95,591	)		(134,394	)		(38,803	)		(29	%)
Loss on derivative instruments, net		(15	)		(24,197	)		(24,182	)		(100	%)
Gain on investments, net		2,326			124,146			(121,820	)		(98	%)
Equity in net losses of affiliated companies		(1,167	)		(4,354	)		(3,187	)		(73	%)
(Loss) gain on extinguishment of debt		(7,006	)		3,896			(10,902	)	NM
Other, net		(258	)		(616	)		(358	)		(58	%)
Income tax expense		49,922			13,402			36,520			272	%
Minority interest, net of tax		413			(1,644	)		(2,057	)		(125	%)
Net income	$	62,682		$	117,745		$	(55,063	)		(47	%)

Cox Communications, Inc.

NMNotes ~~denotes~~to ~~percentage~~Condensed isConsolidated ~~not~~Financial ~~meaningful~~Statements (Unaudited) — Continued

~~Revenues~~forum non-conveniens. A related suit styled Linda Ward, et al. v. At Home Corporation (No. 418233) was filed on September 6, 2001, in the same court. On February 7, 2002, the Court consolidated the Ward action with the Schaffer/Yourman action, thereby also staying the Ward action. On June 18, 2002, the court granted plaintiffs’ motion to lift the stay and authorized discovery to proceed regarding Cox’s pending motion to dismiss for lack of personal jurisdiction. On September 10, 2002, the United States Bankruptcy Court for the Northern District of California in the Excite@Home bankruptcy proceeding held that the claims in the suits were derivative and, thus, constituted the exclusive property of the Excite@Home bankruptcy estate. The Bankruptcy Court thereafter ordered the plaintiffs to dismiss the suits. Plaintiffs subsequently appealed the Bankruptcy Court’s decision to the United States District Court for the Northern District of California. On September 29, 2003, the District Court affirmed the order of the Bankruptcy Court. On October 27, 2003, plaintiffs filed a notice of appeal of the District Court’s decision to the United States Court of Appeals for the Ninth Circuit, and briefing of the appeal has concluded. Cox intends to defend this action vigorously. The outcome cannot be predicted at this time.

On April 26, 2002, Frieda and Michael Eksler filed an amended complaint naming Cox as a defendant in a class action lawsuit in the United States District Court for the Southern District of New York against AT&T Corp. and certain former officers and directors of Excite@Home, among others. Cox was served on May 10, 2002. This case subsequently was consolidated with a related case captioned Semen Leykin v. AT&T Corp., et al., and another related case, and an amended complaint in the consolidated case, naming Cox as a defendant, was filed and served on November 7, 2002. On March 10, 2005, the Court issued an order certifying a class of all persons and entities who purchased the publicly traded common stock of Excite@Home during the period March 28, 2000 through September 28, 2001, and directing that notice of the certification be given to the class. The ~~following~~class ~~table~~excludes ~~sets~~the ~~forth~~defendants ~~summarized~~in ~~revenue~~the ~~information~~action and certain of their related persons. The complaint asserts a claim against Cox as an alleged “controlling person” of Excite@Home under Section 20(a) of the Securities Exchange Act for violations of Section 10(b) of the Securities ~~three~~Exchange ~~months~~Act ~~ended~~and ~~June~~Rule 3010b-5 thereunder. The suit seeks from Cox unspecified monetary damages, statutory ~~2004~~compensation and other relief. In addition, a claim against Cox’s former Executive Vice President, David Woodrow, who formerly served on Excite@Home’s board of directors, is asserted for breach of purported fiduciary duties. The suit seeks from Woodrow unspecified monetary and punitive damages. On February 11, 2003, Cox and Woodrow filed a dispositive motion to dismiss on various grounds, including failure to state a claim. On September 17, 2003, the District Court granted the motion in part and denied it in part. Specifically, the Court dismissed several purported statements by Excite@Home as bases for potential liability because they were merely generalized expressions of confidence and optimism constituting “puffery,” dismissed the fiduciary duty claim against Mr. Woodrow as pre-empted by the federal securities laws, and denied the motions as to the remaining allegations of the complaint. On October 7, 2003, Cox and Mr. Woodrow sought reconsideration of a portion of the Court’s order. On February 17, 2004, the Court granted plaintiffs leave to file a motion to amend the complaint to add an additional claim for relief against all defendants under Section 14(a) of the Securities Exchange Act in connection with an allegedly false or misleading proxy statement issued by Excite@Home. On February 24, 2004, the Court granted Cox’s and Mr. Woodrow’s motion for reconsideration and dismissed plaintiffs’ allegations that Cox and Mr. Woodrow were “control persons” with respect to primary violations of Rule 10b-5 alleged to have occurred after August 28, 2000. On April 5, 2004, Cox and certain other defendants jointly filed a motion to dismiss the Section 14(a) cause of action that was added in plaintiffs’ amended complaint. On August 9, 2004, the District Court granted defendants’ motion, and dismissed the Section 14(a) cause of action. On May 31, 2005, the plaintiffs requested permission from the Court to move to amend their complaint to expand the class period to include the period from November 9, 1999 to March 28, 2000, the beginning of the current class period. On July 8, 2005, the court orally issued a stay and ordered the plaintiffs to file a proposed amended complaint, which amendment Cox shall have the opportunity to oppose. Cox intends to defend this action vigorously. The outcome cannot be predicted at this time.

	Three Months Ended June 30
	2004		% of Total			2003		% of Total			$ Change		% Change
	(Thousands of Dollars)
Residential
Video	$	960,914		60	%	$	907,901		64	%	$	53,013		6	%
Data		270,545		17	%		210,700		15	%		59,845		28	%
Telephony		144,111		9	%		116,449		8	%		27,662		24	%
Other		26,336		2	%		20,538		1	%		5,798		28	%
Total residential		1,401,906		88	%		1,255,588		88	%		146,318		12	%
Commercial		86,338		5	%		70,078		5	%		16,260		23	%
Advertising		106,996		7	%		98,273		7	%		8,723		9	%
Total revenues	$	1,595,240		100	%	$	1,423,939		100	%	$	171,301		12	%

On July 21, 2005, Ronald Ventura filed a lawsuit against Cox and David Woodrow, among others, in the United States District Court for the Southern District of New York. Cox has not been served with this lawsuit. The complaint in the Ventura action asserts claims substantially similar to the operative

2018

~~The~~Cox ~~$171.3 million~~Communications, ~~increase in total revenues is primarily attributable~~Inc. ~~to:~~

•Notes ato ~~27%~~Condensed ~~increase~~Consolidated inFinancial ~~customers~~Statements ~~for~~(Unaudited) ~~advanced~~— services, which include digital cable, high-speed Internet access and telephony customers; • an increase in basic cable rates resulting from increased programming costs and inflation, as well as increased channel availability; and • an increase in commercial broadband customers, as well as an increase in advertising sales.Continued

~~Cox~~allegations ~~has~~in ~~experienced~~the ~~solid~~Leykin ~~growth~~action indescribed ~~digital~~above. ~~cable~~Accordingly, ~~residential~~the ~~high-speed~~Ventura complaint ~~Internet~~asserts ~~and~~a ~~telephony~~claim ~~customers.~~against ~~For~~Cox as an alleged “controlling person” of Excite@Home under Section 20(a) of the ~~second~~Securities ~~quarter~~Exchange Act for purported violations by At Home of ~~2004~~Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. In addition, the Ventura complaint asserts a claim for unjust enrichment against Cox:, which asserts that Cox should be required to disgorge an amount equal to the value of the 75 million shares of AT&T stock that Cox received from AT&T in 2001. No other claims are asserted against Cox. The Complaint seeks from Cox unspecified monetary and punitive damages, statutory compensation, disgorgement, and other relief. Cox intends to defend this action vigorously. The outcome cannot be predicted at this time.

• On ~~ended~~June 14, ~~the~~2004, ~~quarter~~Acacia ~~with~~Media ~~approximately~~Technologies 6Corporation filed a lawsuit against Cox and Hospitality Network, Inc.3, ~~million~~(a ~~basic~~wholly-owned ~~video~~subsidiary ~~customers~~of Cox) among others, upin 0the United States District Court for the Northern District of California asserting claims for patent infringement.6% The ~~from~~complaint ~~June~~seeks ~~30,~~preliminary ~~2003~~and permanent injunctive relief and damages in an unspecified amount. •On ~~added~~July 7, 602004,~~351~~ ~~digital~~Acacia ~~cable~~Media ~~customers,~~filed ~~which~~an ~~contributed~~amended complaint to ~~year-over-year~~its ~~growth~~lawsuit ofto ~~18%~~add CoxCom as a defendant. •Cox ~~added~~and 97CoxCom timely filed their answer to the amended complaint on October 21,~~517~~ ~~high-speed~~2004. On ~~Internet~~November 11, ~~customers~~2004, ~~which~~Acacia ~~contributed~~Media tofiled ~~year~~a motion before the Multi-~~over-year~~District ~~growth~~Litigation Panel to transfer related patent actions under 28 U.S.C. § 1407. That motion sought to transfer several related cases brought by Acacia in other jurisdictions to a single court. All of ~~34%~~the defendants opposed that motion. •A ~~added~~hearing 66on the motion was held on January 27,~~265~~ ~~telephony~~2005. ~~customers~~On February 24, ~~which~~2005, the ~~contributed~~Multi-District Litigation panel transferred all of the Acacia litigation to ~~year-over-year~~Judge ~~customer~~Ware ~~growth~~in the Northern District of ~~35%~~California. CoxCom and Hospitality Network intend to defend the action vigorously. The outcome cannot be predicted at this time.

