





<PAGE>
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)
    [X]           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                     For the fiscal year ended May 31, 1997

                                       OR

    [ ]          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 0-16899

                          CENTURY COMMUNICATIONS CORP.
             (Exact name of registrant as specified in its charter)

          New Jersey                                             06-1158179
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                                50 Locust Avenue
                          New Canaan, Connecticut 06840
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (203) 972-2000

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                 Class A Common Stock, par value $.01 per share

        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] No [_]

        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes [X] No [ ]

        As of August 13, 1997, there were 31,003,597 shares of Class A Common
Stock outstanding and 44,357,308 shares of Class B Common Stock outstanding. The
aggregate market value of the Class A Common Stock held by non-affiliates of the
Company, based upon the last reported sale price of the Class A Common Stock on
The Nasdaq Stock Market on August 13, 1997 of $6.50 per share, was $195,000,988.

                       DOCUMENTS INCORPORATED BY REFERENCE

        Certain portions of the Company's Proxy Statement to be filed with the
Commission pursuant to Rule 14a-6 under the Securities Exchange Act of 1934 in
connection with the Company's 1997 Annual Meeting of Shareholders are
incorporated by reference in Part III, Items 10-13 of this Annual Report on Form
10-K.




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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                      Page
                                                                                      ----
<S>          <C>                                                                      <C>
                                     PART I

ITEM 1.      Business..................................................................  1
             General...................................................................  1
             Cable Television........................................................... 1
             Wireless Telephone........................................................  8
             Australian Pay Television................................................. 12
             Regulation and Legislation................................................ 13
             Employees................................................................. 21

ITEM 2.      Properties................................................................ 21

ITEM 3.      Legal Proceedings......................................................... 22

ITEM 4.      Submission of Matters to a Vote of Security Holders....................... 22
             Executive Officers of the Company......................................... 22

                                     PART II

ITEM 5.      Market for Registrant's Common Equity and Related Stockholder Matters..... 24

ITEM 6.      Selected Financial Data................................................... 26

ITEM 7.      Management's Discussion and Analysis of Financial Condition
               and Results of Operations............................................... 28
             Cautionary Statement for Purposes of the "Safe Harbor"
               Provisions of the Private Securities Litigation
               Reform Act of 1995.......................................................43

ITEM 8.      Financial Statements and Supplementary Data................................47

ITEM 9.      Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure......................................47

                                    PART III

ITEM 10.     Directors and Executive Officers of the Registrant.........................47

ITEM 11.     Executive Compensation.....................................................47

ITEM 12.     Security Ownership of Certain Beneficial Owners and
               Management...............................................................48

ITEM 13.     Certain Relationships and Related Transactions.............................48

                                     PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.......... 48

SIGNATURES........................................................................... II-1

EXHIBIT INDEX.........................................................................II-2
</TABLE>










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                                     PART I

ITEM 1.    BUSINESS

                                     GENERAL

           The Company was incorporated in New Jersey on December 5, 1985 as the
holding company for a corporation of the same name incorporated in Texas on June
12, 1973 ("Century Texas"). As used in this Annual Report on Form 10-K, unless
the context otherwise requires, the term "Company" means Century Communications
Corp., a New Jersey corporation, and its subsidiaries. The Company is engaged
primarily in the ownership and operation of cable television systems. References
to a "fiscal" year mean the Company's fiscal year ended May 31.

           At May 31, 1997, the Company owned and operated 70 cable television
systems in 25 states and Puerto Rico. At that date, the Company's cable systems
passed approximately 2,245,000 homes and served a total of approximately
1,273,000 primary basic subscribers. Certain of the Company's cable systems
referred to above are owned 50% by the Company and 50% by unaffiliated entities.
At May 31, 1997, these systems passed approximately 549,000 homes and served
approximately 278,000 primary basic subscribers.

           The Company has a common stock interest of approximately 32% and,
through ownership of shares of a class of Common Stock which has
disproportionate votes per share (15 votes per share), a voting interest in
Centennial Cellular Corp. ("Centennial" or "Centennial Cellular") of
approximately 74%. The Company also provides management services to Centennial.
Solely as a result of the Company's controlling interest in the voting power of
Centennial, the operations of Centennial are consolidated with those of the
Company for financial reporting purposes only. Centennial is engaged in the
ownership and operation of wireless telephone systems, primarily in four
geographic areas in the United States and Puerto Rico.

           The Company has interests in businesses in the pay television
industry in Australia. See "Business - Australian Pay Television." The Company
is pursuing a strategy to sell its Australian investments and is currently in
discussion with investment advisors with respect thereto.

           The Company expects to continue to consider acquisitions of or
investments in cable television systems and other communications-related
properties. Centennial Cellular expects to continue to consider acquisitions of
or investments in wireless telephone systems and other communications-related
products and services.

           For certain industry segment information regarding the Company's
cable television business, as well as its investments in the wireless telephone
and Australian pay television businesses, see Note 16 of the notes to
consolidated financial statements.

                                CABLE TELEVISION

           Cable television is a service that delivers a variety of channels of
television programming, primarily video entertainment and information, and to
subscribers who pay a monthly fee for the service.




                                      -1-



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           The primary level of cable television service is commonly referred to
as "basic service" and must be taken by all subscribers. The content of basic
service varies widely from system to system but, pursuant to the Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act"), must include local television signals and public, governmental and
educational access channels. Basic service may also include certain
satellite-delivered cable programming channels. In addition to basic service,
one or more expanded tiers of service may also be offered to subscribers. These
expanded tiers of service usually include additional satellite-delivered cable
programming channels and are available for additional monthly fees. Basic
service and expanded cable programming service tiers are generally subject to
the rate regulation provisions of the 1992 Cable Act and the Telecommunications
Act of 1996 (the "1996 Act").

           Most cable television systems also offer premium services, such as
Home Box Office, Showtime, The Movie Channel and Cinemax, on a per channel basis
or as a part of a package of premium services for an extra monthly fee and may
also offer sporting events, concerts and other entertainment programming as a
premium service on a per program basis. Per channel and per program services are
not subject to the rate regulation provisions of the 1992 Cable Act.

           See "Business - Regulation and Legislation - Cable Television -
Federal Regulation" and "Business - Regulation and Legislation - Cable
Television - Rates."

DEVELOPMENT OF CABLE TELEVISION SYSTEMS

           The following table indicates the growth of the Company's cable
television systems since May 31, 1993:

<TABLE>
<CAPTION>
                                                                 May 31,
                                     ------------ ------------ ------------ ------------ ------------
                                        1997         1996         1995         1994         1993
                                     ------------ ------------ ------------ ------------ ------------
<S>                                    <C>          <C>          <C>          <C>          <C>      
    Homes passed by cable              2,245,000    2,060,000    1,790,000    1,675,000    1,650,900
    Primary basic subscribers          1,273,000    1,250,000    1,100,000      945,000      934,000
    Primary basic subscribers as a
    percentage of homes passed             56.7%        60.7%        61.4%        56.4%        56.6%
</TABLE>

        Management's estimate of homes passed in franchise areas is based on
local sources believed to be reliable, such as city directories, chambers of
commerce, public utilities, estimates of public officials and, where available,
actual house counts.

THE CABLE TELEVISION SYSTEMS

        At May 31, 1997, the Company had 70 cable television systems in 25
states and Puerto Rico, with the largest concentrations of subscribers in its
systems in Southern California, Puerto Rico and Colorado Springs, Colorado.
Substantially all the Company's cable television systems were wholly owned by
the Company. The balance of the Company's systems, including systems serving
Brunswick, Georgia, Owensboro, Kentucky, Wauwatosa, Wisconsin, Glendora, Chino
and Chino Hills, California and greater San Juan, Puerto Rico were owned 50% by
the Company.



                                      -2-

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        On August 16, 1996, the Company entered into agreements to acquire two
cable television systems which serve an aggregate of approximately 35,000
primary basic subscribers, which agreements were subsequently assigned to a
joint venture in which each of the Company and Citizens Utilities Company
("Citizens Utilities" or "Citizens") have a 50% interest (the "Century/Citizens
Joint Venture"). These systems are primarily located in Yorba Linda, Orange
County and Diamond Bar, California. Pursuant to the agreements, the aggregate
purchase price for these systems was approximately $69.5 million. The Company
currently expects to fund the acquisitions using available credit facilities.
The purchase of these systems by the Company is subject to regulatory approvals.
There is no assurance that the Company will obtain such approvals or that such
acquisitions will be consumated.

        The Company and Citizens Utilities own, through the Century/Citizens
Joint Venture, cable television systems serving certain areas of Southern
California serving approximately 52,400 primary basic subscribers.

        Citizens Utilities is a diversified utility company in which the Company
owns approximately 1.8% of the issued and outstanding Common Stock as of August
13, 1997. Leonard Tow is Chairman of the Board and Chief Executive Officer of
the Company and Chairman of the Board, Chief Executive Officer and Chief
Financial Officer of Citizens Utilities. Two other directors of the Company,
Robert D. Siff and Claire L. Tow, are also directors of Citizens Utilities.

SUBSCRIBER SERVICES AND RATES

        Like other cable television operators, the Company offers to its
subscribers multiple channels of television programming, primarily video
entertainment and information programming. Services vary from system to system
because of differences in channel capacity, regulatory requirements and viewer
interest.

        The Company's cable television revenues are derived principally from
monthly subscription fees. Rates to subscribers vary from market to market and
in accordance with the type of service selected. In virtually all the Company's
cable television systems, basic service has been expanded to include many
satellite-delivered cable programming channels previously offered on expanded
tiers of service, while certain other satellite-delivered cable programming
channels are offered on a per channel basis and as part of a package of
services. Effective September 1, 1993, as part of its rate adjustments, the
Company implemented a plan whereby subscribers were given the choice of buying
certain satellite-delivered programming services individually on a per channel
basis ("a la carte") or as part of a package of services at a discounted price.
The Federal Communications Commission (the "FCC") in its reconsideration of rate
regulations promulgated under the 1992 Cable Act, reviewed the validity of such
a la carte service offerings, and it empowered franchising authorities to do the
same. A la carte packages which were determined to be evasions of rate
regulation rather than true enhancements of subscriber choice were treated as
regulated tiers, and cable operators that engaged in such practices became
subject to further rate adjustments and refund orders.

        Further adjustments to the Company's rates were made pursuant to the
November 10, 1994 revision by the FCC to the FCC's rate formula. As part of such
revisions, the FCC decided that discounted packages of non-premium a la carte
services would be subject to rate regulation in the future. However, in applying
this new policy to a la carte packages such as those already offered by the
Company and numerous other cable operators, the FCC decided that where only a
few services were moved from regulated tiers to the a la carte package, the
package would be treated as if it were a tier of new program services and thus
not subject



                                      -3-

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to rate regulation. Approximately 84% of the Company's primary basic subscribers
have a la carte offerings which conform to this structure, and thus are not
subject to rate regulation. Approximately 16% of the Company's primary basic
subscribers have expanded a la carte service offerings, which are subject to the
rate settlement described below.

        Several of the Company's systems, along with numerous other cable
operators, received specific inquiries from the FCC regarding their
implementation of the a la carte method of offering cable services. A proposed
resolution of the inquiry based, in part, upon pending basic and cable
programming service tier rate complaints in several of the Company's cable
systems serving approximately 180,000 subscribers in Los Angeles County,
requires the Company to adjust its rates for cable basic and cable programming
services tiers and make subscriber refunds. For recent developments in cable
programming service tier rate regulations, see "Business - Regulation and
Legislation - Cable Television - Federal Regulation" and "Business - Regulation
and Legislation - Cable Television - Rates."

        In addition to monthly subscription fees, other sources of revenue for
cable operators are the sale of advertising time on locally originated and
satellite-delivered programming and revenues from services which offer
merchandise for sale to subscribers. Such services compensate cable television
systems based upon a percentage of their sales revenue. None of these revenue
sources is subject to rate regulation.

        Most of the Company's systems have a capacity of at least 35 channels
and all are fully built, except for upgrading, rebuilding and extension of
certain systems and continuing construction of cable plant in certain systems to
accommodate growth within the Company's franchise areas. As of May 31, 1997, all
or certain portions of 45 of the Company's systems, serving an aggregate of
approximately 1,050,000 primary basic subscribers, were equipped with
addressable decoding converters, which permit the Company to adjust service
received by a subscriber without making a service call and serve as a
computerized method of controlling the signals decoded and received by
subscribers. Such converters also facilitate the Company's ability to sell
optional pay-per-view programming.

FRANCHISES

        The Company's cable television systems operate pursuant to non-exclusive
franchises issued by governmental authorities. In many cases, a system passes
homes in more than one governmental subdivision and, occasionally, more than one
state. Generally, under the terms of the Company's franchises, a franchise fee
(ranging up to 5% of revenues of the cable system) is payable to the
governmental authority. As of May 31, 1997, the Company held 359 franchises with
unexpired terms ranging from under one year to over 15 years. These franchises
typically contain many conditions, such as standards of service, including
number of channels and provision of free service to schools and certain other
public institutions, time requirements on commencement and completion of
construction, and the maintenance of insurance and indemnity bonds. State and
local franchises are in certain respects subject to the requirements of federal
regulation under the Cable Communications Policy Act of 1984, the 1992 Cable Act
and the 1996 Act. See "Business - Regulation and Legislation - Cable Television
- Federal Regulation."

        Most of the Company's franchises can be terminated prior to their stated
expiration by the franchising authority, after due process, for breach of
material provisions of the franchise. All franchises are subject to renewal. To
date, the Company's franchises have generally been renewed or extended at or
effective upon their stated expirations, generally on modified but not unduly
burdensome terms. However, as a condition to



                                      -4-

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<PAGE>

the renewal of a franchise, some franchising authorities have required improved
facilities, increased channel capacity or enhanced services.

        The franchise for the City of Santa Monica, California, serving
approximately 23,800 primary basic subscribers as of May 31, 1997, was
terminated by the City of Santa Monica effective December 13, 1987, due to
alleged violations of the local ordinance with respect to the transfer of the
franchise to the Company prior to approval from the local authority. The
relevant local authority has not yet enforced this termination and the Company
continues to operate this system. The Company and the relevant local authority
have agreed that neither party has waived its legal rights as a result of the
local authority's failure to enforce the termination of the franchise. The
parties are currently negotiating the terms of a new franchise agreement and the
Company anticipates concluding an acceptable franchise agreement with the local
authority. If, however, such an agreement is not concluded and the local
authority seeks to enforce the termination, the Company intends to oppose
vigorously such action and termination in an appropriate forum based upon its
rights under applicable law.

PROGRAMMING SUPPLIERS

        The Company provides cable network programming to its subscribers
pursuant to contracts with program suppliers. The Company generally pays program
suppliers a monthly fee per subscriber. The costs to the Company to provide
cable programming have increased in recent years and are expected to continue to
increase as a result of additional programming being provided to subscribers,
increased consumer identification with certain programming permitting suppliers
of such programming to charge increased fees, inflationary increases and other
factors. See "Business - Regulation and Legislation - Cable Television -
Carriage of Broadcast Television Signals."

OTHER TECHNOLOGIES

        Digital. The Company expects to utilize compressed digital video
technology, which converts, on average, from ten to 12 analog signals (now used
to transmit video) into a digital format and compresses such signals into the
space normally occupied by one analog signal. The digitally compressed signal is
uplinked to a satellite, which sends the signal back down to a cable system's
headend to be distributed, via optical fiber and coaxial cable, to the
customer's home. At the home, a set-top video terminal converts the digital
signal back into analog channels that can be viewed on a normal television set.
The implementation of digital technology will significantly enhance the quantity
and quality of channel offerings. It is expected that, initially, such digital
services will include expanded pay-per-view movies, additional packages of
premium services and satellite-delivered channels.

        Cable Modem Services. The Company is presently in the initial deployment
stage of high-speed cable modem services. Cable modems are capable of providing
access to online information at much faster speeds than conventional modems. The
Company expects to expand its deployment of cable modem services throughout
fiscal 1998.

COMPETITION

        General. Cable television systems generally compete for viewer attention
with the direct reception of broadcast television signals by the viewer's own
antenna. The extent of such competition is dependent upon



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the number and quality of signals available and the alternative services offered
by the cable system. A cable system also competes to varying degrees with other
communications and entertainment media, including movies, theater and VCRs, and
other leisure time activities. The extent to which a cable communications system
is competitive depends, in part, upon the cable system's ability to provide, at
a reasonable price to consumers, a greater variety of programming and other
communications services than are available off-air or through other alternative
delivery sources (see "Business - Regulation and Legislation") and upon
high-quality technical performance and customer service.

        Other Technologies. Other technologies supply services that compete with
certain services provided by cable television. These technologies include: (i)
direct broadcast satellite to home transmission ("DBS"), whereby signals are
transmitted by satellite to receiving facilities located on the premises of
subscribers; (ii) "wireless cable" including multichannel multipoint
distribution system ("MMDS") and similar technologies, which use low-power
microwave frequencies to transmit programming over the air to subscribers; (iii)
satellite master antenna systems ("SMATV"), which use a satellite earth station
to receive signals and then transmit such signals by cable to residences within
a given building or complex; (iv) television translator stations, which
rebroadcast television broadcast signals at different frequencies at lower power
to improve reception; and (v) "low-power" television stations, which have begun
operations in certain communities, and may increase the number of free and
subscription broadcast television signals in many areas.

        The FCC has implemented regulations to enhance the ability of cable
competitors to purchase and make available to home satellite dish owners certain
satellite-delivered cable programming at competitive costs. The 1996 Act and FCC
regulations implementing the 1996 Act preempt certain local restrictions on the
use of home satellite dishes and roof-top antennae to receive satellite
programming and over-the-air broadcasting services (see "Business - Regulation
and Legislation").

        All the foregoing services and technologies have the capacity to deliver
multiple channels of video programming and other information to subscribing
homes and thus to compete directly with the cable services provided by the
Company. Federal law generally prohibits cable operators from owning and
operating certain competing technologies, such as SMATV and MMDS, within their
franchise service areas. As these technologies and services continue to develop,
and because of recent measures by the federal government encouraging such
development, as well as the existing regulatory framework, there is expected to
be increased competition adversely affecting the business of the Company. In
addition, certain provisions of the 1996 Act, such as the change in the
definition of a "cable system" so that competitive providers of video services
will only be regulated as a cable system if they use public rights-of-way, could
materially affect the growth and operation of the cable television industry and
the cable services provided by the Company. See "Business Regulation and
Legislation - Cable Television - Federal Regulation."

        Non-Exclusive Franchises. Because the Company's systems are operated
under non-exclusive franchises, other applicants may obtain franchises in areas
where the Company currently has franchises. Franchising authorities may be more
likely to grant a second franchise for an area if they anticipate that increased
competition will have the effect of reducing rates charged or moderating
increases in rates and improving services offered by the franchise holders. In
addition, franchising authorities themselves may seek to operate cable systems
in competition with private cable operators.



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        Applications for competing franchises may be made at any time. It is
possible that well-financed businesses, including businesses from outside the
cable industry (such as the public utilities which own the facilities to which
the cable is attached), may become competitors for franchises or providers of
competing services. Congress has repealed the prohibition against the national
television networks owning cable systems, and telephone companies may now enter
the cable industry, as more fully discussed below.

        Regulation. Pursuant to the 1996 Act, local telephone companies,
including the Regional Bell Operating Companies, which were previously barred
from the ownership and operation of cable systems in their service areas, are
now permitted to enter the cable television business. Local telephone companies
may obtain a local franchise and provide cable television service in direct
competition with cable operators. Alternatively, telephone companies may utilize
a concept called open video systems ("OVS") whereby telephone companies will be
able to become FCC-certified to offer channel capacity to third parties and to
offer video programming directly on up to one-third of the system's capacity. An
OVS operator will not have to obtain a local franchise, nor will it be subject
to rate regulation, but it will have to abide by a number of the rules that
govern cable operators.

        The 1996 Act also provides that registered utility holding companies and
subsidiaries may provide telecommunications services (including cable
television), notwithstanding the Public Utility Holding Company Act of 1935, as
amended. Because of their substantial resources, telephone companies and
utilities could be formidable competitors to traditional cable systems, and
several have begun offering cable service.

        Other new technologies, including Internet-based services, may become
competitive with services that cable communications systems can offer. The FCC
has authorized television broadcast stations to transmit textual and graphic
information. The FCC also permits commercial and non-commercial FM stations to
use their subcarrier frequencies to provide non-broadcast services including
data transmissions. The FCC established an over-the-air Interactive Video and
Data Service that will permit two-way interaction with commercial and
educational programming along with informational and data services. Local
exchange carriers ("LECs") and other common carriers also provide facilities for
the transmission and distribution to homes and businesses of interactive
computer-based services, including the Internet, as well as data and other
non-video services. See "Business - Wireless Telephone - Competition."

        Advances in communications technology, as well as changes in the
marketplace and the regulatory and legislative environment, are constantly
occurring. Thus, it is not possible to predict the effect that ongoing or future
developments might have on the cable communications industry or on the
operations of the Company.



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                               WIRELESS TELEPHONE

        The Company has a common stock interest of approximately 32% and,
through ownership of shares of a class of Common Stock which has
disproportionate votes per share (15 votes per share), a voting interest in
Centennial of approximately 74%. The Company also provides management services
to Centennial. Solely as a result of the Company's controlling interest in the
voting power of Centennial, the operations of Centennial are consolidated with
those of the Company for financial reporting purposes only. The market value of
the Company's interest in Centennial, based solely on the equivalent number of
publicly traded shares of Class A Common Stock of Centennial, was $121,485,406
on May 31, 1997. At May 31, 1997, Citizens Utilities owned 1,982,294 shares of
Class B Common Stock of Centennial and 102,187 shares of Convertible Redeemable
Preferred Stock of Centennial. As a result of its ownership of securities of
Centennial and in accordance with an agreement with Citizens Utilities, the
Company has the ability to nominate at least a majority and elect all the
directors of Centennial. The Company has agreed to vote for one director to be
nominated by Citizens Utilities.

        Centennial is engaged in the ownership and operation of wireless
telephone systems, primarily in four geographic areas in the United States and
Puerto Rico. It was organized in 1988. Centennial operates its wireless
telephone systems located in the continental United States (the "Domestic
Wireless Telephone Systems") pursuant to 29 cellular licenses which it owns, and
operates its developing PCS telephone system located in the Commonwealth of
Puerto Rico (the "Puerto Rico Wireless Telephone System") pursuant to a PCS
license which it owns. Centennial also plans to participate in a full range of
telecommunications services in Puerto Rico including wireless PCS, competitive
local exchange and alternative access in Puerto Rico. Centennial's current
wireless interests represent markets that cover approximately 10.1 million Net
Pops. Approximately 6.5 million of these Net Pops are represented by
Centennial's Domestic Wireless Telephone Systems. Approximately 5.4 million of
these Net Pops are represented by interests in those Domestic Wireless Telephone
Systems that Centennial owns and operates. The balance of approximately 1.1
million Net Pops of the Domestic Wireless Telephone Systems represents minority
interests in limited partnerships, controlled by other parties, that own
wireless telephone systems that primarily serve the Sacramento Valley and the
San Francisco Bay area in California ("Investment Interests"). The balance of
approximately 3.6 million Net Pops represents Centennial's Puerto Rico Wireless
Telephone System.

THE WIRELESS SYSTEMS

        Centennial's wireless telephone systems, which include systems utilizing
both cellular and PCS licenses, provide communications services to
vehicle-installed ("mobile"), ready-to-carry ("transportable") and hand-held
("portable") wireless telephones. Wireless telephone systems are designed to
allow for mobility of the subscriber. In addition to mobility, wireless
telephone systems provide access through system interconnections to local and
long distance telecommunications networks and offer other ancillary services
such as voice mail, call waiting, call forwarding and conference calling. These
communications services can be integrated with a variety of competing and
complementary networks. The wireless system operator has a traffic interchange
agreement with, and pays a fee to, the local wireline telephone company so that
calls may be placed from a mobile unit to a conventional telephone. The amounts
paid under these agreements are subject to negotiation and vary from system to
system. The rates, terms and conditions of these agreements may be subject to
state and FCC regulation. See "Business Regulation and Legislation - Wireless
Telephone - Federal Regulation."



                                      -8-

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        As used in this Annual Report on Form 10-K, "Pops" means the population
of a market based upon the final 1990 Census Report of the Bureau of the Census,
United States Department of Commerce, and "Net Pops" means a market's Pops
multiplied by the percentage interest that Centennial owns in an entity licensed
by the FCC to construct or operate a cellular telephone system (or to provide
PCS) in that market.

        The chart below sets forth certain information about the Domestic
Wireless Telephone Systems, the Puerto Rico Wireless Telephone System and the
Investment Interests as of August 13, 1997.

<TABLE>
<CAPTION>
                                                 Pops          Net Pops
                                                 ----          --------
<S>                                            <C>             <C>      
Domestic Wireless Telephone Systems
      Michiana Cluster                         3,327,800       3,261,300
      East Texas/Louisiana Cluster             1,950,600       1,928,000
      Southwestern Cluster                       230,000         230,000
                                              ----------       ---------
Total Domestic Wireless Telephone
Systems                                        5,508,400       5,419,300
                                              ----------       ---------
Puerto Rico Wireless Telephone
System                                         3,600,000       3,600,000
                                              ----------       ---------
Investment Interests*                         10,776,800       1,100,800
                                              ----------       ---------
Total Domestic Wireless Telephone
Systems, Puerto Rico Wireless
Telephone System and Investments
Interests                                     19,885,200      10,120,100
                                              ==========      ==========
</TABLE>
---------------------------

*   Centennial has determined to pursue a strategy to sell or otherwise dispose
    of its Investment Interests. Centennial has not yet made a final
    determination as to the estimated sale proceeds or the timing of such
    disposition and believes that the fair market value exceeds the net book
    value of the recorded assets.


                                      -9-

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        As of May 31, 1997, Centennial's Domestic and Puerto Rico Wireless
Telephone Systems had 203,900 subscribers in the markets listed above and for
each of fiscal 1996, 1995, 1994 and 1993, Centennial had 135,000, 85,920, 49,040
and 33,600 subscribers, respectively, in such markets. At May 31, 1997,
Centennial's pro rata share of subscribers relating to the Investment Interests
was approximately 105,000.

        All of Centennial's systems are currently operational. A system is
deemed operational when it has met the FCC's requirements for an operating
license and has received an FCC license to commence operations.

        Puerto Rico Wireless Telephone System; Other Telecommunications
Services. Centennial has commenced the design, construction and operation of its
developing Puerto Rico Wireless Telephone System. Centennial has substantially
completed installation of the initial system. Centennial was the successful
bidder for one of two MTA licenses to provide broadband PCS services in the
Commonwealth of Puerto Rico and the U.S. Virgin Islands and the FCC granted the
30 Mhz Block B broadband PCS license for the Puerto Rico-Virgin Islands MTA to
Centennial in fiscal 1996. The licensed area represents approximately 3.6
million Net Pops.

        Centennial currently estimates that the total cost of the acquisition
and build out of the infrastructure of the PCS system will be approximately $150
million in the aggregate (including a license fee that Centennial has paid of
approximately $55 million). Of this budgeted amount, Centennial has incurred
costs of approximately $69 million related to equipment and installation through
fiscal year 1997 and anticipates expending approximately $26 million to complete
the buildout through fiscal 1999.

        Centennial also plans to participate in the intra-island and interstate
telecommunications market in Puerto Rico as a service provider pursuant to FCC
requirements for interstate service and pursuant to an authorization issued to
Centennial in December 1994, as amended in July 1996, by the Public Service
Commission of the Commonwealth of Puerto Rico for intra-island service.

CENTENNIAL ACQUISITIONS

        On September 12, 1996, Centennial acquired 100% of the ownership
interests in the partnership owning the non-wireline cellular telephone system
serving the Benton Harbor, Michigan MSA for approximately $35 million in cash.
The Benton Harbor market represents approximately 161,400 Net Pops.

COMPETITION

        The FCC grants two 25 MHz licenses to operate cellular telephone systems
in each of 306 Metropolitan Statistical Areas ("MSAs") and in each of 428 Rural
Statistical Areas ("RSAs"). The FCC also grants two 30 MHz licenses to operate
broadband PCS systems in each of 51 defined Major Trading Areas ("MTAs") and one
30 MHz and three 10 MHz licenses in each of 493 Basic Trading Areas ("BTAs")
which are component parts of MTAs. The Domestic Wireless Telephone Systems and
the systems in which Centennial has Investment Interests compete directly with
the other wireless licensees in each market on the basis of quality, price, area
served, services offered and responsiveness of customer service. Centennial also
may be placed at a competitive disadvantage with the other licensees in a market
if such licensees provide wireless telephone service in adjacent markets.



                                      -10-

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<PAGE>

        It is uncertain what effect PCS will have on Centennial's wireless
operations. The FCC revised its rules to state explicitly that cellular
licensees may provide any PCS-type services on their channels without prior
notification to the FCC. Management of Centennial believes that technological
advances in present cellular telephone technology, including the use of digital
technology, in conjunction with buildout of the present cellular systems
throughout the nation with cell splitting and microcell technology, will provide
essentially the same services as the services that PCS providers are expected to
provide, but there can be no assurance that this will happen.

        Many of Centennial's competitors are larger and may have access to more
substantial financial resources than Centennial. These competitors include
Regional Bell Operating Companies, large independent telephone companies and
AT&T Wireless, among others.

        Centennial's Puerto Rico Wireless Telephone System faces primary
competition from the incumbent wireless telephone licensees in Puerto Rico,
which include the Puerto Rico Telephone Company ("PRTC"), an entity owned by the
Commonwealth of Puerto Rico, and Corecom Inc., a publicly held company.

        In addition to competition from cellular and broadband PCS licensees,
Centennial faces competition from other current technologies, including enhanced
SMR systems, narrowband PCS systems, satellite-based mobile telephony and
conventional landline telephone service. Regional and nationwide one-way paging
service also may be a competitive alternative adequate for those who do not need
a two-way service or may reduce wireless telephone usage among subscribers to
both cellular and paging services.

        Technological advances in the communications field continue to occur
which make it difficult to predict the extent of additional future competition
for wireless systems, but it is certain that in the future there will be more
potential substitutes for Centennial's current wireless technology. There can be
no assurance that Centennial will not face significant future competition or
that Centennial's current wireless technology will not eventually become
obsolete.

        Potential Conflicts of Interest and Competition. Substantially all of
the Company's current wireless operations and investments are conducted or held
by Centennial. Although exceptions are permitted by the Conflicts/Non-Compete
Agreement described below, the Company has indicated to Centennial that it
intends to conduct all its wireless telephone operations through Centennial,
subject to FCC restrictions. Citizens has agreed with the Company and Centennial
that Citizens will conduct all its wireless telephone operations through
Centennial, except in areas where Citizens operates or acquires landline
telephone systems and areas contiguous thereto. There can be no assurance that
Centennial will not lose any material expansion opportunities as a result of
such exception or any conflicts that may exist between the interests of Citizens
and Centennial.

        The Company, Centennial and Citizens have entered into a
Conflicts/Non-Compete Agreement. Pursuant to such agreement, except as described
below, neither the Company nor Citizens may compete with Centennial in the
acquisition of cellular telephone businesses or ownership interests therein, and
Centennial will have the first opportunity to purchase any cellular telephone
business or ownership interests therein that may be presented to Citizens or the
Company. Citizens has no obligation to present any such business opportunity to
Centennial if the business under consideration is located in or is contiguous to
an area in which Citizens (or a subsidiary or affiliate at least 50% owned by
Citizens) owns or operates a landline telephone operation.



                                      -11-

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                            AUSTRALIAN PAY TELEVISION

GENERAL

        Since fiscal 1994, the Company has invested, through a wholly owned
subsidiary, approximately $148 million in the pay television industry in
Australia, including approximately $126 million in East Coast Pay Television Pty
Limited (together with its wholly owned subsidiaries, "ECT"), a corporation
organized under the laws of New South Wales, Australia. Through a wholly owned
subsidiary, the Company also entered into a programming joint venture, XYZ
Entertainment Pty Limited ("XYZ"), a corporation organized under the laws of New
South Wales, Australia, in which it has a net 25% interest. The Company is
pursuing a strategy to sell its Australian interests and is currently in
discussion with investment advisors with respect thereto (See Note 3 to
consolidated financial statements).

DESCRIPTION OF AUSTRALIAN INTERESTS

        ECT owns Satellite Subscription Broadcast License A, described below
("License "A"), one of three such licenses that were permitted to be granted by
Australian authorities prior to July 1997. From and after July 1997, more than
three such licenses may be granted; as of August 15, 1997, only three such
licenses have been granted. The license allows for direct-to-home ("DTH")
satellite television broadcasting and allows ECT to offer four channels of
programming via DTH. Australis Media Limited ("Australis"), another pay
television company in Australia, owns Satellite Subscription Broadcast License B
("License "B"), the second of the three licenses currently in use for DTH
services, allowing for the DTH broadcast of four channels of programming. ECT
and Australis have entered into agreements pursuant to which ECT may offer its
four License A channels for distribution individually or as part of a combined
package with License B programming in a package of services known as the Galaxy
Package. It was contemplated that the Galaxy Package be distributed by Australis
through DTH and MMDS in the six largest capital cities in Australia (as well as
Western Australia) and in distinct regional areas outside the capital cities by
its franchisees. Arrangements were also made for the distribution of the License
A package throughout Australia via cable pursuant to a long-term agreement with
FOXTEL (a competitive cable television provider and owner of a cable television
network).

        ECT, Australis and Australis' other franchisee have acquired control of
substantially all of the currently issued licenses which can be used for
transmission of pay television programming via MMDS in Australia. ECT owns or
controls all of the currently issued licenses which entitle it to transmit pay
television programming via MMDS in regions covering approximately 755,000
households in Coastal New South Wales and all of Tasmania (including Wollongong,
Hobart and Newcastle, Australia and surrounding areas) (the "ECT Franchise
Areas"). ECT has entered into a franchise agreement with Australis (the
"Franchise Agreement") pursuant to which it has the exclusive right (and is
obligated) for at least a 15-year period (with an option to renew for an
additional ten years) to deliver in each of the ECT Franchise Areas any
subscription broadcast service supplied by Australis, including the Galaxy
Package.

        Programming for the License A package is provided by XYZ. The other
participants in XYZ are United International Holdings, a leading international
provider of pay television services, and FOXTEL.



                                      -12-

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<PAGE>

        Pursuant to an agreement between ECT and Australis (the "IUA"), ECT has
a contractual right to maintain, at ECT's option, up to a 25% interest (a
percentage based on the aggregate capital originally invested by each party) in
the accumulated revenues net of certain associated expenses of Australis with
respect to all of its pay television services, referred to in the IUA as the
adjusted infrastructure net cash flow ("AINCF"). The extent of ECT's
participation in the AINCF is conditioned upon its contribution to certain of
Australis' costs in connection with its operations (the "IUA Costs"). Australis
has asserted that as of January 1996, ECT's participation in the AINCF has
decreased (from 25% to 13.4% and possibly to 10% at May 31, 1996 due to ECT's
failure to contribute funds for IUA Costs (approximately Australian $136
million) which assertion ECT has contested. Although it is likely that the total
amount of IUA Costs has increased since May 31, 1996, Australis has not made any
further assertions with respect to further funds owed by ECT. There can be no
assurance that this dispute will be resolved. See "Business - Australian Pay
Television - Dependence on Australis; Weak Financial Position of Australis;
Disputes with Australis."

