David Pugliese, VP Product Marketing David Pugliese, VP Product Marketing

and Managementand Management

Bundling: Bundling: Our Competitive EngineOur Competitive Engine

Wachovia Securities 13th Annual Nantucket Equity Conference

Wachovia Securities 13th Annual Nantucket Equity Conference

Safe HarborSafe HarborDuring this presentation, we will be making certain forward During this presentation, we will be making certain forward looking statements within the meaning of Section 21E of the looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, about business Securities Exchange Act of 1934, as amended, about business strategies and goals, market potential, future financial strategies and goals, market potential, future financial performance, new service and product launches and other performance, new service and product launches and other matters. These statements address matters that involve matters. These statements address matters that involve significant risks and uncertainties that could cause actual significant risks and uncertainties that could cause actual results to differ materially from such statements, including, results to differ materially from such statements, including, without limitation, possible changes in expected market without limitation, possible changes in expected market acceptance of new products or services, impact of rate acceptance of new products or services, impact of rate changes, ability of vendors to meet contractual obligations, changes, ability of vendors to meet contractual obligations, competitive issues, regulatory issues and continued access to competitive issues, regulatory issues and continued access to capital on terms acceptable to the Company.capital on terms acceptable to the Company.Please refer to publicly filed documents of the Company, Please refer to publicly filed documents of the Company, including the Company’s most recent Form 10-K for additional including the Company’s most recent Form 10-K for additional information about the Company and for additional information information about the Company and for additional information about the risks and uncertainties related to the Company. about the risks and uncertainties related to the Company.

Use of Non-GAAP MeasuresUse of Non-GAAP Measures

This presentation contains certain non-GAAP This presentation contains certain non-GAAP financial measures including operating cash flow financial measures including operating cash flow and free cash flow. For full disclosure of the use of and free cash flow. For full disclosure of the use of these non-GAAP measures and a reconciliation pf these non-GAAP measures and a reconciliation pf these non-GAAP financial measures with the most these non-GAAP financial measures with the most directly comparable GAAP measures, please see directly comparable GAAP measures, please see our quarterly earnings press release, which is our quarterly earnings press release, which is posted on our website at posted on our website at www.www.coxcox.com/investor.com/investor..

Cox Communications ProfileCox Communications Profile

• 6.5 million customer relationships in 23 states6.5 million customer relationships in 23 states– Larger systems include Phoenix, Orange County, Larger systems include Phoenix, Orange County,

Las Vegas, Omaha, San Diego, New England, etcLas Vegas, Omaha, San Diego, New England, etc..

• 4th largest cable television provider4th largest cable television provider– Nation’s 12th largest phone company and third Nation’s 12th largest phone company and third

largest in Californialargest in California

• Regionally concentrated clustersRegionally concentrated clusters• Leading multi-service broadband providerLeading multi-service broadband provider

– VideoVideo– VoiceVoice– High-speed InternetHigh-speed Internet

What Sets Cox Apart?What Sets Cox Apart?

• Plant upgrades nearly completePlant upgrades nearly complete– Network is over Network is over 90% upgraded90% upgraded to at least 750 MHz to at least 750 MHz – Approximately Approximately 96%96% of homes passed have digital of homes passed have digital

and high-speed Internet availability TODAY!and high-speed Internet availability TODAY!– Ring-in-ring redundant fiber network to the node - Ring-in-ring redundant fiber network to the node -

crucial for offering life-line phone service crucial for offering life-line phone service

• Continued demand for basic and advanced Continued demand for basic and advanced services services – Well positioned versus competitionWell positioned versus competition– 3-product offering including telephone service 3-product offering including telephone service – 11stst to make bundling strategy a priority to make bundling strategy a priority

What Sets Cox Apart?What Sets Cox Apart?