~~Cox~~Eighteen ~~experiences~~putative ~~some~~class ~~seasonality~~action inlawsuits ~~its~~were ~~business~~filed, ~~primarily~~purportedly ason abehalf ~~result~~of the public stockholders of Cox, challenging CEI’s August 2, 2004 proposal to acquire all of the issued and ~~college~~outstanding ~~students~~shares ~~leaving~~of ~~school~~Cox Class A common stock not beneficially owned by CEI, for $32.00 in cash per share. Fifteen of the ~~summer~~lawsuits ~~break~~were ~~and~~filed ~~people~~in ~~traveling~~the ~~to warmer~~Court ~~climates~~of ~~for~~Chancery of the ~~winter~~State ~~months~~of Delaware. Following ~~The~~a ~~college~~hearing ~~students~~held on August 24, 2004, the Delaware court consolidated the actions under the caption In re Cox Communications, Inc. Shareholders’ ~~annual~~Litigation, ~~summer~~Consolidated C.A. No. 613-N. The ~~departure~~Delaware ~~contributed~~complaint tonames aas ~~slight~~defendants ~~decline~~Cox, inCEI, ~~basic~~Cox ~~video~~Holdings, ~~customers~~Barbara ~~during~~Cox ~~the~~Anthony and Anne Cox ~~second~~Chambers, ~~quarter~~and the members of ~~2004~~the Cox Board of Directors. ~~This~~The ~~seasonality~~Delaware ~~has~~complaint ~~generally~~alleges, ~~resulted~~among other things, that the price proposed to be paid in ~~increased~~the proposed transaction was unfairly low, that ~~revenues~~the ~~during~~initiation and timing of the ~~third~~proposed ~~quarter~~transaction were in breach of the ~~year.~~defendants’ purported duties of loyalty and constituted unfair dealing, that the structure of the proposed transaction was inequitably coercive, that defendants caused materially misleading and incomplete information to be disseminated to the public holders of the Cox ~~expects~~shares, ~~this~~and ~~trend~~that the Board defendants would breach their duty of care and good faith by approving the proposed transaction and by purportedly attempting to disenfranchise the holders of the Cox shares by circumventing certain alleged ~~continue~~contractual invoting ~~2004~~rights. The Delaware complaint seeks an injunction against the proposed transaction, or, if it is consummated, rescission of the transaction and imposition of a constructive trust, as well as money damages, an accounting, attorneys’ fees, expenses and other relief.

The remaining three putative class action lawsuits were filed in the Superior Court of Fulton County, Georgia, styled Brody v. Cox ~~expects~~Communications, ~~its~~Inc., ~~overall~~et ~~growth~~al., ~~trend~~2004CV89198, toGolombuski ~~continue~~v. Cox Communications, ~~also~~Inc., ~~anticipates~~et al., 2004CV89216, and Durgin v. Cox Communications, Inc., et al., ~~continued~~2004CV89301. ~~customer~~The ~~demand~~Georgia ~~for~~actions ~~its~~were ~~existing~~purportedly ~~portfolio~~brought on behalf of ~~broadband~~the ~~products~~public holders of shares of Cox Class A common stock against Cox, asCEI and the Cox Board, although four counts of the ~~well~~Golombuski ascomplaint ~~for~~were ~~new~~brought ~~services~~derivatively ~~such~~on asbehalf ~~Entertainment~~of OnCox ~~Demand~~against the Cox Board and CEI. With the exception of the Durgin action, ~~Home~~which ~~Networking~~did not assert claims against CEI, the Georgia ~~high-definition~~actions ~~television~~each allege that CEI and ~~digital~~the ~~video~~Cox ~~recorders~~Board breached their fiduciary duties in connection with the proposed transaction, which plaintiffs allege proposed a purchase price which was below the fair value of the Cox shares. On August 18, 2004, plaintiffs in the Georgia actions moved for entry of a case management order to consolidate the Georgia Actions under the caption In re Cox Communications, Inc. Shareholder Litigation, C.A. No. 2004—CV—89198.

~~Costs and expenses (cost of services and selling,~~19 ~~general and administrative expenses)~~

TheTable followingof table sets forth summarized operating expenses for the three months ended June 30, 2004 and 2003. Contents

	Three Months Ended June 30
	2004		2003		$ Change		% Change
	(Thousands of Dollars)
Cost of services
Programming costs	$	320,725	$	286,682	$	34,043		12	%
Other cost of services		323,902		303,440		20,462		7	%
Total cost of services		644,627		590,122		54,505		9	%
Selling, general and administrative
Marketing		83,431		74,476		8,955		12	%
General and administrative		251,145		227,226		23,919		11	%
Total selling, general and administrative		334,576		301,702		32,874		11	%
Total costs and expenses	$	979,203	$	891,824	$	87,379		10	%

Cox Communications, Inc.

~~Cost~~Notes ~~of services includes cable programming costs, which are costs paid~~ to ~~programmers~~ ~~for~~Condensed ~~cable~~Consolidated ~~content~~Financial ~~and~~Statements ~~are~~(Unaudited) ~~generally~~— ~~paid on a per-subscriber basis.~~Continued Cost of services also includes other direct costs and field service and call center costs. Other direct costs include costs that Cox incurs in conjunction with providing its residential, commercial and advertising services. Field service costs include costs associated with providing and maintaining Cox’s broadband network and customer care costs necessary to maintain its customer base.

21 On October 19, 2004, CEI and Cox publicly announced that they had entered into a Merger Agreement pursuant to which the shares of Cox Class A common stock not beneficially owned by CEI would be proposed to be acquired for $34.75 per share by means of a tender offer and follow-on merger. On October 18, 2004, prior to the announcement of the Merger Agreement, the parties to the Delaware action agreed upon and executed a memorandum of understanding. Pursuant to the Delaware memorandum of understanding, the parties to the Delaware action agreed, subject to the conditions set forth therein, to enter into a stipulation of settlement, to cooperate in public disclosures related to the Merger Agreement, and to use their best efforts to gain approval of the proposed settlement terms by the Delaware court.

~~Table~~ Also on October 18, 2004, the parties to the Georgia actions entered into a memorandum of understanding ~~Contents~~which set forth the agreement by the parties for the dismissal of the Georgia actions.

~~Cost~~On ofNovember 18, ~~services~~2004, ~~increased~~the ~~$54.5 million~~court ~~over~~entered ~~the~~a ~~comparable~~scheduling ~~period~~order in ~~2003~~ ~~due~~the toDelaware ~~a $34~~action.~~0 million~~ ~~increase~~The scheduling inorder ~~programming~~preliminarily ~~costs~~certified ~~reflecting programming~~the ~~rate~~Delaware ~~increases~~action ~~and~~as ~~customer~~a ~~growth.~~class ~~Approximately~~action ~~10%~~on behalf of ~~the~~a class ~~increase~~consisting inof ~~programming~~all ~~costs~~record ~~was~~and ~~attributable~~beneficial toholders ~~programming~~of ~~rate~~Cox ~~increases,~~shares (other than CEI and its subsidiaries), from and including August 2%, ~~was~~2004 ~~related~~through toand ~~customer~~including ~~growth.~~the ~~Other~~date ~~cost~~ of ~~services~~the ~~increased $20.5~~consummation ~~million,~~of ~~primarily~~the ~~due~~merger, toand ~~27%~~certain ~~growth~~persons inrelated ~~advanced-service~~to ~~customers over~~ the ~~last~~ ~~twelve~~class ~~months,~~members. ~~partially~~The ~~offset~~defendants byin ~~cost~~the ~~savings~~Delaware action ~~achieved~~are ~~through successful~~excluded ~~field~~from ~~service~~the ~~initiatives~~class.

~~Selling~~On January 13, ~~general~~2005, an individual shareholder and ~~administrative~~several ~~expenses~~mutual ~~include~~funds ~~marketing,~~who ~~salaries~~purportedly were ~~and~~members ~~benefits~~of the plaintiff class filed a joint objection to the requested attorneys’ fees sought by plaintiffs’ counsel, ~~commissions~~but ~~and~~did ~~bonuses~~not object to the proposed settlement itself. On March 18, ~~travel~~2005, ~~facilities~~the Delaware court entered a final order approving the proposed settlement, ~~insurance~~certifying the requested class, and ~~other~~dismissing the claims asserted against the defendants with prejudice. The time to ~~administrative~~appeal ~~expenses~~this order has expired, and no appeal was taken. ~~Selling~~On June 6, ~~general~~2005, ~~and~~the ~~administrative~~Delaware ~~expenses~~court issued ~~increased~~an opinion ordering Cox to pay $321.9275 million ~~due~~of the $4.95 million in fees and expenses that the Delaware plaintiffs’ attorneys had sought and Cox previously had agreed not to: oppose, pursuant to the terms of the stipulation of settlement. Plaintiffs and the shareholders who objected to the award of fees filed cross-appeals to the Delaware court’s decision on attorneys’ fees.

	•		a $23.9 million increase in general and administrative expenses primarily related to increased salaries and benefits and the cost of trials of new video and telephony products; and
	•		a $9.0 million increase in marketing expense primarily due to additional marketing related to new video products and an industry-wide campaign aimed at satellite competition, as well as a 9% increase in marketing costs associated with Cox Media, Cox’s advertising sales business.

On June 27, 2005, the Georgia court granted a joint motion to dismiss the Georgia actions with prejudice filed by the Georgia plaintiffs and defendants and also ordered Cox to pay plaintiffs’ counsel $1.25 million in fees and expenses, which amount Cox previously had agreed not to oppose. The time for appeal of the Georgia court’s decisions has expired without appeal.

Cox ~~expects continued increases in programming costs~~ and ~~will continue to pass through some portion of these increases to~~ its ~~customers.~~subsidiaries Inare ~~addition,~~parties ~~Cox expects~~ to ~~have~~various ~~continued~~other ~~growth~~legal inproceedings ~~advanced~~that ~~services,~~are ~~which~~ordinary ~~include digital~~and ~~cable,~~incidental ~~high-speed~~to ~~Internet~~their ~~access~~businesses. ~~and~~Management ~~telephony,~~does ~~both~~not asexpect athat ~~result~~any of ~~increased penetration where~~ these ~~services~~other ~~were available in 2003 and continued roll-out~~currently ofpending ~~these~~legal ~~services~~proceedings inwill ~~new~~have ~~areas during 2004. As~~ a ~~result~~material ofadverse ~~these~~impact ~~trends,~~on Cox ~~expects~~’s ~~its~~consolidated ~~cost of services and~~financial position, toresults aof ~~lesser~~operations ~~degree,~~or ~~selling,~~cash ~~general and administrative expenses to increase~~flows.

~~Depreciation~~12. ~~and amortization~~Other

~~Depreciation and amortization increased to $397.1 million from $364.3~~ ~~million~~In inMarch ~~the~~2005, ~~second quarter of 2003 due to an increase in depreciation from~~ Cox’s ~~continuing~~announced ~~investments~~it inis ~~its~~exploring ~~broadband~~a ~~network~~sale inof ~~order~~cable ~~to deliver~~operations ~~additional~~serving ~~programming~~approximately ~~and services~~900,000 subscribers.

~~Loss (gain) on sale of cable systems~~20

InTable the second quarter of 2004, Cox recorded a $5.0 million pre-tax loss on the sale of certain small, non-clustered cable systems in Oklahoma, Kansas, Texas and Arkansas, which in the aggregate consisted of approximately 53,000 basic cable subscribers. Contents

~~Interest~~Item 2. ~~expense~~Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Interest~~The ~~expense~~following ~~decreased~~discussion ~~29%~~should tobe ~~$95.6 million~~read ~~primarily~~in ~~due~~conjunction towith ~~a reduction~~the ofaccompanying ~~outstanding~~unaudited Condensed ~~indebtedness~~Consolidated ~~and~~Financial ~~interest~~Statements ~~savings~~for asthe athree ~~result~~and ofsix-month ~~Cox’s interest~~periods ~~rate~~ended ~~swap~~June 30, ~~agreements~~2005 and 2004.