DEPENDENCE ON AUSTRALIS; WEAK FINANCIAL POSITION OF AUSTRALIS;
DISPUTES WITH AUSTRALIS

        ECT is dependent on the efforts of Australis in the pay television
industry in Australia. The Company has become aware that Australis' financial
position has significantly deteriorated to the point where its ability to
continue as a going concern is in doubt. ECT's financial position (and, as a
result, the Company's investment in ECT) may be materially and adversely
affected if Australis were to become insolvent. ECT's pay television subscriber
business is dependent on acceptance of the Galaxy Package as a well-known
national product, as well as the infrastructure established by Australis,
including the national marketing and subscriber management service.

        The Company is currently unable to predict the ultimate resolution of
these matters. The remaining net book value of its investments in the various
aspects of Australian pay television aggregated approximately $24 million at May
31, 1997. See Item 7. "Management's Discussion and Analysis of Financial
Condition and Results of Operations." The Company will continue to assess the
potential impact of the above noted matters on its interests in its Australian
pay television businesses.

                           REGULATION AND LEGISLATION

CABLE TELEVISION

        General. The cable television industry is regulated by the FCC, some
state governments and substantially all local governments. In addition, various
legislative and regulatory proposals under



                                      -13-

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<PAGE>

consideration from time to time by the Congress and various federal agencies
have in the past, and may in the future, materially affect the Company and the
cable television industry.

        Federal Statutory Laws. The principal federal statute governing cable
television is the Communications Act of 1934, as amended. Amendments in 1984 and
1992 and amendments in 1996 (codified as the 1996 Act) have had particular
impact on the way in which cable systems are regulated. The 1984 and 1992
amendments added significantly to the regulatory burdens of cable operators,
particularly in the areas of (i) cable system rates for both basic and certain
nonbasic services; (ii) programming access and exclusivity arrangements; (iii)
access to cable channels by unaffiliated programming services; (iv) leased
access terms and conditions; (v) horizontal and vertical ownership of cable
systems; (vi) customer service requirements; (vii) franchise renewals; (viii)
television broadcast signal carriage and retransmission consent; (ix) technical
standards; (x) customer privacy; (xi) consumer protection issues; (xii) cable
equipment compatibility; (xiii) obscene or indecent programming; and (xiv)
requiring subscribers to subscribe to tiers of service other than basic service
as a condition of purchasing premium services.

        The 1996 Act, enacted into law in February 1996, substantially amended
the Communications Act by, among other things, removing barriers to competition
in the cable television and telephone markets and reducing the regulation of
cable television rates.

        Federal Regulation. The FCC, the principal federal regulatory agency
with jurisdiction over cable television, has promulgated extensive regulations
covering such areas as the regulation of cable service rates in areas where
cable television systems are not subject to effective competition,
cross-ownership between cable television systems and certain other
communications businesses, carriage of television broadcast programming,
ownership of inside wiring, programming agreements, programmer access to cable
channels, signal leakage and frequency use, technical standards and performance,
consumer protection and customer service, indecent programs, parental control
devices, origination cablecasting, consumer electronics equipment compatibility,
sponsorship identification, equal employment opportunity, children's
programming, maintenance of various records, and antenna structure notification,
marking and lighting. The FCC has the authority to enforce these regulations
through the imposition of substantial fines, the issuance of cease and desist
orders and/or the imposition of other administrative sanctions, such as the
revocation of FCC licenses needed to operate certain transmission facilities
often used in connection with cable operations.

        Rates. Under federal law, nearly all cable television systems are
subject to local rate regulation of basic service. Franchising authorities are
empowered under the law to ensure that basic cable rates are reasonable and that
rates for installation of cable service, converter boxes and additional outlets
are based on actual costs. In addition, the FCC is required to review rates for
nonbasic service tiers (other than per-channel or per-program services) under
certain circumstances. The FCC also is authorized to impose restrictions on the
retiering and rearrangement of cable services under certain circumstances. Local
franchising authorities and/or the FCC are empowered to limit future rate
increases and to order a reduction of existing rates which exceed the maximum
permitted level for either basic and/or nonbasic cable services and associated
equipment, and refunds can be required.

        The 1996 Act eliminates regulation of rates for nonbasic service tiers
for all cable operators as of March 31, 1999. In the interim, regulation of
rates for nonbasic service tiers can only be triggered if a franchising
authority complaint based on more than one subscriber complaint is made with the
FCC within 90



                                      -14-

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<PAGE>

days after a rate increase. These 1996 Act provisions should materially alter
the applicability of FCC rate regulations previously adopted.

        Although rates for video programming offered on a per channel or a per
program basis are not regulated, cable operators must permit customers to
purchase such programming without the necessity of subscribing to any tier of
service, other than the basic service tier, unless the cable system is
technically incapable of doing so. Generally, this exemption from compliance
with the statute for cable systems that lack such technical capability is only
available until a cable system obtains the capability, but not later than
December 2002.

        Carriage of Broadcast Television Signals. Commercial television
broadcast stations which are "local" to a cable system, i.e., the system is
located in the station's Area of Dominant Influence, must elect every three
years whether to require the cable system to carry the station, subject to
certain exceptions, or whether the cable system must negotiate for
"retransmission consent" to carry the station. Local noncommercial television
stations also are given similar mandatory carriage rights, but are not given the
option to negotiate retransmission consent for the carriage of their signal. In
addition, cable systems must obtain retransmission consent for the carriage of
all commercial broadcast stations, except for certain "superstations."

        Franchise Fees. Although franchising authorities may impose franchise
fees, such payments cannot exceed five percent of a cable system's annual gross
revenues from cable services. Franchising authorities are also empowered in
awarding new franchises or renewing existing franchises to require cable
operators to provide cable-related facilities and equipment and to enforce
compliance with voluntary commitments.

        Renewal of Franchises. Renewal procedures and criteria designed to
protect incumbent franchisees against arbitrary denials of renewal have been
established by federal law governing the cable television industry. These
procedures can provide substantial protection to incumbent franchisees, although
renewal is by no means assured, as the franchisee must meet certain statutory
standards. Even if a franchise is renewed, a franchising authority may impose
new and more onerous requirements such as upgrading facilities and equipment,
although the municipality must take into account the cost of meeting such
requirements.

        Channel Set-Asides. Under federal law, local franchising authorities may
require cable operators to set aside certain channels for public, educational
and governmental access programming. Further, cable television systems with 36
or more activated channels must designate a portion of their channel capacity
for commercial leased access by unaffiliated third parties. Leased access rates
must be set according to a formula determined by the FCC.

        Competing Franchises. Franchising authorities are prohibited from
unreasonably refusing to grant franchises to competing cable television systems.
Franchising authorities are permitted to operate their own cable television
systems without franchises.

        Ownership Restrictions and Market Entry. The 1996 Act allows telephone
companies to compete directly with cable operators by repealing the historic
telephone company/cable cross-ownership ban. This allows LECs, including the
Regional Bell Operating Companies, to compete with cable operators both inside
and outside their telephone service areas. Because of their resources, LECs
could be formidable competitors to traditional cable operators, and certain LECs
have begun offering cable service.



                                      -15-

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<PAGE>

        The 1996 Act also provides that registered utility holding companies and
subsidiaries may provide telecommunications services (including cable
television) notwithstanding the Public Utility Holding Company Act of 1935, as
amended. Because of their resources, utilities could be formidable competitors
to traditional cable systems.

        The 1996 Act eliminates statutory restrictions on broadcast/cable
cross-ownership (including broadcast network/cable restrictions), but leaves in
place existing FCC regulations prohibiting local cross-ownership between
television stations and cable systems. The 1996 Act also eliminates the three
year holding period previously required under a statutory provision regarding
"anti-trafficking." The present federal regulatory scheme leaves in place
existing restrictions on cable cross-ownership with SMATV and MMDS facilities,
but lifts those restrictions where the cable operator is subject to effective
competition. However, the FCC has adopted regulations which permit cable
operators to own and operate SMATV systems within their franchise area, provided
that such operation is consistent with local cable franchise requirements.

        FCC rules preclude a cable system from devoting more than 40% of its
activated channel capacity to the carriage of affiliated national program
services. A companion rule establishing a nationwide ownership cap on any cable
operator equal to 30% of all domestic cable subscribers has been stayed pending
further judicial review.

        Cable Entry Into Telecommunications. The 1996 Act provides that no state
or local laws or regulations may prohibit or have the effect of prohibiting any
entity from providing any interstate or intrastate telecommunications service.
States are authorized, however, to impose "competitively neutral" requirements
regarding universal service, public safety and welfare, service quality and
consumer protection. State and local governments also retain their authority to
manage the public rights-of-way. Although the 1996 Act clarifies that
traditional cable franchise fees may be based only on revenues related to the
provision of cable television services, it also provides that local franchising
authorities ("LFAs") may require reasonable, competitively neutral compensation
for management of the public rights-of-way when cable operators provide
telecommunications service. However, many of the specific terms and conditions
for such interconnection will remain uncertain until they are resolved by the
courts, the FCC and state regulatory commissions.

        Cable entry into telecommunications will be affected by the regulatory
landscape now being fashioned by the FCC and state regulators. One critical
component of the 1996 Act to facilitate the entry of new telecommunications
providers (including cable operators) is the interconnection obligation imposed
on all telecommunications carriers.

        Technical Requirements. The FCC has adopted technical standards for
cable television, and local franchising authorities are prohibited from adopting
standards which are in conflict with or more restrictive than those established
by the FCC. Cable systems must also limit signal leakage to prevent harmful
interference with aeronautical navigation and safety radio services.

        Pole Attachments. The FCC currently regulates the rates, terms and
conditions imposed by certain public utilities for use of their poles unless
state public service commissions are able to demonstrate that they regulate such
rates, terms and conditions. Under the 1996 Act, investor-owned utilities must
make poles and conduits available to cable systems under delineated terms.
Electric utilities are given the right to deny access



                                      -16-

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<PAGE>

to particular poles on a nondiscriminatory basis for lack of capacity, safety,
reliability, and generally accepted engineering reasons. The current method for
determining attachment rates charged by telephone and utility companies will
continue for five years. However, the 1996 Act directs the FCC to establish a
new formula for the rental rate for poles used by cable operators who provide
"telecommunications services" which will result in higher pole rental rates for
such cable operators. Any increases pursuant to this formula may not begin for
five years and will be phased-in in equal increments over years five through
ten. This new FCC formula does not apply in states which certify they regulate
pole rents, nor will it apply to cable operators who provide only traditional
cable services.

        Copyright. Cable television systems are subject to federal copyright
licensing covering carriage of broadcast signals. In exchange for making
semi-annual payments to a federal copyright royalty pool and meeting certain
other obligations, cable operators obtain a statutory license to retransmit
broadcast signals. The amount of this royalty payment varies, depending on the
amount of system revenues from certain sources, the number of distant signals
carried, and the location of the cable system with respect to over-the-air
television stations.

        Copyrighted music performed in programming supplied to cable television
systems by pay cable networks (such as HBO) and basic cable networks (such as
USA Network) is licensed by the networks through private agreements with the
American Society of Composers and Publishers ("ASCAP") and BMI, Inc. ("BMI"),
the two major performing rights organizations in the United States. Copyrighted
music performed by cable systems themselves on local origination channels, in
advertisements inserted locally on cable networks, et cetera, also must be
licensed.

        State and Local Regulation. Because a cable television system uses local
streets and rights-of-way, cable television systems are subject to state and
local regulation, typically imposed through the franchising process. State
and/or local officials are usually involved in franchise selection, system
design and construction, safety, service rates, consumer relations, billing
practices and community related programming and services.

        Cable television systems generally are operated pursuant to nonexclusive
franchises, permits or licenses granted by a municipality or other state or
local government entity. Franchises generally are granted for fixed terms and in
many cases are terminable if the franchise operator fails to comply with
material provisions. Although federal law provides for certain procedural
protections, there can be no assurance that renewals will be granted or that
renewals will be made on similar terms and conditions. Franchises usually call
for the payment of fees, often based on a percentage of the system's gross
customer revenues, to the granting authority. Upon receipt of a franchise, the
cable system owner usually is subject to a broad range of obligations to the
issuing authority directly affecting the business of the system. The terms and
conditions of franchises vary materially from jurisdiction to jurisdiction, and
even from city to city within the same state, historically ranging from
reasonable to highly restrictive or burdensome. Under the existing federal
regulatory scheme, there are certain limitations on a franchising authority's
ability to control the operation of a cable system operator. However, exclusive
franchises are prohibited and franchising authorities are permitted to exercise
greater control over the operation of franchised cable television systems,
especially in the area of customer service and rate regulation. Federal law also
allows franchising authorities to operate their own multichannel video
distribution system without having to obtain a franchise and permits states or
local franchising authorities to adopt certain restrictions on the ownership of
cable television systems.



                                      -17-

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Moreover, franchising authorities are immunized from monetary damage awards
arising from regulation of cable television systems or decisions made on
franchise grants, renewals, transfers and amendments.

        In addition to the foregoing, other existing federal regulations,
copyright licensing and, in many jurisdictions, state and local franchise
requirements, currently are the subject of a variety of judicial proceedings,
legislative hearings and administrative and legislative proposals that could
change, in varying degrees, the manner in which cable television systems
operate. Neither the outcome of these proceedings nor their impact upon the
cable television industry can be predicted at this time. Moreover, changes in
the regulatory and legislative environment are constantly occurring. The Company
cannot predict the effect that ongoing or future developments may have on the
cable television industry generally or the Company specifically.

WIRELESS TELEPHONE

        Federal Regulation. Pursuant to the Communications Act, the cellular,
PCS, paging, conventional mobile telephone systems and SMR systems operated by
Centennial are licensed and regulated by the FCC as Commercial Mobile Radio
Service ("CMRS") facilities. The FCC limits entities to a total of 45 MHz of
licensed CMRS spectrum in any given market area.

        Cellular and PCS licenses are granted for a term of up to ten years,
after which they must be renewed. Licenses may be revoked and license renewal
applications denied for cause. It is possible that there may be competition for
a license upon the expiration of its initial license term. While there can be no
assurance that any license will be renewed, the FCC's rules provide for a
significant renewal preference to a cellular and PCS licensee that has used its
spectrum for its intended purpose and complied with FCC regulations and the
federal communications statutes.

        The FCC's rules prohibit cellular telephone and broadband PCS licensees
from imposing restrictions on the resale of wireless service by parties who
purchase blocks of telephone numbers from an operational system and then resell
them to the public. This prohibition expires for wireless licensees five years
after the date that the last group of initial PCS licenses are granted.

        The FCC also regulates a number of other aspects of the operation and
ownership of CMRS systems. There can be no assurance that any FCC requirements
currently applicable to Centennial's CMRS systems will not be changed in the
future.

        State and Local Regulation. Following the grant of an FCC construction
permit to an applicant, and prior to the commencement of commercial service (and
prior to construction in certain states), the holder of the permit may have to
obtain certain approvals from the appropriate regulatory bodies in the
jurisdictions in which it will offer CMRS service. At present, none of the
states in which Centennial's CMRS operations are located may regulate the entry
of CMRS providers or the rates charged for CMRS service. However, they can
regulate other terms and conditions of service.

        The siting and construction of the CMRS facilities, including
transmitter towers, antennas and equipment shelters may be subject to state or
local zoning, land use and other local regulations. Before a system can be put
into commercial operation, the holder of a construction permit must obtain all
necessary zoning and building permit approvals for the transmitter sites and
MTSO locations.

                                      -18-

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<PAGE>

        Recent Federal and State Legislation. The 1996 Act contains significant
provisions aimed, in part, at opening local telecommunications markets to
competition. These provisions govern, among other telecommunications matters,
the removal of market-entry barriers and impose on incumbent LECs duties to
negotiate, in good faith, interconnection agreements and provide under
reasonable and nondiscriminatory terms interconnection for exchange services and
access to unbundled network elements at any technically feasible point within
the carrier's network. The 1996 Act also provides for the development of
competitive markets through such provisions governing resale, number
portability, dialing parity, access to right-of-ways and numbering
administration.

        The overall impact of the 1996 Act on the business of Centennial is
unclear and will likely remain so for the foreseeable future. Centennial may
benefit from reduced costs in acquiring required communications services, such
as LEC interconnection. However, other provisions of the 1996 Act relating to
interconnection, telephone number portability, equal access and resale could
subject Centennial to increased competition.

        Comprehensive telecommunications reform legislation was enacted in 1996
by the Commonwealth of Puerto Rico. This legislation, titled the Puerto Rico
Telecommunications Act of 1996 (the "Puerto Rico Act"), purports to open the
Puerto Rico telecommunications market to competition and, among other things, it
establishes the Puerto Rico Telecommunications Regulatory Board (the "Board")
which has been given primary regulatory jurisdiction in Puerto Rico over all
telecommunications services, all service providers, and all persons with a
direct or indirect interest in said services or providers. On December 11, 1996,
the Board assumed jurisdiction over all intra-island telecommunications matters.

        FCC and State Proceedings. The 1996 Act imposes interconnection
obligations on all telecommunications carriers in order to facilitate the entry
of new telecommunications providers. This requirement has the potential of
realizing benefits for Centennial's cellular, PCS and other telecommunications
businesses. In August 1996, the FCC issued comprehensive rules regarding the
introduction of competition into the local telephone market. These rules address
most aspects of the provision of competitive local telephony services from both
facilities-based and non-facilities-based competitors and address the process by
which potential competitors negotiate with incumbent telephone companies for
interconnection, the facilities that must be available for interconnection, the
use of components of the incumbents' networks, the resale of services of others,
and the pricing of interconnection and other services and facilities used for
offering competitive local telephone services. The rules also provide that
incumbent LECs must begin paying Centennial and other wireless providers
immediately for terminating landline-originated traffic on the wireless
facilities. On appeal, the U.S. Court of Appeals for the Eighth Circuit
overturned several of the FCC's rules, the most important of which were the
pricing rules. The FCC is expected to seek review of this decision from the
Supreme Court.

        Decisions related to universal service and access charge reform have
also been released by the FCC. These decisions have been appealed.

        Centennial has filed a Petition for Declaratory Ruling and Preemption
with the FCC in which it seeks a ruling that the regulatory approach as well as
certain provisions of the Puerto Rico Act are preempted pursuant to Sections
253(a) and 332(c) of the Communications Act because they are inconsistent with
the pro-competition language and/or objectives of the 1996 Act, constitute
impermissible barriers to the entry of local



                                      -19-

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<PAGE>

telecommunications competition and/or constitute impermissible regulation of
CMRS entry or rates. Several other entities subsequently filed similar petitions
with the FCC. This matter is currently pending.

        On December 26, 1996, Centennial, on behalf of its PCS subsidiary, filed
a petition with the Board seeking arbitration of the many unresolved issues in
the negotiation with PRTC for interconnection of Centennial's PCS network with
PRTC's landline telephone network. On January 21, 1997, Centennial filed a
petition with the Board seeking arbitration of the many unresolved issues in the
negotiation with PRTC for interconnection of Centennial's fiber optic network
with PRTC's landline telephone network. The two petitions were substantially
consolidated by the arbitrator and after several sessions with the arbitrator
and PRTC, Centennial's PCS subsidiary successfully negotiated interconnection
agreements with PRTC covering most of the unresolved issues. Those agreements,
which reflect considerably lower interconnection rates than those PRTC had been
charging, have been approved by the Board and are currently in effect.

AUSTRALIAN PAY TELEVISION

        Australia. Australia is a Federal jurisdiction. The provision of
subscription television services is regulated by the Federal Government under
various Commonwealth statutes. In addition, State and Territory laws, including
environmental and consumer contract legislation, may impact on the construction
and maintenance of a transmission system for subscription television services,
and the content of those services, as well as on various aspects of the
subscription television business itself.

        The Australian regulatory framework distinguishes between the regulation
of the content of subscription television services themselves and the regulation
of the facilities used to transmit those services.

        The transmission facilities used to provide services are principally
regulated by the Radiocommunications Act 1992 ("RCA") and the Telecommunications
Act 1991 ("TCA"). The RCA, which commenced on July 1, 1993, regulates the use of
the radio frequency spectrum, including the use of MMDS transmission and the
spectrum used by satellite operations. The TCA, which commenced on July 1, 1991,
regulates the provision of telecommunications services including certain aspects
of carrier operated satellites.

        The majority of the major city MMDS licenses held by ECT expire in 1999
while the majority of MMDS licenses held by ECT for regional areas expire in
2000. If renewed, an MMDS license will remain in force, unless canceled or
suspended on an earlier date, for the period specified in the MMDS license,
which may be a period of up to five years.

        The Company's ability to sell or transfer its Australian interests is
limited by the Australian regulatory framework which contains various
limitations on foreign ownership. The Broadcasting Services Act of 1992
prohibits ownership of company interests, as defined, by foreign persons with
respect to Subscription Television Broadcast licensees. Additionally, the
Foreign Acquisitions and Takeovers Act 1975 ("FATA") requires notification to
and approval of the Australian Treasurer before a foreign natural person or
corporation may hold a substantial interest in any Australian corporation. A
person is taken to hold a "substantial interest": (a) in a corporation, if the
person, alone or together with any associates (as defined in the FATA), is in a
position to control not less than 15% of the voting power in the corporation or
holds interest in not less than 15% of the issued shares in the corporation; or
(b) in a trust estate, if the person alone



                                      -20-

<PAGE>
<PAGE>

or together with any associates (as defined), holds a beneficial interest in not
less than 15% of the corpus or income of the trust estate.

                                    EMPLOYEES

        At May 31, 1997, the Company had approximately 3,930 employees. Certain
of the employees of 12 of its cable systems, including three of its largest
systems, are represented by unions. The Company considers its relations with its
employees to be good.

ITEM 2. PROPERTIES.

        The principal physical assets associated with the Company's cable
television systems consist of operating plant and equipment, including signal
receiving apparatus, headends and distribution systems and subscriber house drop
equipment. The signal receiving apparatus typically includes a tower, antennas,
ancillary electronic equipment and earth stations for reception of satellite
signals. Headends, consisting of associated electronic equipment necessary for
the reception, amplification and modulation of signals, are located near the
receiving devices. The Company's distribution system consists principally of
fiber and coaxial cables and related electronic equipment. Subscriber devices
consist principally of decoding converters. The physical components of cable
television systems may require maintenance and periodic upgrading and rebuilding
to keep pace with technological advances. The Company owns or leases property
for receiving sites (antenna towers and headends), microwave facilities and
business offices and owns most of its service vehicles.

        With respect to Centennial's wireless systems, Centennial owns or leases
sales and administrative offices and sites for the MTSOs and cell sites.
Centennial also leases office space at 1305 and 1325 Campus Parkway, Neptune,
New Jersey where it has its principal corporate office. Cell sites typically
include a tower and transmitting, receiving and signaling equipment and are
connected by landline, microwave or other means to the systems' computers in the
MTSO.

        As of May 31, 1997, the Company leases approximately 35,000 square feet
of office space at 50 Locust Avenue, New Canaan, Connecticut, where it has its
corporate headquarters, pursuant to a newly renegotiated lease which expires
December 31, 2004 and provides for two five-year renewal terms. The monthly
rental payments pursuant to the lease are approximately $68,000.

        With respect to the property owned by the Company or Centennial, the
Company is of the opinion that it or Centennial, as the case may be, has
generally satisfactory title to such properties used in their respective
businesses, subject to the liens for current taxes and liens incident to minor
encumbrances. In addition, the Company considers the properties owned and leased
by it and Centennial to be suitable and adequate for the conduct of their
respective business operations in the future.


                                      -21-

<PAGE>
<PAGE>

ITEM 3. LEGAL PROCEEDINGS.

        There were no material pending legal proceedings, other than routine
litigation incidental to the business, to which the Company or any of its
subsidiaries is a part of or to which any of their property is subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

        There were no matters submitted to a vote of the Company's shareholders
during the fiscal quarter ended May 31, 1997.

                                      * * *

                       EXECUTIVE OFFICERS OF THE COMPANY

        The names, ages and positions of all the executive officers of the
Company as of May 31, 1997 are listed below along with their business experience
during the past five years. Officers serve at the discretion of the Board of
Directors. There are no arrangements or understandings between any officer and
any other person pursuant to which the officer was selected and, except as
otherwise indicated below, there are no family relationships between any
executive officers or any directors of the Company.

        LEONARD TOW, 69, has been Chairman of the Board of the Company since
October 1989. He has also been a director and the Chief Executive Officer of the
Company since its incorporation in December 1985, and of Century Texas from the
date of its organization in 1973 through December 1985. He was Chief Financial
Officer of the Company until December 1996. He also served as President and
Chief Operating Officer of the Company from December 1985 to October 1989, and
as President of Century Texas from 1973 through December 1985. Mr. Tow has been
active in the cable television industry for approximately 30 years. He has also
served as Chairman of the Board of Citizens Utilities since June 1990, as Chief
Executive Officer of Citizens Utilities since July 1, 1990, and as a director of
Citizens Utilities since April 1989. Mr. Tow holds a Ph.D. from Columbia
University and is the husband of Claire L. Tow.

        BERNARD P. GALLAGHER, 50, has been a director of the Company since
October 1990 and has been President and Chief Operating Officer of the Company
since October 1989. Mr. Gallagher has also been Chairman of the Board and Chief
Executive Officer of Centennial since August 1991 and has been a director of
Centennial since March 1991. From February 1990 to August 1991, Mr. Gallagher
was President and Chief Operating Officer of Centennial. From 1979 to October
1989, Mr. Gallagher served in various financial and executive capacities at
Comcast Corporation, a cable and cellular company, and its subsidiaries,
including Vice President and Treasurer from November 1984 to October 1989.

        MICHAEL G. HARRIS, 51, has been Senior Vice President - Engineering of
the Company since June 1991, and was Vice President, Engineering of the Company
from 1982 to June 1991. He was Director of Engineering of Century Texas from
1973 to 1982 and Vice President, Engineering of Century Texas from 1982 to
December 1985. Mr. Harris has also been Senior Vice President, Engineering of
Centennial Cellular since August 1991, and was Vice President, Engineering of
Centennial from the date of its incorporation in 1988 to August 1991.



                                      -22-

<PAGE>
<PAGE>

        SCOTT N. SCHNEIDER, 39, has been a director of the Company since October
1994. Mr. Schneider has been Chief Financial Officer of the Company since
December 1996, Senior Vice President and Treasurer of the Company since June
1991, and has been an Assistant Secretary of the Company since October 1986. He
was a Vice President of the Company from October 1986 to June 1991 and was
Controller of the Company from December 1985 to June 1991. He was Controller of
Century Texas from December 1982 to December 1985. Mr. Schneider has also been a
director and Senior Vice President, Chief Financial Officer and Treasurer of
Centennial since August 1991. He was a Vice President and Controller of
Centennial from the date of its incorporation in 1988 to August 1991.

        DANIEL E. GOLD, 61, has been a Senior Vice President of the Company and
President of the Century Cable Television Division of the Company since February
1995. From July 1994 to January 1995, he was Chief Executive Officer of the
American Society of Composers, Authors and Publishers. Mr. Gold was Senior Vice
President, Operations, of the Century Cable Television Division of the Company
from 1991 to June 1994. Mr. Gold was President and Chief Executive Officer of
the eight television station group of Knight Ridder Broadcasting Company from
1985 to 1990, and was President and Chief Operating Officer of Comcast
Corporation from 1980 to 1985. Between 1960 and 1980, Mr. Gold held a variety of
positions in the areas of government, law and broadcasting.

        CLAIRE L. TOW, 66, has been Senior Vice President and a director of the
Company since February 1988. She has been involved in the operations of the
Company since its incorporation and with Century Texas since its incorporation.
Mrs. Tow is the wife of Leonard Tow.

        DAVID Z. ROSENSWEIG, 71, has been a director and the Secretary of the
Company since its incorporation in December 1985 and of Century Texas from 1982
to December 1985. Mr. Rosensweig has also been a director and Secretary of
Centennial since its incorporation in 1988. He has been a member of the New York
law firm of Leavy Rosensweig & Hyman since May 1987, which acts as general
counsel to the Company and Centennial.

        ROBERT J. LARSON, 38, has been Vice President - Controller of the
Company since October 1994, was Controller of the Company from June 26, 1991 to
1994 and was Assistant Controller from 1989 to June 25, 1991. Mr. Larson has
been Vice President - Accounting and Administration of Centennial since March
1995 and was Vice President - Controller of Centennial from October 1994 to
March 1995, Controller of Centennial from 1990 to October 1994, and was
Assistant Controller of Centennial from 1989 to 1990. Prior to joining the
Company and Centennial, Mr. Larson was a manager with Touche Ross & Co., a
predecessor firm of Deloitte & Touche LLP.

        CLIFFORD A. BAIL, 42, has been Vice President-Legal Affairs and
Corporate Counsel of the Company since January 1997. Mr. Bail has also been Vice
President - Legal Affairs and Corporate Counsel of Centennial since January
1997. From 1992 to 1996, Mr. Bail was a member of the law firm of Leavy
Rosensweig & Hyman, which acts as general counsel to the Company and Centennial.


                                      -23-

<PAGE>
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

        The Class A Common Stock commenced trading on The Nasdaq Stock Market
("Nasdaq") under the symbol CTYA on January 5, 1995. Prior to such date, the
Class A Common Stock was traded on the American Stock Exchange. There is no
established public market for the Class B Common Stock. The table set forth
below lists the high and low sale prices for the Class A Common Stock reported
on Nasdaq for the calendar quarters indicated.

      1995                                        High                Low
      ----                                        ------              ----
      First Quarter..............                 10 1/8              7 1/4
      Second Quarter.............                 10 1/8              7 5/8
      Third Quarter..............                 10 1/2              8 5/8
      Fourth Quarter.............                 10 3/8              7 3/4

      1996

      First Quarter..............                 10 1/8              7 1/2
      Second Quarter.............                 10 1/8              8 1/4
      Third Quarter..............                  8 7/8              6 1/8
      Fourth Quarter.............                  7 5/8              5 1/8

      1997

      First Quarter..............                  6 1/4              3 7/8
      Second Quarter.............                  7 1/8              3 5/8
      Third Quarter (through August 13)            7 3/8              5 1/8


        On August 13, 1997, the last sale price of the Class A Common Stock, as
reported on Nasdaq, was $6.50 per share. At August 13, 1997, there were
approximately 1,140 holders of record of shares of Class A Common Stock and 4
holders of record of shares of Class B Common Stock.

DIVIDEND POLICY

        The Company has never paid a cash dividend on its common stock. The
Company is currently restricted from paying cash dividends by certain of its
debt instruments. Its ability to do so is further limited by provisions of
credit agreements entered into by certain of its subsidiaries that limit the
amount of cash that may be upstreamed to the Company.

        If all cumulative dividends shall have been paid as declared or set
apart for payment upon shares of Preferred Stock then outstanding, if any,
holders of shares of Class A Common Stock and Class B Common Stock are entitled
to receive such dividends as may be declared by the Company's Board of Directors
out of funds legally available for such purpose. No dividend may be declared or
paid in cash or property on any share of Class B Common Stock, however, unless
simultaneously the same dividend is paid on each share of



                                       24

<PAGE>
<PAGE>

Class A Common Stock. Dividends can be declared and paid on shares of Class A
Common Stock without being declared and paid on the shares of Class B Common
Stock. In the case of any stock dividend, holders of Class A Common Stock are
entitled to receive the same percentage dividend (payable in shares of Class A
Common Stock) as the holders of Class B Common Stock receive (payable in shares
of Class B Common Stock).


                                       25

<PAGE>
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA.

        The selected consolidated financial data set forth below for the five
years ended May 31, 1997 have been derived from the Company's audited
consolidated financial statements. This data should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the consolidated financial statements and notes thereto included
elsewhere in this Annual Report on Form 10-K.

<TABLE>
<CAPTION>
                                                           YEAR ENDED MAY 31,
                                                           -------------------
                                  1997             1996            1995            1994            1993
                              -------------     -----------     -----------     -----------     -----------
                                            (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S>                              <C>             <C>             <C>             <C>             <C>      
STATEMENT OF OPERATIONS DATA
Revenues                         $ 643,490       $ 495,274       $ 416,687       $ 374,599       $ 345,131
                              -------------     -----------     -----------     -----------     -----------
Cost of services                   139,017         108,403         103,673          83,132          80,715
Selling, general and
  administrative                   166,362         119,779         110,381          82,368          71,027
Regulatory restructuring                --              --           4,000              --              --
charge
Depreciation and                   261,778         216,777         171,931         151,296         138,547
amortization
Write-down of Australian            40,000          10,000              --              --              --
assets
Australian expenses                 30,562          24,067              --              --              --
                              -------------     -----------     -----------     -----------     -----------
                                   637,719         479,026         389,985         316,796         290,289
                              -------------     -----------     -----------     -----------     -----------
Operating income                     5,771          16,248          26,702          57,803          54,842
Interest expense                   200,743         172,215         139,001         121,698         112,294
Other (income) expense             (14,570)        (11,107)         (2,270)         (3,645)          5,218
                              --------------    -----------     -----------     -----------     -----------
Loss before income tax
benefit
  minority interest               (180,402)       (144,860)       (110,029)        (60,250)        (62,670)
  and extraordinary item
Income tax benefit                 (30,658)        (34,326)         (8,061)         (5,633)        (12,401)
                              -------------     -----------     -----------     -----------     -----------
Loss before minority
interest                          (149,744)       (110,534)       (101,968)        (54,617)        (50,269)
  and extraordinary item
Minority interest in loss of
  subsidiaries                      15,451           8,417          19,343          12,690          12,478
                              -------------     -----------     -----------     -----------     -----------
Loss before extraordinary         (134,293)       (102,117)        (82,625)        (41,927)        (37,791)
item
  Extraordinary item-loss on
    early retirement of 
debt, net                           (7,582)             --              --              --              --
                              -------------     -----------     -----------     -----------     -----------
Net loss                         $(141,875)      $(102,117)      $ (82,625)      $ (41,927)      $ (37,791)
                              =============     ===========     ===========     ===========     ===========
Dividend on  subsidiary
convertible redeemable
preferred stock                    $ 4,850       $   4,256       $   4,419       $   5,838       $   5,883
                              =============     ===========     ===========     ===========     ===========
Loss applicable to common
  shares                         $(146,725)      $(106,373)      $ (87,044)      $ (47,765)      $ (43,674)
                              =============     ===========     ===========     ===========     ===========
Loss per common share:
  Loss before extraordinary
    item                            $(1.86)       $  (1.44)       $  (1.01)       $  (0.53)       $  (0.49)
  Extraordinary item                 (0.10)             --              --              --              --
                              -------------     -----------     -----------     -----------     -----------
  Net loss                          $(1.96)       $  (1.44)       $  (1.01)       $  (0.53)       $  (0.49)
                              =============     ===========     ===========     ===========     ===========
Weighted average number of
  common shares outstanding
  during the period             74,675,000      73,748,000      86,277,000      89,381,000      88,652,000
                              =============     ===========     ===========     ===========     ===========
</TABLE>


                                       26

<PAGE>
<PAGE>

<TABLE>
<CAPTION>
                                                       YEAR ENDED MAY 31,
                                                       ------------------
                             1997            1996             1995             1994           1993
                           ----------     -----------      -----------      -----------     ----------
                                                     (DOLLARS IN THOUSANDS)
<S>                        <C>            <C>              <C>              <C>             <C>       
BALANCE SHEET DATA
Total assets               $2,154,231     $2,234,909       $2,004,417       $1,350,426      $1,303,484
Long-term debt              2,186,981      2,081,611        1,741,143        1,270,989       1,167,423
Common stockholders'
  deficiency                 (598,643)      (448,013)        (351,645)        (243,628)      (215,238)
</TABLE>

    See Note 3 of the consolidated financial statements regarding recent
acquisitions and the effect of such acquisitions on the comparability of the
historical financial statements of the Company.