• Common platformCommon platform– Only operator with Only operator with one fully integrated billing one fully integrated billing

and back-office systemand back-office system across all markets across all markets

• Committed to customer satisfactionCommitted to customer satisfaction– Highest customer satisfaction among MSOsHighest customer satisfaction among MSOs

• Increasing year-over-year growth in revenue Increasing year-over-year growth in revenue and OCF over the past four years and OCF over the past four years

• Free cash flow positive for the full year 2003Free cash flow positive for the full year 2003 • Seasoned and experienced management teamSeasoned and experienced management team

Growth As a Top PriorityGrowth As a Top Priority1Q03 Highlights1Q03 Highlights

• Industry leading revenue growth of 16%Industry leading revenue growth of 16%

• EBITDA (historical) grew 22%EBITDA (historical) grew 22%– EBITDA margins at 35.1% up 180 basis EBITDA margins at 35.1% up 180 basis

points from 1Q02 points from 1Q02

• $30 million in free cash flow for the $30 million in free cash flow for the quarterquarter– 33rdrd consecutive quarter of free cash flow consecutive quarter of free cash flow

Continue the GrowthContinue the GrowthSequential Net Gains Per QuarterSequential Net Gains Per Quarter

10272 84 77

114157 136 154

67 657362

2Q02 3Q02 4Q02 1Q03

Digital HSI Phone

278302

287 296

(in Thousands)

What’s Driving Customer Growth? What’s Driving Customer Growth? Bundling = Core of our Competitive StrategyBundling = Core of our Competitive Strategy

Cox Cox BundlingBundlingStrategy Strategy

NewNewProductProduct

DevelopmentDevelopmentCompetitiveCompetitiveMarketingMarketing

RetailRetailDistributionDistribution

StrategyStrategy

CustomerCustomerServiceServiceQualityQuality

UpgradeUpgradeCompletionCompletion

ProgrammingProgramming & Content& Content

SimplicitySimplicity

ServiceService

SavingsSavings

Bundled OfferBundled OfferStrategyStrategy

Customer-CentricCustomer-CentricStrategyStrategy

Value for the customerValue for the customerValue for CoxValue for Cox

Cox Bundling StrategyCox Bundling StrategyService, Simplicity and SavingsService, Simplicity and Savings

Key InitiativesKey InitiativesEnhancing the BundleEnhancing the Bundle• VideoVideo

• PVRPVR• VOD/SVODVOD/SVOD• HDTVHDTV

• Broadband enhancementsBroadband enhancements• Cox.Net contentCox.Net content• Value-added servicesValue-added services

• Protection packageProtection package• Home networkingHome networking• Xbox compatibleXbox compatible

• Phone enhancementsPhone enhancements• Feature developmentFeature development• Unlimited plansUnlimited plans• VoIPVoIP

NewNewProductProduct

DevelopmentDevelopment

The Benefits of BundlingThe Benefits of Bundling

• CONVENIENCE of one CONVENIENCE of one providerprovider– One-stop-shop for customer One-stop-shop for customer

service, installation and billingservice, installation and billing

• Bundled SAVINGSBundled SAVINGS– Better value for the moneyBetter value for the money– $10 equivalent on 3-product $10 equivalent on 3-product

bundlebundle

• Consumer CHOICEConsumer CHOICE– ““Build your own bundle”Build your own bundle”– 1 bill or multiple bills1 bill or multiple bills– Discount optionsDiscount options

• Incremental penetrationIncremental penetration

• Churn reductionChurn reduction

• Operational efficienciesOperational efficiencies

• Competitive advantageCompetitive advantage

Customer Cox

The Benefits of BundlingThe Benefits of Bundling

• CONVENIENCE of one CONVENIENCE of one providerprovider– One-stop-shop for customer One-stop-shop for customer

service, installation and billingservice, installation and billing

• Bundled SAVINGSBundled SAVINGS– Better value for the moneyBetter value for the money– $10 equivalent on 3-product $10 equivalent on 3-product

bundlebundle

• Consumer CHOICEConsumer CHOICE– ““Build your own bundle”Build your own bundle”– 1 bill or multiple bills1 bill or multiple bills– Discount optionsDiscount options

• Incremental penetrationIncremental penetration

• Churn reductionChurn reduction

• Operational efficienciesOperational efficiencies

• Competitive advantageCompetitive advantage

Customer Cox

The One-Stop-ShopThe One-Stop-ShopCustomer Service, Billing and InstallationCustomer Service, Billing and Installation

COX Alternative

RBOC

Dial Up or DSL Provider

DBS

1.