~~Loss~~Results onof ~~derivative instruments, net~~Operations

InThree ~~August 2003,~~Months ~~Cox~~Ended ~~terminated a series of prepaid forward contracts accounted for as zero-coupon debt. While these contracts were outstanding~~June 30, ~~changes~~ in2005 ~~the~~Compared ~~market value of the Sprint PCS common stock associated~~ with ~~the~~Three ~~contracts~~Months ~~impacted~~Ended ~~the loss on derivative instruments. As a result of the termination of the contracts~~June 30, ~~the pre-tax loss on derivative instruments for the second quarter of~~ 2004 ~~was insignificant.~~ During the second quarter of 2003, Cox recorded a $24.2 million pre-tax loss on derivative instruments primarily resulting from the change in the fair value of certain derivative instruments embedded in Cox’s zero-coupon debt that were indexed to shares of Sprint PCS common stock that Cox owned.

22 The following table sets forth summarized consolidated financial information for the three months ended June 30, 2005 and 2004.


	Three Months Ended
	June 30
	2005			2004			$ Change			% Change
	(Thousands of Dollars)
Revenues	$	1,776,653		$	1,595,240		$	181,413			11	%
Cost of services		709,485			644,627			64,858			10	%
Selling, general and administrative expenses		375,051			334,576			40,475			12	%
Depreciation and amortization		463,204			397,114			66,090			17	%
Loss on sale of cable systems		—			5,021			(5,021	)		(100	%)

Operating income		228,913			213,902			15,011			7	%
Interest expense		(171,661	)		(95,591	)		(76,070	)		80	%
Loss on derivative instruments, net		(48	)		(15	)		(33	)	NM
(Loss) gain on investments, net		(2,723	)		2,326			(5,049	)	NM
Loss on extinguishment of debt		(13,019	)		(7,006	)		(6,013	)		86	%
Other, net		(585	)		(258	)		(327	)		127	%
Income tax expense		21,061			50,359			(29,298	)		(58	%)
Minority interest, net of tax		—			413			(413	)		(100	%)
Equity in net losses of affiliated companies, net of tax		(1,534	)		(730	)		(804	)		110	%

Net income	$	18,282		$	62,682		$	(44,400	)		(71	%)

~~Gain~~NM ondenotes ~~investments,~~percentage ~~net~~is not meaningful

~~Net gain on investments of $2.3 million for the second quarter of 2004 was~~Revenues due to the sale of all remaining shares of Sprint stock held by Cox. The net gain on investments for the comparable period in 2003 of $124.1 million was primarily due to a $97.2 million pre-tax gain on the sale of 32.9 million shares of Sprint PCS common stock and a $27.1 million pre-tax gain as a result of the change in the market value of Cox’s investment in Sprint PCS common stock classified as trading.

~~Equity~~ The infollowing ~~net~~table ~~losses~~sets offorth ~~affiliated~~summarized ~~companies~~revenue information for the three months ended June 30, 2005 and 2004.

Equity in net losses of affiliated companies for the second quarter of 2004 was $1.2 million compared to $4.4 million for the second quarter of 2003. Generally, this loss is attributable to Cox’s proportionate share of the investee’s income or loss. Although Cox has various levels of ownership and rights with respect to the companies in which it has equity investments, Cox has little, if any, control over the financial position of these companies. Therefore, Cox cannot predict the impact that its equity investments will have on its future operations.


	Three Months Ended June 30
	2005		% of Total			2004		% of Total			$ Change			% Change
			(Thousands of Dollars)
Residential
Video	$	1,011,344		57	%	$	960,914		60	%	$	50,430			5	%
Data		334,372		19	%		270,545		17	%		63,827			24	%
Telephony		183,325		10	%		144,111		9	%		39,214			27	%
Other		23,854		1	%		26,336		2	%		(2,482	)		(9	%)

Total residential		1,552,895		87	%		1,401,906		88	%		150,989			11	%
Commercial		105,082		6	%		86,338		5	%		18,744			22	%
Advertising		118,676		7	%		106,996		7	%		11,680			11	%

Total revenues	$	1,776,653		100	%	$	1,595,240		100	%	$	181,413			11	%

~~(Loss)~~ The ~~gain~~11% onincrease ~~extinguishment~~in oftotal ~~debt~~revenues is primarily attributable to:

~~During the second quarter of 2004, Cox recorded a $7.0 million pre-tax~~21 loss on extinguishment of debt due to the redemption of $14.6 million aggregate principal amount of Cox’s exchangeable subordinated debentures due 2029 (PRIZES) and $0.1 million aggregate principal amount of Cox’s 3% exchangeable subordinated debentures due 2030 (Premium PHONES), which represented all remaining outstanding PRIZES and Premium PHONES. During the comparable period in 2003, Cox recorded a $3.9 million pre-tax gain resulting from the purchase of $1.3 billion aggregate principal amount of the PRIZES and $274.9 million aggregate principal amount of the Premium PHONES pursuant to Cox’s offer to purchase any and all PRIZES and Premium PHONES.

IncomeTable taxof expense (benefit) Contents

~~Income~~• ~~tax~~a ~~expense~~22% ~~was~~increase ~~$49.9 million~~in customers for ~~the~~advanced ~~second~~services, ~~quarter~~including ofdigital ~~2004 compared~~cable, tohigh-speed ~~$13.4 million~~Internet ~~for~~access ~~the~~and ~~same~~telephony ~~period~~customers; in• ~~2003.~~an ~~The~~increase ~~change~~ in ~~the~~basic ~~effective~~cable ~~tax~~rates ~~rate~~resulting ~~was~~from ~~primarily~~increased ~~due~~programming ~~to the~~costs ~~impact of investing~~ and ~~financing~~inflation, ~~transactions~~as inwell ~~the~~as ~~prior~~increased ~~year,~~channel ~~along with~~availability; ~~varying~~and ~~effective~~• ~~state~~an ~~tax~~increase ~~rates~~in ~~across~~commercial ~~Cox’s~~broadband ~~operations~~customers.

~~Net~~ Cox ~~income~~has experienced solid growth in digital cable, residential high-speed Internet and telephony customers. For the second quarter of 2005, Cox:

~~Net~~• ~~income~~ended ~~for~~ the ~~second~~quarter with approximately 6.3 million basic video customers, consistent with the quarter ofended June 30, 2004. ~~was~~• ~~$62~~added 48,768 digital cable customers, which contributed to year-over-year growth of 12%.~~7 million~~ ~~compared~~• added 97,779 high-speed Internet customers, which contributed to ~~$117~~ year-over-year growth of 27%.~~7 million~~ ~~for~~• ~~the~~added ~~comparable~~89,023 ~~period~~telephony incustomers, ~~2003~~which contributed to year-over-year growth of 33%.

23 Cox experiences some seasonality in its business, primarily as a result of college students leaving school for the summer break and people traveling to warmer climates for the winter months. The college students’ annual summer departure contributed to a slight decline in basic video customers during the second quarter of 2005. This seasonality has generally resulted in increased revenues during the third quarter of the year. Cox expects this trend to continue in 2005.

~~Table~~ Cox expects its overall growth trend to continue. Cox also anticipates continued customer demand for its existing portfolio of ~~Contents~~broadband products, as well as for new services such as Entertainment On Demand, Home Networking, high-definition television and digital video recorders.

~~Six~~Costs ~~Months~~and ~~Ended~~expenses ~~June 30,~~(cost ~~2004~~of ~~Compared~~services ~~with~~and ~~Six~~selling, ~~Months~~general ~~Ended~~and ~~June 30,~~administrative ~~2003~~expenses)

The following table sets forth summarized ~~consolidated~~operating ~~financial information~~expenses for the ~~six~~three months ended June 30, ~~2004~~2005 and ~~2003~~2004.

	Six Months Ended
	Three Months Ended
	June 30
	2004			2003			$ Change			% Change
	2005			2004			$ Change			% Change
	(Thousands of Dollars)
Revenues	$	3,135,597		$	2,790,221		$	345,376			12	%
Cost of services
Cost of services		1,280,443			1,169,914			110,529			9	%
Programming costs	$	351,949		$	320,725		$	31,224			10	%
Selling, general and administrative expenses		671,884			608,738			63,146			10	%
Other cost of services		357,536			323,902			33,634			10	%
Depreciation and amortization		789,180			748,594			40,586			5	%
Total cost of services		709,485			644,627			64,858			10	%
Loss (gain) on sale of cable systems		5,021			(469	)		5,490		NM
Selling, general and administrative
Operating income		389,069			263,444			125,625			48	%
Marketing		90,912			83,431			7,481			9	%
Interest expense		(192,203	)		(264,218	)		(72,015	)		(27	%)
General and administrative		284,139			251,145			32,994			13	%
Loss on derivative instruments, net		(54	)		(26,700	)		(26,646	)		(100	%)
Total selling, general and administrative		375,051			334,576			40,475			12	%
Gain on investments, net		29,135			122,395			(93,260	)		(76	%)
Total costs and expenses	$	1,084,536		$	979,203		$	105,333			11	%
Equity in net losses of affiliated companies		(195	)		(6,518	)		(6,323	)		(97	%)
(Loss) gain on extinguishment of debt		(7,006	)		3,896			(10,902	)	NM
Other, net		(1,767	)		(957	)		810			85	%
Income tax expense (benefit)		96,022			(1,096	)		97,118		NM
Minority interest, net of tax		(572	)		(3,914	)		(3,342	)		(85	%)
Net income	$	120,385		$	88,524		$	31,861			36	%

NM Cost ~~denotes~~of ~~percentage~~services isincludes ~~not~~cable ~~meaningful~~programming costs, which are costs paid to programmers for cable content and are generally paid on a per-subscriber basis. Cost of services also includes other direct costs and field service and call center costs. Other direct costs include costs that Cox incurs in conjunction with providing its residential, commercial and advertising services. Field service costs include costs associated with providing and maintaining Cox’s broadband network and customer care costs necessary to maintain its customer base.