                                       27

<PAGE>
<PAGE>




ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (dollar amounts in thousands except subscriber,
pop and share data)

The Company is primarily engaged in the ownership and operation of cable
television systems and earns its revenues primarily from subscriber fees. At May
31, 1997, the Company owned and operated 70 cable television systems in 25
states and Puerto Rico. At that date, the Company's cable systems passed
approximately 2,245,000 homes and served a total of approximately 1,273,000
primary basic subscribers. Certain of the Company's cable systems referred to
above are owned 50% by the Company and 50% by unaffiliated entities. At May 31,
1997, these systems passed approximately 549,000 homes and served approximately
278,000 primary basic subscribers.

The Company has a common stock interest of approximately 32% and a voting
interest of approximately 74% in Centennial Cellular Corp. ("Centennial") and
provides management services to Centennial. Centennial is engaged in the
ownership and operation of wireless telephone systems, primarily in four
geographic areas in the United States and Puerto Rico. The market value of this
interest, based solely on the equivalent number of publicly-traded shares of
Class A Common Stock, was $121,485,406 on May 31, 1997. In accordance with
Financial Accounting Standards Board Statement No. 94, the accounts of
Centennial are consolidated with those of the Company for reporting purposes for
all periods presented.

The Company has interests in businesses in the pay television industry in
Australia. The interests include investments in entities (which include East
Coast Pay Television Pty. Limited ("ECT") and XYZ Entertainment Pty. Limited
("XYZ") which have the following: (i) programming arrangements and ownership of
a satellite subscription broadcast license which permits distribution of
programming via direct-to-home (DTH) satellite television broadcasting
throughout Australia; (ii) ownership of wireless cable distribution licenses
(MDS) in areas covering approximately 755,000 households; (iii) an interest in
net cash flow of Australis Media Limited ("Australis"), another Australian pay
television operator; and (iv) programming services. During the first quarter of
the fiscal year ended May 31, 1996, for accounting and reporting purposes, the
Company consolidated the operations of ECT, which was previously accounted for
by the equity method of accounting. There was no significant impact on the
consolidated statement of operations as a result of such change. During fiscal
1997 and 1996, the Company recorded writedowns of its Australian investments of
$40,000 and $10,000, respectively. The Company has determined to sell its
Australian investments and has retained an investment banker to assist in the
separate sale of its interests in ECT and XYZ (See Note 3 to consolidated
financial statements).

Certain of the Company's cable television systems are subject to rate regulation
which has negatively affected the Company's business. The Company has
implemented new rate and service offerings which give subscribers the choice of
buying certain programming services individually on a per channel basis or as
part of a package of premium services at a discounted price. Several of the
Company's systems, along with numerous other cable operators, received specific
inquiries from the Federal Communications Commission (the "FCC") regarding their
implementation of this method of offering cable services. A proposed resolution
of the inquiry which is based, in part, upon pending basic and cable programming
service tier rate complaints in several Los Angeles area cable systems served by
the Company, requires the Company to adjust its rates for its basic and cable
programming services tiers and make subscriber refunds.



                                       28

<PAGE>
<PAGE>

During July and August 1994, further adjustments to the Company's rates were
made in certain of the Company's cable television systems pursuant to the FCC's
second revision to its rate formula. As a result, the Company experienced a
further decrease in the regulated portion of its services for the fiscal year
ended May 31, 1995. Under the regulatory price cap mechanism established by the
FCC, a portion of the decline was offset, in part, by allowable rate increases
during fiscal 1995. Such increases relate to adjustments for the annual change
in the Gross National Producers Price Index as well as certain increases in
programming fees, the addition of new channel services and so called "external
costs" as delineated in the rules. The bulk of such price adjustments became
effective during the first quarter of fiscal years 1996, 1997 and 1998.

On February 8, 1996, "The Telecommunications Act of 1996" (the "Act") was
enacted into law. The new law alters federal, state and local laws and
regulations regarding telecommunications providers and services, including the
cable television industry. The Act deregulates (except for basic service) cable
service rates over a three year period. Implementing regulations of the Act are
currently being promulgated. The effect that the Act will have on the Company's
cable television business cannot be determined at this time.

FISCAL YEARS ENDED MAY 31, 1997 AND MAY 31, 1996

The following discussion describes the Company's three business segments: cable
television, wireless telephone investment and Australian investments.

Cable Television

Consolidated revenues for the year ended May 31, 1997 increased by $148,216 or
29.9%, over the year ended May 31, 1996. Revenue from cable television
operations increased by $90,713 or 24.6%, over the corresponding year ended May
31, 1996 as a result of regulated price increases, increases in the number of
cable television subscribers and acquisitions. Acquisitions of cable television
systems accounted for $54,846 of the increase or 60.5%. Average primary basic
cable television subscribers ("Basic Subscribers") for the year ended May 31,
1997 were approximately 1,255,000 as compared to approximately 1,088,000 Basic
Subscribers for the year ended May 31, 1996, an increase of 15.3%. The impact of
acquisitions of cable television systems accounted for 95.7% of the increase.
Average monthly revenue per Basic Subscriber, including programmers' share of
such revenue, was approximately $38.57 during the year ended May 31, 1997, as
compared to approximately $34.84 during the year ended May 31, 1996, an increase
of 10.7%.

Cost of services of the Company's cable television operations increased by
$18,516 or 22.5%, while selling, general and administrative expenses of the
Company's cable television operations increased by $25,639 or 30.0%. The
Company's recent cable television acquisitions accounted for $11,849 or 64.0% of
the $18,516 increase in cost of services and $14,948 or 58.3% of the $25,639
increase in selling, general and administrative expense. As a result, before
giving effect to increased costs associated with acquisitions, costs of services
and selling, general and administrative expenses increased by $6,667 and
$10,691, respectively, during the year ended May 31, 1997. The principal reason
for the increase in these costs was the increase in the variable component of
the Company's cost structure which increases in relation to increased revenue.
The Company anticipates continued increases in the cost of services and selling,
general and administrative expenses as the growth of its businesses continues.



                                       29

<PAGE>
<PAGE>

Consolidated depreciation and amortization (domestic) for the year ended May 31,
1997 increased by $47,842 or 24.5% over the year ended May 31, 1996. The cable
television operations accounted for $35,111 of which $30,069 was attributable to
recent cable television acquisitions. Consolidated operating income for the year
ended May 31, 1997 was $5,771 or $10,477 below the operating income for the year
ended May 31, 1996, principally as a result of the Company's $40,000 write-down
of Australian assets. (See Liquidity and Capital Resources - Australian Pay
Television). The wireless telephone operations contributed $26,057 of operating
losses. The Company's operating income related to its cable television
operations was $87,652, an increase of $11,447 or 15.0% over the year ended May
31, 1996.

Consolidated other income represents primarily the Company's proportionate share
of the net income or loss of minority investment interests accounted for by the
Company using the equity method of accounting. The Company has recorded $4,258
and $7,126 of expense for the years ended May 31, 1997 and May 31, 1996,
respectively for its minority investments in Australia. These expenses were
offset by $15,180 and $10,743 of income for the years ended May 31, 1997 and May
31, 1996, respectively, related to minority wireless telephone investments held
by Centennial. Additionally, the Company recognized gains on the sale of assets
of $3,819, and $8,310 during the years ended May 31, 1997 and 1996,
respectively.

Consolidated interest expense for year ended May 31, 1997 increased by $28,528
or 16.6% as compared with the year ended May 31, 1996. Each of the Company's
three business segments contributed to the increase: cable television $14,700,
wireless telephone investment $5,493 and Australian investments $8,335. Interest
expense of the Company's cable segment rose as a result of higher average debt
levels. For the year ended May 31, 1997, the average debt outstanding was
approximately $1,727,000 or $323,000 above the average outstanding debt balance
of $1,404,000 during the year ended May 31, 1996. The increase in expense was
partially offset by a decline in interest rates. The Company's weighted average
interest rate excluding borrowings of Centennial, the Australian investments and
the Company's 50% owned joint ventures was approximately 9.2% in the year ended
May 31, 1997 as compared to approximately 10.2% in the year ended May 31, 1996.
In addition, the Company increased the proportion of floating rate bank debt in
its capital structure. Short-term interest rates of the Company's variable rate
bank credit agreement increased from 6.7% at May 31, 1996 to 7.3% at May 31,
1997.

After losses attributable to minority interests in subsidiaries for the year
ended May 31, 1997, a consolidated pretax loss, before extraordinary item of
$164,951 was incurred, as compared to a pretax loss of $136,443 for the year
ended May 31, 1996. The income tax benefit of $30,658 for the year ended May 31,
1997 represents a reduction of the deferred tax liability by the tax effect of
the current period losses of the Company, offset by current state and local
taxes for the period. These tax benefits are non-cash in nature. The Company
anticipates, beginning in fiscal 1998, that it will no longer record tax
benefits resulting from operating losses. As a result, the Company expects that
net losses and loss per share will increase.

The consolidated net loss for the year ended May 31, 1997 of $141,875 represents
an increase of $39,758 from the loss of $102,117 for the year ended May 31,
1996, principally as a result of the Company's $40,000 write-down of Australian
assets. (See Liquidity and Capital Resources - Australian Investment). Included
in the net loss for the fiscal year ended May 31, 1997 is an extraordinary loss
(net of tax benefit of $5,379) of $7,582 related to the early retirement of
debt. Such amount represents the accelerated write-off of deferred financing
costs and call premiums paid related to the Company's 11 7/8% Senior
Subordinated Debentures Due 2003 which Debentures were redeemed on April 15,
1997 (See Liquidity and Capital Resources). The Company expects net losses to
continue until such time as the cable television systems and


                                       30

<PAGE>
<PAGE>

investments in plant associated with rebuilds and extensions of its cable
television systems and expansion of Centennial's wireless telephone system
infrastructure generate sufficient earnings to offset the associated costs of
acquisitions and operations.

Wireless Telephone

Centennial's revenue increase accounted for 26.2% of the total increase in the
revenue of the Company. Revenue from wireless telephone operations for the year
ended May 31, 1997 increased by $38,826 or 34.6%, over the year ended May 31,
1996. The increase in revenue was the result of growth in subscriptions to and
the resulting increased usage of wireless telephone service. Acquisitions
accounted for $4,572 or 11.8% of the increase for the year ended May 31, 1997.

Cost of services related to Centennial's wireless telephone operations, which
accounted for 27.5% of the total cost of services for the Company, during the
year ended May 31, 1997 was $38,228, an increase of $12,099 or 46.3% as compared
to the year ended May 31, 1996. The increase was due in part to a larger number
of telephone units sold, the variable costs associated with a larger revenue and
subscription base and increased wireless telephone coverage areas resulting from
the continued expansion of Centennial's network and the commencement of PCS
telephone service in Puerto Rico. Included in cost of services during the period
ended May 31, 1997 were $1,927 of costs associated with the start-up of
Centennial's Puerto Rico telecommunications business.

Selling, general and administrative expenses related to Centennial's wireless
telephone operations, representing 33.1% of the total amount for the Company,
rose to $55,132, an increase of $20,944 or 61.3% above the $34,188 recorded
during the year ended May 31, 1996. The increase resulted primarily from the
variable costs associated with a larger subscription and revenue base and an
increase in Centennial's managerial, customer service and sales staff to
accommodate the larger subscription and revenue base and the anticipated growth
of its wireless telephone business as well as the commencement of PCS telephone
service in Puerto Rico. Included in selling, general and administrative expenses
during the year ended May 31, 1997 were $5,086 of costs associated with the
start-up of Centennial's Puerto Rico telecommunications network.

The wireless telephone operations and acquisitions accounted for $12,731 or
26.6% of the increase in the Company's domestic depreciation and amortization
for the 1997 period. Centennial's wireless telephone operating loss for the year
ended May 31, 1997 of $26,057 increased by $6,948 or 36.4% from the loss of
$19,109 for the year ended May 31, 1996.

Interest expense of the Company's wireless segment increased to $33,379 for the
year ended May 31, 1997, an increase of $5,493 or 20.0% from the year ended May
31, 1996. After giving effect to interest capitalized during the pre-operating
stage of Centennial's PCS business ($2,752 during fiscal 1997 and $5,200 during
fiscal 1996), gross interest costs of the wireless segment for the year ended
May 31, 1997 and May 31, 1996 were $36,131 and $33,086, respectively. The
increase is the result of additional borrowings for acquisitions, working
capital and debt service. Centennial's average debt outstanding during the year
ended May 31, 1997 was $374,893, an increase of $24,893 as compared to the
average debt level of $350,000 during the year ended May 31, 1996. Centennial's
weighted average interest rate decreased to 9.3% for the year ended May 31, 1997
from 9.5% for the year ended May 31, 1996.



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The Company expects net losses in Centennial's wireless operations to continue
until such time as the operations of the wireless telephone systems and
expansion of the wireless telephone system infrastructure generate sufficient
earnings to offset the associated costs of acquisitions and operations.

Australian Investments

The Australian investment accounted for $18,677, or 12.6% of the total increase
in revenue of the Company. Australian operating expenses for the year ended May
31, 1997 increased by $6,495 or 27% over the year ended May 31, 1996.
Depreciation and amortization expense, the result of its initial buildout and
license acquisition was $18,511. Including a $40,000 write-down of Australian
assets, the Australian operating loss for the year ended May 31, 1997 was
$55,825.

FISCAL YEARS ENDED MAY 31, 1996 AND MAY 31, 1995

Revenue for the year ended May 31, 1996 increased by $78,587 or 18.9%, over the
year ended May 31, 1995. Revenue from cable television operations increased by
$37,238 or 11.2%, over the corresponding year ended May 31, 1995 as a result of
increases in the number of cable television subscriptions and acquisitions.
Acquisitions of cable television systems accounted for $17,868 of the increase
or 48.0%. The increase was partially offset by a decline in revenues related to
the implementation of rate regulations established by the FCC pursuant to the
1992 Cable Act. Average primary basic cable television subscribers ("Basic
Subscribers") for the twelve months ended May 31, 1996, were approximately
1,088,000 as compared to approximately 995,000 during the twelve-month period
ended May 31, 1995, an increase of 9.3%. The impact of acquisitions of cable
television systems accounted for 41.5% of the increase. Average monthly revenue
per Basic Subscriber, including programmer's share of such revenue, was
approximately $34.84 during the twelve months ended May 31, 1996, as compared to
approximately $33.11 during the comparable prior twelve month period, an
increase of 5.2%. The Australian operations accounted for $14,571, or 18.5% of
the total increase in revenue.

Revenue from wireless telephone operations for the year ended May 31, 1996
increased by $26,778 or 31.4%, over the year ended May 31, 1995. The increase in
revenue was the result of growth in subscriptions to and the resulting increased
usage of wireless telephone service. Acquisitions accounted for increased
revenue of $21,279 for fiscal 1996, which increase more than offset a decline in
revenue from cellular systems which were sold or exchanged of $12,756.

Costs and expenses excluding depreciation and amortization and the Australian
operations for the year ended May 31, 1996 increased by $14,128 or 6.6% over the
year ended May 31, 1995. Cost of services for the year ended May 31, 1996
increased by $4,730 or 4.6% over the corresponding period in the prior year,
while selling, general and administrative expense increased by $9,398 or 8.5%.

Cost of services of the Company's cable television operations increased by $753
or 0.9%, while selling, general and administrative expenses of the Company's
cable television operations for the year ended May 31, 1996 increased to
$85,591, an increase of $1,265 or 1.5% over the $84,326 in the year ended May
31, 1995. However, the Company's recent cable television acquisitions accounted
for $3,734 or 495% of the $753 increase in cost of services and $2,794 or 220%
of the $1,265 increase in selling, general and administrative expense. As a
result, before giving effect to increased costs associated with acquisitions,
costs of services and selling, general and administrative expenses declined by
$2,981 and $1,529,



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<PAGE>

respectively during the year ended May 31, 1996. The principal reason for the
decline in these costs was the Company's implementation of a planned
restructuring of its operations.

Cost of services related to the wireless telephone operations during the year
ended May 31, 1996 was $26,129, an increase of $3,977 or 18.0% as compared to
the year ended May 31, 1995. The reason for the increase was a larger number of
telephone units sold, the variable costs associated with a larger revenue and
subscription base as well as increased cellular coverage areas resulting from
the continued expansion of Centennial's network. Included in cost of services
during fiscal year ended 1996 were $195 of pre-operating costs associated with
the start-up of Centennial's Puerto Rico telecommunications business.

Selling, general and administrative expenses related to the wireless telephone
operations rose to $34,188, an increase of $8,133 or 31% above the $26,055
recorded during the year ended May 31, 1995. The increase resulted primarily
from the variable costs associated with a larger subscription and revenue base
and anticipated growth of its wireless telephone business. Included in selling,
general and administrative expenses during fiscal year ended 1996 were $218 of
pre-operating costs associated with the start-up of Centennial's Puerto Rico
telecommunications business.

The Company anticipates continued increases in the cost of services and selling,
general and administrative expenses as the growth of its wireless telephone
business continues. In addition, the Company expects that the start-up and
development of its recently acquired wireless telephone markets will contribute
to an increase in these costs and expenses.

Depreciation and amortization (domestic) for the year ended May 31, 1996
increased by $23,494 or 13.7% over the year ended May 31, 1995. The wireless
telephone operations and acquisitions accounted for $5,347 of this increase, the
cable television operations accounted for $18,147.

The  Australian  operations  incurred  expenses of $45,419,  including  $21,352
of depreciation and amortization.

Operating income for the year ended May 31, 1996 decreased by $10,454 or 39.2%
below the year ended May 31, 1995, principally as a result of a $10,000
write-down of Australian assets. The Centennial operating loss for the year
ended May 31, 1996 of $19,109 decreased by $9,321 or 33% from the loss of
$28,430 for the year ended May 31, 1995. The Australian operating loss for the
year ended May 31, 1996 was $40,848. The Company's operating income before the
inclusion of its cellular and Australian operations was $76,205 an increase of
$21,073 or 38.2% over the year ended May 31, 1995.

Other income represents the Company's proportionate share of the net income or
loss of minority investment interests accounted for by the Company using the
equity method of accounting. The Company has recorded $7,126 and $2,400 of
expense for fiscal years ended May 31, 1996 and 1995 for its minority
investments in Australia, offset by $10,473, $4,670 and $3,645 of income for
fiscal years ended May 31, 1996, 1995 and 1994 related to minority investments
of the Company's wireless telephone operations. Included in other income for the
fiscal year ended May 31, 1996, was the recognition of approximately $8,310 of
gain on the sale of assets held by Centennial.

Interest expense for the year ended May 31, 1996 increased by $33,214 or 23.9%
as compared with the year ended May 31, 1995 reflecting higher average debt
levels and secondarily, higher interest rates in effect



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<PAGE>

during the year ended May 31, 1996. In addition, the Company incurred a non cash
charge of $2,647 reflecting the write off of debt issuance costs associated with
a bank credit agreement refinanced during the year ended May 31, 1996. For the
year ended May 31, 1996, the average debt outstanding was approximately
$1,754,000 or $310,000 above the average outstanding debt balance of $1,444,000
during the year ended May 31, 1995. The wireless telephone operations accounted
for $94,247 or 30.4% of the increase. The Company's weighted average interest
rate excluding borrowings of Centennial and the Company's 50% owned joint
ventures was approximately 10.2% in the year ended May 31, 1996 as compared to
approximately 9.8% in the year ended May 31, 1995. The increase in such rates is
primarily the result of a one time non cash charge of $2,647 of deferred debt
issuance costs as a result of the Company's refinancing of a bank credit
facility (see Financing and Capital Formation - The Company). Short-term
interest rates of the Company's variable rate bank credit agreements declined
from 6.8% at May 31, 1995 to 6.7% at May 31, 1996. Additionally, as described
below interest expense related to the Company's interest rate hedge agreements
declined during the year ended May 31, 1996. During the year ended May 31, 1996,
the Company incurred interest expense of $741 in respect of the interest rate
hedge transactions compared to interest expense of $2,794 in respect of the
interest rate hedge transactions in the year ended May 31, 1995. All of the
Company's obligations under interest rate hedge agreements expired during the
year ended May 31, 1996. See "Liquidity and Capital Resources". Centennial's
weighted average interest rate increased to 9.5% for the year ended May 31, 1996
from 9.2% for the year ended May 31, 1995. Centennial capitalized $5,200 of
interest related to its ownership of a PCS license (see Centennial
Acquisitions). Interest expense of the Company's Australian operations was
$1,299 during the fiscal year ended May 31, 1996.

After losses attributable to minority interests in subsidiaries for the year
ended May 31, 1996, a pretax loss of $136,443 was incurred, as compared to a
pretax loss of $90,686 for the year ended May 31, 1995. The income tax benefit
of $34,326 for the year ended May 31, 1996 represents an adjustment to the
deferred tax liability of the Company, offset by current state and local taxes
for the period. These tax benefits are non-cash in nature and are attributable
to the Company's acquisitions and results of operations, calculated in
accordance with the Financial Accounting Standards Board Statement No. 109 for
the years ended May 31, 1996 and May 31, 1995.

The net loss for the year ended May 31, 1996 of $102,117 represents an increase
of $19,492 or 23.6% over the loss for the year ended May 31, 1995. The Company
expects net losses to continue until such time as the operations of the wireless
telephone systems, Australian operations, cable television systems and
investments in plant associated with rebuilds and extensions of its cable
television systems and expansion of the wireless telephone system infrastructure
generate sufficient earnings to offset the associated costs of acquisitions and
operations described above.

LIQUIDITY AND CAPITAL RESOURCES (dollar amounts in thousands except share data)

The Company has grown through acquisitions as well as upgrading, extending and
rebuilding its existing cable television systems. Since both the Company's
business and related investments are capital intensive, the Company and
Centennial must continue to seek various sources of financing to meet their
respective needs, including growth in internally generated cash, bank financing,
joint ventures and partnerships and public and private placements of debt and
equity securities. Certain subsidiaries of the Company (other than Centennial)
have entered into credit agreements with various bank groups and private lending
institutions providing for an aggregate of approximately $1,055,000 of potential
borrowing capacity for cable



                                       34

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<PAGE>

operations. Approximately $642,500 of that aggregate availability has been
drawn. Subsidiaries of Centennial have entered into agreements which furnish
approximately $130,000 of potential borrowing capacity for wireless telephone
operations at May 31, 1997 which indebtedness is non-recourse to the Company. In
addition, Centennial had $45,000 of undrawn lines of credit available at May 31,
1997.

The Company's internally-generated cash, along with third party financing,
primarily bank borrowings and the issuance of debt securities to the public,
have enabled it to fund its working capital requirements, capital expenditures
for property, plant and equipment, acquisitions, investments and debt service.
The Company has funded the principal obligations on its long-term borrowings by
refinancing the principal with expanded bank lines of credit, through the
issuance of debt securities in the public market and through private
institutions as well as internally generated cash flow. Although to date the
Company has been able to obtain financing on satisfactory terms, there can be no
assurance that this will continue to be the case in the future. Certain of the
debt instruments to which the Company and its subsidiaries are a party impose
restrictions on the incurrence of indebtedness.

During the year ended May 31, 1997, the Company made consolidated capital
expenditures of $170,767 of which 52% was made by Centennial. The Company's
future commitments for property, plant and equipment in its cable television
business consist of usual upgrades, extensions, betterments and replacements of
cable plant and equipment. As the Company completes capital projects started in
prior fiscal years, it anticipates an annualized rate of approximately $100,000
for cable television capital expenditures in fiscal 1998. Various construction
projects have been undertaken to expand the operations of certain cable
television systems into adjacent and previously unbuilt areas and to rebuild and
upgrade its existing cable system plant. The Company is currently considering
the further upgrade of its cable television distribution systems in certain of
its cable television markets to expand its capability for the delivery of video,
voice and data transmission. Should the Company undertake such an upgrade plan,
it would result in an acceleration of capital expenditures which would otherwise
be incurred in future years. The Company has not yet determined the feasibility,
timing or cost of such projects. Funds for cable television capital projects and
related equipment are currently available from internally generated cash and
other financing resources.

Centennial's wireless telephone capital projects include the addition of cell
sites for greater coverage areas, as well as enhancements to the existing
infrastructure of the wireless system. Centennial expects capital expenditures
for its domestic wireless telephone markets of $30,000 during the 1998 fiscal
year. During fiscal 1996, Centennial began construction of its PCS network in
Puerto Rico and spent approximately $48,960 during the year ended May 31, 1997.
Centennial currently estimates that the remaining cost to complete the build-out
of the infrastructure of its PCS network will be approximately $26,300 to be
expended through fiscal 1999. Funds for Centennial's capital expenditure
requirements may be provided by other bank borrowings, debt or equity issuances
or other financing resources.

For the year ended May 31, 1997, consolidated earnings were less than fixed
charges by $188,004. However, such amount reflects non-cash charges totaling
$266,628, consisting of depreciation and amortization and subsidiary preferred
stock dividends. Historically, cash generated from operating activities has
exceeded fixed charges. The Company believes that its cable television
operations will continue to generate sufficient cash to meet the debt service
obligations under the debt instruments applicable to its cable television
businesses.



                                       35

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<PAGE>

It is anticipated that in the next fiscal year, cash generated from Centennial's
wireless telephone operations will not fully cover required capital
expenditures, the debt service under its credit agreements and preferred stock
dividends. Although to date, Centennial has been able to obtain financing on
satisfactory terms, there is no assurance that this will continue to be the case
in the future. It is currently anticipated that any shortfall will be made up
either through equity issuances or additional borrowing. Based upon current
market conditions, the Company expects that cash flows from operations and funds
from currently available credit facilities will be sufficient to enable
Centennial to meet required cash commitments through the next twelve month
period.

Cash on hand was sufficient to fund the Company's expenditures for property,
plant and equipment and financing and investing activities. The Company will
continue to rely on internally generated cash as well as various financing
activities to fund these requirements.

FINANCING AND CAPITAL FORMATION - THE COMPANY

CCC-II, Inc. ("CCC-II"), a subsidiary of the Company, entered into a credit
agreement as amended August 12, 1996, that provides CCC-II a three year $350,000
unsecured revolving credit facility which converts to a five year term loan with
a syndicate of banks led by Citibank, N.A. as agent for the syndicate. The
interest rates payable on borrowings under the credit facility are based on, at
the election of CCC-II, (a) the base rate of interest announced by Citibank,
N.A. plus 0% to 0.5% per annum based upon certain conditions, or (b) the London
Interbank Offering Rate plus 0.75% to 1.375% per annum based upon certain
conditions. The credit facility restricts the incurrence of certain additional
debt by CCC-II, limits the ability of CCC-II to pay dividends to the Company and
requires that certain operating tests be met. CCC-II is in compliance with the
terms of the credit facility. At May 31, 1997, $185,000 was available for
borrowing under this facility.

CCC-I, Inc. ("CCC-I"), a subsidiary of the Company, entered into a credit
agreement as amended August 12, 1996, that provides CCC-I a three year $525,000
unsecured revolving credit facility that converts to a five year term loan with
a syndicate of banks led by Citibank, N.A. as agent for the syndicate. The
proceeds of the facility were used by the Company to repay existing indebtedness
and was used for working capital and general corporate purposes. The repayment
by the Company on August 7, 1995, of its existing indebtedness discharged all of
the Company's obligations under its then-existing $300,000 credit agreement and,
as a result, such agreement was terminated. The interest rates payable on
borrowings under the credit facility are based on, at the election of CCC-I, (a)
the base rate of interest announced by Citibank, N.A. plus 0% to 0.625% per
annum based upon certain conditions, or (b) the London Interbank Offering Rate
plus 0.75% to 1.625% per annum based upon certain conditions. The credit
facility restricts the incurrence of certain additional debt of CCC-I, limits
the ability of CCC-I to pay dividends to the Company and requires that certain
operating tests be met. CCC-I is in compliance with the terms of the credit
facility. At May 31, 1997, $201,000 was available for borrowing under this
facility.

The terms and covenants of certain of the Company's bank credit facilities
require certain of the Company's subsidiaries to enter into various interest
rate hedge agreements (the "Hedge Agreements"). During the fiscal year ended May
31, 1996, all of the Company's obligations with respect to Hedge Agreements
expired.

On January 17, 1997, the Company issued $250,000 aggregate principal amount of
8-7/8% Senior Notes due 2007 pursuant to a registration statement that was filed
with the Securities and Exchange Commission (the



                                       36

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<PAGE>

"SEC") on October 26, 1993. The primary use of proceeds was the redemption of
the Company's 11-7/8% Senior Subordinated Debenture due 2003. On March 27, 1997,
the Company gave notice of redemption of the entire principal amount outstanding
of its $204,000 11-7/8% Senior Subordinated Debentures maturing 2003. The Senior
Subordinated Debentures were redeemed on April 15, 1997 at a redemption price of
105% of the principal amount thereof. Including the 5% redemption premium, the
aggregate funds required for such redemption was $214,200. The effect of the
redemption resulted in an extraordinary loss during the fourth quarter of fiscal
1997 of approximately $12,961 reflecting the call premium and write-off of
deferred financing costs ($7,582 net of income tax benefit).

On April 4, 1997, the Company filed a registration statement with the SEC
relating to the shelf registration of an additional $500,000 of the Company's
debt securities, augmenting the remaining $2,000 available under the July 1994
registration statement. The registration became effective July 15, 1997. The
debt securities may be issued from time to time in series on terms to be
specified in one or more prospectus supplements at the time of the offering. If
so specified with respect to any particular series, the debt securities may be
convertible into shares of the Company's Class A Common Stock. As of August 18,
1997 there was $502,000 available for issuance.

On April 15, 1997, Citizens Century Cable Television Venture ("CCCTV") entered
into an agreement for the provision of a three-year revolving credit facility in
the principal amount of $200,000 with Bank of America and Societe General, which
converts into a five-year term loan. The facility is secured by the assets of
CCCTV. The loan is non-recourse to both Citizens and the Company. Borrowings
under the facility are to be repaid in semi-annual installments commencing June
30, 2000. The facility requires mandatory prepayments of principal refinancing
to the extent that the loan balance exceeds the refinancing on working capital
commitment (as defined in the facility). Borrowings under the facility bear
interest, at the option of CCCTV, at either the base rate, certificate of
deposit rate, or the Eurodollar rate, plus the applicable margin (as defined in
the facility). The principal use of proceeds will be to fund acquisitions as
well as general corporate purposes (all of which was available at May 31, 1997).
The agreement expires on March 31, 2005.

FINANCING AND CAPITAL FORMATION - CENTENNIAL

Centennial, since August 1988, has acquired 29 wireless telephone markets in the
United States that it owns and manages, some of which are considered to be in
the early development phase of operations. Centennial also owns minority equity
investment interests in certain other wireless telephone systems. Centennial
successfully bid on March 13, 1995 for one of two Metropolitan Trading Area
("MTA") licenses to provide broadband personal communications services ("PCS")
in the Commonwealth of Puerto Rico and the U.S. Virgin Islands. The Puerto Rico
Wireless Telephone System is in the start-up and construction stage.

On August 30, 1991, Citizens Cellular Company merged with and into Centennial,
and in connection with the merger, Centennial issued to Citizens Utilities
Company ("Citizens"), Convertible Redeemable Preferred Stock valued at $128,450
and Class B Common Stock representing 18.8% of the then outstanding common
equity of Centennial. In connection with an amendment to a services agreement
with the Company, Centennial issued its Second Series Convertible Redeemable
Preferred Stock valued at $5,000 to the Company. The preferred stock carried no
cash dividend requirements through August 31, 1996, but the shares accreted
liquidation preference and redemption value at the rate of 7.5% per annum,
compounded quarterly until then. The fully accreted liquidation preference and
redemption value of the Convertible



                                       37

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Redeemable Preferred Stock and the Second Series Convertible Redeemable
Preferred Stock held by Citizens and Century at August 31, 1996 was $186,287 and
$7,252, respectively. Beginning September 1, 1996, the holders of the
Convertible Redeemable Preferred Stock and the Second Series Convertible
Redeemable Preferred Stock were entitled to receive cash dividends at the rate
of 8.5% per annum. Assuming no change in the number of shares of such classes
outstanding, the annual dividend payments, commencing in 1997, to be made in
respect of the Convertible Redeemable Preferred Stock and the Second Series
Convertible Redeemable Preferred Stock will be $15,834 and $616, respectively.
Both classes of Preferred Stock are subject to mandatory redemption in fiscal
2007. Any unpaid dividends continue to accumulate without additional cost to
Centennial. On December 19, 1996, Centennial paid cash dividends to Citizens and
Century of $3,959 and $154, respectively and, during March 1997, declared a cash
dividend in the same amounts to each of Citizens and Century. Centennial will
determine from time to time, the timing, amount, and distribution (if any) of
additional preferred stock dividends of Centennial.

During fiscal 1994, Centennial filed a shelf registration statement with the SEC
for up to 8,000,000 shares of Centennial's Class A Common Stock that may be
offered from time to time in connection with acquisitions. At May 31, 1997,
4,239,231 shares were available for issuance under this registration statement.

Centennial, on April 6, 1995, filed a shelf registration statement with the SEC
for the issuance of $500,000 of Centennial's debt securities. The debt
securities may be issued from time to time in series on terms to be specified in
one or more prospectus supplements at the time of the offering. If so specified
with respect to any particular series, the debt securities may be convertible
into shares of Centennial's Class A Common Stock. At May 31, 1997, $400,000
remained available for issuance.

On September 12, 1996, as amended, Centennial entered into a $50,000 credit
facility with Citibank, N.A. (the "Amended Credit Facility"). The facility
terminates on January 31, 2001. The commitment of the lender under the Amended
Credit Facility may be increased to $90,000 at the election of the lenders. As
of July 30, 1997 the commitment was increased to $75,000. Approximately $35,000
of the Amended Credit Facility was used to fund the Benton Harbor, Michigan
cellular telephone system acquisition (see "Acquisitions, Exchanges,
Dispositions - Centennial"), and has since been repaid. The Amended Credit
Facility is available for acquisitions, working capital and general corporate
purposes. The interest rate payable on borrowings under the new credit facility
is based on, at the election of Centennial, (a) "Base Rate" plus a margin of 2%
or (b) "Eurodollar Rate" plus a margin of 3%. The Amended Credit Facility is
secured by the stock of certain of Centennial's subsidiaries not otherwise
subject to restrictions under Centennial's Senior Note Indentures. The Amended
Credit Facility restricts the incurrence of certain additional debt of
Centennial, and limits Centennial's ability to pay dividends. As of May 31, 1997
$5,000 was outstanding under the Amended Credit Facility. Centennial was in
compliance with the covenants of the Amended Credit Facility at May 31, 1997.