2.

3.

One fully integrated IT platform makes this possible!

Bundling- Bundling- Not Just About DiscountsNot Just About Discounts

%%

Source: Horowitz Associates, Inc. Source: Horowitz Associates, Inc.

One number to call for customer serviceOne number to call for customer service 6969

One integrated monthly billOne integrated monthly bill 6868

For new home, having all the services pre-wired For new home, having all the services pre-wired 6868

6262Dealing with just one companyDealing with just one company

5959A progressive discounting plan: 10% disc. when A progressive discounting plan: 10% disc. when

subscribe to 2 services and 15% with 3 servicessubscribe to 2 services and 15% with 3 services

What is Important to the Consumer?What is Important to the Consumer?

Customers want convenience!Customers want convenience!

The Benefits of BundlingThe Benefits of Bundling

• Incremental penetrationIncremental penetration

• Churn reductionChurn reduction

• Operational efficienciesOperational efficiencies

• Competitive advantageCompetitive advantage

Customer Cox• CONVENIENCE of one CONVENIENCE of one

providerprovider– One-stop-shop for One-stop-shop for

customer service, customer service, installation and billinginstallation and billing

• Bundled SAVINGSBundled SAVINGS– Better value for the moneyBetter value for the money– $10 equivalent on 3-$10 equivalent on 3-

product bundleproduct bundle

• Consumer CHOICEConsumer CHOICE– ““Build your own bundle”Build your own bundle”– 1 bill or multiple bills1 bill or multiple bills– Discount optionsDiscount options

Bundling Drives PenetrationBundling Drives Penetration(In Thousands)

1,020 1,107 1,227 1,325 1,428

195232

279326

375

1Q02 2Q02 3Q02 4Q02 1Q03

2 Product Bundled Subs 3 Product Bundled Subs

Bundled Penetration to Basic CustomersBundled Penetration to Basic Customers

19%21%

23% 26% 29%

Impact of Bundling on ChurnImpact of Bundling on ChurnAverage Monthly Customer ChurnAverage Monthly Customer Churn

3.0%3.0%

2.3%2.3% 1.9%1.9% 2.2%2.2%

1.4%1.4%

VideoVideo Only Only VideoVideo +HSI +HSI HSIHSI + Phone + Phone VideoVideo + Phone + Phone Video + HSI +Video + HSI +PhonePhone

Bundling reduces churn as much as 50% in 3 product homes!

Bundled Sell-in is GrowingBundled Sell-in is GrowingPercent of New Basic Subs taking Bundled

Services

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03

Total Company Phone Markets

41%

29%

Sell-in EfficienciesSell-in Efficiencies

• One marketing messageOne marketing message– Reduces marketing costs, effortsReduces marketing costs, efforts

• One call; one saleOne call; one sale• One truck rollOne truck roll• One BillOne Bill• Lower churn Lower churn • Higher take rate on additional revenue Higher take rate on additional revenue

streams (long distance, phone features, streams (long distance, phone features, digital cable)digital cable)

Marketing the Cox BundleMarketing the Cox Bundle

• Market The BundleMarket The Bundle• TV, Direct Mail, Radio, TV, Direct Mail, Radio,

Web, Etc.Web, Etc.• Bundled messages drive Bundled messages drive

higher non-customer higher non-customer response ratesresponse rates

• Sell the BundleSell the Bundle• Customer contact Customer contact

employees focused on employees focused on BSI (Bundled Sell-In)BSI (Bundled Sell-In)

• Database MarketingDatabase Marketing• The right product mix, The right product mix,

right offer, etc.right offer, etc.