~~Revenues~~22

TheTable followingof table sets forth summarized revenue information for the six months ended June 30, 2004 and 2003. Contents

	Six Months Ended June 30
	2004		% of Total			2003		% of Total			$ Change		% Change
	(Thousands of Dollars)
Residential
Video	$	1,911,545		61	%	$	1,806,843		65	%	$	104,702		6	%
Data		528,228		17	%		404,918		15	%		123,310		30	%
Telephony		278,071		9	%		223,188		8	%		54,883		25	%
Other		52,843		2	%		39,857		1	%		12,986		33	%
Total residential		2,770,687		89	%		2,474,806		89	%		295,881		12	%
Commercial		169,521		5	%		136,634		5	%		32,887		24	%
Advertising		195,389		6	%		178,781		6	%		16,608		9	%
Total revenues	$	3,135,597		100	%	$	2,790,221		100	%	$	345,376		12	%

Cost of services increased $64.9 million over the comparable period in 2004 due to a $31.2 million increase in programming costs primarily reflecting programming rate increases. Other cost of services increased $33.6 million, primarily due to an 11% growth in total customers over the last twelve months, partially offset by cost savings achieved through successful field service initiatives.

~~The~~Selling, ~~$345.4 million~~general ~~increase~~and inadministrative ~~total~~expenses ~~revenues~~include ismarketing, ~~primarily~~salaries ~~attributable~~and benefits, commissions and bonuses, travel, facilities, insurance and other administrative expenses. Selling, general and administrative expenses increased $40.5 million due to:

• a 27% increase in customers for advanced services, which include digital cable, high-speed Internet access and telephony customers; • an increase in basic cable rates resulting from increased programming costs and inflation, as well as increased channel availability; and • an increase in commercial broadband customers, as well as an increase in advertising sales.

	•		a $33.0 million increase in general and administrative expenses primarily related to increased salaries and benefits, as well as an increase in the cost of providing healthcare benefits; and,

	•		a $7.5 million increase in marketing expense primarily due to additional marketing related to new video products, as well as a 14% increase in costs associated with Cox Media, Cox’s advertising sales business.

Cox ~~has~~expects ~~experienced~~continued ~~solid~~increases in programming costs and will continue to pass through some portion of these increases to its customers. In addition, Cox expects to have continued growth in advanced services, which include digital cable, ~~residential~~ high-speed Internet access and telephony, ~~customers.~~both ~~For~~as ~~the~~a result ~~six~~of ~~months~~increased ~~ended~~penetration ~~June 30,~~where these services were available in 2004 and continued roll-out of these services in new areas during 2005. As a result of these trends, Cox: expects its cost of services and, to a lesser degree, selling, general and administrative expenses to continue to increase.

•Depreciation ~~ended~~and the period with approximately 6.3 million basic video customers, up 0.6% from June 30, 2003. • added 137,304 digital cable customers, which contributed to year-over-year growth of 18%. • added 258,872 high-speed Internet customers, which contributed to year-over-year growth of 34%. • added 145,224 telephony customers, which contributed to year-over-year customer growth of 35%.amortization

~~Cox~~Depreciation ~~expects~~and ~~its~~amortization ~~overall~~increased ~~growth~~to ~~trend~~$463.2 million tofrom ~~continue~~$397.1 million ~~Cox~~in ~~also~~the ~~anticipates~~second ~~continued~~quarter ~~customer~~of ~~demand~~2005. ~~for~~This ~~its~~was ~~existing~~primarily ~~portfolio~~due to the amortization of ~~broadband~~finite-lived ~~products,~~intangible assets that resulted from the push-down basis accounting applied as a result of the December 2004 going-private transaction, as well as ~~for~~an ~~new~~increase in depreciation from Cox’s continuing investments in its broadband network in order to deliver additional programming and services. ~~such~~Cox aswill ~~Entertainment~~continue Onto invest ~~Demand,~~in ~~Home~~its ~~Networking~~broadband network and new services, which management expects will result in increased ~~high-definition~~revenues ~~television~~to ~~and~~offset ~~digital~~increased ~~video~~depreciation ~~recorders~~expense.

24Loss on sale of cable systems

~~Table~~ In the second quarter of ~~Contents~~2004, Cox recorded a $5.0 million pre-tax loss on the sale of certain small, non-clustered cable systems in Oklahoma, Kansas, Texas and Arkansas, which in the aggregate consisted of approximately 53,000 basic cable subscribers.

~~Costs~~Interest ~~and expenses (cost of services and selling, general and administrative~~expense ~~expenses)~~

~~The~~Interest ~~following~~expense ~~table~~increased ~~sets~~80% ~~forth~~to ~~summarized~~$171.7 million ~~operating~~primarily ~~expenses~~due ~~for~~to increased outstanding indebtedness incurred in December 2004 as a result of the ~~six~~going-private transaction discussed ~~months~~further ~~ended~~in ~~June~~Note 3. “Going- Private Transaction” in Part 301, ~~2004~~Item 1. ~~and~~“Condensed ~~2003~~Consolidated Financial Statements.”

	Six Months Ended June 30
	2004		2003		$ Change		% Change
	(Thousands of Dollars)
Cost of services
Programming costs	$	638,384	$	577,500	$	60,884		11	%
Other cost of services		642,059		592,414		49,645		8	%
Total cost of services		1,280,443		1,169,914		110,529		9	%
Selling, general and administrative
Marketing		162,412		140,739		21,673		15	%
General and administrative		509,472		467,999		41,473		9	%
Total selling, general and administrative		671,884		608,738		63,146		10	%
Total costs and expenses	$	1,952,327	$	1,778,652	$	173,675		10	%

(Loss) gain on investments, net

~~Cost~~Net ofloss ~~services~~on ~~includes~~investments ~~cable~~of ~~programming~~$2.7 million ~~costs, which are costs paid to programmers~~ for ~~cable~~the ~~content~~second ~~and~~quarter ~~are~~of ~~generally~~2005 ~~paid~~was ondue to a ~~per~~pre-~~subscriber basis.~~tax ~~Cost~~decline ofconsidered ~~services~~to ~~also~~be ~~includes~~ other ~~direct~~than ~~costs~~temporary ~~and~~in ~~field~~the ~~service~~fair ~~and~~value ~~call center~~of ~~costs~~certain investments. ~~Other~~The ~~direct~~net gain ~~costs~~on ~~include~~investments ~~costs~~for ~~that~~the ~~Cox~~comparable ~~incurs~~period in ~~conjunction with~~2004 ~~providing~~of ~~its residential, commercial and advertising services~~$2.3 million ~~Field service~~was ~~costs~~primarily ~~include~~due ~~costs~~to ~~associated~~the ~~with providing and maintaining Cox’s~~sale ~~broadband~~of ~~network~~all ~~and~~remaining ~~customer~~shares ~~care~~of ~~costs~~Sprint ~~necessary~~stock toheld ~~maintain~~by ~~its customer base~~Cox.

~~Cost of services increased $110.5 million over the comparable period in~~23 2003 due to a $60.9 million increase in programming costs reflecting programming rate increases and customer growth. Approximately 9% of the increase in programming costs was attributable to programming rate increases, and 2% was related to customer growth. Other cost of services increased $49.6 million, primarily due to 27% growth in advanced-service customers over the last twelve months, partially offset by cost savings achieved through successful field service initiatives.

Selling,Table generalof and administrative expenses include marketing, salaries and benefits, commissions and bonuses, travel, facilities, insurance and other administrative expenses. Selling, general and administrative expenses increased $63.1 million primarily due to: Contents

	•		a $41.5 million increase in general and administrative expenses primarily related to increased salaries and benefits and the cost of trials of new video and telephony products; and
	•		a $21.7 million increase in marketing expense primarily due to additional marketing related to new video products and an industry-wide campaign aimed at satellite competition, as well as an 8% increase in marketing costs associated with Cox Media, Cox’s advertising sales business.

Loss on extinguishment of debt

~~Cox~~During ~~expects~~the ~~continued~~second ~~increases~~quarter inof ~~programming~~2005, ~~costs~~Cox ~~and~~recorded ~~will~~a ~~continue~~$13.0 million ~~to pass~~pre-tax ~~through~~loss ~~some~~on ~~portion~~ extinguishment of ~~these~~debt ~~increases~~due to ~~its~~the ~~customers~~redemption of $62.3 million Inoriginal ~~addition,~~principal ~~Cox expects~~amount toat ~~have~~maturity ~~continued~~of ~~growth~~Discount Debentures infor ~~advanced~~aggregate ~~services~~cash consideration of $32.5 million, which ~~include~~represented ~~digital~~all remaining ~~cable,~~outstanding ~~high-speed~~Discount ~~Internet~~Debentures. ~~access~~During ~~and~~the ~~telephony,~~comparable ~~both~~period asin a2004, ~~result~~Cox ofrecorded ~~increased~~a ~~penetration~~$7.0 million ~~where~~pre-tax ~~these~~loss ~~services~~on ~~were~~extinguishment ~~available~~of indebt ~~2003~~due ~~and~~to ~~continued~~the ~~roll-out~~redemption of $14.6 million aggregate principal amount of ~~these~~Cox’s ~~services~~exchangeable insubordinated ~~new~~debentures ~~areas~~due ~~during~~2029 ~~2004~~(PRIZES) and $0.1 million Asaggregate aprincipal ~~result~~amount of ~~these~~Cox’s ~~trends,~~3% ~~Cox~~exchangeable subordinated debentures due 2030 ~~expects~~(Premium ~~its~~PHONES), ~~cost~~which ofrepresented ~~services~~all remaining outstanding PRIZES and, toPremium PHONES. As a result ~~lesser~~of ~~degree,~~these ~~selling~~redemptions, ~~general~~Cox ~~and administrative~~no ~~expenses~~longer tohas ~~increase~~any outstanding exchangeable subordinated debentures.

25Income tax expense

~~Table~~ Income tax expense was $21.1 million for the second quarter of ~~Contents~~2005 compared to $50.4 million for the same period in 2004. The change in income tax expense was primarily due to the change in pre-tax income, varying effective state tax rates across Cox’s operations between 2004 and 2005, and the effect of on-going income tax audits. Cox’s effective tax rates for 2005 and 2004 were 51.5% and 44.4%, respectively.

~~Depreciation~~Equity ~~and~~in ~~amortization~~net losses of affiliated companies, net of tax

~~Depreciation~~Equity ~~and~~in ~~amortization~~net ~~increased~~losses toof affiliated companies, net of tax, for the second quarter of 2005 was $~~789~~1.25 million ~~from~~compared to $~~748~~0.6 7 million infor the ~~six~~second ~~months~~quarter ~~ended~~of ~~June 30, 2003~~2004. ~~This~~Generally, ~~was~~this ~~mainly~~loss ~~due~~is attributable to ~~an increase~~Cox’s inproportionate ~~depreciation~~share ~~from~~of ~~Cox~~the investee’s ~~continuing~~income ~~investments~~or inloss. ~~its~~Although ~~broadband~~Cox has ~~network~~various inlevels ~~order~~of ownership and rights with respect to ~~deliver~~the ~~additional~~companies ~~programming~~in ~~and~~which ~~services~~it has equity investments, Cox has little, if any, control over the financial position of these companies. Therefore, Cox cannot predict the impact that its equity investments will have on its future operations.