Centennial Puerto Rico Wireless Corporation ("CPRW"), a wholly owned subsidiary
of Centennial, which is engaged in the ownership and operation of the PCS
business in Puerto Rico, entered into a four-year $130,000 revolving credit
facility with Citibank, N.A. (the "Puerto Rico Credit Facility") which converts
into a four year term loan on April 25, 2001. The principal use of proceeds will
be to fund the buildout of the Company's PCS business in Puerto Rico. The
proceeds will also be used by CPRW for working capital and general corporate
purposes and were used to pay certain cash dividends to Centennial as permitted
by the Puerto Rico Credit Facility. The interest rate payable on borrowings
under the Puerto Rico Credit Facility are based on, at the election of CPRW, (a)
the "Base Rate", as defined, plus a margin of 1.50% or





                                       38

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<PAGE>

(b) the "Eurodollar Rate", as defined, plus a margin of 2.50%, adjusted for the
maintenance of certain specified leverage ratios, as applicable. The Puerto Rico
Credit Facility, which is non-recourse to the Company, is secured by
substantially all of the assets of CPRW and its direct and indirect subsidiaries
and requires CPRW to meet and maintain certain financial and operating
covenants, including the maintenance of certain minimum annualized cash flows
(as defined), the maintenance of certain ratios of operating cash flow to debt
service and total outstanding debt to operating cash flow and performance
requirements including minimum subscriber levels. The facility will restrict the
use of borrowing, limit the incurrence of certain additional indebtedness by
CPRW and limits CPRW's ability to declare and pay dividends to the Company and
management fees to affiliates. As of May 31, 1997, $74,000 was outstanding under
the Puerto Rico Credit Facility. Centennial was in compliance with the covenants
of the Puerto Rico Credit Facility at May 31, 1997.

In order to meet its obligations with respect to its debt and preferred stock
obligations, it is important that Centennial continue to improve operating cash
flow. In order to do so, Centennial's revenues must increase at a faster rate
than operating expenses. Increases in revenues will be dependent upon continuing
growth in the number of subscribers and maximizing revenue per subscriber.
Centennial has substantially completed the development of its managerial,
administrative and marketing functions, and is continuing the construction of
wireless systems in its existing and recently acquired markets in order to
achieve these objectives. There is no assurance that growth in subscribers or
revenue will occur. In addition, Centennial's participation in the PCS business
in Puerto Rico is expected to be capital intensive, with remaining network
buildout costs of approximately $26,300 to be expended through 1999. Further,
due to the start-up nature of the PCS business, Centennial expects the PCS
business to require additional cash investment to fund its operations over the
next several years. The PCS business is expected to be highly competitive with
the two existing wireless telephone providers as well as the other MTA PCS
license holder. There is no assurance that the PCS business will generate cash
flow or reach profitability. Even if operating cash flow does increase, it is
anticipated that cash generated from Centennial's wireless telephone operations
and PCS business will not be sufficient in the next several years to cover
interest, the preferred stock dividend requirements that commenced in the
current fiscal year, and required capital expenditures. Centennial continues to
seek various sources of external financing to meet its current and future needs,
including bank financing, joint ventures and partnerships, and public and
private placements of debt and equity securities of Centennial. Although to
date, Centennial has been able to obtain financing on satisfactory terms, there
is no assurance that this will be the case in the future.

ACQUISITIONS - CABLE TELEVISION

On March 2, 1993, a joint venture in which each of the Company and Citizens have
a 50% interest ("the Century/Citizens Joint Venture") entered into agreements to
acquire the assets of two cable television systems which serve in the aggregate
approximately 45,000 primary basic subscribers. The aggregate purchase price for
the cable television systems was $92,900, subject to adjustment. On September
30, 1994, the Century/Citizens Joint Venture completed the acquisition of one of
these cable television systems serving approximately 24,000 primary basic
subscribers. On December 1, 1995, the second acquisition serving approximately
21,000 primary basic subscribers was completed. The purchase price of
approximately $51,900 at September 30, 1994 and $41,000 at December 1, 1995 was
funded by the Company and Citizens equally.



                                       39

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<PAGE>

On May 31, 1996, the Company acquired the cable television systems serving
Anaheim, Hermosa Beach/Manhattan Beach, Fairfield and Rohnert Park/Yountville,
California for an aggregate purchase price of approximately $287,600, subject to
adjustment. Funds for this acquisition were provided by an existing bank credit
facility. At May 31, 1996, such cable television systems served an aggregate of
approximately 135,000 primary basic subscribers.

On August 16, 1996, the Company entered into agreements to acquire two cable
television systems which serve an aggregate of approximately 35,000 primary
basic subscribers, which agreements were subsequently assigned to the
Century/Citizens Joint Venture. These systems are primarily located in Yorba
Linda, Orange County and Diamond Bar, California (the "CCCTV Acquisitions").
Pursuant to the agreements, the aggregate purchase price for these systems was
approximately $69,500. The Company currently expects to fund these acquisitions
using available credit facilities. The purchase of these systems by the Company
is subject to regulatory approvals. There is no assurance that the Company will
obtain such approvals or that such acquisitions will be consumated.

ACQUISITIONS, EXCHANGES, DISPOSITIONS - CENTENNIAL

On June 30, 1995, Centennial acquired the non-wireline cellular telephone
systems serving (a) Newtown, LaPorte, Starke, Pulaski, Jasper and White,
Indiana, (b) Kosciusko, Noble, Steuben and Lagrange, Indiana, (c) Williams,
Defiance, Henry and Paulding, Ohio and (d) Copiah, Simpson, Lawrence, Jefferson
Davis, Walthall and Marion, Mississippi, representing an aggregate of
approximately 608,100 Net Pops. The above-described systems were acquired by
Centennial in exchange for Centennial's non-wireline cellular telephone systems
serving the Roanoke, Virginia MSA, the Lynchburg, Virginia MSA, North Carolina
RSA #3 and Iowa RSA #5, representing an aggregate of approximately 644,000 Net
Pops. Simultaneously with the consummation of the transaction described above,
Centennial sold its 72.2% interest in the non-wireline cellular telephone system
serving the Charlottesville, Virginia MSA, representing an aggregate of
approximately 94,700 Net Pops, for a cash purchase price of approximately
$9,914. Centennial recognized a gain of approximately $4,176 as a result of the
sale. "Net Pops" means a market's Pops multiplied by the percentage interest
that Centennial owns in an entity licensed by the FCC to construct or operate a
cellular telephone system (or to provide personal communications services) in
that market and "Pops" means the population of a market based upon the final
1990 Census Report of the Bureau of the Census, United States Department of
Commerce.

On October 31, 1995, Centennial acquired (i) a 94.3% interest in the
non-wireline cellular telephone system serving the Lafayette, Louisiana MSA,
representing approximately 205,700 Net Pops, in exchange for Centennial's
non-wireline cellular telephone system serving the Jonesboro, Arkansas RSA
(comprising approximately 205,000 Net Pops), the license rights and assets
located in and covering Desoto and Red River Parishes of Louisiana 3 RSA
(comprising approximately 34,700 Net Pops), the license rights and assets
located in and covering a section of Morehouse Parish of Louisiana 2 RSA
(comprising approximately 24,100 Net Pops) and a cash payment by Centennial of
approximately $5,580, subject to adjustment, and (ii) an additional 14.3%
minority interest in the Elkhart, Indiana RSA, a market in which Centennial now
has a 91.4% interest, and an additional 12.7% equity investment interest in the
Lake Charles, Louisiana MSA, a market in which Centennial now has a 25.1%
interest, for a cash payment of approximately $2,951.



                                       40

<PAGE>
<PAGE>

In summary, during fiscal 1996, Centennial acquired 813,800 Net Pops, additional
minority interests in existing Centennial markets and $1,383, in cash (net), in
exchange for 1,002,500 Net Pops previously owned by Centennial.

On September 12, 1996, Centennial acquired for approximately $35,000 in cash,
100% of the ownership interests in the partnership owning the non-wireline
cellular telephone system serving the Benton Harbor, Michigan MSA. The Benton
Harbor market represents approximately 161,400 Net Pops.

Centennial has determined to pursue a strategy to sell or otherwise dispose of
substantially all of its minority interests in cellular telephone systems
representing approximately 1,100,000 Net Pops. Centennial has not yet made a
final determination as to the estimated sale proceeds or timing of such
disposition.

CENTENNIAL PERSONAL COMMUNICATIONS SERVICES ("PCS")

Centennial was the successful bidder for one of two MTA licenses to provide
broadband personal communications services (PCS) in the Commonwealth of Puerto
Rico and the U.S. Virgin Islands. The licensed area represents approximately
3,623,000 Net Pops. The amount of the final bid submitted and paid by Centennial
was $54,672. Approximately, $15,500 of capital expenditures were incurred during
fiscal 1996 and approximately $48,960 during the year ended May 31, 1997.
Centennial's participation in the PCS business is expected to be capital
intensive, requiring additional network buildout costs of approximately $26,300
to be expended through 1999. In addition, due to the start-up nature of the PCS
business, Centennial expects the PCS business to require additional cash
investment to fund its operations over the next several years. The PCS business
is expected to be highly competitive with the two existing wireless telephone
providers as well as the other MTA PCS license holder. At May 31, 1997,
Centennial had approximately 16,900 PCS customers. There is no assurance that
the PCS business will generate cash flow or reach profitability. Centennial is
exploring various sources of external financing including but not limited to
bank financing, joint ventures, partnerships and placement of debt and equity
securities of Centennial. Centennial used a portion of the net proceeds from the
sale of the 10 1/8% Notes to pay the balance of the purchase price for the
license.

Centennial also plans to participate in the intra-island and interstate
telecommunications market in Puerto Rico as a service provider pursuant to FCC
requirements for interstate service and pursuant to an authorization issued to
Centennial in December 1994, as amended in July 1996, by the Public Service
Commission of the Commonwealth of Puerto Rico for intra-island service.

INVESTMENTS

Australian Pay Television

Since fiscal 1994, the Company has invested, through a wholly-owned subsidiary,
approximately $148,000 in the Australian pay television industry, including
approximately $126,000 in ECT. Since the fourth fiscal quarter of 1996, the
Company has written down $50,000 of this investment. The Company has determined
to pursue a strategy to sell its investments in its Australian operations and
has retained an investment banker to assist in the separate sale of ECT and XYZ.
It has also determined to make no further investments in ECT. Once the Company
has developed its formal plan for disposition, including the means to complete



                                       41

<PAGE>
<PAGE>

that plan and the period expected to be required for completion of the
disposition, the Company anticipates accounting for its Australian operations as
discontinued operations. 

The Company is currently unable to  predict  the  ultimate
resolution of these matters. At May 31, 1997, the remaining net book value of
its investments in the various aspects of the Australian pay television
industry, after giving effect to the aforementioned write-down of Australian
assets, aggregated approximately $24,000. The Company will continue to assess
the impact, if any, of the above noted matters on the carrying value of its
investments in the Australian pay television businesses.

FOREIGN CURRENCY EXCHANGE RATE RISKS: HEDGING

The Company's monetary assets and liabilities are subject to foreign currency
exchange risk as certain equipment purchases and payments for certain operating
expenses, such as programming expenses, are denominated in currencies other than
their own functional currency. In addition, certain of the Company's
subsidiaries have notes payable and notes receivable which are denominated in a
currency other than their own functional currency or intercompany loans payable
linked to the U.S. dollar.

In general, the Company does not execute hedge transactions to reduce its
exposure to foreign currency exchange rate risks. Accordingly, the Company may
experience economic loss and a negative impact on earnings with respect to its
holdings solely as a result of foreign currency exchange rate fluctuations,
which include foreign currency devaluations against the dollar. The Company may
also experience economic loss and a negative impact on earnings related to these
monetary assets and liabilities. In general, exchange rate risk to the Company's
commitments for equipment purchases and operating expenses is generally limited
due to the insignificance of the related monetary asset and liability balances;
however, exchange rate risk to the Company of these notes payable and notes
receivable and debt linked to the U.S. dollar have and will continue to impact
its reported earnings.

Australia generally does not restrict the removal or conversion of local or
foreign currency; however, there is no assurance this position will continue.

STOCK REPURCHASE

In October 1992, the Company announced that its Board of Directors authorized
the repurchase, from time to time, of up to 2,000,000 shares of its Class A
Common Stock, depending on prevailing market conditions. The Company has
purchased 907,500 shares at a total cost of $4,650 as of August 5, 1997.

Subsequent to May 31, 1997, the Company announced that its Board of Directors
authorized the repurchase in the open market and in privately negotiated
transactions, from time to time, of up to an additional 5,000,000 shares of its
Class A Common Stock, depending on prevailing market conditions.

On December 21, 1994, Centennial announced that its Board of Directors
authorized the repurchase, from time to time, of up to 1,000,000 shares of
Centennial's Class A Common Stock, depending on prevailing market conditions.
Centennial has purchased 244,000 shares at a total cost of $3,902 as of August
5, 1997.

Subsequent to May 31, 1997, Centennial announced that its Board of Directors
authorized the repurchase in the open market and in privately negotiated
transactions of up to an additional 3,000,000 shares of Centennial's Class A
Common Stock, depending on prevailing market conditions.

                                       42

<PAGE>
<PAGE>

        CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
             OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
      (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SUBSCRIBER, POP AND SHARE DATA)

        This report contains or incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Where any such forward-looking statement includes a statement of the
assumptions or bases underlying such forward-looking statement, the Company
cautions that assumed facts or bases almost always vary from the actual results,
and the differences between assumed facts or bases and actual results can be
material, depending upon the circumstances. Where, in any forward-looking
statement, the Company or its management expresses an expectation or belief as
to future results, there can be no assurance that the statement of expectation
or belief will result or be achieved or accomplished. The words "believe",
"expect", "estimate", "anticipate", "project" and similar expressions may
identify forward-looking statements.

        Taking into account the foregoing, the following are identified as
important factors that could cause actual results to differ materially from
those expressed in any forward-looking statement made by, or on behalf of, the
Company:

NET LOSSES; STOCKHOLDERS' DEFICIENCY

        The Company has reported net losses of $141,875, $102,117 and $82,625
for the fiscal years ended May 31, 1997, 1996 and 1995, respectively. The
Company expects net losses to continue for the foreseeable future, at least
until such time as the operations of its cable television systems and cellular
telephone systems can generate sufficient earnings to offset the charges,
including depreciation and amortization and interest expense, incurred in
connection with such operations and its investments in plants associated with
rebuilds and extensions of its cable television systems and expansion of the
cellular telephone system infrastructure.

        Reflecting net losses in prior periods, the common stockholders'
deficiency as stated on the Company's consolidated balance sheet at May 31, 1997
was $598,643. The Company's assets, including its cable television franchises
and cellular telephone and PCS licenses, are recorded on its balance sheet at
historical cost. The Company believes that the current fair value of such assets
is significantly in excess of their historical cost.

LEVERAGE; CAPITAL REQUIREMENTS

        The Company has met and believes, based on current market conditions,
that it will continue to meet its cash obligations with internally generated
cash from operations, along with third party financing, primarily bank
borrowings and the issuance of debt securities to the public, and anticipates
that its cable television operations will continue to meet the debt service
obligations under debt instruments applicable to the cable television
operations. Principal payments are due under the Company's cable operations and
Centennial's debt instruments beginning in the fiscal year ended May 31, 2001.
The Company will need to refinance certain such obligations on or before such
time and believes, based on current market conditions, that it will be able to
do so. However, there can be



                                       43

<PAGE>
<PAGE>

no assurance that the Company will be successful in any such refinancing or that
the terms of any such financing will be favorable to the Company. The Indentures
for the Company's outstanding issues of publicly-held debt (the "Indentures")
impose certain restrictions on the incurrence of additional indebtedness. See "
--Restrictive Covenants; Consequences of Default."

        For the year ended May 31, 1997, earnings were less than fixed charges
by $188,004. Such amount reflects non-cash charges totaling $266,628, consisting
of depreciation and amortization and subsidiary preferred stock dividends.

HIGHLY COMPETITIVE INDUSTRY

        The Company's ability to maintain or increase its offering of cable
television services and wireless telephone and other communications services can
be subject to the changes in consumer demand, price competition, and the cost
and supply of hardware, software and other technology required to provide such
services. Future profitability also may be affected by the Company's ability to
compete with other cable television services and communications service
enterprises which may be larger, offer more services, and possess greater
resources.

        Cable television systems generally compete for viewer attention with the
direct reception of broadcast television signals by the viewer's own antenna.
The extent of such competition is dependent upon the number and quality of
signals available and the alternative services offered by the cable system. A
cable system also competes to varying degrees with other communications and
entertainment media, including movies, theater and VCRs, and other leisure time
activities. The extent to which a cable communications system is competitive
demands, in part, upon the cable system's ability to provide, at a reasonable
price to consumers, a greater variety of programming and other communications
services than are available off-air or through other alternative delivery
sources (see Item 1. "Business - Regulation and Legislation") and upon superior
technical performance and customer service. Additionally, because the Company's
systems are operated under non-exclusive franchises, other applicants may obtain
franchises in areas where the Company currently has franchises.

HIGHLY REGULATED INDUSTRY

        The 1996 Act alters federal, state and local laws and regulations
regarding telecommunications providers and services, including the cable
television industry. The 1996 Act deregulates (except for basic service) cable
service rates over a three year period. Implementing regulations of the 1996 Act
are currently being written. The effect that the 1996 Act will have on the
Company's cable television business cannot be determined at this time. See Item
1. "Business - Regulation and Legislation - Cable Television."

        Additionally, the licensing, ownership, construction, operation and sale
of controlling interests in wireless telephone systems are regulated by the FCC.
Certain aspects of wireless telephone system ownership, construction, operation
(including, but not limited to, rates and the resale of wireless service) and
sale may be subject to public utility or other state and municipal regulation in
the states in



                                       44

<PAGE>
<PAGE>

which service is provided. Changes in the regulation of wireless telephone
system operators or their activities (such as increased price regulation by
state authorities or a decision by the FCC to permit more than two licensees in
each service area) could have a material adverse effect on Centennial's
operations.

RESTRICTIVE COVENANTS; CONSEQUENCES OF DEFAULT

        The Credit Agreements limit the ability of certain subsidiaries of the
Company to incur additional indebtedness, including intercompany indebtedness,
or liens, to pay dividends to the Company and require that certain operating and
financial tests be met, including the maintenance of the ratio of earnings
before interest, depreciation and taxes (as defined in the Credit Agreements,
"EBIDT") to debt service for the Total Debt (as defined therein) of such
subsidiaries, the ratio of Total Debt to EBIDT and the ratio of EBIDT to
interest expense for the Total Debt of such subsidiaries at certain prescribed
levels. The Note Agreements impose similar restrictions and requirements. The
Indentures also contain various covenants including, but not limited to, the
following: (i) restrictions on mergers, sales and consolidations, (ii)
restrictions on dividends, redemptions or repurchase of the Company's capital
stock or the capital stock of any of its affiliates, (iii) limitations on
transactions with, or investments in, affiliates, (iv) restrictions on the
ability to make loans to, or act as guarantor for, certain of its subsidiaries
and affiliates, which presently consist of those subsidiaries and affiliates
engaged in the wireless telephone and related businesses, and (v) the
maintenance of various financial ratios. There can be no assurance that the
assets of the Company would be sufficient to repay all such senior debt and any
Senior Subordinated Debt Securities and Subordinated Debt Securities then
outstanding.

        Management believes that the Company is not presently at risk of
noncompliance with any of the covenants described above. However, there can be
no assurance that this will continue to be the case.

CONTROL BY CERTAIN STOCKHOLDERS

        The ownership interest in the Company of Leonard Tow and certain trusts
for the benefit of members of his family (the "Tow Trusts"), constituting
approximately 93% of the combined voting power of both the Class A Common Stock
and the Class B Common Stock of the Company as of August 13, 1997, presently
gives them the power to elect all but one member of the Board of Directors of
the Company and to control the vote on all other matters submitted to a vote of
the Company's stockholders.

        Under certain of the Credit Agreements, an event of default occurs if
Leonard Tow and/or members of his immediate family or the Tow Trusts cease to
own, in the aggregate, stock of the Company having at least a majority of the
combined voting power of both classes of Common Stock of the Company.


                                       45

<PAGE>
<PAGE>

RECOVERY OF AUSTRALIAN INVESTMENT

        At May 31, 1997, the remaining net book value of the Company's
Australian investments was approximately $24 million. With respect to such net
book value on its books, the Company is currently evaluating the current and
potential future operating cash flows of ECT and its equity interest in an
Australian programming venture. Further, the Company is in discussion with its
investment advisors with respect to a strategy to sell its investments in its
Australian operations. The Company currently believes that the remaining net
book value of its Australian investments is realizable, but there can be no
assurance as to the timing or amount of any receipts. See Item 1. "Business --
Australian Pay Television."

OPERATING HAZARDS AND UNINSURED RISKS

        While the Company maintains insurance against certain of the risks
associated with its cable television and wireless communications businesses, the
occurrence of a significant event that is not fully insured against could have a
material adverse affect on the Company.

REFINANCING AND INTEREST RATE EXPOSURE RISKS

        The business and operating results of the Company can be adversely
affected by factors such as the availability or cost of capital, changes in
interest rates, changes in tax rates due to new tax laws, market perceptions of
the cable television or wireless communications businesses of the Company, or
security ratings.

POTENTIAL FOR CHANGES IN ACCOUNTING STANDARDS

        Authoritative generally accepted accounting principle or policy changes
from such standard setting bodies as the Financial Accounting Standards Board,
and the SEC may affect the Company's results of operations or financial
position.


                                       46

<PAGE>
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The financial statements and supplementary financial information that
are required to be included pursuant to this Item 8 are listed in Item 14 under
the caption "1. Index of Financial Statements" in this Annual Report on Form
10-K, together with the respective pages in this Annual Report on Form 10-K
where such information is located. The financial statements and supplementary
financial information specifically referenced in such list are incorporated in
this Item 8 by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE.

        During the fiscal year ended May 31, 1997, the Company was not involved
in any disagreement with its independent certified public accountants on
accounting principles or practices or on financial disclosure.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

        The information with respect to the directors of the Company required to
be included pursuant to this Item 10 will be included under the caption
"Election of Directors" in the Company's Proxy Statement relating to the 1997
Annual Meeting of Shareholders (the "Proxy Statement"), to be filed with the
Securities and Exchange Commission (the "Commission") pursuant to Rule 14a-6
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
is incorporated in this Item 10 by reference. The information with respect to
the executive officers of the Company required to be included pursuant to this
Item 10 is included under the caption "Executive Officers of the Company" in
Part I of this Annual Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION.

        The information with respect to executive compensation required to be
included pursuant to this Item 11 will be included under the caption "Executive
Compensation and Other Information" in the Proxy Statement and is incorporated
in this Item 11 by reference.


                                       47

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<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT.

        The information with respect to the security ownership of (1) beneficial
owners of more than 5% of the Class A Common Stock, (2) the directors or
nominees for director of the Company, (3) each of the top five executive
officers and (4) all directors and officers of the Company as a group that is
required to be included pursuant to this Item 12 will be included under the
captions "Principal Shareholders," "Election of Directors" and "Executive
Compensation and Other Information - Beneficial Ownership by Management" in the
Proxy Statement and is incorporated in this Item 12 by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        The information with respect to any reportable transaction, business
relationship or indebtedness between the Company and the beneficial owners of
more than 5% of the Class A Common Stock, the directors or nominees for director
of the Company, the executive officers of the Company or the members of the
immediate families of such individuals that is required to be included pursuant
to this Item 13 will be included under the caption "Executive Compensation and
Other Information - Certain Relationships and Related Transactions" in the Proxy
Statement and is incorporated in this Item 13 by reference.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
         FORM 8-K.

        (a) The following documents are filed as part of this Annual Report on
Form 10-K:

        1.  INDEX OF FINANCIAL STATEMENTS

        The following financial statements are included at the indicated page in
this Annual Report on Form 10-K and incorporated in this Item 14(a)1 by
reference:

                                                                Page
                                                                ----
               Independent Auditors' Report....................  F-1
               Consolidated Balance Sheets.....................  F-2
               Consolidated Statements of Operations...........  F-4
               Consolidated Statements of Cash Flows...........  F-5
               Notes to Consolidated Financial Statements......  F-7

        2.  FINANCIAL STATEMENT SCHEDULE

        None.



                                       48

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<PAGE>

        3.  REPORTS ON FORM 8-K

        None.

        4.  EXHIBITS

             The following documents are filed as part of this Annual Report on
Form 10-K:


                                       49

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<PAGE>

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                                     EXHIBIT
------                                     -------
<S>             <C>
3.1             Restated Certificate of Incorporation of the Company (filed as
                Exhibit 6(a)(i) to the Company's Quarterly Report on Form 10-Q
                for the quarter ended February 28, 1990 and incorporated herein
                by reference and Amendment to Restated Certificate of
                Incorporation of the Company, filed as Exhibit 6(a)(i) to the
                Company's Quarterly Report on Form 10-Q for the fiscal quarter
                ended November 30, 1990 and incorporated herein by reference).

3.2             By-laws of the Company, as amended (filed as Exhibit 3(b) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1995, and incorporated herein by reference).

4.1             Equity Subscription Agreement, dated as of November 21, 1990,
                among Centennial Cellular, Century Communications Corp., a Texas
                corporation, and Century Cellular Holding Corp., a New York
                corporation (filed as Exhibit 4(o) to the Company's Annual
                Report on Form 10-K for the fiscal year ended May 31, 1992 and
                incorporated herein by reference).

4.2             Indenture, dated as of November 15, 1988, by and between the
                Company and the Bank of Montreal Trust Company, as Trustee
                (filed as Exhibit 4(l) to Amendment No. 7 to the Company's
                Registration Statement on Form S-1 (File No. 33-21394) under the
                Securities Act of 1933, as amended, (the "1988 Form S-1"); said
                1988 Form S-1 having been filed with the Commission on April 22,
                1988 and incorporated herein by reference, and said Amendment
                No. 7 to the 1988 Form S-1 having been filed with the Commission
                on November 10, 1988 and incorporated herein by reference).

4.3             Indenture, dated as of October 15, 1991, by and between the
                Company and the Bank of Montreal Trust Company, as Trustee
                (filed as Exhibit 4.2 to Amendment No. 2 to the Company's
                Registration Statement on Form S-3 (File No. 33-33787) under the
                Securities Act of 1933, as amended (the "1991 Form S-3"); said
                1991 Form S-3 having been filed with the Commission on August
                31, 1990 and incorporated herein by reference, and said
                Amendment No. 2 to the 1991 Form S-3 having been filed with the
                Commission on March 1, 1991 and incorporated herein by
                reference).

4.4             First Supplemental Indenture, dated as of October 15, 1991, by
                and between the Company and the Bank of Montreal Trust Company,
                as Trustee (filed as Exhibit 7(2) to the Company's current
                report on Form 8-K, dated October 17, 1991 and incorporated
                herein by reference).

4.5             Indenture, dated as of February 15, 1992, by and between the
                Company and the Bank of America National Trust and Savings
                Association, as Trustee (filed as Exhibit 4.3 to Amendment No. 2
                to the Company's Registration Statement on Form S-3 (File No.
                33-33787) under the Securities Act of 1933, as amended (the
                "1991 Form S-3"); said
</TABLE>


                                       50

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<PAGE>

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                                     EXHIBIT
------                                     -------
<S>             <C>
                1991 Form S-3 having been filed with the Commission on March 9,
                1990 and incorporated herein by reference, and said Amendment
                No. 2 to the 1991 Form S-3 having been filed with the Commission
                on March 1, 1991 and incorporated herein by reference).

4.6             First Supplemental Indenture, dated as of February 15, 1992, by
                and between the Company and the Bank of America National Trust
                and Savings Association, as Trustee (filed as Exhibit 4(t) to
                the Company's Annual Report on Form 10-K for the fiscal year
                ended May 31, 1992 and incorporated herein by reference).

4.7             Second Supplemental Indenture, dated as of August 15, 1992, by
                and between the Company and Bank of America National Trust and
                Savings Association, as Trustee (filed as Exhibit 4(u) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1992 and incorporated herein by reference).

4.8             Third Supplemental Indenture, dated as of April 1, 1993, by and
                between the Company and Bank of America National Trust and
                Savings Association, as Trustee (filed as Exhibit 4(v) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1993 and incorporated herein by reference).

4.9             Fourth Supplemental Indenture, dated as of March 6, 1995, by and
                between the Company and Bank of America National Trust and
                Savings Association, as Trustee (filed as Exhibit 4(w) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1995, and incorporated herein by reference).

'D'4.10         Fifth Supplemental Indenture, dated as of January 23, 1997, by
                and between the Company and First Trust of California, National
                Association, successor trustee to Bank of America National Trust
                and Savings Association, as Trustee.

       The Company hereby agrees to furnish to the Securities and Exchange
Commission, upon its request, a copy of each instrument omitted pursuant to Item
601(b)(4)(iii) of Regulation S-K.

*10.1           Amended Employment Agreement, dated as of July 1, 1991, between
                the Company and Leonard Tow (filed as Exhibit 10(a)(1) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1992 and incorporated herein by reference).

*10.2           Agreement, dated July 30, 1992, between the Company and the
                Leonard and Claire Tow Life Insurance Trust (filed as Exhibit
                10(a)(2) to the Company's Annual Report on Form 10-K for the
                fiscal year ended May 31, 1992 and incorporated herein by
                reference).

*10.3           Employment Agreement, dated as of January 1, 1995, between the
                Company and
</TABLE>



                                       51

<PAGE>
<PAGE>

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                                     EXHIBIT
------                                     -------
<S>             <C>
                Daniel E. Gold (filed as Exhibit 10(a)(7) to the Company's
                Annual Report on Form 10-K for the fiscal year ended May 31,
                1996 and incorporated herein by reference).

'D'*10.4        Employment Agreement, dated as of January 1, 1997, between the
                Company and Scott N. Schneider.

'D'*10.5        Employment Agreement, dated as of January 1, 1997, between the
                Company and Michael G. Harris.

'D'*10.6        Employment Agreement, dated as of January 1, 1997, between the
                Company and Frank Tow.

'D'*10.7        Employment Agreement, dated as of January 1, 1997, between the
                Company and Clifford A. Bail.

10.8            Principal Stockholders' Agreement, dated as of December 7, 1985,
                between Sentry Insurance a Mutual Company ("Sentry"), the
                Company, Leonard Tow individually and as Trustee, and Claire Tow
                as Trustee (filed as Exhibit 10(a) to the Company's Registration
                Statement on Form S-1 (No. 33-2025) under the Securities Act of
                1933, as amended, filed with the Commission on December 9, 1985
                (the "1986 Form S-1") and incorporated herein by reference).

10.9            Amendment to Principal Stockholders' Agreement, dated August 31,
                1987 (filed as an Exhibit to the Company's Current Report on
                Form 8-K dated September 11, 1987 and incorporated herein by
                reference).

10.10           Lease, dated July 15, 1987, between Locust Avenue Associates and
                Century-Texas (filed as Exhibit 10(h) to the 1988 Form S-1 and
                incorporated herein by reference).

'D'10.11        Agreement for lease dated as of January 1, 1997 by and between
                Locust Avenue Associates Limited Partnership and Century Texas.

10.12           Third Agreement of Amendment to the Amended and Restated Joint
                Venture Agreement, dated June 18, 1987, among American
                Television and Communications Corporation, Daniels & Associates,
                Inc., Tele-Communications, Inc., Comcast Corporation and Century
                Southwest Cable Television, Inc. (filed as Exhibit 10(m) to the
                1988 Form S-1 and incorporated herein by reference).

10.13           Colorado Springs Joint Sharing and Buy-Sell Agreement, dated
                November 1, 1974,
</TABLE>

                                       52

<PAGE>
<PAGE>

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                                     EXHIBIT
------                                     -------
<S>             <C>
                among Century Venture Corporation, Century Colorado Corp.,
                American Television and Communications Corporation, Century
                Texas and Vumore-Video Corporation of Colorado, Inc. (filed as
                Exhibit 10(h) to the 1986 Form S-1 and incorporated herein by
                reference).

*10.14          1985 Stock Option Plan of the Company (filed as Annex A to the
                Company's Registration Statement on Form S-8 (File No. 33-34387)
                under the Securities Act of 1933, as amended, filed with the
                Commission on April 19, 1990 and incorporated herein by
                reference).

*10.15          Incentive Award Plan of the Company (filed as Annex A to the
                Company's Registration Statement on Form S-8 (File No 33-23718)
                under the Securities Act of 1933, as amended, filed with the
                Commission on August 11, 1988 and incorporated herein by
                reference.

*10.16          1985 Employee Stock Purchase Plan of the Company, as amended
                (filed as Exhibit 10(r) to the Company's Annual Report on Form
                10-K for the year ended May 31, 1995, and incorporated herein by
                reference).

*10.17          Non-Employee Director Stock Option Plan of the Company (filed as
                Annex A to the Company's Registration Statement on Form S-8
                (File No. 33-34388) under the Securities Act of 1933, as
                amended, filed with the Commission on April 19, 1990 and
                incorporated herein by reference).

*10.18          1985 Stock Equivalent Plan (filed as Exhibit 10(m) to the 1986
                Form S-1 and incorporated herein by reference).

*10.19          Century Retirement Investment Plan (filed as Exhibit 10(x) to
                the company's Annual Report on Form 10-K for year ended May 31,
                1992 and incorporated herein by reference).

*10.20          Century 1992 Management Equity Incentive Plan (filed as Exhibit
                10(x)(1) to the Company's Annual Report on Form 10-K for the
                year ended May 31, 1992 and incorporated herein by reference).

*10.21          1993 Non-Employee Directors' Stock Option Plan of the Company
                (filed as Exhibit 10(v)(2) to the Company's Annual Report on
                Form 10-K for the fiscal year ended May 31, 1995, and
                incorporated herein by reference).

*10.22          1994 Stock Option Plan of the Company (filed as Exhibit 10(v)(3)
                to the Company's Annual Report on Form 10-K for the fiscal year
                ended May 31, 1995, and incorporated herein by reference).
</TABLE>


                                       53

<PAGE>
<PAGE>


<TABLE>
<CAPTION>

EXHIBIT
NUMBER                                     EXHIBIT
------                                     -------
<S>             <C>
10.23           Interest Rate Swap Agreement, dated as of July 18, 1986, between Citibank, N.A.
                and Century-Texas (filed as Exhibit 10(v) to Amendment No. 5 to the 1988 Form S-1
                and incorporated herein by reference).

10.24           Amendment No. 1 to Management Agreement and Joint Venture
                Agreement (Century ML Venture), dated September 21, 1987,
                between Century Texas and ML Media Partners, L.P., a Delaware
                limited partnership (filed as Exhibit 10(w) to the Company's
                Annual Report on Form 10-K for the fiscal year ended May 31,
                1989 and incorporated herein by reference).