Cox Bundling Vs. DBS Cox Bundling Vs. DBS Cox is Competitively PositionedCox is Competitively Positioned

• Our fully integrated 3-product bundle provides a Our fully integrated 3-product bundle provides a competitive advantage versus DBS offeringscompetitive advantage versus DBS offerings– DBS operators are constrained by bandwidth and DBS operators are constrained by bandwidth and

lack of two-way capabilitylack of two-way capability

– DBS penetration in Cox markets grew more in 2001 DBS penetration in Cox markets grew more in 2001 than in 2002 despite local into local launches and than in 2002 despite local into local launches and increased promotional activityincreased promotional activity

• DBS purchase intent declines by 30% among 3-DBS purchase intent declines by 30% among 3-product bundle customersproduct bundle customers

– 1Q03 DBS penetration in our markets was flat versus 1Q03 DBS penetration in our markets was flat versus 4Q02 at nearly half the national average4Q02 at nearly half the national average

Only Cox can offer video, voice and high-speed Only Cox can offer video, voice and high-speed Internet services with the option of one billInternet services with the option of one bill

Cox Bundling Vs. the RBOCsCox Bundling Vs. the RBOCsCox is Competitively Positioned Cox is Competitively Positioned

• DSL providers (most notably SBC) have been using aggressive DSL providers (most notably SBC) have been using aggressive promotions for the past 9-12 months promotions for the past 9-12 months

• We have seen no impact on Cox High-Speed Internet run rates - even in We have seen no impact on Cox High-Speed Internet run rates - even in California California

• Verizon recently reduced DSL pricing to $34.95 raising questions in Verizon recently reduced DSL pricing to $34.95 raising questions in investors’ minds investors’ minds

Cox HSI is very competitively positioned:Cox HSI is very competitively positioned:CoxCox VerizonVerizon

• Speed - downstreamSpeed - downstream 3 Mbps3 Mbps 1.5 Mbps*1.5 Mbps*• Speed - upstreamSpeed - upstream 256 Kbps256 Kbps 128 Kbps128 Kbps

• AvailabilityAvailability 96%96% ~63%~63%* 1.5 Mbps at best depending on distance from central office

Competitively PositionedCompetitively PositionedThe Cox Bundle The Cox Bundle Comes Out AheadComes Out Ahead

Difference

HSI Service $ 29.95 $ 39.95 $ 10.00

(a) Telephone Service 28.95 11.95 (17.00)

(b) Telephone Features included 5.95 5.95

Subtotal (HSI + Phone) 58.90 57.85(1.05)

(c) Video Service 39.98 40.99 1.01

Bundle Value/Discount (10.00) (10.00)

Total $ 98.88 $ 88.84 $ (10.04)

COXVERIZON

(a) $29.95 Verizon offer requires purchase of telephone package and LD

(b) Minimum feature requirement for Cox Bundle

(c) Verizon Video represents DISH Network Top 100 plus local channels; Cox Video is standard service

(bundled discount does not require digital service in this market)

RHODE ISLAND

What’s in Store for the Future?What’s in Store for the Future?Continue the GrowthContinue the Growth• Continued basic subscriber growth Continued basic subscriber growth

• Driving the new and advanced services Driving the new and advanced services penetration higherpenetration higher

• Double-digit growth in revenue and operating Double-digit growth in revenue and operating cash flowcash flow

• Improving marginsImproving margins

• Continued significant declines in capex leading Continued significant declines in capex leading to significant free cash flow generationto significant free cash flow generation

Because of our competitive position and long-term focus, we are well prepared for future growth

David Pugliese, VP Product Marketing David Pugliese, VP Product Marketing

and Managementand Management

Bundling: Bundling: Our Competitive EngineOur Competitive Engine

Wachovia Securities 13th Annual Nantucket Equity Conference

Wachovia Securities 13th Annual Nantucket Equity Conference