~~Interest~~Net ~~expense~~income

~~Interest~~Net ~~expense~~income ~~decreased~~for ~~27%~~the tosecond quarter of 2005 was $~~192~~18.23 million ~~primarily~~compared ~~due~~ to ~~interest savings~~$62.7 million asfor ~~a result of a reduction of outstanding indebtedness and Cox’s~~the ~~interest~~comparable ~~rate~~period ~~swap~~in ~~agreements~~2004.

~~Loss~~Six onMonths ~~derivative~~Ended ~~instruments~~June 30, ~~net~~2005 Compared with Six Months Ended June 30, 2004

InThe ~~August 2003,~~following ~~Cox~~table ~~terminated~~sets aforth ~~series~~summarized ofconsolidated ~~prepaid~~financial ~~forward~~information ~~contracts accounted~~ for ~~as zero-coupon debt. While these contracts were outstanding, changes in~~ the market value of the Sprint PCS common stock associated with the contracts impacted the loss on derivative instruments. As a result of the termination of the contracts, the pre-tax loss on derivative instruments for the six months ended June 30, ~~2004~~2005 was insignificant. For the six months ended June 30, 2003, Cox recorded a $26.7 million pre-tax loss on derivative instruments primarily due to a $22.9 million pre-tax loss resulting from the change in the fair value of certain derivative instruments embedded in Cox’s zero-coupon debt that were indexed to shares of Sprint PCS common stock and ~~a $4~~2004.~~4 million pre-tax loss resulting from the change in the fair value of Cox’s~~ ~~net settleable warrants.~~

Gain on investments, net


	Six Months Ended
	June 30
	2005			2004			$ Change			% Change
	(Thousands of Dollars)
Revenues	$	3,480,713		$	3,135,597		$	345,116			11	%
Cost of services		1,391,384			1,280,443			110,941			9	%
Selling, general and administrative expenses		743,620			671,884			71,736			11	%
Depreciation and amortization		897,400			789,180			108,220			14	%
Loss on sale of cable system		—			5,021			(5,021	)		(100	%)

Operating income		448,309			389,069			59,240			15	%
Interest expense		(335,149	)		(192,203	)		(142,946	)		74	%
Loss on derivative instruments, net		(78	)		(54	)		(24	)		44	%
(Loss) gain on investments, net		(2,721	)		29,135			(31,856	)		(109	%)
Loss on extinguishment of debt		(13,019	)		(7,006	)		(6,013	)		86	%
Other, net		(367	)		(1,767	)		1,400			(79	%)
Income tax expense		49,375			96,065			(49,690	)		(49	%)
Minority interest, net of tax		—			(572	)		572			(100	%)
Equity in net losses income of affiliated companies, net of tax		(2,306	)		(152	)		(2,154	)	NM

Net income	$	45,294		$	120,385		$	(75,091	)		(62	%)

~~Net~~NM ~~gain~~denotes onpercentage ~~investments of $29.1 million for the six months ended June 30,~~is ~~2004~~not ~~was due to a $2~~meaningful.~~3 million pre-tax gain on the sale of all remaining shares~~ of Sprint stock held by Cox, a $19.5 million pre-tax gain on the sale of 0.1 million shares of Sprint PCS preferred stock and a $7.3 million pre-tax gain on the sale of certain other non-strategic investments. Net gain on investments for the comparable period in 2003 of $122.4 million was primarily due to a $97.2 million pre-tax gain on the sale of 32.9 million shares of Sprint PCS common stock and a $27.1 million pre-tax gain as a result of the change in market value of Cox’s investment in Sprint PCS common stock classified as trading.

~~Equity in net losses of affiliated companies~~24

EquityTable in net losses of affiliated companies for the six months ended June 30, 2004 was $0.2 million compared to $6.5 million for the comparable period in 2003. Generally, this loss is attributable to Cox’s proportionate share of the investee’s income or loss. Although Cox has various levels of ownership and rights with respect to the companies in which it has equity investments, Cox has little, if any, control over the financial position of these companies. Therefore, Cox cannot predict the impact that its equity investments will have on its future operations. Contents

~~Income tax expense (benefit)~~Revenues

~~Income~~The ~~tax~~following ~~expense~~table ~~was~~sets ~~$96.0 million~~forth summarized revenue information for the six months ended June 30, ~~2004~~ ~~compared~~2005 ~~to income tax benefit of $1.1 million for the same period in 2003. The change in the effective tax rate was primarily due to the impact of investing~~ and ~~financing transactions in the prior year, along with varying effective state tax rates across Cox’s operations~~2004.

Net income


	Six Months Ended June 30
	2005		% of Total			2004		% of Total			$ Change			% Change
			(Thousands of Dollars)
Residential
Video	$	2,000,825		57	%	$	1,911,545		61	%	$	89,280			5	%
Data		655,641		19	%		528,228		17	%		127,413			24	%
Telephony		352,953		10	%		278,071		9	%		74,882			27	%
Other		50,472		2	%		52,843		2	%		(2,371	)		(4	%)

Total residential		3,059,891		88	%		2,770,687		89	%		289,204			10	%
Commercial		204,426		6	%		169,521		5	%		34,905			21	%
Advertising		216,396		6	%		195,389		6	%		21,007			11	%

Total revenues	$	3,480,713		100	%	$	3,135,597		100	%	$	345,116			11	%

~~Net~~The ~~income~~11% ~~for~~increase ~~the~~in ~~six~~total ~~months~~revenues ~~ended~~is ~~June 30,~~primarily ~~2004~~attributable ~~was $120.4 million compared~~ to ~~net income of $88.5 million for the comparable period in 2003.~~:

26• a 22% increase in customers for advanced services, including digital cable, high-speed Internet access and telephony customers; • an increase in basic cable rates resulting from increased programming costs and inflation, as well as increased channel availability; and • an increase in commercial broadband customers.

~~Table~~ Cox ofhas ~~Contents~~experienced solid growth in digital cable, residential high-speed Internet and telephony customers. For the six months ended June 30, 2005, Cox:

~~Liquidity~~• ~~and~~ended ~~Capital~~the ~~Resources~~ period with approximately 6.3 million basic video customers, consistent with the period ending December 31, 2004. • added 143,267 digital cable customers, which contributed to year-over-year growth of 12%. • added 275,192 high-speed Internet customers, which contributed to year-over-year growth of 27%. • added 200,545 telephony customers, which contributed to year-over-year customer growth of 33%.

~~Uses~~ Cox expects its overall growth trend to continue. Cox also anticipates continued customer demand for its existing portfolio of ~~Cash~~broadband products, as well as for new services such as Entertainment On Demand, Home Networking, high-definition television and digital video recorders.

AsCosts ~~part of Cox’s ongoing strategic plan, Cox has invested,~~ and ~~will continue~~expenses to(cost ~~invest, capital to enhance the reliability and capacity~~ of ~~its broadband network in preparation for the offering of new~~ services. ~~Cox believes it will be able to meet its capital needs for the next twelve months~~ and ~~the foreseeable~~selling, ~~future~~general ~~with amounts available under existing revolving credit facilities~~ and ~~its~~administrative ~~commercial paper program.~~expenses)

~~During~~The following table sets forth summarized operating expenses for the six months ended June 30, ~~2004, Cox made capital expenditures~~ of2005 ~~$617.9 million. These expenditures were primarily directed at costs related to electronic equipment located on customers’ premises~~ and ~~costs associated with network equipment used to enter new service areas~~2004.

Capital expenditures for the year ending 2004 are expected to be approximately $1.4 billion. Although management continuously reviews industry and economic conditions to identify opportunities, Cox does not have any current plans to make any material acquisitions or enter into any cable systems exchanges in 2004.


	Six Months Ended June 30
	2005		2004		$ Change		% Change
	(Thousands of Dollars)
Cost of services
Programming costs	$	699,734	$	638,384	$	61,350		10	%
Other cost of services		691,650		642,059		49,591		8	%

~~Net commercial paper repayments during the six months ended June 30, 2004~~25 were $266.3 million. During the six months ended June 30, 2004, Cox repaid $72.5 million of debt, which included the repurchase of its remaining outstanding convertible senior notes, PRIZES and Premium PHONES.

SourcesTable of Cash Contents

During the six months ended June 30, 2004, Cox generated $857.4 million from operating activities. Proceeds from the sale of investments of $70.2 million included the sale of 0.1 million shares of Sprint PCS preferred stock for net proceeds of $56.9 million, the sale of certain other non-strategic investments for proceeds of $10.3 million and the sale of all remaining Sprint stock for proceeds of $3.0 million. Cox received net proceeds of approximately $53.1 million from the sale of certain small, non-clustered cable systems in Oklahoma, Kansas, Texas and Arkansas.


	Six Months Ended June 30
	2005		2004		$ Change		% Change
	(Thousands of Dollars)
Total cost of services		1,391,384		1,280,443		110,941		9	%
Selling, general and administrative
Marketing		177,870		162,412		15,458		10	%
General and administrative		565,750		509,472		56,278		11	%

Total selling, general and administrative		743,620		671,884		71,736		11	%

Total costs and expenses	$	2,135,004	$	1,952,327	$	182,677		9	%

Cost of services includes cable programming costs, which are costs paid to programmers for cable content and are generally paid on a per-subscriber basis. Cost of services also includes other direct costs and field service and call center costs. Other direct costs include costs that Cox incurs in conjunction with providing its residential, commercial and advertising services. Field service costs include costs associated with providing and maintaining Cox’s broadband network and customer care costs necessary to maintain its customer base.

AtCost ~~June 30,~~of ~~2004,~~services ~~Cox~~increased ~~had approximately~~ $6110.79 ~~billion~~million ofover ~~outstanding indebtedness.~~the ~~Derivative~~comparable ~~adjustments~~period in ~~accordance~~2004 ~~with~~due ~~SFAS~~to ~~No. 133~~a ~~reduced the reported debt balance at June 30, 2003 by approximately~~ $~~611~~61.2 4 million ~~to approximately~~increase ~~$7.0 billion.~~in Asprogramming acosts ~~result~~primarily ofreflecting ~~Cox’s~~programming ~~purchase~~rate ofincreases. ~~substantially~~Other ~~all~~cost of ~~its~~services ~~exchangeable~~increased ~~subordinated debentures~~$49.6 million, ~~net~~primarily ~~settlement~~due ofto ~~its zero-coupon~~an ~~debt~~11% ~~and~~growth ~~sales~~in oftotal ~~Sprint~~customers ~~PCS~~over ~~stock during 2003, SFAS No. 133~~the ~~adjustments~~last ~~did~~twelve ~~not significantly impact reported indebtedness at June 30~~months, ~~2004 and~~partially ~~are~~offset ~~not~~by ~~expected~~cost tosavings beachieved ~~material~~through insuccessful ~~the~~field ~~future~~service initiatives.