10.25           Management Agreement and Joint Venture Agreement (Century-ML
                Radio Venture), dated as of February 15, 1989, between Century
                Texas and ML Media Partners, L.P., a Delaware limited
                partnership (filed as Exhibit 10(x) to the Company's Annual
                Report on Form 10-K for the fiscal year ended May 31, 1989 and
                incorporated herein by reference).

10.26           Plan and Agreement of Merger, dated August 2, 1991, by and among
                Century Cellular Holding Corp., Century Cellular Corp., Citizens
                Utilities Company and Citizens Cellular Corp., together with
                exhibits, including Management Agreement, Conflicts/Non-Compete
                Agreement, Stock Transfer Agreement and Registration Rights
                Agreement (filed as Exhibit 10(cc) to the Company's Annual
                Report on Form 10-K for the fiscal year ended May 31, 1991 and
                incorporated herein by reference).

10.27           Credit Agreement, dated as of August 4, 1995, by and among
                CCC-I, Inc., Pullman TV Cable Co., Inc., Kootenai Cable, Inc.,
                Citibank N.A., as agent, and each of the banks parties thereto
                (filed as Exhibit 10(ff) to the Company's Annual Report on Form
                10-K for the fiscal year ended May 31, 1996 and incorporated
                herein by reference).

10.28           Credit Agreement, dated as of June 30, 1994, by and among CCC-II, Inc., Citibank
                N.A. as managing agent, and each of the banks parties thereto (filed as Exhibit 10
                to the Company's report on Form 8-K dated July 25, 1994 and incorporated herein by
                reference.  The Company hereby agrees to furnish to the Securities and Exchange
                Commission, upon its request, a copy of each instrument omitted pursuant to Item
                601(b) (4) (iii) of Regulation S-K).
                
10.29           Eighth Restated Credit Agreement, dated as of July 10, 1990,
                between Century Texas, Century Investors and Citibank, N.A., on
                behalf of itself and as agent, and The Chase Manhattan Bank
                (National Association), The Bank of Nova Scotia, The First
                National Bank of Chicago, Bank of Montreal, The Royal Bank of
                Canada, Continental Bank N.A., Bankers Trust Company, Nippon
                Credit Bank, Provident National Bank, and Security Pacific
                National Bank (the "Eighth Restated Banks") (filed as an Exhibit
                to the Company's Current Report on Form 8-K, filed July 13,
                1990, and incorporated herein by reference).
</TABLE>

                                       54

<PAGE>
<PAGE>

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                                     EXHIBIT
------                                     -------
<S>             <C>
10.30           Third Amendment, dated as of November 21, 1990 (the "Third
                Amendment"), among Centennial Cellular Corp., a Delaware
                corporation ("Centennial Cellular Corp."), the Lender parties on
                the signature page thereto, Citibank, N.A., as agent, Century
                Cellular Holding Corp., and the Guarantor of parties on the
                signature page thereto, to the Credit Agreement, dated as of
                October 11, 1989, among Centennial Cellular Corp., and Citibank,
                N.A., on behalf of itself and as agent, and
                Kansallis-Osake-Pankki, Provident National Bank, DnC America
                Banking Corporation, Meridian Bank, Lincoln Savings Bank,
                Toronto Dominion Bank, and The Bank of Nova Scotia (the
                "Cellular Banks") (filed as an Exhibit to the Company's
                Quarterly Report on Form 10-Q for the fiscal quarter ended
                November 30, 1991, and incorporated herein by reference).

10.31           Credit Agreement, dated as of October 11, 1989, among Centennial Cellular Corp.,
                and Citibank, N.A., on behalf of itself and as agent, and the Cellular Banks, as
                Amended and Restated pursuant to the Third Amendment (filed as an Exhibit to the
                Company's Quarterly Report on Form 10-Q for the fiscal quarter ended November 30,
                1991, and incorporated herein by reference).

10.32           Second Restated Consolidated Guaranty and Pledge Agreement,
                dated as of July 10, 1990, made by the subsidiaries of the
                Company set forth on the signature pages thereto to Citibank,
                N.A., as agent for the Eighth Restated Banks (filed as Exhibit
                4(g) to the Company's Annual Report on Form 10-K for the fiscal
                year ended May 31, 1990 and incorporated herein by reference).

10.33           Third Restated Pledge Agreement and Guaranty, dated as of July
                10, 1990, made by the Company to Citibank, N.A., as agent for
                the Eighth Restated Banks (filed as Exhibit 4(h) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1990 and incorporated herein by reference).

10.34           Seventh Restated Pledge and Security Agreement, dated as of July 10, 1990, made by
                Century Texas to Citibank, N.A., as agent for the Eighth Restated Banks (filed as
                Exhibit (i)A to the Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1990 and incorporated herein by reference).

10.35           Third Collateral Agreement Amendment, dated as of July 10, 1990
                made by Century Texas, the Company and Citibank, N.A. as agent
                for the Eighth Restated Banks (filed as Exhibit 4(i)B to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1990 and incorporated herein by reference).

10.36           Pledge Agreement, dated as of October 11, 1989, made by Century
                Cellular Holding Corp., a New York corporation, to Citibank,
                N.A., as agent for the Cellular Banks (filed as an Exhibit to
                the Company's Quarterly Report on Form 10-Q for the period
                quarterly ended November 30, 1990 and incorporated herein by
                reference).
</TABLE>

                                       55

<PAGE>
<PAGE>

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                                     EXHIBIT
------                                     -------
<S>             <C>
10.37           Pledge and Security Agreement, dated as of October 11, 1989,
                made by Centennial Cellular Corp. to Citibank, N.A., as agent
                for the Cellular Banks, as Amended and Restated pursuant to the
                Third Amendment (filed as an Exhibit to the Company's Quarterly
                Report on Form 10-Q for the quarterly period ended November 30,
                1990 and incorporated herein by reference).

10.38           Consolidated Guaranty and Pledge Agreement, dated as of October
                11, 1989, made by the subsidiaries of Centennial Cellular Corp.
                set forth on the signature pages thereto to Citibank, N.A., as
                agent for the Cellular Banks, as Amended and Restated pursuant
                to the Third Amendment (filed as an Exhibit to the Company's
                Quarterly Report on Form 10-Q for the quarterly period ended
                November 30, 1990 and incorporated herein by reference).

'D'10.39        Amendment No. 1 dated as of August 9, 1996 among CCC-I, Inc.,
                Pullman TV Cable Co., Inc. and Kootenai Cable, Inc., Citibank,
                N.A., as agent, and each of the bank parties thereto.

'D'10.40        Amendment No. 1 dated as of August 9, 1996 among CCC-II, Inc.,
                Citibank, N.A., as managing agent, and each of the bank
                parties thereto.

'D'10.41        Credit Agreement dated as of April 15, 1997 among Citizens
                Century Cable Television Venture, Bank of America, National
                Trust and Savings Association, as Syndication Agent, and
                Societe General, as Agent, Corestates Bank, N.A., The First
                National Bank of Boston, LTCB Trust Company, and PNC Bank,
                National Association, as Co-Agents, and each of the
                bank parties thereto.


</TABLE>

'D'11     Computation of loss per common share.

'D'12     Computation of ratios.

'D'21     List of subsidiaries of the Company.

'D'23.1   Consent of Deloitte & Touche LLP.

'D'27     Financial Data Schedule.

--------------------------

*     Constitutes a management contract or compensatory plan or arrangement.
'D'   Filed herewith.

                                       56




<PAGE>
<PAGE>


                          INDEPENDENT AUDITORS" REPORT

Board of Directors and Stockholders
Century Communications Corp.
New Canaan, Connecticut

     We have audited the accompanying consolidated balance sheets of Century
Communications Corp. and subsidiaries as of May 31, 1997 and 1996, and the
related consolidated statements of operations and cash flows for each of the
three years in the period ended May 31, 1997. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

     We conductd our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosure in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by 
managment, as well as evaluting the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Century Communications Corp.
and Subsidiaries as of May 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
May 31, 1997 in conformity with generally accepted accounting principles.


DELOITTE & TOUCHE LLP

Stamford, Connecticut
August 4, 1997



                                      F-1


<PAGE>
<PAGE>



                          CENTURY COMMUNICATIONS CORP.
                                AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                              Amounts in Thousands
<TABLE>
<CAPTION>
                                                                                     May 31,
                                                                        --------------------------------
                                                                             1997             1996
                                                                        -----------       --------------
<S>                                                                       <C>                <C>
ASSETS
Current assets:

       Cash and short-term investments                                    $  151,947         $  164,592

       Accounts receivable less allowance for doubtful
           accounts of $3,592 and $3,008 respectively                         48,958             41,002

       Prepaid expenses and other current assets                              14,649              6,632
                                                                          ----------         ----------
       Total current assets                                                  215,554            212,226

Property, plant and equipment - net                                          715,418            651,607

Investment in marketable equity securities                                    45,118             53,069

Equity investments in cable television and wireless telephone 
    systems - net                                                            102,097            108,256

Debt issuance costs, less accumulated amortization of
     $13,270  and $11,652, respectively                                       31,735             28,352

Cable television franchises, less accumulated amortization of
     $322,309 and $285,991, respectively                                     401,775            525,194

Wireless telephone licenses, less accumulated amortization of
     $214,494 and $164,786, respectively                                     347,206            360,213

Excess of purchase price over value of net assets acquired, less
     accumulated amortization of $58,920 and $51,529, respectively           280,643            279,202

Other assets                                                                  14,685             16,790
                                                                          ----------         ----------
                                                                          $2,154,231         $2,234,909
                                                                          ==========         ==========
</TABLE>


                 See notes to consolidated financial statements

                                       F-2



<PAGE>
<PAGE>

                          CENTURY COMMUNICATIONS CORP.
                                AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                  (continued)
                    Amounts in Thousands (Except Share Data)

<TABLE>
<CAPTION>
                                                                                                         May 31,
                                                                                              -----------------------------
                                                                                                  1997               1996
                                                                                              ----------         -----------
<S>                                                                                           <C>                <C>
LIABILITIES AND COMMON STOCKHOLDERS'
DEFICIENCY

Current liabilities:
   Current maturities of long-term debt                                                       $   15,011         $   15,084
   Accounts payable                                                                               26,711             26,102
   Accrued expenses and other current liabilities                                                150,407            115,048
                                                                                              ----------         ----------
        Total current liabilities                                                                192,129            156,234

Long-term debt                                                                                 2,186,981          2,081,611
Deferred income taxes                                                                             53,959             99,474
Minority interest in subsidiaries                                                                133,518            162,790

Commitments and contingencies (See Notes)

Preferred stock, par value $.01 per share authorized
   100,000,000 shares, none issued                                                                     -                  -

Subsidiary convertible redeemable preferred stock (at aggregate liquidation value which
   approximates the fair market value) par value $.01 per share, authorized, issued 
   and outstanding 102,187 shares (redemption value of $1,823 per share)                         186,287            182,813

Common stockholders' deficiency:
   Common stock, par value $.01 per share:
   Class A, authorized 400,000,000 shares,
       issued, 62,695,127 and 59,946,280 shares, respectively,
       and outstanding 30,968,289 and  28,591,658 shares, respectively                               627                599
   Class B, authorized 300,000,000 shares, issued and outstanding 45,126,115 and
      45,406,115 shares, respectively                                                                451                454

   Additional paid-in capital                                                                    176,871            175,804
   Other, including 31,726,838 and 31,354,622 treasury shares, respectively                     (127,549)          (117,702)
   Accumulated deficit                                                                          (649,043)          (507,168)
                                                                                              ----------         ----------
            Total common stockholders' deficiency                                               (598,643)          (448,013)
                                                                                              ----------         ----------
                                                                                              $2,154,231         $2,234,909
                                                                                              ==========         ==========
</TABLE>

                 See notes to consolidated financial statements

                                      F-3



<PAGE>
<PAGE>


                          CENTURY COMMUNICATIONS CORP.
                                AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    Amounts in Thousands (Except Share Data)

<TABLE>
<CAPTION>
                                                                             Year ended May 31,
                                                                 --------------------------------------------
                                                                     1997            1996            1995
                                                                 ------------    ------------    ------------
<S>                                                              <C>             <C>             <C>
Revenues:                                                                                        
    Cable service income                                         $   459,219     $   368,506     $   331,268
    Wireless telephone service income                                151,023         112,197          85,419
    Australian operations                                             33,248          14,571               -
                                                                 -----------     -----------     ----------- 
                                                                     643,490         495,274         416,687
                                                                 -----------     -----------     ----------- 
Costs and expenses:
    Cost of services - Cable                                         100,789          82,274          81,521
    Cost of services -Wireless telephone                              38,228          26,129          22,152
    Selling, general and administrative                              166,362         119,779         110,381
    Regulatory restructuring charge                                        -               -           4,000
    Depreciation and amortization - domestic                         243,267         195,425         171,931
    Depreciation and amortization - Australia                         18,511          21,352               -
    Write-down of Australian assets                                   40,000          10,000               -
    Australian expenses                                               30,562          24,067               -
                                                                 -----------     -----------     ----------- 
                                                                     637,719         479,026         389,985
                                                                 -----------     -----------     ----------- 
Operating income                                                       5,771          16,248          26,702
Interest expense                                                     200,743         172,215         139,001
Other income (Notes 1 and 3)                                          14,570          11,107           2,270
                                                                 -----------     -----------     ----------- 
    Loss before income tax (benefit),
    minority interest and extraordinary item                        (180,402)       (144,860)       (110,029)

Income tax (benefit)                                                 (30,658)        (34,326)         (8,061)

                                                                 -----------     -----------     ----------- 
Loss before minority interest and extraordinary item                (149,744)       (110,534)       (101,968)

Minority interest in loss of subsidiaries                             15,451           8,417          19,343
                                                                 -----------     -----------     ----------- 
Loss before extraordinary item                                      (134,293)       (102,117)        (82,625)
Extraordinary item - loss on early retirement of debt,
    net of income tax benefit of $5,379.                              (7,582)              -               -
                                                                 -----------     -----------     ----------- 
    Net loss                                                     $  (141,875)    $  (102,117)    $   (82,625)
                                                                 ===========     ===========     =========== 
Dividend on subsidiary convertible
    redeemable preferred stock                                   $     4,850     $     4,256     $     4,419
                                                                 ===========     ===========     =========== 
                                                                                                   
Loss applicable to common shares                                 $  (146,725)    $  (106,373)    $   (87,044)
                                                                 ===========     ===========     =========== 
Loss per common share:
    Loss before extraordinary item                               $     (1.86)    $     (1.44)    $     (1.01)
    Extraordinary item                                                 (0.10)              -               -
                                                                 -----------     -----------     ----------- 
    Loss                                                         $     (1.96)    $     (1.44)    $     (1.01)
                                                                 ===========     ===========     =========== 
Weighted average number of common shares
outstanding during the period                                     74,675,000      73,748,000      86,277,000
                                                                 ===========     ===========     =========== 

</TABLE>

                 See notes to consolidated financial statements

                                      F-4
  


<PAGE>
<PAGE>


                          CENTURY COMMUNICATIONS CORP.
                                AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                              Amounts in Thousands
<TABLE>
<CAPTION>
                                                                          Year ended May 31,
                                                               ------------------------------------------
                                                                    1997           1996           1995
                                                               ------------     ----------     ----------
<S>                                                            <C>              <C>            <C>
OPERATING ACTIVITIES:                                                                     
   Cash  received from subscribers and others                  $   774,680      $ 590,137      $ 494,671
   Cash paid to suppliers, employees and 
       governmental agencies                                      (482,936)      (333,930)      (289,606)
   Australian operations                                                 -         (1,213)             -
   Interest paid                                                  (162,409)      (154,219)      (108,933)
                                                               -----------      ---------      ---------
         NET CASH PROVIDED BY OPERATING ACTIVITIES                 129,335        100,775         96,132
                                                               -----------      ---------      ---------
INVESTING ACTIVITIES:
   Capital expenditures                                           (170,767)      (100,287)      (109,737)
   Cable television and wireless telephone
       franchise expenditures                                       (2,916)        (2,723)        (1,012)
   (Acquisition) disposition of other assets                          (648)         1,969         (7,116)
   Acquisition and exchanges of cable television and
      wireless telephone systems                                   (35,446)      (355,215)      (219,315)
   Australian activities                                                 -        (24,434)             -
   Purchase of marketable securities                                     -              -         (5,350)
   Distributions received from equity investments                    6,863          6,870          2,896
   Capital contributed to equity investments                        (2,878)        (1,463)        (3,783)
                                                               -----------      ---------      ---------
         NET CASH USED IN INVESTING ACTIVITIES                    (205,792)      (475,283)      (343,417)
                                                               -----------      ---------      ---------
FINANCING ACTIVITIES:
   Proceeds from long-term borrowings                            1,162,000        728,500        761,984
   Principal payments on long-term debt                         (1,079,200)      (415,956)      (306,038)
   Debt issuance costs                                             (12,666)        (5,025)       (14,072)
   Purchase of treasury stock                                       (2,359)          (158)      (110,092)
   Cash contributed by joint venture partners                            -              -         25,871
   Payment of subsidiary preferred stock dividends                  (7,918)             -              -
   Issuance of common stock                                          3,955          2,975          1,191
   Issuance of subsidiary preferred and common                                               
      stock, net of related costs                                        -              -         49,426
                                                               -----------      ---------      ---------
             NET CASH PROVIDED BY                                                            
             FINANCING ACTIVITIES                                   63,812        310,336        408,270
                                                               -----------      ---------      ---------
NET (DECREASE) INCREASE IN CASH AND SHORT-TERM
   INVESTMENTS                                                     (12,645)       (64,172)       160,985
CASH AND SHORT-TERM INVESTMENTS - BEGINNING
   OF YEAR                                                         164,592        228,764         67,779
                                                               -----------      ---------      ---------
CASH AND SHORT-TERM INVESTMENTS - END OF YEAR                  $   151,947      $ 164,592      $ 228,764
                                                               ===========      =========      =========

</TABLE>

                 See notes to consolidated financial statements

                                      F-5



<PAGE>
<PAGE>

                          CENTURY COMMUNICATIONS CORP.
                                AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (continued)
                              Amounts in Thousands


<TABLE>
<CAPTION>
                                                                                    Year ended May 31,
                                                                           ---------------------------------------
                                                                              1997          1996          1995
                                                                           ----------    -----------    ----------
<S>                                                                         <C>           <C>           <C>
RECONCILIATION OF NET LOSS TO NET CASH PROVIDED                                                         
   BY OPERATING ACTIVITIES

NET LOSS                                                                   $(141,875)    $(102,117)     $(82,625)

Adjustments to reconcile net loss to net cash provided
   by operating activities:

   Depreciation and amortization                                             261,778       216,777       171,931
   Gain on sale of assets                                                          -        (4,176)            -
   Minority interest in loss of subsidiaries                                 (15,451)       (8,417)      (19,343)
   Deferred income taxes                                                     (38,145)      (37,170)      (11,518)
   Non cash interest charges                                                  28,769        28,044        18,792
   Write-down of Australian assets                                            40,000        10,000             -
   Non cash Australian operations                                                  -         8,554             -
   Other                                                                     (14,558)      (16,016)       (2,897)
   Change in assets and liabilities net of effects of acquired
      cable television and wireless telephone systems:
         Accounts receivable - (increase)                                     (1,336)       (4,014)       (3,738)
         Prepaid expenses and other current assets
              (increase)                                                      (2,279)         (249)         (179)
         Accounts payable and accrued expenses - increase/(decrease)          10,632        (5,179)       23,335
         Customers' deposits and prepayments - increase                        1,800         6,584         2,374
         Net working capital change - Australian operations                        -         8,154             -
                                                                           ---------     ---------      --------
                                 Total adjustments                           271,210       202,892       178,757
                                                                           ---------     ---------      --------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                  $ 129,335     $ 100,775      $ 96,132
                                                                           =========     =========      ========
</TABLE>


                 See notes to consolidated financial statements

                                      F-6



<PAGE>
<PAGE>



                  CENTURY COMMUNICATIONS CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED MAY 31, 1997, 1996 AND 1995
          (AMOUNTS IN THOUSANDS EXCEPT SUBSCRIBER, POP AND SHARE DATA)

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Century
Communications Corp., all of its subsidiaries and certain partnership interests
(the "Company") from their respective dates of acquisition (see Note 3).
Included in subsidiaries are the 50% indirectly-owned: Century Venture Corp. and
Subsidiary, Century-ML Cable Venture and Subsidiary, and Citizens Century Cable
Television Venture (see Note 10). In addition, the consolidated financial
statements include the accounts of Centennial Cellular Corp., ("Centennial"), an
approximately 32% owned company (at May 31, 1997) in which the Company controls
approximately 74% of the voting power of the common shares. During the fiscal
year ended May 31, 1996, the Company, for accounting and reporting purposes,
consolidated the operations of East Coast Pay Television Pty. Limited, ("ECT")
an Australian Company. ECT was previously accounted for by the equity method of
accounting. There was no significant impact on the consolidated statement of
operations as a result of this change. The Company has determined to pursue a
strategy to sell its investments in its Australian operations, including ECT
(see Note 3 - Australian Pay Television). All material intercompany transactions
and balances have been eliminated.

REVENUE RECOGNITION

Cable service income includes earned subscriber service revenues and charges for
installation and connections, net of programmers' share of pay television
revenues. Such programmers' share netted against service income amounted to
$114,591, $92,014, and $69,572 in 1997, 1996 and 1995, respectively.

Wireless telephone service income includes service revenues and charges for
installation and connections, net of land line charges of $28,049, $20,000, and
$15,030 in 1997, 1996 and 1995, respectively.

Charges for installations and connections for both cable television and wireless
telephone operations are recognized into revenue upon completion of the
installation or reconnection. Subscriber services paid in advance are recognized
as income when earned.

INVESTMENT IN MARKETABLE EQUITY SECURITIES

The Company classifies its investments in debt and equity securities as
available for sale in accordance with SFAS No. 115 "Accounting for Certain
Investments in Debt and Equity Securities".

Unrealized holding gains and losses, net of the related income tax effect on
these securities are excluded from earnings and are reported as a separate
component of stockholders' deficiency until realized.



                                      F-7

<PAGE>
<PAGE>

Equity securities at May 31, 1997 and 1996 are stated at their fair market
values. The adjusted cost basis of these equity securities at May 31, 1997 and
1996 was $32,255. The Company recorded a decrease in the unrealized gain of
$7,950 during the year ended May 31, 1997 and an increase in the unrealized gain
of $6,397 and $14,416 during the years ended May 31, 1996 and 1995,
respectively. As of August 13, 1997, the market value of these securities had
declined approximately $4,500 from May 31, 1997.

DEBT ISSUANCE COSTS

Costs associated with the issuance of the Company's debt securities and credit
facilities (Note 6) have been capitalized and are being amortized on a
straight-line basis over the lives of the issues.

EQUITY INVESTMENTS IN CABLE TELEVISION AND WIRELESS SYSTEMS

The Company records such investments at purchased cost at the date of
acquisition and adjusts for the Company's share of net income or loss from the
acquisition date. At May 31, 1997, the Company's equity investments principally
consist of a $94,153 investment in wireless minority interests (see Note 12).
The difference of $123,024 between the cost of the Company's equity investments
in wireless systems and the underlying book value is amortized over ten years.
Accumulated amortization at May 31, 1997, 1996 and 1995 was $69,878, $57,588 and
$45,341, respectively (see Note 12).

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost. Depreciation is computed
principally using the straight-line method over the following estimated useful
lives of the assets:

        Buildings                                             15 - 25 years
        Cable television and cellular telephone
               transmission and distribution systems

               and related equipment                          8 - 15 years
        Miscellaneous equipment and furniture and
               fixtures                                       3 - 15 years

The cost of connections for new cable television subscribers are capitalized at
standard per subscriber rates for labor, materials and overhead. Expenditures
for maintenance and repairs are charged to operating expense as incurred, and
betterments, replacement equipment and additions are capitalized.

CABLE TELEVISION FRANCHISES

Cable television franchises principally consist of amounts allocated under
purchase accounting (see Note 3). Such amounts are amortized using the
straight-line method over the lives of the franchises (generally ranging from 10
to 15 years).


                                      F-8

<PAGE>
<PAGE>

WIRELESS TELEPHONE LICENSES

Wireless telephone licenses consist of amounts allocated under purchase
accounting (see Note 3). Such amounts are amortized, commencing with the date of
operations, using the straight-line method over a period of 10 and 40 years for
cellular and personal communications services ("PCS") licenses, respectively.
Centennial, during the fiscal years ended May 31, 1997 and 1996, capitalized
interest costs of $2,752 and $5,200, respectively, related to the acquisition of
the PCS license.

EXCESS OF PURCHASE PRICE OVER VALUE OF NET ASSETS ACQUIRED

The excess of purchase price over value of net assets acquired ("goodwill") is
being amortized using the straight-line method over a period of 40 years.

INCOME TAXES

The Company accounts for income taxes in accordance with Financial Accounting
Standards No. 109, "Accounting for Income Taxes" which provides that the
deferred tax provision is determined by the liability method. Deferred tax
assets and liabilities are recognized based on the differences between the book
and tax basis of assets and liabilities using presently enacted tax rates.

LOSS PER COMMON SHARE

Loss per common share is calculated using the weighted average number of common
shares outstanding during each period. Loss per common share, as shown on the
Consolidated Statements of Operations for the periods presented, does not
include stock options as a common stock equivalent as their effect on loss per
share is antidilutive. The loss per common share reflects a charge for the
dividend on subsidiary convertible redeemable preferred stock of $4,850, $4,256
and $4,419 for the years ended May 31, 1997, 1996 and 1995, respectively.

STATEMENT OF CASH FLOWS

Short-term investments classified as cash equivalents in the consolidated
financial statements consist principally of overnight deposits, government
securities and commercial paper with acquired maturities of three months or
less.

FOREIGN CURRENCY TRANSLATION

The functional currency for the Company's foreign operations is the applicable
local currency. The translation of the applicable foreign currency into U.S.
dollars is performed for the balance sheet accounts using current exchange rates
in effect at the balance sheet date and for revenue and expense accounts using a
weighted average exchange rate during the period. The gains and losses, net of
applicable deferred income taxes if any, resulting from such translation are
included in stockholders' equity.

MANAGEMENT ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and



                                      F-9

<PAGE>
<PAGE>

liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting periods. Actual results could differ from those estimates.

VALUATION OF  LONG LIVED ASSETS

The Company, on a quarterly basis, undertakes a review and valuation of the net
carrying value, recoverability and write-off period of all categories of its
long lived assets. The Company in its valuation considers current market values
of its properties, competition, prevailing economic conditions, government
policy including taxation, and the Company's and the industry's historical and
current growth patterns. The Company also considers its financial structure,
including the underlying cost of securities which support the Company's internal
growth and acquisitions, as well as the recoverability of the cost of its long
lived assets based on a comparison of estimated undiscounted operating cash
flows for the systems which generated long lived assets with the carrying value
of the long lived assets. The Company's long lived assets are stated at the
lower of cost or market and are amortized over their respective expected lives.

DISCLOSURE OF FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount reported in the balance sheets for cash and cash
equivalents, accounts receivable, accounts payable and accrued expenses
approximates fair value because of the immediate short-term maturity of these
financial instruments.

RECLASSIFICATIONS

Certain prior year balances have been reclassified to conform with the current
year presentation.

NEW ACCOUNTING PRONOUNCEMENTS

In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings Per Share", which is effective for
financial statements ending after December 15, 1997. This statement supercedes
Accounting Principles Board Opinion No. 15 and replaces the presentation of
primary Earnings Per Share ("EPS") on the face of the statement of operations.
Adoption of SFAS 128 would not result in a change of EPS previously reported by
the Company using APB 15. Disclosure of Diluted EPS is not required due to the
anti-dilutive effect of the Company's equity instruments.

The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 129 "Disclosure of Information about Capital
Structure", Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income," and Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" in 1997.
The Company believes these Statements will not have a material impact on the
Consolidated Financial Statements of the Company when adopted in Fiscal 1998.



                                      F-10

<PAGE>
<PAGE>

NOTE 2.  SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

The table below summarizes non-cash reclassifications that occurred during the
years ended May 31, 1997, 1996 and 1995. The reclassifications result primarily
from the Company's acquisitions (including deferred taxes) and exchanges and
consolidation of entities previously accounted for by the equity method of
accounting:

<TABLE>
<CAPTION>
                                        1997           1996          1995
                                     --------        --------      ---------

<S>                                 <C>                             <C>
Current assets                      $               $  3,835        $
Property, plant and equipment                          3,026
Marketable securities                                  6,398         14,416
Equity investments                                   (86,941)
Cable television franchises          (14,828)        111,067
Wireless telephone licenses                            2,635
Goodwill                              14,828          10,659         72,343
Other assets                                          (1,338)
                                    --------        --------        -------
                                    $     --        $ 49,341        $86,759
                                    ========        ========        =======

Current liabilities                 $   (462)       $ 27,225        $
Deferred taxes                                        13,529         72,343
Minority interest                                        650
Additional paid in capital                             1,539
Other stockholders' deficiency           462           6,398         14,416
                                    --------        --------        -------
                                    $     --        $ 49,341        $86,759
                                    ========        ========        =======
</TABLE>


                                      F-11

<PAGE>
<PAGE>

NOTE 3.  ACQUISITIONS

During the three year period ended May 31, 1997, the Company acquired the net
assets of cable television and wireless telephone systems as follows:

<TABLE>
<CAPTION>
                                                                    AMOUNTS ALLOCATED TO
                                                           -----------------------------------------
                               NUMBER OF        TOTAL         CABLE       WIRELESS         PROPERTY
                                SYSTEMS       PURCHASE     TELEVISION     TELEPHONE        PLANT AND
                               ACQUIRED         PRICE      FRANCHISES     LICENSES         EQUIPMENT
                               --------       --------     ----------     ---------        ---------
<S>                               <C>        <C>            <C>           <C>             <C>     
EQUIPMENT
Year ended May 31, 1997            1          $ 35,316       $     --      $ 33,429        $  1,234
Year ended May 31, 1996            5          $329,868       $212,693      $  9,623        $111,565
Year ended May 31, 1995           20          $381,661       $109,359      $214,088        $  52,265
</TABLE>

These transactions have been accounted for as purchases and the results of
operations of the acquired systems have been included in the accompanying
consolidated financial statements from the dates of acquisition. The Company has
recorded the purchase price of the cable television and wireless telephone
systems at the fair market value of acquired assets on the dates of acquisition
with the excess purchase price being recorded to cable television franchises and
wireless telephone licenses.

CABLE TELEVISION DIVISION ACQUISITIONS

On May 31, 1996, the Company acquired the cable television systems serving
Anaheim, Hermosa Beach/Manhattan Beach, Fairfield and Rohnert Park/Yountville,
California for an aggregate purchase price of approximately $287,600, subject to
adjustment. Funds for this acquisition were provided by an existing bank credit
facility. At May 31, 1996, such cable television systems served an aggregate of
approximately 135,000 primary basic subscribers.

On May 8, 1996, the Company acquired the Orange County News Channel ("OCN") for
approximately $2,500.

On March 2, 1993, the Company and Citizens ("the Century/Citizens Joint
Venture") entered into an agreement to acquire the assets of two cable
television systems which serve in the aggregate approximately 45,000 primary
basic subscribers. The aggregate purchase price for the cable television systems
is $92,900 subject to adjustment. Citizens and the Company have agreed that they
will own and operate the cable television systems in a joint venture structure
in which each company will have a 50% ownership interest. On September 30, 1994,
the Century/Citizens Joint Venture completed the acquisition of one of these
cable television systems serving approximately 24,000 primary basic subscribers.
On December 1, 1995, the second acquisition serving approximately 21,000 primary
basic subscribers was completed. The purchase price of approximately $51,900 at
September 30, 1994 and $41,000 at December 1, 1995 was funded by the Company and
Citizens equally.

During the year ended May 31, 1995, the Company acquired ten cable television
systems for a total purchase price of $153,129 consisting of $109,254 in cash
(including the assumption of acquired current liabilities) and 3,581,632 shares
of the Company's Class A Common Stock valued at $43,875, and issued an
additional 1,732,357 shares in fiscal 1997 in relation to the acquisition.


                                      F-12

<PAGE>
<PAGE>

WIRELESS TELEPHONE DIVISION ACQUISITIONS, EXCHANGES AND DISPOSITIONS

On September 12, 1996, Centennial acquired, for approximately $35,000 in cash,
100% of the ownership interests in the partnership owning the wireless telephone
system serving the Benton Harbor, Michigan MSA. The Benton Harbor market
represents approximately 161,400 Net Pops. Approximately $33,429 of the purchase
price was allocated to cellular telephone license.

On October 31, 1995, Centennial acquired (i) a 94.3% interest in the wireless
telephone system serving the Lafayette, Louisiana MSA, representing
approximately 205,700 Net Pops, in exchange for Centennial's wireless telephone
system serving the Jonesboro, Arkansas RSA (comprising approximately 205,000 Net
Pops), the license rights and assets located in and covering Desoto and Red
River Parishes of Louisiana 3 RSA (comprising approximately 34,700 Net Pops),
the license rights and assets located in and covering a section of Morehouse
Parish of Louisiana 2 RSA (comprising approximately 24,100 Net Pops) and a cash
payment by Centennial of approximately $5,580 subject to adjustment, and (ii) an
additional 14.3% minority interest in the Elkhart, Indiana RSA and additional
12.7% minority interest in the Lake Charles, Louisiana MSA for a cash payment of
approximately $2,951.

On June 30, 1995, Centennial acquired the wireless telephone systems serving (a)
Newtown, LaPorte, Starke, Pulaski, Jasper and White, Indiana, (b) Kosciusko,
Noble, Steuben and Lagrange, Indiana (c) Williams, Defiance, Henry and Paulding,
Ohio and (d) Copiah, Simpson, Lawrence, Jefferson Davis, Walthall and Marion,
Mississippi, representing an aggregate of approximately 608,100 Net Pops. The
above-described systems were acquired by Centennial in exchange for Centennial's
wireless telephone systems serving the Roanoke, Virginia MSA, the Lynchburg,
Virginia MSA, North Carolina RSA #3 and Iowa RSA #5, representing an aggregate
of approximately 644,000 Net Pops. Simultaneously with the consummation of the
transaction described above, Centennial sold its 72.2% interest in the wireless
telephone system serving the Charlottesville, Virginia MSA, representing an
aggregate of approximately 94,700 Net Pops, for a cash purchase price of
approximately $9,914 subject to adjustment. The Company recognized a gain of
approximately $4,176 as a result of the sale.

During 1995, Centennial was the successful bidder for one of two Metropolitan
Trading Area ("MTA") licenses to provide broadband personal communications
services ("PCS") in the Commonwealth of Puerto Rico and the U.S. Virgin Islands.
The licensed area represents approximately 3,623,000 Net Pops. The amount of the
final bid submitted and paid by Centennial was $54,672.