~~Recent~~ Selling, ~~Developments~~general and administrative expenses include marketing, salaries and benefits, commissions and bonuses, travel, facilities, insurance and other administrative expenses. Selling, general and administrative expenses increased $71.7 million primarily due to:

In July 2004, Cox received notice from DR Partners of its election to exercise its right to require that Cox purchase its 25% interest in TCA Cable Partners, pursuant to the partnership agreement. The partnership is a general partnership owned 75% by Cox (indirectly owned through subsidiaries) and 25% by DR Partners, operating cable systems in the Southwest, mainly Arkansas, serving approximately 260,000 customers. The price payable to DR Partners by Cox will be determined by a negotiation between DR Partners and Cox, and if they are unable to reach agreement, then an investment advisor will be engaged to determine the purchase price. Cox cannot predict the outcome of the negotiations or, if necessary, the appraisal process at this time.

	•		a $56.3 million increase in general and administrative expenses primarily related to increased salaries and benefits, as well as an increase in the cost of providing healthcare benefits; and,

	•		a $15.5 million increase in marketing expense primarily due to additional marketing related to new video products, as well as an 11% increase in costs associated with Cox Media, Cox’s advertising sales business.

~~Caution~~ Cox ~~Concerning~~expects ~~Forward~~continued increases in programming costs and will continue to pass through some portion of these increases to its customers. In addition, Cox expects to have continued growth in advanced services, which include digital cable, high-~~Looking~~speed ~~Statements~~Internet access and telephony, both as a result of increased penetration where these services were available in 2004 and continued roll-out of these services in new areas during 2005. As a result of these trends, Cox expects its cost of services and, to a lesser degree, selling, general and administrative expenses to increase.

~~This~~Depreciation ~~Form~~and ~~10-Q includes “forward-looking statements” within the meaning of~~amortization Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements that relate to Cox’s future plans, earnings, objectives, expectations, performance, and similar

27 Depreciation and amortization increased to $897.4 million from $789.2 million in the six months ended June 30, 2004. This was primarily due to the amortization of finite-lived intangible assets that resulted from the push-down basis accounting applied as a result of the December 2004 going-private transaction, as well as additional depreciation resulting from an increase in capital expenditures over the comparable period associated with Cox’s continuing investment in its broadband network in order to deliver additional services. Cox will continue to invest in its broadband network and new services, which management expects will result in increased revenues to offset increased depreciation expense.

~~Table~~Loss on sale of ~~Contents~~cable systems

~~projections,~~ During asthe ~~well~~six asmonths ~~any~~ended ~~facts~~June 30, or2004, ~~assumptions~~Cox ~~underlying~~recorded ~~these statements~~a ~~or projections~~$5.0 million ~~Actual~~pre-tax ~~results~~loss ~~may~~on ~~differ materially from~~ the ~~results~~sale ~~expressed~~of orcertain ~~implied~~small, ~~in these forward~~non-~~looking~~clustered ~~statements~~cable ~~due~~systems toin ~~various risks~~Oklahoma, ~~uncertainties or other factors. These factors include competition within the broadband communications industry~~Kansas, ~~Cox’s~~Texas ~~ability to achieve anticipated subscriber~~ and ~~revenue growth~~Arkansas, ~~Cox’s success~~ which in implementing new services and other operating initiatives, and Cox’s ability to generate sufficient cash flow to meet debt service obligations and finance operations. For a more detailed discussion of these and other risk factors, see the ~~“Caution~~ ~~Concerning~~aggregate ~~Forward-Looking~~consisted ~~Statements” section~~ of ~~Cox’s~~approximately ~~Annual Report on Form 10-K for the year ended December 31~~53,000 ~~2003.~~basic ~~Cox~~cable ~~assumes no responsibility to update any forward-looking statements as a result of new information, future events or otherwise~~subscribers.

~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~26

CoxTable has estimated the fair value of its financial instruments as of June 30, 2004 and December 31, 2003 using available market information or other appropriate valuation methodologies. Considerable judgment, however, is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that Cox would realize in a current market exchange. Contents

~~The~~Interest ~~carrying amount of cash, accounts and other receivables, accounts and~~expense other payables and amounts due to/from CEI approximates fair value because of the short maturity of those instruments. The fair value of Cox’s investments stated at fair value are estimated and recorded based on quoted market prices. The fair value of Cox’s equity method investments and investments stated at cost cannot be estimated without incurring excessive costs. Cox is exposed to market price risk volatility with respect to investments in publicly-traded and privately-held entities. Additional information pertinent to the value of Cox’s investments is discussed in Note 3. “Investments” in Part I, Item 1. “Condensed Consolidated Financial Statements.”

~~The~~Interest ~~fair~~expense ~~value~~increased of74% ~~interest~~to ~~rate~~$335.1 million ~~swaps~~primarily ~~used~~due ~~for~~to ~~hedging~~increased ~~purposes was~~outstanding ~~approximately~~indebtedness ~~$21.0 million~~incurred ~~and~~in ~~$61.2~~December ~~million~~2004 atas ~~June 30,~~a ~~2004~~result ~~and~~of ~~December 31, 2003,~~the ~~respectively,~~going-private ~~and~~transaction ~~represents~~discussed further ~~the~~in ~~estimated~~Note ~~amount~~3. ~~that~~“Going- ~~Cox~~Private ~~would~~Transaction” ~~receive upon~~in ~~termination~~Part 1, ofItem 1. ~~the~~“Condensed ~~swap~~Consolidated Financial ~~agreements~~Statements.”

~~Cox’s~~(Loss) ~~outstanding~~gain ~~commercial~~on ~~paper bears interest at current market rates and~~investments, ~~thus, approximates fair value at June 30, 2004 and December 31, 2003. Cox~~net ~~is exposed to interest rate volatility with respect to these variable-rate instruments.~~

~~The~~Net ~~estimated~~loss ~~fair~~on ~~value~~investments of ~~Cox’s~~$2.7 million ~~fixed-rate~~for ~~notes~~the ~~and~~six ~~debentures~~months ~~and exchangeable~~ended ~~subordinated debentures at~~ June 30, ~~2004~~2005 ~~and~~was ~~December 31,~~due ~~2003~~to ~~are~~a ~~based~~pre-tax ondecline ~~quoted~~considered ~~market~~to ~~prices~~be orother athan ~~discounted~~temporary ~~cash~~in ~~flow~~the ~~analysis~~fair ~~using~~value ~~Cox’s~~of certain investments. ~~incremental~~Net ~~borrowing~~gain ~~rate~~on investments for ~~similar~~the ~~types~~comparable period in 2004 of ~~borrowing~~$29.1 million ~~arrangements~~was ~~and dealer~~due ~~quotations~~to: (i) a $19.5 million Apre-tax ~~summary~~gain ofon the ~~carrying~~sale ~~value,~~of ~~estimated~~0.1 million ~~fair~~shares ~~value~~of ~~and~~Sprint PCS preferred stock, (ii) a $7.3 million pre-tax gain on the ~~effect~~sale of acertain ~~hypothetical~~other ~~one~~non-strategic ~~percentage~~investments, ~~point~~and ~~decrease~~(iii) a in$2.3 million ~~interest~~pre-tax ~~rates~~gain on the ~~foregoing~~sale ~~fixed-rate~~of ~~instruments~~all atremaining ~~June 30,~~shares ~~2004~~of ~~and~~Sprint ~~December 31,~~stock ~~2003~~then ~~is as~~held ~~follows:~~by Cox.

	June 30, 2004						December 31, 2003
					Fair Value						Fair Value
	Carrying		Fair		(1% Decrease		Carrying		Fair		(1% Decrease
	Value		Value		in Interest Rates)		Value		Value		in Interest Rates)
	(Millions of Dollars)
Fixed-rate notes and Debentures	$	6,608.0	$	6,979.5	$	7,369.7	$	6,683.4	$	7,323.0	$	7,760.8
Exchangeable subordinated Debentures		18.8		30.4		30.7		26.1		35.6		38.9

Income tax expense

28 Income tax expense was $49.4 million for the six months ended June 30, 2005 compared to $96.1 million for the same period in 2004. The change in income tax expense was primarily due to the change in pre-tax income, varying effective state tax rates across Cox’s operations between 2004 and 2005, and the effect of on-going income tax audits. Cox’s effective tax rates for 2005 and 2004 were 50.9% and 44.2%, respectively.

~~Table~~Equity in net losses of ~~Contents~~affiliated companies, net of tax

~~Item~~ Equity 4in net losses of affiliated companies, net of tax, for the six months ended June 30, 2005 was $2.3 million ~~Controls~~compared to $0.2 million for the same period in 2004. Generally, this loss is attributable to Cox’s proportionate share of the investee’s income or loss. Although Cox has various levels of ownership and ~~Procedures~~rights with respect to the companies in which it has equity investments, Cox has little, if any, control over the financial position of these companies. Therefore, Cox cannot predict the impact that its equity investments will have on its future operations.

~~The~~Net ~~Chief Executive Officer and the Chief Financial Officer of Cox (its~~income principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of June 30, 2004, that Cox’s disclosure controls and procedures: are effective to ensure that information required to be disclosed by Cox in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and include controls and procedures designed to ensure that information required to be disclosed by Cox in such reports is accumulated and communicated to Cox’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

~~There~~Net ~~were~~income nofor ~~changes in Cox’s internal controls over financial reporting that occurred during~~ the ~~quarter~~six months ended June 30, ~~2004~~2005 ~~that~~was ~~have~~$45.3 million ~~materially affected,~~compared orto ~~are~~net ~~reasonably~~income ~~likely~~of $120.4 million tofor ~~materially~~the ~~affect,~~comparable ~~Cox’s~~period ~~internal~~in ~~control over financial reporting~~2004.

~~Cox’s~~Liquidity ~~disclosure controls~~ and ~~procedures~~Capital ~~are designed to provide a~~Resources ~~reasonable level of assurance of reaching Cox’s desired disclosure control objectives and are effective in reaching that level of reasonable assurance.~~

~~Part~~Uses IIof ~~— Other Information~~Cash

~~Item~~ As 1part of Cox’s ongoing strategic plan, Cox has invested, and will continue to invest, capital to enhance the reliability and capacity of its broadband network in preparation for the offering of new services. ~~Legal~~Cox ~~Proceedings~~believes it will be able to meet its capital needs for the next twelve months and the foreseeable future with amounts available under existing revolving credit facilities and its commercial paper program.

~~For~~During athe ~~description~~six ofmonths ~~certain~~ended ~~legal~~June 30, ~~matters~~2005, ~~refer~~Cox tomade ~~Note~~capital 12expenditures of $661.2 million. These ~~“Commitments~~expenditures were primarily directed at costs related to electronic equipment located on customers’ premises and ~~Contingencies”~~costs inassociated ~~Part I,~~with ~~Item 1.~~network ~~“Condensed~~equipment ~~Consolidated~~used ~~Financial Statements~~to enter new service areas.”

Cox isexpects ~~also~~total acapital ~~party~~expenditures for 2005 to ~~various~~be ~~legal~~slightly ~~proceedings~~greater ~~that~~than ~~are~~its ~~ordinary~~2004 ~~and~~level of ~~incidental~~capital tospending, ~~its~~primarily ~~business.~~as ~~Management~~a ~~does~~result ~~not~~of ~~expect~~the ~~that~~robust ~~any~~demand ~~legal~~for new products and services. ~~proceedings~~Although ~~currently~~management ~~pending~~continuously ~~will~~reviews ~~have~~industry aand ~~material~~economic ~~adverse~~conditions ~~impact~~to onidentify opportunities, Cox~~’s consolidated~~ ~~financial~~does ~~position,~~not ~~consolidated~~have ~~results~~any ofcurrent ~~operations~~plans to make any material acquisitions or enter into ~~consolidated~~any ~~cash~~cable ~~flows~~systems exchanges in 2005. In

~~Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities~~27

AsTable of June 30, 2004, Cox had one outstanding series of exchangeable subordinated debentures, referred to as Discount Debentures, that were associated at issuance with shares of Sprint Corporation’s stock. Effective as of April 23, 2004, Sprint eliminated its PCS tracking stock by mandating the exchange of its PCS shares for shares of its FON common stock. Following this recombination, the Discount Debentures are exchangeable by holders for, at Cox’s option, 3.794 shares of FON stock, cash based on the market value of such FON shares or a combination of both. Contents

~~Item~~March 2005, 3.Cox ~~Defaults~~announced ~~Upon~~it ~~Senior~~is ~~Securities~~exploring a sale of cable operations serving approximately 900,000 subscribers.

~~None~~ Repayments of debt during the six months ended June 30, 2005 of $460.0 million primarily consisted of (i) the purchase of all remaining outstanding Discount Debentures and (ii) the repayment of its $375 million 6.9% notes due June 15, 2005 upon their maturity.

~~Item~~ During 4.the ~~Submission~~six months ended June 30, 2005, Cox made payments to acquire its former public stock that was converted into the right to receive cash as part of ~~Matters~~the going-private transaction in December 2004 of aapproximately ~~Vote~~$472.8 million, with such payments being made as holders of ~~Security~~the former ~~Holders~~public stock surrender their certificates and otherwise claim their going-private merger consideration.

~~Cox~~During ~~held~~the ~~its~~six ~~Annual~~months ~~Meeting~~ended ~~of Stockholders on May~~June 1830, ~~2004.~~2005, ~~Two~~Cox ~~matters were~~contributed ~~voted upon at the meeting: (a)~~$43.0 ~~the~~million ~~election of a Board of Directors of seven members~~ to ~~serve~~TV ~~until~~Works, ~~the 2005 Annual Meeting or until their successors~~LLC ~~are~~(formerly ~~duly~~known ~~elected~~as ~~and~~Double ~~qualified;~~C ~~and~~Technologies, (bLLC) ~~approval~~, ofrepresenting ~~Cox’s~~a ~~2004~~33% ~~Employee~~ownership ~~Stock Purchase~~interest ~~Plan~~in the entity.

29 On April 19, 2005, Cox commenced an exchange offer for its outstanding Floating Rate Notes due 2007, 4.625% Notes due 2010 and 5.450% Notes due 2014. The exchange offer was originally scheduled to expire at 5:00 p.m., New York City time, on May 17, 2005, and Cox extended the exchange offer until 5:00 p.m., New York City time, on May 19, 2005 to allow additional time for holders who had not tendered their notes to accept the exchange offer. The exchange offer expired on May 19, 2005, and the notice of guaranteed delivery period expired on May 26, 2005. As a result, Cox accepted all validly tendered and delivered outstanding notes and issued registered notes in the following denominations: (i) $494.3 million Floating Rate Notes, (ii) $1,224.6 million 4.625% Notes, and (iii) $1,249.9 million 5.450% Notes.

~~Table~~Sources of ~~Contents~~Cash

~~The~~ During ~~following~~the ~~directors~~six ~~were~~months ~~elected~~ended June 30, 2005, Cox generated $789.1 million from operating activities. Net revolving credit and ~~they~~commercial ~~received~~paper borrowings during the ~~votes~~six months ended June ~~indicated:~~30, 2004 were $686.9 million and were used primarily to fund the purchase of untendered shares of former public stock that were converted into the right to receive cash as part of the follow-on merger, as well as the repayments of debt.

Nominee	Votes in Favor		Votes Withheld
James C. Kennedy		764,722,378		43,206,964
G. Dennis Berry		764,805,863		43,123,479
Janet M. Clarke		796,324,080		11,605,262
Robert C. O’Leary		764,794,337		43,135,005
James O. Robbins		764,912,787		43,016,555
Rodney W. Schrock		794,858,036		13,071,306
Andrew J. Young		761,172,203		46,757,139

Recently Issued Accounting Pronouncements

~~The~~ In ~~2004~~June 2005, ~~Employee~~the ~~Stock~~FASB ~~Purchase~~issued ~~Plan~~FASB ~~was~~Staff ~~approved~~Position FAS 143-1, ~~with~~Accounting ~~779~~for Electronic Equipment Waste Obligations,~~743,634~~ ~~votes~~that provides guidance on how commercial users and producers of electronic equipment should recognize and measure asset retirement obligations associated with the European Directive 2002/96/EC on Waste Electrical and Electronic Equipment. The guidance in FAS ~~favor~~143-1 3applies to the later of the company’ s fiscal quarter ended June 30,~~577,545~~ ~~votes~~2005 or the date of the adoption of the law by the applicable European Union (EU) member country. The adoption of the FSP in ~~opposition,~~the ~~294,499~~current ~~abstentions,~~quarter ~~and~~did ~~24,313,664~~not ~~broker~~have a material effect on the company’s Consolidated Financial ~~non-votes~~Statements. Due to the fact that several major EU-member countries have not yet enacted country-specific laws, the company cannot estimate the effect of applying this guidance in future periods.

~~Item~~ In June 2005, the EITF reached consensus on Issue No. 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights (EITF 04-5). ~~Other~~EITF ~~Information~~04-5 provides a framework for determining whether a general partner controls and should consolidate a limited partnership or a similar entity in light of certain rights held by the limited partners. The consensus also provides additional guidance on substantive rights. EITF 04-5 is effective after June 29, 2005 for all newly formed partnerships and for any pre-existing limited partnerships that modify their partnership agreements after that date. EITF 04-5 must be adopted by January 1, 2006 for all other limited partnerships through a cumulative effect of a change in accounting principle recorded in opening equity or it may be applied retrospectively by adjusting prior period financial

~~None.~~28

ItemTable 6.of Exhibits and Reports on Form 8-KContents

(statements. EITF 04-5 is not anticipated to have a) ~~Exhibits:~~material effect on our financial position or results of operations.

3.1	—	Amended Certificate of Incorporation of Cox Communications, Inc. (Incorporated by reference to Exhibit 3.1 to Cox’s Quarterly Report on Form 10-Q, filed with the Commission on November 14, 2000.)
3.2	—	Bylaws of Cox Communications, Inc. (Incorporated by reference to Exhibit 3.2 to Cox’s Registration Statement on Form S-4, File No. 33-80152, filed with the Commission on December 16, 1994.)
10.1	—	Five-Year Credit Agreement, dated as of June 4, 2004, by and among Cox Communications, Inc., the Lenders party thereto and JPMorgan Chase Bank, as Administrative Agent for the Lenders, Bank of America, N.A., as Co-Syndication Agent, Wachovia Bank, National Association, as Co-Syndication Agent, J.P. Morgan Securities Inc., as Co-Lead Arranger and Joint Bookrunner, and Bank of America Securities, LLC, as Co-Lead Agent and Bookrunner
10.2	—	Share Conversion Agreement, dated as of June 23, 2004, by and among (1) Brian L. Greenspun, Trustee of the Unified Credit Trust of the Declaration of Trust for the Greenspun Family, dated December 6, 1988, G.C. Investments, LLC (f/k/a G.C. Investments, a Limited Liability Company), Greenspun Legacy Limited Partnership, and 3G Capital, LLC, and (2) Cox Communications, Inc.
21	—	Subsidiaries of Cox Communications, Inc.
31.1	—	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
31.2	—	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
32.1	—	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3 (SFAS No. 154). This Statement replaces APB Opinion No. 20, Accounting Changes and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS No. 154 applies to all voluntary changes in an accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. SFAS No. 154 is effective for accounting changes and error corrections occurring in fiscal years beginning after December 15, 2005. The adoption of SFAS No. 154 is not anticipated to have a material effect on our financial position or results of operations.

(b)		Reports on Form 8-K filed during the quarter ended June 30, 2004:
		Form 8-K dated June 4, 2004 (filed June 9, 2004) announcing Cox’s entry into five-year credit agreement and Cox’s redemption of all remaining outstanding Exchangeable Subordinated Debentures due 2029 (PRIZES) and all remaining outstanding 3% Exchangeable Subordinated Debentures due 2030 (Premium PHONES) under Item 5 and furnishing a copy of Cox’s redemption press release under Item 7.
		Form 8-K dated June 23, 2004 (filed June 24, 2004) announcing Cox’s conversion of all its outstanding shares of Class A Convertible Preferred Stock into shares of Class A Common Stock under Item 5.

In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47). FIN 47 clarifies that the term “conditional asset retirement obligation” as used in FASB Statement No. 143, Accounting for Asset Retirement Obligations, refers to a legal obligation of an entity to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. Such an obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. Accordingly, an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. FIN 47 is effective for Cox no later than December 31, 2005. Cox is currently assessing the impact of FIN 47 on its consolidated financial statements.