Centennial also plans to participate in the alternative access business in
Puerto Rico pursuant to FCC requirements for interstate service and pursuant to
an authorization issued to the Company in December, 1994 by the Public Service
Commission of the Commonwealth of Puerto Rico for intrastate service.

During the year ended May 31, 1995, Centennial completed ten wireless market
acquisitions for a total purchase price of $173,860 consisting of $51,761 in
cash (including the assumption of acquired current liabilities) and 7,023,383
shares of Centennial's Class A Common Stock valued at $122,099. An additional
226,665 shares of Centennial's Class A Common Stock were issued during fiscal
1996 to satisfy a post closing adjustment to the purchase price of one of the
acquisitions completed during the year ended May 31, 1995.



                                      F-13

<PAGE>
<PAGE>

AUSTRALIAN PAY TELEVISION

Since fiscal 1994, the Company has invested, through a wholly-owned subsidiary,
approximately $148,000 in the Australian Pay TV industry, including
approximately $126,000 in ECT. The Company's investment in ECT was effected
through the acquisition by the Company of convertible debentures and ordinary
shares of ECT representing a 76.2% economic interest in ECT. The Company has the
right to designate five of the seven directors of ECT and to approve certain
corporate transactions. The Company has also entered into long-term management
agreements with ECT.

The Company also holds a 25% interest in a joint venture which provides
programming to ECT and other pay television services in Australia. The Company's
25% interest in XYZ is derived through the Company's joint venture with United
International Holdings, Inc. ("UIH"), a leading international provider of pay
television services.

Since the fourth fiscal quarter of fiscal 1996, the Company has written down
$50,000 of its Australian investment. The Company has determined to pursue a
strategy to sell its investments in its Australian operations and has retained
an investment banker to assist in the separate sale of ECT and XYZ. It has also
determined to make no further investments in ECT. Once the Company has developed
its formal plan for disposition, including the means to complete that plan and
the period expected to be required for completion of the disposition, the
Company anticipates accounting for its Australian operations as discontinued
operations.

The Company is currently unable to predict the ultimate resolution of these
matters. At May 31, 1997, the remaining net book value of its investments in the
various aspects of the Australian pay television industry, after giving effect
to the aforementioned write-down of Australian assets and the Company's
percentage of cumulative losses of ECT and XYZ, aggregated approximately
$24,000. The Company currently believes that the remaining net book value is
realizable.

The following summarizes the assets, stockholders' deficiency and results of
operations of XYZ which was accounted for by the equity method during the years
ended May 31, 1997, 1996 and 1995. All amounts have been derived from XYZ's
financial statements and adjusted for interim financial activity from the
Australian Venture's year end to the Company's fiscal year end and have been
converted to U.S. dollars using the exchange rates for the applicable periods
(amounts in thousands and unaudited).

<TABLE>
<CAPTION>
                                            1997         1996           1995
                                            ----         ----           ----
<S>                                    <C>             <C>            <C>     
        Assets                         $    11,786     $  14,400      $  9,388
        Stockholders' deficiency           (48,180)      (31,128)       (2,220)
        Net loss                           (17,052)      (28,908)       (2,220)
</TABLE>

The Company's equity share of XYZ's net loss amounted to $4,263, $7,126 and $800
and is recorded in other income on the Company's consolidated statement of
operations for the years ended May 31, 1997, 1996 and 1995, respectively.



                                      F-14

<PAGE>
<PAGE>

The components of costs and expenses included in Australian operations in the
Company's financial statements at May 31, 1997 and 1996 were as follows:

<TABLE>
<CAPTION>
                                                     1997           1996
<S>                                                 <C>            <C>    
        Cost of services                            $16,054        $10,546
        Selling, general and administrative          14,508         13,521
                                                    -------        -------
                                                    $30,562        $24,067
                                                    =======        =======
</TABLE>

PRO FORMA INFORMATION

The summary pro forma information includes the results of the Company and all
acquisitions and pending acquisitions, in each case as if such acquisitions had
been consummated as of June 1, 1994 (unaudited).

<TABLE>
<CAPTION>
                                               YEAR ENDED MAY 31,
                                  --------------------------------------------
                                     1997             1996             1995
                                  ----------       ----------       ----------
<S>                                <C>              <C>             <C>      
Revenues                           $ 660,763        $ 574,586       $ 514,898

Net loss                           $(145,451)       $(125,368)      $(109,707)

Loss per common share              $  (2.01)        $   (1.72)      $  (1.25)
</TABLE>

Pro forma loss per common share for the years ended May 31, 1997, 1996 and 1995
is calculated on a fully diluted basis using the pro forma average number of
common shares outstanding during the period, including common stock equivalents.

NOTE 4.  TRANSACTIONS WITH RELATED PARTIES

The Company purchased workers compensation and general insurance from Sentry
Insurance (holder of 6.3% of Class B Common stock at May 31, 1997) and its
affiliated companies. In fiscal 1996 and 1995 the Company also purchased group
health, life and casualty insurance coverage. The Company paid a total of
$7,810, $10,155 and $8,462 for such insurance for the fiscal years ended May 31,
1997, 1996 and 1995, respectively.

Leavy, Rosensweig & Hyman of which David Z. Rosensweig is a member, serves as
General Counsel to the Company. Mr. Rosensweig is also a director and secretary
of the Company. The Company paid approximately $2,008, $1,772 and $1,960 to
Leavy, Rosensweig & Hyman for the fiscal years ended May 31, 1997, 1996 and
1995, respectively.

The Company believes that all transactions between it, Sentry Insurance and
Leavy, Rosensweig & Hyman have been on terms no less favorable to the Company
than would have been available from nonaffiliated parties.

                                      F-15

<PAGE>
<PAGE>

NOTE 5.  ACCOUNT ANALYSIS

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                     MAY 31,
                                                         ------------------------------
                                                             1997                1996
                                                         -----------          -------
<S>                                                        <C>               <C>       
        Land                                               $    8,651        $    8,344
        Buildings                                              35,674            35,873
        Cable television and wireless telephone
            transmission and distribution systems

            and related equipment                           1,021,686           969,031
        Miscellaneous equipment and furniture
            and fixtures                                       57,226            51,289
        Australian plant and equipment                         21,524            20,979
                                                           ----------        ----------
                                                            1,144,761         1,085,516
        Less accumulated depreciation                        (429,343)         (433,909)
                                                           ----------        ----------
                                                           $  715,418        $  651,607
                                                           ==========        ==========
</TABLE>


Depreciation expense was approximately $119,336, $89,299 and $73,571 for the
fiscal years ended May 31, 1997, 1996, and 1995, respectively. Approximately
$4,743 of accumulated depreciation was written off in relation to the sale of
wireless telephone equipment during the year ended May 31, 1997. During fiscal
1997 the Company wrote-off $119,000 of fully depreciated property, plant and
equipment.

Accrued expenses and other current liabilities consist of the following:

<TABLE>
<CAPTION>
                                               MAY 31,
                                     -------------------------
                                        1997           1996
                                     --------         --------
<S>                                  <C>              <C>     
Accrued Interest                     $ 32,409         $ 22,921
Accrued capital purchases              11,317             --
Accrued unpaid invoices                 9,620             --
Australian A/P & Accrued               17,070           20,874
Accrued Other                          58,821           51,883
Customer Deposits & Prepaids           21,170           19,370
                                     --------         --------
                                     $150,407         $115,048
                                     ========         ========
</TABLE>



                                      F-16

<PAGE>
<PAGE>


NOTE 6.  LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                               MAY 31,
                                                                    ----------------------------
                                                                       1997              1996
                                                                    ---------         ----------
<S>                                                                 <C>               <C>       
        Credit facility (a)                                         $  324,000        $  305,000
        Credit facility (b)                                            165,000           226,000
        9 1/2% Senior notes due 2000 (c)                               150,000           150,000
        9 3/4% Senior notes due 2002 (d)                               200,000           200,000
        11 7/8% Senior subordinated debentures due 2003 (e)                 --           204,000
        Zero Coupon Senior discount notes due 2003 (f)                 265,381           242,962
        9 1/2% Senior notes due 2005 (g)                               250,000           250,000
        8 7/8% Senior Notes due 2007 (h)                               250,000                --
        Subsidiary 8 7/8% Senior notes due 2001 (i)                    250,000           250,000
        Subsidiary 9.47% Senior secured notes due 2002 (j)             100,000           100,000
        Subsidiary 10 1/8% Senior notes due 2005 (k)                   100,000           100,000
        Subsidiary revolving credit and term loan (l)                   53,500            53,500
        Subsidiary credit facility (m)                                  74,000                --
        Subsidiary credit facility (n)                                   5,000                --
        Subsidiary credit facility (o)                                      --                --
        Other, including Australian operations                          15,111             15,233
                                                                    ----------        ----------
                                                                     2,201,992         2,096,695
        Current maturities                                              15,011            15,084
                                                                    ----------        ----------
                                                                    $2,186,981        $2,081,611
                                                                    ==========        ==========
</TABLE>


(a) On August 4, 1995, as amended August 12, 1996, CCC-I, Inc. ("CCC-I"), a
subsidiary of the Company, entered into a three year, $525,000 unsecured
revolving credit facility which converts to a five year term loan. The proceeds
of the facility were used by CCC-I to repay existing indebtedness of CCC-I
($148,000 at May 31, 1995) and will be used for working capital and general
corporate purposes. The repayment by CCC-I of its existing indebtedness
discharged all of CCC-I's obligations under its then-existing credit agreement
and, as a result, such agreement was terminated. During fiscal 1996, the Company
incurred a non cash charge of $2,647 reflecting the write off of debt issuance
costs associated with the replaced credit agreement. The interest rates payable
on borrowings under the amended credit facility are based on, at the election of
CCC-I, (a) the base rate of interest announced by Citibank, N.A. plus 0% to
0.625% per annum based upon certain conditions, or (b) the London Interbank
Offering Rate plus 0.75% to 1.625% per annum based upon certain conditions. At
May 31, 1997, CCC-I's weighted average interest rate was 7.2%. This credit
facility restricts the incurrence of certain additional debt by CCC-I, limits
the ability of CCC-I to pay dividends to the Company and requires that certain
operating tests be met. The carrying value of the credit facility approximates
fair value which was based upon the current rates offered to the Company for
debt with similar remaining maturities.



                                      F-17

<PAGE>
<PAGE>


The agreement expires on August 31, 2004 and provides for mandatory principal
repayments, among other possible reductions, in the following percentages:

<TABLE>
<CAPTION>
                      LAST DAY            LAST DAY           LAST DAY            LAST DAY
YEAR                 OF FEBRUARY           OF MAY            OF AUGUST          OF NOVEMBER
----                 -----------           ------            ---------          -----------
<S>                    <C>                  <C>                <C>                 <C>  
1999                     --                   --                   --              4.00%
2000                   4.00%                4.00%              4.00%               4.50%
2001                   4.50%                4.50%              4.50%               5.25%
2002                   5.25%                5.25%              5.25%               5.75%
2003                   5.75%                5.75%              5.75%               5.50%
2004                   5.50%                5.50%              5.50%                 --
</TABLE>

The credit facility restricts the incurrence of certain additional debt of
CCC-I, limits the ability of CCC-I to pay dividends to the Company and requires
that certain operating tests be met.

(b) On June 30, 1994, as amended August 12, 1996, CCC-II, Inc. ("CCC-II"), a
subsidiary of the Company entered into a three year $350,000 unsecured revolving
credit facility which converts to a five year term loan with a syndicate of
banks led by Citibank, N.A. as agent for the syndicate. The proceeds of the
facility may be used for acquisitions, working capital and general corporate
purposes. The interest rates payable on borrowings under the amended credit
facility are based on, at the election of CCC-II, (a) the base rate of interest
announced by Citibank, N.A. plus 0% to 0.5% per annum based upon certain
conditions, or (b) the London Interbank Offering Rate plus 0.75% to 1.375% per
annum based upon certain conditions. At May 31, 1997, CCC-II's weighted average
effective interest rate was 7.9%. This credit facility restricts the incurrence
of certain additional debt by CCC-II, limits the ability of CCC-II to pay
dividends to the Company and requires that certain operating tests be met. The
carrying value of the credit facility approximates fair value which was based
upon the current rates offered to the Company for debt with similar remaining
maturities.

The agreement expires on August 31, 2004 and provides for mandatory principal
repayments, among other possible reductions, in the following percentages:

<TABLE>
<CAPTION>
                      LAST DAY            LAST DAY           LAST DAY           LAST DAY
YEAR                 OF FEBRUARY           OF MAY            OF AUGUST         OF NOVEMBER
----                 -----------           ------            ---------         -----------
<S>                    <C>                  <C>                <C>                 <C>  
1999                     --                   --                 --                2.50%
2000                   2.50%                2.50%              2.50%               5.00%
2001                   5.00%                5.00%              5.00%               5.00%
2002                   5.00%                5.00%              5.00%               6.25%
2003                   6.25%                6.25%              6.25%               6.25%
2004                   6.25%                6.25%              6.25%                 --
</TABLE>

During the year ended May 31, 1996, all of the Company's obligations with
respect to Hedge Agreements expired. Based upon current market conditions and
current mix of fixed and floating rate debt securities of the Company and the
elimination of any future hedge requirements in its current bank credit
facilities, the Company currently has no plans to renew, extend or replace the
Hedge Agreements.

(c) On August 21, 1992, the Company issued Senior Notes Due 2000 ("9 1/2%
Notes") in the principal amount of $150,000 which mature on August 15, 2000. The
9 1/2% Notes bear interest at 9 1/2%



                                      F-18

<PAGE>
<PAGE>

payable semiannually on February 15 and August 15 of each year commencing
February 15, 1993. The 9 1/2% Notes may not be redeemed prior to maturity.

The 9 1/2% Notes are senior in right of payment to all existing and future
subordinated indebtedness of the Company and rank pari passu with its 9 3/4%
Senior Notes Due 2002. The 9 1/2% Notes limit the ability of the Company and its
subsidiaries (as defined) to incur indebtedness and liens, restrict the payment
or declaration of dividends on its Capital Stock, and restrict the purchase or
redemption of its Capital Stock.

The 9 1/2% Notes provide that the holders will have the right to require the
Company to purchase the 9 1/2% Notes following a transaction or transactions
which reduce below 300 the number of record holders of the Company's Class A
Common Stock and which result in certain reductions in the ratings of the 9 1/2%
Notes. At May 31, 1997 and 1996, the 9 1/2% Notes were trading at 103.3% and
100.4% of par or $154,905 and $150,615, respectively.

(d) On February 13, 1992, the Company issued Senior Notes Due 2002 ("the 9 3/4%
Notes") in the principal amount of $200,000 which mature on February 15, 2002.
The notes bear interest at 9 3/4% payable semiannually on February 15 and August
15 of each year commencing August 15, 1992. The 9 3/4% Notes may be redeemed
prior to maturity. The 9 3/4% Notes limit the ability of the Company and its
subsidiaries (as defined) to incur indebtedness or liens.

The 9 3/4% Notes provide that the holders will have the right to require the
Company to purchase the 9 3/4% Notes following a transaction or transactions
which reduce below 300 the number of record holders of the Company's Class A
Common Stock and which result in certain reductions in the ratings of the 9 3/4%
Notes. At May 31, 1997 and 1996, the 9 3/4% Notes were trading at 104.2% and
100.5% of par or $208,400 and $200,920, respectively.

(e) On October 17, 1991, the Company redeemed all of its $200,000 12 3/4% Senior
Subordinated Reset Debentures Due 2000 and concurrently sold $204,000 11 7/8%
Senior Subordinated Debentures Due 2003 (the "Debentures"). The Debentures were
called by the Company on April 15, 1997 at a redemption price of 105% of the
principal amount. Accordingly, the amount required to retire the 11 7/8%
Debentures at April 15, 1997 was $214,200 plus accrued interest of $12,113. As a
result of the early redemption, the Company recorded a $7,582 net loss on early
retirement of debt as an extraordinary item, net of income taxes of $5,379.

(f) On April 1, 1993, the Company issued Senior Discount Notes Due 2003 ("the
Discount Notes") in the discounted amount of $183,678 yielding 8.875% annually
to maturity. The Discount Notes mature on March 15, 2003 at $444,000. There will
be no periodic payments of interest on the Discount Notes, and they may not be
redeemed prior to maturity. During the years ended May 31, 1997 and 1996,
approximately $22,419 and $20,526 of interest, respectively was amortized in the
consolidated financial statements.

The Discount Notes are general unsecured obligations of the Company and are
senior in right of payment to all existing and future subordinated indebtedness
of the Company. The Discount Notes rank pari passu with the Company's 9 1/2%
Senior Notes Due 2000 and its 9 3/4% Senior Notes Due 2002. The Discount Notes
limit the ability of the Company and its subsidiaries (as defined) to incur
indebtedness and liens, restrict the payment or declaration of dividends on its
Capital Stock, and restrict the purchase or redemption of its Capital Stock.



                                      F-19

<PAGE>
<PAGE>

The Discount Notes provide that the holders will have the right to require the
Company to purchase the Notes following a transaction or transactions which
reduce below 300 the number of record holders of the Company's Class A Common
Stock and which result in certain reductions in the ratings of the Discount
Notes. At May 31, 1997 and 1996, the Notes were trading at 58.1% and 50.0% of
par or $258,097 and $221,867, respectively.

(g) On March 6, 1995, the Company issued unsecured Senior Notes due 2005 ("the 9
1/2% Notes") in the principal amount of $250,000 which mature March 1, 2005. The
Notes bear interest at 9 1/2% payable semi-annually on March 1 and September 1
of each year commencing September 1, 1995. The 9 1/2% Notes may not be redeemed
by the Company.

The 9 1/2% Notes are senior in right of payment to all existing and future
subordinated indebtedness of the Company and rank pari passu with its 9 3/4%
Senior Notes Due 2002 , the 9 1/2% Notes Due 2000 and the Discount Notes. The 9
1/2% Notes limit the ability of the Company and its subsidiaries (as defined) to
incur indebtedness and liens, restrict the payment or declaration of dividends
on Capital Stock, and restrict the purchase or redemption of its Capital Stock.

The 9 1/2% Notes provide that the holders will have the right to require the
Company to purchase the 9 1/2% Notes following a transaction or transactions
which reduce below 300 the number of record holders of the Company's Class A
Common Stock and which result in certain reductions in the ratings of the 9 1/2%
Notes. At May 31, 1997 and 1996, the Notes were trading at 102.8% and 98.9% of
par or $257,075 and $247,200, respectively.

(h) On January 17, 1997, the Company issued Senior Notes Due 2007 ("8 7/8%
Notes") in the principal amount of $250,000 which mature on January 15, 2007.
The 8 7/8% Notes were issued pursuant to a prior $500,000 shelf registration of
the Company's securities filed with the SEC on October 26, 1993. The 8 7/8%
Notes bear interest at 8 7/8% payable semiannually on January 15 and July 15 of
each year commencing July 15, 1997. The 8 7/8% Notes may not be redeemed prior
to maturity.

The 8 7/8% Notes will rank pari pasu with all existing and future Senior
Indebtedness (as that term is used in the Prospectus) of the company, including
the 9 3/4% Senior Notes Due 2002, the 9 1/2% Senior Notes Due 2000, the Senior
Discount Notes due 2003 and the 9 1/2% Senior Notes due 2005 and will be senior
in right of payment to all existing and future subordinated indebtedness of the
Company.

The 8 7/8% Notes provide that the holders will have the right to require the
Company to purchase the 8 7/8% Notes following a transaction or transactions
which reduce below 300 the number of record holders of the Company's Class A
Common Stock and which result in certain reduction in ratings of the 8 7/8%
Notes. At May 31, 1997 the Notes were trading at 97.11% of par or $242,775.

The net proceeds received by the Company from the sale of the 8 7/8% Notes, of
approximately $244,607, were used to temporarily repay a portion of the
long-term debt outstanding under two credit agreements executed by subsidiaries
of the Company. The net proceeds were used to retire $204,000 aggregate
principal amount of 11 7/8% Senior Subordinated Debentures due 2003 issued by
the Company in October 1991 (the "11 7/8% Debentures"). The 11 7/8% Debentures
were called by the Company on April 15, 1997 at a redemption price of 105% of
the principal amount thereof. Accordingly, the amount required to retire the 11
7/8% Debentures at such time was $214,200 plus accrued interest of $12,113. The
effect of the redemption resulted in an extraordinary loss of



                                      F-20

<PAGE>
<PAGE>

approximately $7,582, net of income taxes, reflecting the call premium and
write-off of deferred financing costs. The balance of the net proceeds may be
used by the Company for general corporate purposes, including but not limited to
the financing of capital expenditures, investments, purchases of the Company's
securities and acquisitions. Pending any specific application, the net proceeds
will be added to working capital and invested in short-term interest bearing
obligations.

(i) On November 15, 1993, Centennial issued $250,000 of eight year unsecured
Senior Notes (the 8 7/8% Notes). The interest on these notes is payable
semi-annually at an interest rate of 8 7/8%. The interest is computed on the
basis of a 360-day year (twelve 30 day months). The maturity date of the 8 7/8%
Notes is November 1, 2001 unless redeemed earlier at the option of Centennial,
however not prior to May 1, 1999. If early redemption is sought during the
twelve-month period beginning May 1 of each of the following years, the
redemption price is calculated using:

                 YEAR                         PERCENTAGE
                 ----                         ----------
                 1999                           105.25%
                 2000                           103.50%
                 2001                           101.75%

The proceeds of the 8 7/8% Notes were used to retire all outstanding bank debt.
At November 15, 1993, the amount was $182,700. Costs associated with the bond
offering were capitalized and are being written off on a straight-line basis
over the life of the issue. At May 31, 1997 and 1996, the 8 7/8% Notes were
trading at 99.47% and 93.74% of par or $248,675 and $234,350, respectively.

(j) On December 31, 1992, Century-ML Cable Corporation ("CML") and Century/ML
Cable Venture ("CCV"), subsidiaries of the Company through which the Company
owns a 50% interest in cable television systems in Puerto Rico, entered into
separate note agreements (the "Note Agreements") with a group of institutional
lenders providing for the issuance by CML of $100,000 aggregate principal amount
of its 10-year 9.47% Senior Secured Notes Due 2002. Interest on the Notes is
payable semiannually and principal will be payable in installments of 20% of the
original principal amount beginning on September 30, 1998, with final maturity
at September 30, 2002. The Notes are subject to various other prepayment
provisions, including prepayment with premium at the option of CML at any time
prior to their expressed maturity and prepayment with premium at the option of
the holders thereof upon the occurrence of certain events involving changes in
control of CML and CCV. The Note Agreements contain various financial and
operating covenants, including, among other things, maintenance of certain
financial ratios, restrictions on the ability of CML and CCV to incur
indebtedness or liens and to make certain distributions and capital expenditures
and limits on certain other corporate actions. The Notes are entitled to the
benefits of certain security agreements and guarantees, including a guaranty by
CCV of the payment of all principal of, premium, if any, and interest on the
notes. The notes are secured by substantially all of the assets of CCV. The
carrying value of the credit facility approximates fair value which was
estimated based upon the current rates offered to CCV for debt with similar
remaining maturities.

Proceeds from the issuance of the Notes were used to repay all principal and
interest outstanding on CML's credit facility. Concurrent with issuance of the
Notes, CML amended and restated its existing credit facility effective December
31, 1992 ("the Second Restated Credit Agreement"). The Second Restated Credit
Agreement provided for a committed credit line of $20,000 which reduced to
$12,650 on May 31, 1996. This facility was canceled on May 31, 1997. At May 31,
1996, no amounts were



                                      F-21

<PAGE>
<PAGE>

outstanding on this facility.

(k) On May 11, 1995, Centennial issued $100,000 of ten year unsecured Senior
Notes ("the 10 1/8% Notes"). The interest on the 10 1/8% Notes is payable
semi-annually on the basis of a 360-day year (twelve 30 day months). The 10 1/8%
Notes rank pari passu with Centennial's 8 7/8% Notes and may not be redeemed
prior to maturity on May 15, 2005. Costs associated with the May 11, 1995 bond
offering were capitalized and will be written off on a straight-line basis over
the life of the issue. At May 31, 1997 and 1996, the 10 1/8% Notes were trading
at 104.25% and 98.72% of par or $104,250 and $98,720, respectively.

Both the 8 7/8% and 10 1/8% Notes restrict Centennial from directly or
indirectly declaring or paying any dividends on its presently or subsequently
issued common stock, limit the ability of Centennial to incur additional
indebtedness and limit making any distributions of assets to its stockholders.
At May 31, 1997, Centennial was in compliance with all covenants of the Notes.

(l) On July 31, 1995, a subsidiary of the Company, Century Venture Corp. ("CVC")
entered into a three year, $80,000 revolving credit facility which converts to a
five year term loan. The proceeds of the facility were used by CVC to repay
existing indebtedness of CVC and will be used for working capital and general
corporate purposes. The repayment by CVC of its existing indebtedness discharged
all of CVC's obligations under its then-existing credit agreement and, as a
result, such agreement was terminated. The interest rates payable on borrowings
under the new credit facility are based on, at the election of CVC, (a) "C/D
Base Rate" plus an applicable margin, as defined or (b)"Eurodollar Base Rate"
plus an applicable margin as defined or (c) "ABR" rate as defined.

The agreement expires on February 28, 2004 and provides for a reduction in the
aggregate commitment, among other possible reductions, in the following amounts:

<TABLE>
<CAPTION>
                      LAST DAY                 LAST DAY            LAST DAY               LAST DAY
YEAR                 OF FEBRUARY                OF MAY            OF AUGUST             OF NOVEMBER
----                 -----------               --------           ---------             -----------
<S>                     <C>                      <C>                 <C>                   <C>  
1998                   $   --                   $   --              $1,875                $1,875
1999                    1,875                    1,875               2,500                 2,500
2000                    2,500                    2,500               3,125                 3,125
2001                    3,125                    3,125               3,750                 3,750
2002                    3,750                    3,750               3,750                 3,750
2003                    3,750                    3,750               6,667                 6,667
2004                    6,666
</TABLE>

The credit facility restricts the incurrence of certain additional debt of CVC,
limits the ability of CVC to pay dividends to the Company and requires that
certain operating tests be met.

(m) On April 25, 1997, Centennial Puerto Rico Wireless Corporation ("CPRW")
entered into a $130,000 revolving credit Facility with Citibank, N.A. which
converts to a four-year term loan on April 25, 2001 (the "Puerto Rico Credit
Facility"). The proceeds of the Puerto Rico Credit Facility will be used
primarily to finance the construction and operation of PCS, competitive access
and telecommunications networks in Puerto Rico and the United States Virgin
Islands. The proceeds will also be used for working capital and general
corporate purposes and were used to pay certain cash dividends to Centennial as
permitted by the Puerto Rico Credit Facility. The interest rate payable on
borrowings under the new credit facility are based on, at the election of CPRW,
(a) the "Base Rate", as



                                      F-22

<PAGE>
<PAGE>

defined, plus a margin of 1.50% or (b) the "Eurodollar Rate", as defined, plus a
margin of 2.50%, adjusted for the maintenance of certain specified leverage
ratios, as applicable. The Puerto Rico Credit Facility is non-recourse to
Centennial and the Company. The Puerto Rico Credit Facility is secured by
substantially all of the assets of CPRW and its direct and indirect
subsidiaries. The Puerto Rico Credit Facility restricts the incurrence of
certain additional debt and requires that certain operating tests be met. At May
31, 1997, $74,000 was outstanding under the Puerto Rico Credit Facility.

(n) On September 12, 1996, Centennial entered into a $50,000 credit facility
with Citibank, N.A., which was amended April 22, 1997 (the "Amended Credit
Facility"). The commitment of the lenders under such Amended Credit Facility may
be increased to $90,000 at the election of the lenders. As of July 30, 1997, the
commitment was increased to $75,000. The Amended Credit Facility terminates on
January 31, 2001. Approximately $35,000 of the facility was used to fund the
Benton Harbor, Michigan wireless telephone system acquisition (see Acquisitions
- Centennial), and has since been repaid. The remainder will be used for working
capital and general corporate purposes. The interest rate payable on borrowings
under the Amended Credit Facility is based at the election of Centennial, on (a)
the "Base Rate", as defined, plus a margin of 2% or (b) the "Eurodollar Rate",
as defined, plus a margin of 3%. The Amended Credit Facility is secured by the
pledge of stock of certain of Centennial's subsidiaries not otherwise subject to
restrictions under its Senior Note Indentures, including the subsidiary which
operates the Benton Harbor system. The Amended Credit Facility is further
guaranteed by certain of Centennial's subsidiaries holding Investment Interests.
The Amended Credit Facility restricts the incurrence of certain additional debt,
limits Centennial's ability to pay dividends and requires that certain operating
tests be met. At May 31, 1997, $5,000 was outstanding under the Amended Credit
Facility.

(o) On April 15, 1997, Citizens Century Cable Television Venture ("CCCTV")
entered into an agreement for the provision of a three-year revolving credit
facility in the principal amount of $200,000 with Bank of America and Societe
General, which converts into a five-year term loan. The facility is secured by
the assets of CCCTV. The loan is non-recourse to both Citizens and the Company.
Borrowings under the facility are to be repaid in semi-annual installments
commencing June 30, 2000 and expiring on March 31, 2005. The agreement provides
for mandatory principal repayments, among other possible reductions, in the
following percentages:

<TABLE>
<CAPTION>
                          Last Day of         Last day of          Last day of          Last day of
        Year                 March                June              September            December
        ----                 -----                ----              ---------            --------
        <S>               <C>                 <C>                   <C>                 <C>
        2000                   -                 2.33%                2.33%               2.33%
        2001                 4.00%               4.00%                4.00%               4.00%
        2002                 5.00%               5.00%                5.00%               5.00%
        2003                 5.25%               5.25%                5.25%               5.25%
        2004                 7.13%               7.13%                7.13%               7.13%
        2005                 7.50%                 --                    --                  --
</TABLE>

The facility requires mandatory prepayments of principal refinancing to the
extent that the loan balance exceeds the refinancing on the working capital
commitment (as defined in the facility). Borrowings under the facility bear
interest, at the option of CCCTV, at either the base rate, certificate of
deposit rate, or the Eurodollar rate, plus the applicable margin (as defined in
the facility). The principal use of proceeds will be to fund acquisitions as
well as general corporate purposes. No amounts were outstanding under the
facility at May 31, 1997.



                                      F-23

<PAGE>
<PAGE>

The aggregate annual principal payments for the next five years and thereafter
are summarized as follows (amounts in thousands):

               1998                        $   15,011
               1999                            27,550
               2000                            81,305
               2001                           275,295
               2002                           599,520
               2003 and thereafter          1,203,311
                                           ----------
                                           $2,201,992
                                           ==========

At May 31, 1997, the Company and its subsidiaries were in compliance with all
covenants of the above noted agreements.

NOTE 7.  COMMITMENTS AND CONTINGENCIES

PENDING ACQUISITIONS

On August 16, 1996, the Company entered into agreements to acquire two cable
television systems which serve an aggregate of approximately 35,000 primary
basic subscribers, which agreements were subsequently assigned to a joint
venture in which each of the Company and Citizens Utilities Company ("Citizens
Utilities" or "Citizens") have a 50% interest (the "Century/Citizens Joint
Venture"). These systems are primarily located in Yorba Linda, Orange County and
Diamond Bar, California. Pursuant to the agreements, the aggregate purchase
price for these systems was approximately $69,500. The Company currently expects
to fund the acquisitions using available credit facilities. The purchase of
these systems by the Company is subject to regulatory approvals. There is no
assurance that the Company will obtain such approvals or that such acquisitions
will be consummated.

STOCK REPURCHASE

In October 1992, the Company's Board of Directors authorized the purchase of up
to 2,000,000 shares of its Class A Common Stock in the open market and in
privately negotiated transactions, depending on prevailing market conditions.
During August, 1997, the Company announced that its Board of Directors
authorized the repurchase in the open market and in privately negotiated
transactions, from time to time, of up to 5,000,000 additional shares of Class A
Common Stock, depending on prevailing market conditions. The Company purchased
171,500 shares of its own Class A Common Stock in the open market for a purchase
price of $660 during the fourth quarter of fiscal 1997. Subsequent to May 31,
1997, the Company purchased 736,000 of such shares in the open market for a
purchase price of $3,990. These shares purchased in fiscal 1997 and 1998 have
been accounted for as Treasury Shares during the respective fiscal years.

On December 21, 1994, Centennial announced that its Board of Directors
authorized the repurchase in the open market and in privately negotiated
transactions, from time to time, of up to 1,000,000, shares of Centennial's
Class A Common Stock, depending on prevailing market conditions. Subsequent to
May 31, 1997 Centennial purchased 244,000 shares of its own Class A Common Stock
in the open market for a purchase price of $3,902. Subsequent to May 31, 1997,
Centennial announced that its Board of Directors authorized the repurchase in
the open market and in privately negotiated transactions of up to an additional
3,000,000 shares of its Class A Common Stock, depending on prevailing market


                                      F-24

<PAGE>
<PAGE>

conditions.

EQUITY INVESTMENTS IN WIRELESS TELEPHONE SYSTEMS

Centennial has determined to pursue a strategy to sell or otherwise dispose of
its minority equity investments in wireless telephone systems representing
approximately 1,100,000 net pops. Centennial has not yet made a final
determination as to the estimated sale proceeds or the timing of such
disposition and believes that the fair market value of its minority equity
investments exceeds the net book value of the recorded assets at May 31, 1997.

LEASES

At May 31, 1997, the Company's approximate annual lease obligations and expenses
(under operating leases) were as follows:

         Pole rentals                                  $ 3,676
         Vehicles and equipment                            428
         Antenna site and property access                2,856
         Warehouse, studio and office                    5,342
                                                       -------
                                                       $12,302
                                                       =======

The above leases are substantially all short-term or cancelable by either party
upon notice.

REGULATORY RESTRUCTURING CHARGE

The Company recorded a one time charge of $4,000 in the fourth quarter of fiscal
1995 in accordance with a plan adopted to restructure the Company's cable
television operations in response to recent FCC mandated rules. The charge
includes related employee severance costs, coincident with the restructuring.
The restructuring charge was substantially cash in nature and did not result in
a write-off of the Company's assets.

LETTERS OF CREDIT

The Company is a party to several letters of credit totaling $7,803. No payments
have been made under these agreements.

LITIGATION

The Company and its subsidiaries are involved in litigation and regulatory
matters which involve certain claims which arise in the normal course of
business, none of which individually, or in the aggregate, in the opinion of
management, is expected to have a materially adverse effect on the Company's
consolidated financial position or results of operations.



                                      F-25

<PAGE>
<PAGE>

NOTE 8.  COMMON STOCKHOLDERS' DEFICIENCY

COMMON STOCK

The voting rights with respect to the two classes of Common Stock are as
follows: Class A shares entitle the holder to one vote per share, Class B shares
entitle the holder to ten votes per share. Shares of Class B Common Stock are
convertible into shares of Class A Common Stock on a one-for-one basis upon
transfer from the current Class B stockholders. The Company is restricted from
paying cash dividends on its common stock by its credit agreements (Note 6).