30 In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets—an amendment of APB Opinion No. 29 (SFAS No. 153). The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions (APB No. 29), is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in APB Opinion No. 29, however, included certain exceptions to that principle. SFAS No. 153 amends APB Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. SFAS No. 153 is effective for such exchange transactions occurring in fiscal periods beginning after June 15, 2005. The adoption of SFAS No. 153 is not anticipated to have a material effect on our financial position or results of operations.

~~Table~~ In December 2004, the FASB issued SFAS No. 123 (Revised), Share-Based Payment (SFAS 123 (R)). This statement replaces SFAS No. 123 and supersedes APB Opinion No. 25. SFAS No. 123 (R) requires companies to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees and to record compensation cost for all stock awards granted after the required effective date and to awards modified, repurchased, or cancelled after that date. In addition, Cox is required to record compensation expense (as previous awards continue to vest) for the unvested portion of ~~Contents~~previously granted awards that remain outstanding at the date of adoption. As issued, SFAS No. 123 (R) would have been effective for interim periods beginning after June 15, 2005. In April 2005, the Securities and Exchange Commission (SEC) amended the compliance date for SFAS No. 123 (R) to the beginning of the next fiscal year that begins after June 15, 2005. Cox is currently assessing the impact of this statement on its consolidated financial statements.

~~SIGNATURES~~Caution Concerning Forward-Looking Statements

~~Pursuant~~This toForm 10-Q includes “forward-looking statements” within the ~~requirements~~meaning of ~~the~~Section 21E of the Securities Exchange Act of 1934, ~~the registrant~~as ~~has~~amended. ~~duly~~These ~~caused~~forward-looking ~~this~~statements ~~report~~include, among others, statements that relate to beCox’s ~~signed~~future onplans, ~~its~~earnings, ~~behalf~~objectives, byexpectations, performance, and similar projections, as well as any facts or assumptions underlying these statements or projections. Actual results may differ materially from the results expressed or ~~undersigned~~implied ~~thereunto~~in ~~duly~~these ~~authorized.~~forward-looking statements due to

		Cox Communications, Inc.
Date: August 4, 2004		/s/ Jimmy W. Hayes
		Jimmy W. Hayes
		Executive Vice President, Finance
		and Chief Financial Officer
		(principal financial officer and
		duly authorized officer)

31 Table of Contents

various risks, uncertainties or other factors. These factors include competition within the broadband communications industry, Cox’s ability to achieve anticipated subscriber and revenue growth, Cox’s success in implementing new services and other operating initiatives, and Cox’s ability to generate sufficient cash flow to meet debt service obligations and finance operations. For a more detailed discussion of these and other risk factors, see the “Caution Concerning Forward-Looking Statements” section of Cox’s Annual Report on Form 10-K for the year ended December 31, 2004. Cox assumes no responsibility to update any forward-looking statements as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Cox has estimated the fair value of its financial instruments as of June 30, 2005 and December 31, 2004 using available market information or other appropriate valuation methodologies. Considerable judgment, however, is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that Cox would realize in a current market exchange.

The carrying amount of cash, accounts and other receivables, accounts and other payables and amounts due to/from CEI approximates fair value because of the short maturity of those instruments. The fair value of Cox’s investments stated at fair value are estimated and recorded based on quoted market prices. The fair value of Cox’s equity method investments and investments stated at cost cannot be estimated without incurring excessive costs. Cox is exposed to market price risk volatility with respect to investments in publicly-traded and privately-held entities. Additional information pertinent to the value of Cox’s investments is discussed in Note 4. “Investments” in Part I, Item 1. “Condensed Consolidated Financial Statements.”

The fair value of interest rate swaps used for hedging purposes was approximately $2.1 million and $16.4 million at June 30, 2005 and December 31, 2004, respectively, and represents the estimated amount that Cox would receive upon termination of the swap agreements.

Cox’s outstanding commercial paper bears interest at current market rates and, thus, approximates fair value at June 30, 2005 and December 31, 2004. Cox is exposed to interest rate volatility with respect to these variable-rate instruments.

The estimated fair value of Cox’s fixed-rate notes and debentures and exchangeable subordinated debentures at June 30, 2005 and December 31, 2004 are based on quoted market prices or a discounted cash flow analysis using Cox’s incremental borrowing rate for similar types of borrowing arrangements and dealer quotations. A summary of the carrying value, estimated fair value and the effect of a hypothetical one percentage point decrease in interest rates on the foregoing fixed-rate instruments at June 30, 2005 and December 31, 2004 is as follows:


	June 30, 2005						December 31, 2004
					Fair Value						Fair Value
	Carrying		Fair		(1% Decrease		Carrying		Fair		(1% Decrease
	Value		Value		in Interest Rates)		Value		Value		in Interest Rates)
					(Millions of Dollars)
Fixed-rate notes and Debentures	$	8,355.5	$	8,800.6	$	9,290.1	$	8,760.0	$	9,092.6	$	9,593.0
Exchangeable subordinated Debentures		—		—		—		19.5		31.4		31.6

Item 4. Controls and Procedures

Evaluation of Controls and Procedures. The Principal Executive Officer and the Principal Financial Officer of Cox have concluded, based on their evaluation as of June 30, 2005, that Cox’s disclosure controls and procedures: are effective to ensure that information required to be disclosed by Cox in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and include controls and procedures designed to ensure that information required to be disclosed by Cox in such reports is accumulated and communicated to Cox’s management, including the Principal Executive Officer and the Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Cox’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching Cox’s desired disclosure control objectives and are effective in reaching that level of reasonable assurance.

Changes in Internal Controls. There have been no changes in Cox’s internal controls or in other factors that has materially affected, or is reasonably likely to materially affect Cox’s internal controls, other than the migration to a new financial system that began as of January 1, 2005. The migration, which represents a culmination of more than a year of preparation, testing and training, is scheduled to take place in stages over the course of 2005. Implementation of the new financial system necessarily involves changes to Cox’s procedures for control over financial reporting. Cox’s Principal Executive Officer and Principal Financial Officer believe that throughout the migration process to date, Cox has maintained internal financial controls sufficient to ensure appropriate internal control over financial reporting.

Part II — Other Information

Item 1. Legal Proceedings

For a description of certain legal matters, refer to Note 11. “Commitments and Contingencies” in Part I, Item 1. “Condensed Consolidated Financial Statements.”

Cox is also a party to various legal proceedings that are ordinary and incidental to its business. Management does not expect that any legal proceedings currently pending will have a material adverse impact on Cox’s consolidated financial position, consolidated results of operations or consolidated cash flows.

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities


				(c) Total Number	(d) Maximum
				of Shares	Number of Shares
				Purchased as Part	that May Yet Be
	(a) Total Number			of Publicly	Purchased Under
	of Shares		(b) Average Price	announced Plans	the Plans or
Period	Purchased		Paid Per Share	of Programs	Programs
April 2005		15,343,197	See Note 1	-0-	-0-

Note 1: On March 17, 2005, Cox commenced an offer to exchange outstanding and unexercised employee options to purchase shares of Cox Class A common stock, par value $.01 per share, for a performance award granted pursuant to the Cox Communications, Inc. 2005 Performance Plan (the “Performance Plan”). Vested options with an exercise price of less than $34.75 were valued based on the difference between the exercise price and $34.75, and all other options were valued using the Black-Scholes option pricing model. For each individual employee, the aggregate value of options held by such individual

employee was the target amount of such individual’s performance award. For more information regarding the Performance Plan, refer to Cox’s current report on Form 8-K, dated March 17, 2005 and filed March 21, 2005. The exchange offer expired on April 19, 2005, and 99.9% of eligible employee options were exchanged for performance awards. This exchange offer was conducted pursuant to the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters of a Vote of Security Holders

On May 4, 2005, the stockholders of Cox took action by unanimous written consent to elect Board of Directors of seven members to serve for the ensuing year or until their successors are duly elected and qualified. The following directors were elected unanimously by the two subsidiaries of Cox Enterprises that hold one hundred percent of Cox’s issued and outstanding capital stock: James C. Kennedy, G. Dennis Berry, Janet M. Clarke, Robert C. O’Leary, James O. Robbins, Rodney W. Schrock, and Andrew J. Young.

Item 5. Other Information

On July 26, 2005, Cox announced that Jimmy W. Hayes, the then Executive Vice President and Chief Financial Officer of Cox, had been appointed Executive Vice President of Cox Enterprises effective immediately. William J. Fitzsimmons, Cox’s Vice President of Accounting and Financial Planning and Chief Accounting Officer since April 2001, is acting in the capacity of Cox’s chief financial officer. Prior to April 2001, Mr. Fitzsimmons served as Vice President of Financial Operations for Cox’s system in San Diego, California from 1996 to March 2001. Mr. Fitzsimmons joined Cox in 1993 as Director of Finance for Cox’s Pensacola, Florida system, and was promoted in 1995 to Director of Finance in San Diego.

Effective December 31, 2005, James O. Robbins will retire from his position as President and Chief Executive Officer of Cox. Mr. Robbins will continue serving as a member of the Cox’s Board of Directors. Effective December 31, 2005, Patrick J. Esser, 48, will be promoted to President, and will succeed Mr. Robbins. Mr. Esser has served as Executive Vice President and Chief Operating Officer since January 2004. Previously he served as Executive Vice President, Operations since February 2001. Prior to that, Mr. Esser served as Senior Vice President, Operations beginning January 2000, and as Vice President of Operations beginning May 1999. Previously, he served as Vice President, Advertising Sales from 1991 to 1999. Mr. Esser joined Cox in 1979 as Director of Programming for Cox’s Hampton Roads, Virginia cable system and in 1981 was part of a management team that launched Cox’s local advertising sales subsidiary, CableRep (now Cox Media, Inc.).

Item 6. Exhibits


3.1	—	Certificate of Incorporation of Cox Communications, Inc., as amended (incorporated by reference to exhibit 3.1 to Cox’s Registration Statement on Form S-4, file no. 333-122050, filed on January 14, 2005).

3.2	—	Bylaws of Cox Communications, Inc. (Incorporated by reference to Exhibit 3.2 to Cox’s Registration Statement on Form S-4, File No. 33-80152, filed with the Commission on December 16, 1994.)

10.1	—	Cox Enterprises, Inc. 2005 Unit Appreciation Plan (management contract or compensatory plan).

10.2	—	Form of Unit Appreciation Plan Summary Statement (management contract or compensatory plan).

21	—	Subsidiaries of Cox Communications, Inc.

31.1	—	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

31.2	—	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.

32.1	—	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Cox Communications, Inc.
Date: August 9, 2005	/s/ William J. Fitzsimmons
	William J. Fitzsimmons
	Vice President of Accounting and Financial Planning and Analysis and Chief Accounting Officer (principal financial officer and duly authorized officer)

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