TREASURY STOCK

On March 10, 1995, the Company purchased 20,000,000 shares of its Class B Common
Stock from Sentry Insurance, a Mutual Company, of Stevens Point, Wisconsin
("Sentry Insurance") at an aggregate price of $110,000 utilizing existing credit
lines. For the present, the acquired shares will be held in the Company's
treasury. Upon acquisition the Class B shares were converted automatically to
Class A shares. Prior to this acquisition, 65,406,115 shares of the Company's
Class B Common Stock were outstanding of which 23,134,056 were held by Sentry
Insurance.

During the fourth quarter of fiscal 1997 and the first quarter of fiscal 1998,
the Company purchased 171,500 and 736,000 shares of the Company's Class A Common
Stock in the open market. These shares were accounted for as treasury shares in
the respective fiscal years (See Note 7).

At May 31, 1997 and 1996, the Company held 31,726,838 and 31,354,622 Class A
Common Shares, respectively, in its treasury.


                                      F-26

<PAGE>
<PAGE>


The following table presents changes in the Company's stockholders' equity for
the years ended May 31, 1997, 1996 and 1995.

<TABLE>
<CAPTION>
                                                                 Common Stock
                                                 --------------------------------------------------
                                                      Class A                      Class B           
                                                 ---------------------    -------------------------
                                                 Shares        Dollars    Shares            Dollars  
                                                 ------        -------    ------            -------
<S>                                           <C>               <C>      <C>                <C>      
Balance at June 1, 1994                         34,687,013      $347     66,177,130          $ 662   

Shares issued in connection 
  with employee incentive plans                    445,025         4                                 

Class A shares purchased by the
  Company                                                                                     

Unrealized appreciation of 
  marketable securities                                                                             

Class A shares issued in conjunction
  with acquisitions                              3,581,632        36                                 

Class B shares converted to
  Class A shares                                20,771,015       208    (20,771,015)          (208)

Net paid in capital contributed by
  minority interests                                                                                 

Accretion in liquidation value of
  subsidiary preferred stock                                                                         

Vesting of subsidiary stock options                                                                  

Net loss                                                                                             
                                                ----------     -----     ----------          -----
Balance at May 31, 1995                         59,484,685      $595     45,406,115          $ 454   

Shares issued and acquired in connection
  with employee incentive plans                    461,595         4                                 

Net paid in capital contributed by
   minority interests                                                                                

Accretion in liquidation value of
  subsidiary preferred stock                                                                         

Foreign currency translation adjustment                                                              

Unrealized appreciation of marketable
  securities                                                                                         

Vesting of subsidiary stock options                                                                  

Net loss                                                                                             
                                                ----------     -----     ----------          -----
Balance at May 31, 1996                         59,946,280      $599     45,406,115          $ 454   

Shares issued in connection
  with employee incentive plans                    711,490         7         25,000                  

Class A shares purchased by the
  Company                                                                                            

Class B shares converted to Class A
  shares                                           305,000         3       (305,000)            (3)  

Class A shares issued in connection
  with acquisitions                              1,732,357        18                                 

Subsidiary preferred stock dividends                                                                 

Foreign currency translation adjustment                                                              

Change in unrealized appreciation of
  marketable securities                                                                                

Income tax benefit-subsidiary
  stock options exercised                                                                              

Net loss                                                                                             
                                                ----------     -----     ----------          -----
Balance at May 31, 1997                         62,695,127      $627     45,126,115          $ 451   
                                                ----------     -----     ----------          -----
                                                ----------     -----     ----------          -----


<CAPTION>
                                               Additional     
                                                Paid-in        Accumulated           
                                                Capital          Deficit          Other        Total
                                               ---------       -----------     ----------    --------
<S>                                               <C>            <C>              <C>         <C>
Balance at June 1, 1994                         $105,301        $(322,426)     $ (27,512)    $(243,628)

Shares issued in connection 
  with employee incentive plans                    1,219                                         1,223

Class A shares purchased by the
  Company                                                                       (110,092)     (110,092)

Unrealized appreciation of 
  marketable securities                                                           14,416        14,416

Class A shares issued in conjunction
  with acquisitions                               43,839                                        43,875

Class B shares converted to
  Class A shares                            

Net paid in capital contributed by
  minority interests                              29,263                                        29,263

Accretion in liquidation value of
  subsidiary preferred stock                      (4,419)                                       (4,419)

Vesting of subsidiary stock options                  342                                           342

Net loss                                                          (82,625)                     (82,625)
                                               ----------       ---------     ----------     ----------
Balance at May 31, 1995                         $175,545        $(405,051)     $(123,188)    $(351,645)

Shares issued and acquired in connection
  with employee incentive plans                    2,971                            (158)        2,817

Net paid in capital contributed by
  minority interests                               1,238                                         1,238

Accretion in liquidation value of
  subsidiary preferred stock                      (4,256)                                       (4,256)

Foreign currency translation adjustment                                             (753)         (753)

Unrealized appreciation of marketable
  securities                                                                       6,397         6,397

Vesting of subsidiary stock options                  306                                           306

Net loss                                                         (102,117)                    (102,117)
                                               ----------       ---------     ----------     ----------
Balance at May 31, 1996                         $175,804        $(507,168)     $(117,702)    $(448,013)

Shares issued in connection
  with employee incentive plans                    3,948                                         3,955

Class A shares purchased by the
  Company                                                                         (2,359)       (2,359)

Class B shares converted to Class A
  shares                                                                                           --

Class A shares issued in connection
  with acquisitions                                  (18)                                          --

Subsidiary preferred stock dividends              (4,850)                                       (4,850)

Foreign currency translation adjustment                                              462           462

Change in unrealized appreciation of
marketable securities                                                             (7,950)       (7,950)

Income tax benefit-subsidiary
  stock options exercised                          1,987                                         1,987

Net loss                                                         (141,875)                    (141,875)
                                               ----------       ---------     ----------     ----------

Balance at May 31, 1997                         $176,871        $(649,043)     $(127,549)    $(598,643)
                                               ----------       ---------     ----------     ----------
                                               ----------       ---------     ----------     ----------
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                                       May 31,
                                                      ---------------------------------------
Other stockholders' deficiency items:                  1997             1996           1995
-------------------------------------                 ------           ------         -------
<S>                                                   <C>               <C>            <C>
Treasury stock, at cost                               $(140,121)     $(137,762)     $(137,604)
Unrealized appreciation of marketable
   securities                                            12,863         20,813         14,416
Foreign currency translation adjustment                    (291)          (753)             -
                                                     ----------       ---------     ---------- 
                                                      $(127,549)     $(117,702)     $(123,188)
                                                     ----------       ---------     ---------- 
                                                     ----------       ---------     ---------- 
</TABLE>


                                      F-27





<PAGE>
<PAGE>

NOTE 9.  INCOME TAXES

The Company and its consolidated subsidiaries, except for Century Venture
Corporation and Subsidiaries, Century-ML Cable Venture and Subsidiary, Citizens
Century Cable Television Venture, East Coast Pay Television Pty, Ltd., and
Centennial Cellular Corp. and Subsidiaries (collectively the "Unconsolidated Tax
Group"), file a consolidated federal income tax return. The provision (benefit)
for income taxes are summarized as follows:

<TABLE>
<CAPTION>
                                YEAR ENDED MAY 31,
                  ----------------------------------------------
                     1997              1996                 1995
                  ---------          -------              ------
<S>               <C>               <C>                  <C>     
Current           $  7,486          $  2,844             $  3,457
Deferred           (38,144)          (37,170)             (11,518)
                  ---------         --------             --------
                  $(30,658)         $(34,326)            $ (8,061)
                  =========         =========            =========
</TABLE>

Deferred income taxes result primarily from nondeductible depreciation and
amortization resulting from book and tax basis differences of certain acquired
subsidiaries.

The effective income tax rate of the Company differs from the statutory rate as
a result of the effect of the following items:

<TABLE>
<CAPTION>
                                                               YEAR ENDED MAY 31,
                                                ------------------------------------------------
                                                    1997              1996                  1995
                                                ----------         --------               ------
<S>                                             <C>                <C>             <C>
Computed tax benefit at federal
    statutory rate on loss before
    income taxes and minority
    interest                                   $   (63,141)    $   (50,701)        $   (40,059)
Computed tax benefit of
    Unconsolidated Tax Group                        10,553          11,842              15,186
Recognized tax benefit of
    Unconsolidated Tax Group                        (5,139)        (12,386)            (15,518)
Nondeductible amortization
    resulting from acquired
    subsidiaries                                     1,131           2,433               2,600
State and local income taxes,
    net of federal income tax
    effect                                          (3,782)         (2,760)             (1,832)
Tax benefits related to net operating
    and capital loss carryforwards
    not recognized and changes in
    valuation allowance                             29,685          17,246              30,722
Other                                                   35              --                 840
                                               -----------        --------         -----------
                                              $   (30,658)      $ (34,326)        $    (8,061)
                                               ============      =========         ============
</TABLE>



                                      F-28

<PAGE>
<PAGE>

Temporary differences and carryforwards which give rise to a significant portion
of deferred tax assets and (liabilities) are as follows:

<TABLE>
<CAPTION>
                                                  YEAR ENDED MAY 31,
                                         ------------------------------
                                              1997                1996
                                         -----------           -------
<S>                                        <C>               <C>      
Deferred Tax Assets:
Tax loss carryforward                      $ 200,974         $ 167,936
Valuation allowance                          (99,778)          (89,463)
                                           ---------         ---------
                                           $ 101,196         $  78,473
                                           =========         =========

Deferred Tax Liabilities:
Amortization of intangible assets          $  86,575         $ 105,817
Depreciation of fixed assets                  68,580            72,130
                                           ---------         ---------
                                           $ 155,155         $ 177,947
                                           =========         =========
Net deferred tax liabilities               $  53,959         $  99,474
                                           =========         =========
</TABLE>

The valuation allowance recorded at May 31, 1997 and 1996 represents the portion
of recorded tax loss carryforwards for which it is more likely than not that
such carryforwards will not be realized.

The Company and its subsidiaries, except for the Unconsolidated Tax Group, have
an investment tax credit carryover (after the 35% reduction mandated by TRA 86)
for federal income tax purposes of approximately $11,428 and net operating loss
carryforwards for federal income tax purposes of approximately $489,340 expiring
through 2002 and 2012, respectively.

Century Venture Corporation and Subsidiaries have an investment tax credit
carryover of approximately $2,032 and net operating loss carryforwards of
approximately $11,224 which will expire through 2002 and 2012, respectively.

Centennial Cellular Corp. and Subsidiaries have approximately $105,372 of net
operating loss carryforwards for federal income tax purposes, expiring through
2012 some of which are subject to limitation on their future utilization under
Section 382 of the Internal Revenue Code of 1986.

The operations of Century ML Cable Venture and Subsidiary are subject to Puerto
Rico income taxes.



                                      F-29

<PAGE>
<PAGE>


NOTE 10. JOINT VENTURES

The combined operations and certain other information related to the 50%
indirectly owned Century Venture Corp. and Subsidiaries, Century-ML Cable
Venture and Subsidiary and Citizens Century Cable Television Venture included in
the consolidated balances of the Company are as follows:

<TABLE>
<CAPTION>
                                                            YEAR ENDED MAY 31,
                                                      ---------------------------
                                                         1997              1996
                                                      -----------       ---------
<S>                                                    <C>              <C>     
Combined Statement of Earnings
Revenues                                               $110,811         $ 97,558
Costs and expenses:
        Costs of services                                32,072           26,917
        Selling, general and administrative              18,681           15,831
        Depreciation and amortization                    36,660           33,738
                                                       --------         --------
                                                         87,413           76,486
                                                       --------         --------
Operating Income                                         23,398           21,072
Other expense                                              --                550
Interest                                                 13,114           13,881
                                                       --------         --------
Income before taxes                                      10,284            6,641
Income tax provision                                      1,957            1,240
                                                       --------         --------
        Net Income                                     $  8,327         $  5,401
                                                       ========         ========
Combined Balance Sheet Data
Property, plant and equipment - net                    $102,572         $ 98,763
Total assets                                            311,766          291,013
Long-term debt                                          153,500          153,500
Total liabilities                                       195,875          183,447
</TABLE>

The Company's joint venture partner, ML Media Partners, L.P. ("Media Partners")
has the right to cause a sale of Century-ML Cable Venture and Subsidiary. If
Media Partners proposes such a sale, the Company will have the right to purchase
Media Partners' interest for the appraised fair market value of Media Partners'
50% interest in Century-ML Cable Venture and Subsidiary.

NOTE 11.  EMPLOYEE BENEFIT PLANS

STOCK OPTION PLANS

The Company's 1985 Stock Option Plan (the "1985 Option Plan"), adopted by the
Board of Directors and approved by the stockholders on December 5, 1985, expired
by its terms on May 31, 1995. Accordingly, the Board of Directors adopted and
the stockholders ratified the Company's 1994 Stock Option Plan (the "1994 Option
Plan") on October 26, 1994. Upon ratification of the 1994 Option Plan,



                                      F-30

<PAGE>
<PAGE>

no more grants are to be made under the 1985 Option Plan. The 1985 Stock Option
Plan and the 1994 Stock Option Plan, collectively the "Option Plans", permit the
issuance of "incentive stock options," as defined in Section 422 of the Internal
Revenue Code of 1986, as amended, as well as non-qualified options. The 1985
Option Plan and the 1994 Option Plan provide for the grant of options to
purchase up to 6,897,079 and 5,000,000 shares, respectively, of Class A Common
Stock to directors, officers and other key employees of the Company and its
subsidiaries. The Option Plans are administered by a committee of the Board of
Directors (the "Stock Option Committee") that determines the recipients and
provisions of options granted under the Option Plans, including the option
price, term and number of shares subject to option. The Board of Directors may
amend the Option Plans, except that the approval of the stockholders is
necessary to increase the total number of shares which may be issued or shares
subject to options, to change the minimum purchase price for shares subject to
options, to change the maximum period during which options may be exercised, to
extend the period during which options may be granted under the Option Plans, or
to materially increase benefits to option recipients. Generally, the option
price of incentive and non-qualified stock options granted may be as determined
by the Stock Option Committee, but must be at least equal to 100% of the fair
market value of the shares on the date of the grant. The maximum term of each
option is ten years.

For any participant who owns shares possessing more than 10% of the voting
rights of the Company's outstanding common stock, the exercise price of any
incentive stock option must be at least equal to 110% of the fair market value
of the shares subject to such option on the date of grant and the term of the
option may be no longer than five years. Options become exercisable at such time
or times as the Stock Option Committee may determine when it grants options. All
options granted on or before December 31, 1985 must be exercised in the sequence
in which they were granted. The Option Plans permit the exercise of options by
the payment of cash or shares of Class A Common Stock equal in value to the
option price. Under the terms of the Option Plan with respect to options granted
on or before December 31, 1986, the aggregate fair market value of the Class A
Common Stock (determined at the date of the option grant) for which any employee
may be granted incentive stock options in any calendar year may not exceed $100,
plus certain carry-over allowances from the previous three years. Options
granted under the Option Plans are not transferable by the holder other than by
will or the laws of descent and distribution.

As of May 31, 1997, approximately 250 employees were participating in the Option
Plans.

DIRECTOR OPTION PLAN

The Company's 1993 Non-Employee Directors' Stock Option Plan (the "Directors'
Option Plan") was adopted on October 26, 1994. The Directors' Option Plan
replaced the Non-Employee Director Option Plan adopted in 1989 (the "1989
Director Option Plan") which was terminated by the Board of Directors. Under the
Directors' 1993 Option Plan a total of 323,123 shares of Class A Common Stock
were reserved for issuance. Options for 1,000 shares of Class A Common Stock
will be automatically granted under the Directors' 1993 Option Plan to each
person who is elected or re-elected a non-employee Director on the date of the
annual meeting of shareholders of the Company in each of the years 1994 through
2003.

The Directors' Option Plan shall be administered by the Board of Directors or a
committee (the "Board Committee"). In administering the Directors' Option Plan,
the Board of Directors or the Board Committee may adopt rules and regulations
for carrying out the Directors' Option Plan. The Board of Directors may amend
the Directors' Option Plan and amend the terms and conditions of any option



                                      F-31

<PAGE>
<PAGE>

granted under the Directors' Option Plan, except that the approval of the
stockholders is necessary to increase the total number of shares which may be
issued or transferred under the Directors' Option Plan and to change the minimum
purchase price for shares subject to options.

Options granted under the Directors' Option Plan are nonqualified options not
qualifying as incentive stock options under Section 422 of the Code. The option
price that shares of the Company's Class A Common Stock may be purchased upon
exercise of any option granted under the Directors' Option Plan, will be the
fair market value of such shares on the last trading day prior to the date of
the grant of such option. The Directors' Option Plan permits the exercise of
options in cash, shares of Class A Common Stock valued at the fair market value
on the date of purchase or a combination thereof. The maximum term of each
option is five years and six months immediately succeeding the date of grant.
Options granted under the Directors' Option Plan are not transferable by the
holder other than by will or the laws of descent and distribution. During 1991
and 1990, options to purchase 8,052 and 6,710 shares, respectively, of Class A
Common Stock were granted at an exercise price of $2.79 per share under the 1989
Directors' Option Plan. All of these options were exercised as of May 31, 1996.
Under the 1993 Directors' Option Plan, options to purchase 3,000 shares of Class
A Common Stock were granted during both fiscal 1997 and 1996 at an exercise
price of $7.00 and $8.63 per share, respectively. 1,800 of these options were
vested at May 31, 1997.

SUBSIDIARY EMPLOYEE STOCK OPTION PLANS

Since December 27, 1991, Centennial has awarded options to purchase
approximately 1,722,782 shares of Centennial's Class A Common Stock to
approximately 59 employees of Centennial, including executive officers and
directors. During the fiscal years ended May 31, 1997, 1996 and 1995, the number
of such options awarded were approximately 925,782, 0 and 452,000, respectively.
All option shares issued under the Plan were adjusted subsequent to July 22,
1994 to account for the dilutive effect of Centennial's stock rights offering.
At May 31, 1997, 364,274 options were exercisable.

SUBSIDIARY DIRECTOR OPTION PLAN

The Centennial Director Option Plan, adopted on October 27, 1993, provides for
the grant of non-qualified options to purchase up to 50,000 shares of
Centennial's Class A Common Stock to non-employee/officer directors of
Centennial. Options for 1,000 shares of Centennial's Class A Common Stock shall
be automatically granted under the Centennial Director Option Plan on the date
of the annual meeting of shareholders of Centennial in each of years 1993
through 2002. Options become exercisable at the rate of 20% per year beginning
with the first anniversary of the date of the grant. As of May 31, 1997, 14,200
options were awarded. No options had been exercised as of May 31, 1997.



                                      F-32

<PAGE>
<PAGE>


A summary of the status of the Company's and Centennial's stock options as of
May 31, 1995, 1996 and 1997 and changes during the years then ended is presented
below:

The Company's Stock Options:

<TABLE>
<CAPTION>
                                                                   Weighted
                                                                    Average
                                                                   Exercise
                                                    Number           Price
                                                  ---------        ---------
<S>                                               <C>                <C>  
  1995   Outstanding at June 1, 1994              2,273,669          $6.78
         Granted                                    954,750           7.94
         Exercised                                 (222,025)          3.27
         Canceled                                   (45,353)          7.61
                                                 ----------
         Outstanding at May 31, 1995              2,961,041          $7.16

  1996   Granted                                    186,000          $8.86
         Exercised                                 (338,109)          3.53
         Canceled                                  (162,418)          7.43
                                                  ---------
         Outstanding at May 31, 1996              2,646,514          $7.73

  1997   Granted                                  2,915,909          $6.70
         Exercised                                 (401,440)          5.46
         Canceled                                (1,703,933)         $8.69
                                                ----------
         Options outstanding as of
         May 31, 1997                             3,457,050          $6.66
                                                 =========
</TABLE>


  The number of the Company's options which were exercisable at May 31, 1997,
  1996 and 1995 were 1,566,966, 1,568,965 and 1,330,709, respectively. The
  weighted average exercise prices of such options were $6.55, $7.60 and $6.74
  at May 31, 1997, 1996 and 1995, respectively.

  Of the Company's options granted during fiscal 1997, 1996 and 1995, 1,175,072,
  27,500 and 185,000 options, respectively, had exercise prices that were at
  least equal to 110% of the fair market value of the Company's Class A Common
  Stock at the date of grant.



                                      F-33

<PAGE>
<PAGE>


  Centennial's Stock Options:

<TABLE>
<CAPTION>
                                                                 Weighted
                                                                 Average
                                                                 Exercise
                                                   Number          Price
                                                 ---------       --------
<S>                                                <C>            <C>   
  1995   Outstanding at June 1, 1994               933,947        $ 4.76
         Granted December 9, 1994                  455,000         15.76
         Exercised                                 (79,609)         2.02
         Canceled                                  (12,386)        12.78
                                                ----------
         Outstanding at May 31, 1995             1,296,952        $ 8.71

  1996   Granted                                     4,000        $18.25
         Exercised                                (423,665)         1.00
         Canceled                                 (155,715)         5.35
                                                --------
         Outstanding at May 31, 1996               721,572        $13.98
 
  1997   Granted                                 1,362,282        $11.57
         Exercised                                  (1,704)         9.75
         Canceled                                 (929,296)        14.40
                                                 ---------

         Options outstanding as of
         May 31, 1997                            1,152,854         $10.80
                                                 =========         ======
</TABLE>

  The number of Centennial's options which were exercisable at May 31, 1997,
  1996 and 1995 were 485,473, 327,574 and 540,795, respectively. The weighted
  average exercise prices of such options were $10.47, $12.94 and $4.03 at May
  31, 1997, 1996 and 1995, respectively.

  Of the company's options granted during fiscal 1997, 1996 and 1995, 143,282,
  1,000 and 25,000 options, respectively, had exercise prices that were at least
  equal to 110% of the fair market value of Centennial's Class A Common Stock at
  the date of grant.


                                      F-34

<PAGE>
<PAGE>

The following table summarizes information about the Company's and Centennial's
options outstanding at May 31, 1997:

<TABLE>
<CAPTION>
Range of          Number          Weighted Average    Weighted           Number        Weighted
Exercise          Outstanding     Remaining           Average            Exercisable   Average
Prices            at 5/31/97      Contractual Life    Exercise Price     at 5/31/97    Exercise Price
------            ----------      ----------------    --------------     ----------   ---------------
<S>                <C>               <C>                 <C>              <C>            <C>    
The Company' Stock Options:

$4.00-$8.69        3,457,050         8.24 years          $   6.66         1,566,966      $  6.55
 ==========        =========         ==========          ========         =========      =======

Centennial's Stock Options:

$9.75-$13.50       1,142,656         8.23 years            $10.73           481,556      $10.40
$17-$20               10,198         2.50 years             18.43             3,917       18.72
                   ---------         ----------             -----           -------      ------
                   1,152,854         8.17 years            $10.80           485,473      $10.47
                   =========         ==========             =====           =======      ======
</TABLE>


The estimated fair value of the Company's and Centennial's options granted
during fiscal 1997 and 1996 were as follows:

<TABLE>
<CAPTION>
                               1997                  1996
                               ----                  ----
<S>                            <C>                   <C>            
The Company                    $2.29 per share       $3.04 per share
Centennial                     $3.49 per share       $5.81 per share
</TABLE>

EMPLOYEE STOCK PURCHASE PLAN

On December 5, 1985, the Company adopted the 1985 Employee Stock Purchase Plan.
On October 26, 1994, the Board of Directors and shareholders approved an
amendment to the Company's 1985 Employee Stock Purchase Plan (the "Amended
Purchase Plan"). Under the Amended Purchase Plan, eligible employees (which
generally includes all full-time employees of the Company) may subscribe for
shares of Class A Common Stock at a purchase price of 85% of the average market
price (as defined) of the Class A Common Stock on the first day or last day of
the purchase period, whichever is lower. Payment of the purchase price of the
shares will be made in installments through payroll deductions, with no right of
prepayment. The Company has reserved 1,125,767 shares of Class A Common Stock
for issuance under the Amended Purchase Plan. The Amended Purchase Plan is
administered by the Compensation Committee. As of May 31, 1997, approximately
141,609 shares of Class A Common Stock were subscribed for under the Amended
Purchase Plan.

EQUITY INCENTIVE PLAN

The Company's 1992 Equity Incentive Plan (the "Equity Plan") was adopted by the
Board of Directors and approved by the stockholders on October 28, 1992. The
plan permits the issuance of up to 1,113,945 shares of the Company's Class A
Common Stock for high levels of performance and productivity by officers and
other management employees of the Company. The Equity Plan is administered by
the Compensation Committee of the Company's Board of Directors. The plan
authorizes the Committee to grant stock based awards that include but are not
limited to, restricted stock, performance shares and deferred stock. The
Committee determines the recipients and provisions of the



                                      F-35

<PAGE>
<PAGE>

grants under the Equity Plan, including the grant price, term and number of
shares subject to grant.

Generally, an employee will realize compensation taxable as ordinary income, and
the Company will be entitled to a corresponding tax deduction in an amount equal
to the sum of any cash received by the employee plus the fair market value of
any shares of Class A Common Stock received by the employee.

Through May 31, 1997, the Company had granted 798,036 shares of restricted stock
to nine officers and employees of the Company. The restrictions lapse at the
rate of 20% per year over a five-year period. As of May 31, 1997, 315,909 shares
were available for awards under the Equity Plan.

CENTENNIAL'S EMPLOYEE STOCK PURCHASE PLAN

Centennial has reserved 200,000 shares of Class A Common Stock for issuance
under the 1991 Employee Stock Purchase Plan (the "Purchase Plan"). Under the
Purchase Plan, eligible employees (which generally includes all full-time
employees of Centennial) are able to subscribe for shares of Class A Common
Stock of Centennial at a purchase price of 85% of the average market price (as
defined) of the Class A Common Stock of Centennial on the first day or last day
of the payroll deduction period relating to an offering under the Purchase Plan.
Payment of the purchase price of the shares is to be made in installments
through payroll deductions, with no right of prepayment. The Purchase Plan is
administered by the Compensation Committee of Centennial's Board of Directors.
Rights to purchase shares of Centennial Class A Common Stock under the Purchase
Plan may not be transferred by the recipient and may be forfeited in the event
of the recipient's termination of employment. As of May 31, 1997, approximately
1,100 employees and officers of Centennial were eligible to participate in the
Purchase Plan. As of May 31, 1997, approximately 31,120 shares were subscribed
for under the Purchase Plan.

CENTENNIAL'S EQUITY INCENTIVE PLAN

Centennial's 1993 Equity Incentive Plan (the "Centennial Equity Plan") was
adopted by the Board of Directors of Centennial and approved by their
stockholders on October 27, 1993. The plan permits the issuance of up to 100,000
shares of Centennial's Class A Common Stock for high levels of performance and
productivity by officers and other management employees of Centennial. The
Centennial Equity Plan is administered by the Compensation Committee of
Centennial's Board of Directors. The plan authorizes the Committee to grant
stock based awards that include but are not limited to, restricted stock,
performance shares and deferred stock. The Committee determines the recipients
and provisions of the grants under the Centennial Equity Plan, including the
grant price, term and number of shares subject to grant.

Generally, any employee of Centennial will realize compensation taxable as
ordinary income, and Centennial will be entitled to a corresponding tax
deduction in an amount equal to the sum of any cash received by the employee
plus the fair market value of any shares of Class A Common Stock of Centennial
received by the employee. As of May 31, 1997, 85,500 shares were issued for
awards under the Centennial Equity Plan.

The Company and Centennial apply APB Opinion No. 25 and related interpretations
in accounting for their plans. Accordingly, no compensation cost has been
recognized with respect to their stock option, and stock purchase plans. Had
compensation cost for the Company's and Centennial's stock option and stock
purchase plans been determined based on the fair value of the awards on the
grant dates in



                                      F-36

<PAGE>
<PAGE>

accordance with the accounting provisions of Statement of Financial Accounting
Standards No. 123 "Accounting for Stock-Based Compensation" ("SFAS 123"), the
Company's Consolidated net loss and Consolidated net loss per common share for
the years ended May 31, 1997 and 1996 would have been increased to the pro forma
amounts indicated below:

<TABLE>
<CAPTION>
                                                    1997              1996
                                                    ----              ----
<S>                                            <C>                  <C>         
Consolidated loss applicable to common shares:
        As reported:
        Loss before extraordinary item         $  (139,143)         $  (106,373)
        Extraordinary item                          (7,582)                  --
                                               -----------          -----------
        Loss                                   $  (146,725)         $  (106,373)
                                               ===========          ===========
        Pro forma:
        Loss before extraordinary item         $  (139,852)         $  (106,542)
        Extraordinary item                          (7,582)                  --
                                               -----------          -----------
        Loss                                   $  (147,434)         $  (106,542)
                                               ===========          ===========
Consolidated loss per common share:
        As reported:
        Loss before extraordinary item         $    (1.86)          $     (1.44)
        Extraordinary item                          (0.10)                   --
                                               -----------          -----------
        Loss per common share                  $    (1.96)          $     (1.44)
                                               ===========          ===========
        Pro forma:
        Loss before extraordinary item         $    (1.87)          $     (1.44)
        Extraordinary item                          (0.10)                   --
                                               -----------          -----------
        Loss per common share                  $    (1.97)          $     (1.44)
                                               ===========          ===========
</TABLE>


The fair value of options granted under the Company's and Centennial's stock
option plans during fiscal 1997 and 1996 was estimated on the dates of grant
using the Black-Scholes options-pricing model with the following weighted
average assumptions used: expected volatility of 40.82% (the Company) and 36.78%
(Centennial), risk free interest rate of 6%, and expected lives of option grants
of 3 years. Proforma compensation cost related to shares purchased under the
Company's and Centennial's Employee Stock Purchase Plans is measured based on
the discount from market value. No proforma compensation cost was included in
the proforma amounts above related to 82,500 shares of restricted stock granted
and purchased under Centennial's Equity Incentive Plan for the year ended May
31, 1996. Those restricted shares vest 5 years after the date of grant.
Compensation costs related to the Company's Equity Incentive plan which were
recorded in the Company's Consolidated Statements of Operations for the years
ended May 31, 1997,1996 and 1995 were immaterial.

INCENTIVE AWARD PLAN

An Incentive Award Plan (the "Incentive Plan") was adopted by the Board of
Directors and approved by the stockholders of the Company on December 5, 1985.
The Incentive Plan permits the grant of awards to key employees of the Company
and its subsidiaries, which may include directors and officers, payable



                                      F-37

<PAGE>
<PAGE>

in cash or shares of Class A Common Stock. The Company has reserved 559,529
shares of Class A Common Stock for issuance under the Incentive Plan. The awards
are payable in five to ten equal annual installments on January 1 of the
succeeding years after the grant of the award, provided that the recipient is an
employee on the installment payment date. The Incentive Plan is administered by
the Compensation Committee, which selects the recipients of awards as well as
the amount of such awards. The Board of Directors may amend the Incentive Plan.
Awards granted under the Incentive Plan may not be transferred by the recipients
and may be forfeited in the event of the recipient's termination of employment.
At May 31, 1997, no grants were outstanding.

STOCK EQUIVALENT PLAN

The Company's 1985 Stock Equivalent Plan (the "Equivalent Plan") was adopted by
the Board of Directors and approved by the stockholders on December 5, 1985. The
Equivalent Plan permits the grants of units of Class A Common Stock Equivalents
("units") to key employees of the Company and its subsidiaries, including
officers and directors. The Equivalent Plan is administered by the Compensation
Committee which selects the employees to be granted units, determines the number
of units covered by each grant, determines the time or times when units will be
granted and the conditions subject to which any amount may become payable with
respect to the units, and prescribes the form of instruments evidencing units
granted under the Plan. Payments for units may be made by the Company in cash or
in shares of Class A Common Stock at the fair market value of the units on the
date of payment. The Company has reserved 566,155 shares of Class A Common Stock
for issuance under the Equivalent Plan. Under the terms of the Equivalent Plan,
the total number of units included in all grants to any participant may not
exceed 10% of the total number of units for which grants may be made under the
Equivalent Plan. Units granted under the Equivalent Plan are not transferable by
the holder other than by will or the laws of descent and distribution. As of May
31, 1997, no units have been granted under the Equivalent Plan.

RETIREMENT PLANS

Effective April 1, 1992, the Company adopted a 401(k) defined contribution
retirement plan covering employees of its wholly-owned cable subsidiaries who
are not covered by collective bargaining arrangements. Effective July 1, 1992,
the Company adopted a similar 401(k) plan covering employees of its wholly-owned
cable subsidiaries who are covered by collective bargaining agreements. If a
participant decides to contribute, a portion of the contribution is matched by
the Company. Total expense under the plans was approximately $1,389, $989, and
$755 for the years ended May 31, 1997, 1996 and 1995, respectively.

NOTE 12.  CELLULAR MERGER

On August 30, 1991, the Company's subsidiary Centennial Cellular Corp.
("Centennial Cellular") completed an agreement with Citizens Cellular Company (a
wholly owned subsidiary of Citizens Utilities Company) to merge Citizens
Cellular Company with and into Centennial Cellular. In connection with the
Merger, Centennial Cellular Corp. issued Convertible Redeemable Preferred Stock
valued at $128,450 and 1,367,099 shares of Centennial Cellular Corp. Class B
Common Stock representing 18.8% of the then common equity of Centennial. The
Convertible Redeemable Preferred Stock is convertible on or after the third
anniversary from the date of issuance into 2,972,335 shares of Centennial
Cellular Corp. Class A or B Common Stock. Although the Convertible Redeemable
Preferred Stock carried no cash dividend requirement through August 31, 1996,
the shares accreted



                                      F-38

<PAGE>
<PAGE>

liquidation preference and redemption value at the rate of 7.5% per annum,
compounded quarterly, until then. The accretion for the years ended May 31,
1997, 1996, and 1995 totaled approximately $3,475, $13,080, and $12,161,
respectively. Of this amount, $1,098, $4,256, and $4,419 was charged against
paid-in-capital in the years ended May 31, 1997, 1996 and 1995, respectively,
with the remainder of $2,377, $8,824, and $7,742 charged to minority interests.
The fully accreted liquidation preference and redemption value of such preferred
stock at August 31, 1996 was $186,287. Beginning September 1, 1996, the holders
of the Convertible Redeemable Preferred Stock were entitled to receive cash
dividends at the rate of 8.5% per annum. The Convertible Redeemable Preferred
Stock is subject to mandatory redemption in fiscal 2007. Any unpaid dividends
continue to accumulate without additional cost to Centennial.

Assuming no change in the number of shares of such class outstanding, the annual
dividend payments, commencing in fiscal 1997, to be made with respect to the
preferred stock, if and when declared by Centennial's Board of Directors, will
be $15,834. On December 19, 1996 and May 8, 1997 Centennial paid quarterly cash
dividends to Citizens of $3,959. Centennial will determine, from time to time,
the timing, amount, or distribution (if any) of additional preferred stock
dividends.

The following summarizes the assets, partners' capital, and results of
operations of the six Wireless Partnerships contributed in the Merger that the
Company accounts for by the equity method. All amounts have been derived from
the individual Wireless Partnerships' financial statements through December 31,
1997 and 1996 and adjusted for interim financial activity from the Wireless
Partnerships' calendar year end to the Company's fiscal year end (unaudited):

<TABLE>
<CAPTION>
                                                MAY 31,
                                      -------------------------
                                       1997               1996
                                       ----               ----
<S>                                  <C>               <C>     
        Assets                       $598,370          $507,715
        Partners' Capital             536,775           438,451
        Net Income                    134,596           124,174
</TABLE>

NOTE 13.  SUBSIDIARY COMMON STOCK RIGHTS OFFERING

On July 22, 1994, Centennial successfully completed a rights offering involving
the distribution to holders of record of its Class A Common Stock outstanding on
July 7, 1994 (the "Record Date") transferable subscription rights (the "Rights")
to subscribe for and purchase an aggregate of 3,098,379 additional shares of
Class A Common Stock based on 6,887,287 shares of Class A Common Stock
outstanding on the Record Date for a subscription price of $14.00 per share.
Record date stockholders received 0.45 right for each share of Class A Common
Stock owned by them and were entitled to purchase one share of Class A Common
Stock for each full right held. Holders of Rights purchased an aggregate of
2,988,478 of the 3,098,379 shares of Class A Common Stock available for purchase
pursuant to the basic subscription privilege. The balance of 109,901 shares of
Class A Common Stock were sold pursuant to the over-subscription privilege and
were distributed pro rata among the holders of Rights who requested an aggregate
of 235,746 additional shares pursuant to the over-subscription privilege.

Centennial also distributed to Century and Citizens, the holders of record of
all the shares of Class B Common Stock outstanding as of the Record Date,
nontransferable subscription rights (the "Class B Rights") to subscribe for and
purchase an aggregate of approximately 3,272,311 additional shares of



                                      F-39

<PAGE>
<PAGE>

Class B Common Stock. Century and Citizens each exercised all of the Class B
Rights distributed to them. Each share of Class B Common Stock is convertible
into one share of Class A Common Stock at any time at the option of the holder.

NOTE 14.  REGISTRATION STATEMENTS

THE COMPANY

On April 4, 1997, the Company filed a registration statement with the SEC
relating to the shelf registration of an additional $500,000 of the Company's
debt securities, augmenting the remaining $2,000 available under the July 1994
registration statement. The registration became effective July 15, 1997. The
debt securities may be issued from time to time in series on terms to be
specified in one or more prospectus supplements at the time of the offering. If
so specified with respect to any particular series, the debt securities may be
convertible into shares of the Company's Class A Common Stock. As of August 13,
1997, there was $502,000 available for issuance under this registration
statement

CENTENNIAL

During fiscal 1994, Centennial filed a shelf registration statement with the SEC
for up to 8,000,000 shares of Centennial's Class A Common Stock that may be
offered from time to time in connection with acquisitions. At August 13, 1997,
there were 4,239,231 shares available for issuance under this registration
statement.

Centennial on April 5, 1995, filed a shelf registration statement with the SEC
for the issuance of $500,000 of Centennial's debt securities. The debt
securities may be issued from time to time in series on terms to be specified in
one or more prospectus supplements at the time of the offering. If so specified
with respect to any particular series, the debt securities may be convertible
into shares of Centennial's Class A Common Stock. As of August 13, 1997,
$400,000 remained available for issuance.

NOTE 15.  REGULATORY MATTERS

On October 5, 1992, Congress enacted the Cable Television Consumer Protection
and Competition Act of 1992 ("1992 Cable Act"). The 1992 Act substantially
reregulated the cable television industry and imposed numerous requirements,
including provisions regarding rates which may be regulated by the applicable
local franchising authority and those to be regulated by the FCC, exclusive
programming arrangements, the carriage of broadcast signals, customer service
standards, leased access channels, VCR compatibility and various other matters.

On February 8, 1996, "The Telecommunications Act of 1996" ("Act"), was signed
into law. The new law alters federal, state and local laws and regulations
regarding telecommunications providers and services, including the cable
television industry. The Act deregulates (except for basic service) cable
service rates over a three year period. Implementing regulations of the Act are
currently being written. The effect that the Act will have on the Company's
cable television business cannot be determined at this time.


                                      F-40

<PAGE>
<PAGE>


Note 16. BUSINESS SEGMENTS

The Company's consolidated financial statements include three distinct business
segments. Century Communications owns, operates and develops domestic cable
television systems. Centennial Cellular Corp. a 31.8%, 31.8% and 32.7% owned
subsidary in 1997, 1996 and 1995 owns, operates and invests in wireless
telephone systems. The Company has determined to pursue a strategy to sell its
investments in the Australian operations.

Information about the Company's operations in its three business segments for
the year ended May 31, 1997, 1996 and 1995 is as follows:

<TABLE>
<CAPTION>
                                                 Year ended May 31,
                                  -----------------------------------------------
                                        1997             1996             1995
                                  -------------     -----------      -------------
<S>                                 <C>              <C>              <C>
Revenue:
   Cable television               $     459,646    $     368,669    $     331,439
   Wireless telephone                   151,023          112,197           85,419
   Australian operations                 33,248           14,571                -
   Eliminations                            (427)            (163)            (171)
                                  -------------    -------------    ---------------
                                   
                                  $     643,490    $     495,274    $     416,687
                                  -------------    -------------    ---------------
                                  -------------    -------------    ---------------

Operating income (loss):
   Cable television               $      87,843    $      76,368    $      55,303
   Wireless telephone                   (26,057)         (19,109)         (28,430)
   Australian operations                (55,825)         (40,848)               -
   Eliminations                            (190)            (163)            (171)
                                  -------------    -------------    ---------------
                                  $       5,771    $      16,248    $      26,702
                                  -------------    -------------    ---------------
                                  -------------    -------------    ---------------

Net (loss):
   Cable television               $     (61,447)   $     (47,183)   $     (70,622)
   Wireless telephone                   (33,295)         (16,631)         (32,730)
   Australian operations                (69,717)         (49,273)               -
   Eliminations                          22,584           10,970           20,727
                                  -------------    -------------    ---------------
                                  $    (141,875)   $    (102,117)   $     (82,625)
                                  -------------    -------------    ---------------
                                  -------------    -------------    ---------------

Assets, at end of period:
   Cable television               $   1,535,940    $   1,588,190    $   1,291,748
   Wireless telephone                   844,850          785,812          844,384
   Australian operations                 60,858          127,155                -
   Eliminations                        (287,417)        (266,248)        (131,715)
                                  -------------    -------------    ---------------
                                  $   2,154,231    $   2,234,909    $   2,004,417
                                  -------------    -------------    ---------------
                                  -------------    -------------    ---------------

Depreciation and amortization:
   Cable television               $     159,547    $     124,436    $     106,289
   Wireless telephone                    83,720           70,989           65,642
   Australian operations                 18,511           21,352                -
                                  -------------    -------------    ---------------
                                  $     261,778    $     216,777    $     171,931
                                  -------------    -------------    ---------------
                                  -------------    -------------    ---------------

Capital expenditures:
   Cable television               $      79,555    $      62,205    $      92,199
   Wireless telephone                    88,990           38,082           17,538
   Australian operations (1)              2,222                -                -
                                  -------------    -------------    ---------------
                                  $     170,767    $     100,287    $     109,737
                                  -------------    -------------    ---------------
                                  -------------    -------------    ---------------
</TABLE>

Intersegment sales are not significant. No single customer accounted for more
than 10% of revenues.

(1)  The Australian operations had capital expenditures of $15,317 during the
     year ended May 31, 1996. Such amount was reported in the Investing section
     of the Consolidated Statement of Cash Flows on the line "Australian
     activities".

The financial information which follows is that of Century Communications before
the consolidation of Centennial Cellular Corp. and the Australian operations;
Centennial Cellular Corp., which comprises the Company's wireless telephone
business segment, the Company's Australian operations, as well as consolidated
information.

                                      F-41



<PAGE>
<PAGE>


                    Note 16. Segment Information (continued)

                          BALANCE SHEET FINANCIAL DATA
                                  May 31, 1997
<TABLE>
<CAPTION>
                                                        Century
                                                    Communications
                                                     Corp. before
                                                    consolidation of                            Reclassifications
                                                       Centennial     Centennial     Australian        and
                                                     and Australia   Cellular Corp.  Operations    Eliminations    Consolidated
<S>                                                    <C>           <C>             <C>           <C>             <C>
ASSETS
Current assets:
     Cash and short-term investments                 $  103,201    $     43,415    $    5,331    $          -    $    151,947

     Accounts receivable - net                           20,850          29,991         4,822          (6,705)         48,958

     Prepaid expenses and other
        current assets                                    8,858           4,836           955               -          14,649
                                                      ----------    -----------    ----------     -----------    ------------

              Total current assets                      132,909          78,242        11,108          (6,705)        215,554

Property, plant and equipment - net                     522,023         177,292        16,103               -         715,418

Investment in marketable equity securities               45,118               -             -               -          45,118

Investment in Centennial Cellular
     Corp. at cost                                      139,685               -             -        (139,685)              -

Equity investments in cable television and 
     wireless telephone systems - net                   145,628          94,153          (118)       (137,566)        102,097

Debt issuance cost - net                                 21,872           9,863             -               -          31,735

Cable television franchise - net                        368,010               -        33,765               -         401,775

Wireless telephone licenses - net                             -         347,206             -               -         347,206

Excess of purchase price over value of
     net assets acquired - net                          150,578         130,065             -               -         280,643

Other assets                                             10,117           8,029             -          (3,461)         14,685
                                                      ----------    -----------    ----------     -----------    ------------

                                                     $ 1,535,940   $    844,850    $   60,858    $   (287,417)   $  2,154,231
                                                      ----------    -----------    ----------     -----------    ------------
                                                      ----------    -----------    ----------     -----------    ------------

</TABLE>

                                      F-42



<PAGE>
<PAGE>


                    Note 16. Segment Information (continued)

                          BALANCE SHEET FINANCIAL DATA

                                  May 31, 1997
<TABLE>
<CAPTION>
                                                 Century
                                               Communications
                                               Corp. before
                                               consolidation of      Centennial                 Reclassifications
                                               Centennial            Cellular      Australian         and
                                               and Australia           Corp.       Operations      Eliminations   Consolidated
<S>                                            <C>                   <C>           <C>             <C>            <C>
LIABILITIES AND COMMON STOCKHOLDERS'
EQUITY (DEFICIENCY)

Current Liabilities:
   Current maturities of long-term
      debt                                   $         50          $        -    $   14,961      $        -     $      15,011
   Accounts payable and accrued
      expenses                                     85,179              55,525        21,949          (6,705)          155,948
   Customers' deposits and
      prepayments                                  19,333               7,727             -          (5,890)           21,170
                                              ------------            ---------      --------       ---------       ---------
          Total current liabilities               104,562              63,252        36,910         (12,595)          192,129
   
Long-term debt                                  1,757,981             429,000             -               -         2,186,981

Deferred liability                                  5,000               2,200             -          (7,200)                -

Deferred income taxes                               9,982              43,977             -               -            53,959

Minority interest in subsidiaries                  58,198                   -             -          75,320           133,518

Due to parent                                           -                   -       145,629        (145,629)                -

Convertible redeemable preferred stock                  -             186,287             -               -           186,287

Second series convertible redeemable                                                                               
   preferred stock                                      -               7,252             -          (7,252)                -

Common stockholders' equity (deficiency):
   Common stock, par value $.01 per share:
      Class A                                         627                 165             -            (165)              627
      Class B                                         451                 105             -            (105)              451

   Additional paid-in capital                      88,187             369,704             -        (281,020)          176,871
   Other                                         (127,258)             (4,801)         (291)          4,801          (127,549)
   Accumulated deficit                           (361,790)           (252,291)     (121,390)         86,428          (649,043)
                                              -----------           ---------      --------          ------       -----------

      Total common stockholders' equity
      (deficiency)                               (399,783)            112,882      (121,681)       (190,061)         (598,643)
                                              -----------           ---------      --------          ------       -----------

                                             $  1,535,940          $  844,850    $   60,858      $ (287,417)    $   2,154,231
                                              -----------           ---------      --------          ------       -----------
                                              -----------           ---------      --------          ------       -----------

</TABLE>

                                      F-43


<PAGE>
<PAGE>


                    Note 16. Segment Information (continued)

                     STATEMENT OF OPERATIONS FINANCIAL DATA
                            Year Ended May 31, 1997

<TABLE>
<CAPTION>
                                                  Century
                                                Communications
                                                Corp. before
                                                consolidation of                                    Reclassifications
                                                Centennial             Centennial      Australian         and
                                                and Australia         Cellular Corp.   Operations     Eliminations      Consolidated
<S>                                             <C>                   <C>              <C>           <C>                <C>
Revenues:
  Service income                              $    459,646          $     151,023    $   33,248    $          (427)   $     643,490
                                              ------------          -------------    ----------    ---------------    -------------


Costs and expenses:
  Cost of services                                 100,789                 38,228             -                  -          139,017
  Selling, general and administrative              111,467                 55,132             -               (237)         166,362
  Depreciation and amortization                    159,547                 83,720        18,511                  -          261,778
  Write down of Australian assets                        -                      -        40,000                  -           40,000
  Australian operations                                  -                      -        30,562                  -           30,562
                                              ------------          -------------    ----------    ---------------    -------------
                                                   371,803                177,080        89,073               (237)         637,719
                                              ------------          -------------    ----------    ---------------    -------------

    Operating income (loss)                         87,843                (26,057)      (55,825)              (190)           5,771

Income from equity investments                           -                 15,180             -            (15,180)               -
Interest                                           157,730                 33,379         9,634                  -          200,743
Gain on sale of assets                                   -                  3,819             -             (3,819)               -
Other loss/(income)                                    171                      -         4,258            (18,999)         (14,570)
                                              ------------          -------------    ----------    ---------------    -------------

  Loss before income tax benefit,
  minority interest and extraordinary item         (70,058)               (40,437)      (69,717)              (190)        (180,402)

Income tax (benefit)                               (23,363)                (7,295)            -                  -          (30,658)
                                              ------------          -------------    ----------    ---------------    -------------

  Loss before minority interest and
     extraordinary item                            (46,695)               (33,142)      (69,717)              (190)        (149,744)

Minority interest in loss of subsidiaries           (7,170)                  (153)            -             22,774           15,451

  Loss before extraordinary item                   (53,865)               (33,295)      (69,717)            22,584         (134,293)

Extraordinary item, net                             (7,582)                     -             -                  -           (7,582)
                                              ------------          -------------    ----------    ---------------    -------------

  Net Loss                                    $    (61,447)         $     (33,295)   $  (69,717)   $        22,584    $    (141,875)
                                              ------------          -------------    ----------    ---------------    -------------
                                              ------------          -------------    ----------    ---------------    -------------

</TABLE>

                                      F-44


<PAGE>
<PAGE>



NOTE 17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)


<TABLE>
<CAPTION>
                                                                        Three months ended
                                           --------------------------------------------------------------------
                                                August 31,       November 30,       February 28,       May 31,
                                                   1994              1994               1995             1995
                                           ----------------     --------------   ----------------    -----------
<S>                                             <C>              <C>                <C>                <C>
Revenues                                   $       97,421      $     104,271      $     106,129      $ 108,866
Operating income                                   10,306              9,439              5,395          1,562
Net loss                                          (14,957)           (16,617)           (20,058)       (30,993)
Net loss per common share (1)                       (.18)              (.20)              (.23)          (.42)
 
                                                                      Three months ended
                                           --------------------------------------------------------------------
                                                August 31,       November 30,       February 29,       May 31,
                                                   1995              1995               1996             1996
                                           ----------------     --------------   ----------------    -----------
Revenues                                   $      116,627      $     121,039      $     122,054      $ 135,554
Operating income                                   13,789              9,295              1,747          1,417
Net loss                                          (21,917)           (21,148)           (23,623)       (35,429)
Net loss per common share (1)                       (.31)              (.30)              (.33)          (.49)

                                                                     Three months ended
                                           --------------------------------------------------------------------
                                                August 31,       November 30,       February 28,       May 31,
                                                   1996              1996               1997             1997
                                           ----------------     --------------   ----------------    -----------
Revenues                                   $      153,004      $     158,996      $     160,965      $ 170,525
Operating income (loss)                           (24,314)            15,115             13,339          1,631
Loss before extraordinary item                    (61,212)           (17,257)           (23,368)       (32,456)
Net loss                                          (61,212)           (17,257)           (23,368)       (40,038)
Loss before extraordinary item per
  Common share                                      (.84)              (.25)              (.33)          (.44)
Net loss per common share (1)                       (.84)              (.25)              (.33)          (.54)
</TABLE>

(1) See Note 1 Loss per common share.

                                                F-45



<PAGE>
<PAGE>

                                   SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Company has duly caused this Annual Report
on Form 10-K for the fiscal year ended May 31, 1997 to be signed on its behalf
by the undersigned, thereunto duly authorized, on the 25th day of August, 1997.

                                            CENTURY COMMUNICATIONS CORP.

                                            By:      /s/ Leonard Tow
                                               ------------------------------
                                                        LEONARD TOW

                                            Chief Executive Officer

        Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Annual Report on Form 10-K for the fiscal year ended May 31, 1997
has been signed below by the following persons in the capacities indicated on
the 25th day of August, 1997.

/s/ Leonard Tow                  Chief Executive Officer (principal executive
--------------------------       officer), Chairman and Director
LEONARD TOW                      

/s/ Scott N. Schneider           Senior Vice President, Chief Financial
--------------------------       Officer, Treasurer (principal financial
SCOTT N. SCHNEIDER               officer and principal accounting
                                 officer) and Director

/s/ Bernard P. Gallagher         Director
--------------------------
BERNARD P. GALLAGHER

/s/ William Kraus                Director
--------------------------
WILLIAM  KRAUS

/s/ Claire Tow                   Director
--------------------------
CLAIRE TOW

/s/ David Z. Rosensweig          Director
--------------------------
DAVID Z. ROSENSWEIG

/s/ Peter J. Solomon             Director
--------------------------
PETER J. SOLOMON

/s/ Robert D. Siff               Director
--------------------------
ROBERT D. SIFF


                                      II-1


<PAGE>
<PAGE>


                                  EXHIBIT INDEX

EXHIBIT
NUMBER                                    EXHIBIT
-------                                   -------
3.1             Restated Certificate of Incorporation of the Company (filed as
                Exhibit 6(a)(i) to the Company's Quarterly Report on Form 10-Q
                for the quarter ended February 28, 1990 and incorporated herein
                by reference and Amendment to Restated Certificate of
                Incorporation of the Company, filed as Exhibit 6(a)(i) to the
                Company's Quarterly Report on Form 10-Q for the fiscal quarter
                ended November 30, 1990 and incorporated herein by reference).

3.2             By-laws of the Company, as amended (filed as Exhibit 3(b) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1995, and incorporated herein by reference).

4.1             Equity Subscription Agreement, dated as of November 21, 1990,
                among Centennial Cellular, Century Communications Corp., a Texas
                corporation, and Century Cellular Holding Corp., a New York
                corporation (filed as Exhibit 4(o) to the Company's Annual
                Report on Form 10-K for the fiscal year ended May 31, 1992 and
                incorporated herein by reference).

4.2             Indenture, dated as of November 15, 1988, by and between the
                Company and the Bank of Montreal Trust Company, as Trustee
                (filed as Exhibit 4(l) to Amendment No. 7 to the Company's
                Registration Statement on Form S-1 (File No. 33-21394) under the
                Securities Act of 1933, as amended, (the "1988 Form S-1"); said
                1988 Form S-1 having been filed with the Commission on April 22,
                1988 and incorporated herein by reference, and said Amendment
                No. 7 to the 1988 Form S-1 having been filed with the Commission
                on November 10, 1988 and incorporated herein by reference).

4.3             Indenture, dated as of October 15, 1991, by and between the
                Company and the Bank of Montreal Trust Company, as Trustee
                (filed as Exhibit 4.2 to Amendment No. 2 to the Company's
                Registration Statement on Form S-3 (File No. 33-33787) under the
                Securities Act of 1933, as amended (the "1991 Form S-3"); said
                1991 Form S-3 having been filed with the Commission on August
                31, 1990 and incorporated herein by reference, and said
                Amendment No. 2 to the 1991 Form S-3 having been filed with the
                Commission on March 1, 1991 and incorporated herein by
                reference).

4.4             First Supplemental Indenture, dated as of October 15, 1991, by
                and between the Company and the Bank of Montreal Trust Company,
                as Trustee (filed as Exhibit 7(2) to the Company's current
                report on Form 8-K, dated October 17, 1991 and incorporated
                herein by reference).

4.5             Indenture, dated as of February 15, 1992, by and between the
                Company and the Bank of America National Trust and Savings
                Association, as Trustee (filed as Exhibit 4.3 to Amendment No. 2
                to the Company's Registration Statement on Form S-3 (File No.
                33-33787) under the Securities Act of 1933, as amended (the
                "1991 Form S-3"); said 1991 Form S-3 having been filed with the
                Commission on March 9, 1990 and incorporated herein by
                reference, and said Amendment No. 2 to the 1991 Form S-3 having
                been filed with the Commission on March 1, 1991 and incorporated
                herein by reference).


                                      II-2

<PAGE>
<PAGE>

4.6             First Supplemental Indenture, dated as of February 15, 1992, by
                and between the Company and the Bank of America National Trust
                and Savings Association, as Trustee (filed as Exhibit 4(t) to
                the Company's Annual Report on Form 10-K for the fiscal year
                ended May 31, 1992 and incorporated herein by reference).

4.7             Second Supplemental Indenture, dated as of August 15, 1992, by
                and between the Company and Bank of America National Trust and
                Savings Association, as Trustee (filed as Exhibit 4(u) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1992 and incorporated herein by reference).

4.8             Third Supplemental Indenture, dated as of April 1, 1993, by and
                between the Company and Bank of America National Trust and
                Savings Association, as Trustee (filed as Exhibit 4(v) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1993 and incorporated herein by reference).

4.9             Fourth Supplemental Indenture, dated as of March 6, 1995, by and
                between the Company and Bank of America National Trust and
                Savings Association, as Trustee (filed as Exhibit 4(w) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1995, and incorporated herein by reference).

'D'4.10         Fifth Supplemental Indenture, dated as of January 23, 1997, by
                and between the Company and First Trust of California, National
                Association, successor trustee to Bank of America National Trust
                and Savings Association, as Trustee.

       The Company hereby agrees to furnish to the Securities and Exchange
Commission, upon its request, a copy of each instrument omitted pursuant to Item
601(b)(4)(iii) of Regulation S-K.

*10.1           Amended Employment Agreement, dated as of July 1, 1991, between
                the Company and Leonard Tow (filed as Exhibit 10(a)(1) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1992 and incorporated herein by reference).

*10.2           Agreement, dated July 30, 1992, between the Company and the
                Leonard and Claire Tow Life Insurance Trust (filed as Exhibit
                10(a)(2) to the Company's Annual Report on Form 10-K for the
                fiscal year ended May 31, 1992 and incorporated herein by
                reference).

*10.3           Employment Agreement, dated as of January 1, 1995, between the
                Company and Daniel E. Gold (filed as Exhibit 10(a)(7) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1996 and incorporated herein by reference).

'D'*10.4        Employment Agreement, dated as of January 1, 1997, between the
                Company and Scott N. Schneider.



                                      II-3

<PAGE>
<PAGE>

'D'*10.5        Employment Agreement, dated as of January 1, 1997, between the
                Company and Michael G. Harris.

'D'*10.6        Employment Agreement, dated as of January 1, 1997, between the
                Company and Frank Tow.

'D'*10.7        Employment Agreement, dated as of January 1, 1997, between the
                Company and Clifford A. Bail.

10.8            Principal Stockholders' Agreement, dated as of December 7, 1985,
                between Sentry Insurance a Mutual Company ("Sentry"), the
                Company, Leonard Tow individually and as Trustee, and Claire Tow
                as Trustee (filed as Exhibit 10(a) to the Company's Registration
                Statement on Form S-1 (No. 33-2025) under the Securities Act of
                1933, as amended, filed with the Commission on December 9, 1985
                (the "1986 Form S-1") and incorporated herein by reference).

10.9            Amendment to Principal Stockholders' Agreement, dated August 31,
                1987 (filed as an Exhibit to the Company's Current Report on
                Form 8-K dated September 11, 1987 and incorporated herein by
                reference).

10.10           Lease, dated July 15, 1987, between Locust Avenue Associates and
                Century-Texas (filed as Exhibit 10(h) to the 1988 Form S-1 and
                incorporated herein by reference).

'D'10.11        Agreement for lease dated as of January 1, 1997 by and between
                Locust Avenue Associates Limited Partnership and Century-Texas.

10.12           Third Agreement of Amendment to the Amended and Restated Joint
                Venture Agreement, dated June 18, 1987, among American
                Television and Communications Corporation, Daniels & Associates,
                Inc., Tele-Communications, Inc., Comcast Corporation and Century
                Southwest Cable Television, Inc. (filed as Exhibit 10(m) to the
                1988 Form S-1 and incorporated herein by reference).

10.13           Colorado Springs Joint Sharing and Buy-Sell Agreement, dated
                November 1, 1974, among Century Venture Corporation, Century
                Colorado Corp., American Television and Communications
                Corporation, Century Texas and Vumore-Video Corporation of
                Colorado, Inc. (filed as Exhibit 10(h) to the 1986 Form S-1 and
                incorporated herein by reference).

*10.14          1985 Stock Option Plan of the Company (filed as Annex A to the
                Company's Registration Statement on Form S-8 (File No. 33-34387)
                under the Securities Act of 1933, as amended, filed with the
                Commission on April 19, 1990 and incorporated herein by
                reference).

*10.15          Incentive Award Plan of the Company (filed as Annex A to the
                Company's Registration Statement on Form S-8 (File No. 33-23718)
                under the Securities Act of 1933, as amended, filed with the
                Commission on August 11, 1988 and incorporated herein by
                reference).

*10.16          1985 Employee Stock Purchase Plan of the Company, as amended
                (filed as Exhibit 10(r) to the Company's Annual Report on Form
                10-K for the year ended May 31, 1995, and



                                      II-4

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                incorporated herein by reference).

*10.17          Non-Employee Director Stock Option Plan of the Company (filed as
                Annex A to the Company's Registration Statement on Form S-8
                (File No. 33-34388) under the Securities Act of 1933, as
                amended, filed with the Commission on April 19, 1990 and
                incorporated herein by reference.

*10.18          1985 Stock Equivalent Plan (filed as Exhibit 10(m) to the 1986
                Form S-1 and incorporated herein by reference).

*10.19          Century Retirement Investment Plan (filed as Exhibit 10(x) to
                the Company's Annual Report on Form 10-K for the year ended May
                31, 1992 and incorporated herein by reference).

*10.20          Century 1992 Management Equity Incentive Plan (filed as Exhibit
                10(x)(1) to the Company's Annual Report on Form 10-K for the
                year ended May 31, 1992 and incorporated herein by reference).

*10.21          1993 Non-Employee Directors' Stock Option Plan of the Company
                (filed as Exhibit 10(v)(2) to the Company's Annual Report on
                Form 10-K for the fiscal year ended May 31, 1995, and
                incorporated herein by reference).

*10.22          1994 Stock Option Plan of the Company (filed as Exhibit 10(v)(3)
                to the Company's Annual Report on Form 10-K for the fiscal year
                ended May 31, 1995, and incorporated herein by reference).

10.23           Interest Rate Swap Agreement, dated as of July 18, 1986, between
                Citibank, N.A. and Century-Texas (filed as Exhibit 10(v) to
                Amendment No. 5 to the 1988 Form S-1 and incorporated herein by
                reference).

10.24           Amendment No. 1 to Management Agreement and Joint Venture
                Agreement (Century-ML Venture), dated September 21, 1987,
                between Century-Texas and ML Media Partners, L.P., a Delaware
                limited partnership (filed as Exhibit 10(w) to the Company's
                Annual Report on Form 10-K for the fiscal year ended May 31,
                1989 and incorporated herein by reference).

10.25           Management Agreement and Joint Venture Agreement (Century-ML
                Radio Venture), dated as of February 15, 1989, between Century
                Texas and ML Media Partners, L.P., a Delaware limited
                partnership (filed as Exhibit 10(x) to the Company's Annual
                Report on Form 10-K for the fiscal year ended May 31, 1989 and
                incorporated herein by reference).

10.26           Plan and Agreement of Merger, dated August 2, 1991, by and among
                Century Cellular Holding Corp., Century Cellular Corp., Citizens
                Utilities Company and Citizens Cellular Corp., together with
                exhibits, including Management Agreement, Conflicts/Non-Compete
                Agreement, Stock Transfer Agreement and Registration Rights
                Agreement (filed as Exhibit 10(cc) to the Company's Annual
                Report on Form 10-K for the fiscal year ended May 31, 1991 and
                incorporated herein by reference).



                                      II-5

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10.27           Credit Agreement, dated as of August 4, 1995, among CCC-I,
                Inc., Pullman TV Cable Co., Inc., Kootenai Cable, Inc., Citibank
                N.A., as agent, and each of the banks and parties thereto,
                (filed as Exhibit 10(FF) to the Company's Annual Report on Form
                10-K for the fiscal year ended May 31, 1996 and incorporated
                herein by reference).

10.28           Credit Agreement, dated as of June 30, 1994, among CCC-II, Inc.,
                Citibank N.A. as managing agent, and each of the banks and 
                parties thereto, (filed as Exhibit 10 to the Company's report
                on Form 8-K dated July 25, 1994 and incorporated herein by
                reference). (The Company hereby agrees to furnish to the 
                Securities and Exchange Commission, upon its request, a copy
                of each instrument omitted pursuant to Item 601(b)(4)(iii) of
                Regulation S-K.)

10.29           Eighth Restated Credit Agreement, dated as of July 10, 1990,
                between Century Texas, Century Investors and Citibank, N.A., on
                behalf of itself and as agent, and The Chase Manhattan Bank
                (National Association), The Bank of Nova Scotia, The First
                National Bank of Chicago, Bank of Montreal, The Royal Bank of
                Canada, Continental Bank N.A., Bankers Trust Company, Nippon
                Credit Bank, Provident National Bank, and Security Pacific
                National Bank (the "Eighth Restated Banks") (filed as an Exhibit
                to the Company's Current Report on Form 8-K, filed July 13,
                1990, and incorporated herein by reference).

10.30           Third Amendment, dated as of November 21, 1990 (the "Third
                Amendment"), among Centennial Cellular Corp., a Delaware
                corporation ("Centennial Cellular Corp."), the Lender parties on
                the signature page thereto, Citibank, N.A., as agent, Century
                Cellular Holding Corp., and the Guarantor of parties on the
                signature page thereto, to the Credit Agreement, dated as of
                October 11, 1989, among Centennial Cellular Corp., and Citibank,
                N.A., on behalf of itself and as agent, and
                Kansallis-Osake-Pankki, Provident National Bank, DnC America
                Banking Corporation, Meridian Bank, Lincoln Savings Bank,
                Toronto Dominion Bank, and The Bank of Nova Scotia (the
                "Cellular Banks") (filed as an Exhibit to the Company's
                Quarterly Report on Form 10-Q for the fiscal quarter ended
                November 30, 1991, and incorporated herein by reference).

10.31           Credit Agreement, dated as of October 11, 1989, among Centennial
                Cellular Corp., and Citibank, N.A., on behalf of itself and as
                agent, and the Cellular Banks, as Amended and Restated pursuant
                to the Third Amendment (filed as an Exhibit to the Company's
                Quarterly Report on Form 10-Q for the fiscal quarter ended
                November 30, 1991, and incorporated herein by reference).

10.32           Second Restated Consolidated Guaranty and Pledge Agreement,
                dated as of July 10, 1990, made by the subsidiaries of the
                Company set forth on the signature pages thereto to Citibank,
                N.A., as agent for the Eighth Restated Banks (filed as Exhibit
                4(g) to the Company's Annual Report on Form 10-K for the fiscal
                year ended May 31, 1990 and incorporated herein by reference).

10.33           Third Restated Pledge Agreement and Guaranty, dated as of July
                10, 1990, made by the Company to Citibank, N.A., as agent for
                the Eighth Restated Banks (filed as Exhibit 4(h) to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1990 and incorporated herein by reference).

                                      II-6

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10.34           Seventh Restated Pledge and Security Agreement, dated as of July
                10, 1990, made by Century Texas to Citibank, N.A., as agent for
                the Eighth Restated Banks (filed as Exhibit (i)A to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1990 and incorporated herein by reference).

10.35           Third Collateral Agreement Amendment, dated as of July 10, 1990
                made by Century Texas, the Company and Citibank, N.A. as agent
                for the Eighth Restated Banks (filed as Exhibit 4(i)B to the
                Company's Annual Report on Form 10-K for the fiscal year ended
                May 31, 1990 and incorporated herein by reference).

10.36           Pledge Agreement, dated as of October 11, 1989, made by Century
                Cellular Holding Corp., a New York corporation, to Citibank,
                N.A., as agent for the Cellular Banks (filed as an Exhibit to
                the Company's Quarterly Report on Form 10-Q for the period
                quarterly ended November 30, 1990 and incorporated herein by
                reference).

10.37           Pledge and Security Agreement, dated as of October 11, 1989,
                made by Centennial Cellular Corp. to Citibank, N.A., as agent
                for the Cellular Banks, as Amended and Restated pursuant to the
                Third Amendment (filed as an Exhibit to the Company's Quarterly
                Report on Form 10-Q for the quarterly period ended November 30,
                1990 and incorporated herein by reference).

10.38           Consolidated Guaranty and Pledge Agreement, dated as of October
                11, 1989, made by the subsidiaries of Centennial Cellular Corp.
                set forth on the signature pages thereto to Citibank, N.A., as
                agent for the Cellular Banks, as Amended and Restated pursuant
                to the Third Amendment (filed as an Exhibit to the Company's
                Quarterly Report on Form 10-Q for the quarterly period ended
                November 30, 1990 and incorporated herein by reference).

'D'10.39        Amendment No. 1 dated as of August 9, 1996 among CCC-I, Inc.,
                Pullman TV Cable Co., Inc. and Kootenai Cable, Inc., Citibank,
                N.A., as agent, and each of the bank parties thereto.

'D'10.40        Amendment No. 1 dated as of August 9, 1996 among CCC-II, Inc.,
                Citibank, N.A., as managing agent, and each of the bank
                parties thereto.

'D'10.41        Credit Agreement dated as of April 15, 1997 among Citizens
                Century Cable Television Venture, Bank of America, National
                Trust and Savings Association, as Syndication Agent, and
                Societe General, as Agent, Corestates Bank, N.A., The First
                National Bank of Boston, LTCB Trust Company, and PNC Bank,
                National Association, as Co-Agents, and each of the
                bank parties thereto.


'D'11           Computation of loss per common share.

'D'12           Computation of ratios.

'D'21           List of subsidiaries of the Company.

'D'23.1         Consent of Deloitte & Touche LLP.

'D'27           Financial Data Schedule.

--------------------------

*   Constitutes a management contract or compensatory plan or arrangement.
'D' Filed herewith.



                                      II-7

                       STATEMENT OF DIFFERENCES

         The dagger symbol shall be expressed as.............'D'
         The section symbol shall be expressed as .......... 'SS'








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