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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549





Form 10-Q





CURRENT REPORT

(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2008



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | -----------------------------------------------------------------------------------------

For the transition period from              to
            .





Atlantic Broadband Finance,
LLC

(Exact Name of Registrant As Specified In Charter)







|                                               |  |                          |  |                                  
|---------------------------------------------- |  | ------------------------ |  | ---------------------------------
|Delaware                                       |  | 333-115504               |  | 20-0226936                       
|(State or Other Jurisdiction of Incorporation) |  | (Commission File Number) |  | (IRS Employer Identification No.)

One Batterymarch Park, Suite 405

Quincy, MA 02169

(Address of Principal Executive Offices, including Zip Code)

(617) 786-8800

(Registrants telephone number, including area code)





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 periods 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition
of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer    ̈    Accelerated filer   ̈    Non-accelerated
filer  x    Smaller Reporting Company   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):    Yes   ̈    No  x

Indicate the number of shares outstanding of each of the registrants classes of common units, as of the last
practicable date. Atlantic Broadband Holdings I, LLC owns 100% of the registrants equity.









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FORWARD LOOKING STATEMENTS

Statements in this document that are not historical facts are hereby identified as forward looking statements for the purposes of the safe
harbor provided by Section 21E of the Securities Act of 1933 (the Securities Act). Atlantic Broadband Finance, LLC (the Company) cautions readers that such forward looking statements, including without
limitation, those relating to the Companys future business prospects, revenue, working capital, liquidity, capital needs, interest costs and income, wherever they occur in this document or in other statements attributable to the Company, are
necessarily estimates reflecting the judgment of the Companys senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward looking
statements. Such forward looking statements should, therefore, be considered in light of the factors set forth in Item 2. Managements Discussion and Analysis of the Financial Condition and Results of Operations.

The forward looking statements contained in this report are made under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations. Moreover, the Company, through its senior management, may from time to time make forward looking statements about matters described herein or in other matters concerning
the Company.

The Company disclaims any intent or obligation to update forward looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes to future operating results over time.



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ATLANTIC BROADBAND FINANCE, LLC

TABLE OF CONTENTS



|                              |  |                                                                                              |  |     
|----------------------------- |  | -------------------------------------------------------------------------------------------- |  | ----
|                              |  |                                                                                              |  | Page
|Part 1. Financial Information |  |                                                                                             
|Item 1.                       |  |                                                                                              |  |     
|                              |  | Financial Statements (Unaudited)                                                             |  | 4-13
|                              |  | Condensed Consolidated Balance Sheets  December 31, 2007 and March 31, 2008                 |  |     
|                              |  | Condensed Consolidated Statements of Operations  Three months ended March 31, 2007 and 2008 |  |     
|                              |  | Condensed Consolidated Statements of Cash Flows  Three months ended March 31, 2007 and 2008 |  |     
|                              |  | Notes to Condensed Consolidated Financial Statements                                         |  |     
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations        |  | 14  
|Item 3.                       |  | Quantitative and Qualitative Disclosures of Market Risk                                      |  | 17  
|Item 4T.                      |  | Controls and Procedures                                                                      |  | 18  
|                              | 
|Part 2. Other Information     |  |                                                                                             
|Item 1.                       |  | Legal Proceedings                                                                            |  | 18  
|Item 1A                       |  | Risk Factors                                                                                 |  | 19  
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                  |  | 19  
|Item 3.                       |  | Defaults upon Senior Securities                                                              |  | 19  
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                          |  | 19  
|Item 5.                       |  | Other Information                                                                            |  | 19  
|Item 6.                       |  | Exhibits                                                                                     |  | 19  
|Signatures                    |  | 20                                                                                          
|Certifications                |  | 21                                                                                          



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ATLANTIC BROADBAND FINANCE, LLC

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)



|                                                                                          |  |                  |         |   |               |   |         |  
|----------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ------------- | - | ------- | -
|                                                                                          |  | December 31,2007 |         |   | March 31,2008 |  
|Assets                                                                                    |  |                  |         |   |               |   |         |  
|Current assets                                                                            |  |                  |         |   |               |   |         |  
|Cash and cash equivalents                                                                 |  | $                | 3,390   |   |               | $ | 3,453   |  
|Accounts receivablenet of allowance for doubtful accounts of $470 and $316, respectively |  |                  | 7,788   |   |               |   | 7,002   |  
|Prepaid expenses and other current assets                                                 |  |                  | 1,728   |   |               |   | 2,181   |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total current assets                                                                      |  |                  | 12,906  |   |               |   | 12,636  |  
|Plant, property and equipment, net                                                        |  |                  | 205,472 |   |               |   | 204,350 |  
|Franchise rights                                                                          |  |                  | 547,828 |   |               |   | 547,828 |  
|Goodwill                                                                                  |  |                  | 35,905  |   |               |   | 35,905  |  
|Other intangible assets, net                                                              |  |                  | 1,120   |   |               |   | 910     |  
|Debt issuance costs, net                                                                  |  |                  | 9,494   |   |               |   | 8,922   |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total assets                                                                              |  | $                | 812,725 |   |               | $ | 810,551 |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Liabilities and Members Equity                                                           |  |                  |         |   |               |   |         |  
|Current liabilities                                                                       |  |                  |         |   |               |   |         |  
|Current portion of senior debt                                                            |  | $                | 4,528   |   |               | $ | 4,528   |  
|Current portion of capital lease obligations                                              |  |                  | 389     |   |               |   | 389     |  
|Accrued interest                                                                          |  |                  | 6,656   |   |               |   | 3,432   |  
|Accounts payable                                                                          |  |                  | 14,228  |   |               |   | 12,460  |  
|Accrued expenses                                                                          |  |                  | 10,635  |   |               |   | 8,443   |  
|Unearned service revenue                                                                  |  |                  | 4,189   |   |               |   | 4,344   |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total current liabilities                                                                 |  |                  | 40,625  |   |               |   | 33,596  |  
|Long-term debt                                                                            |  |                  | 616,650 |   |               |   | 619,518 |  
|Capital lease obligation, net of current portion                                          |  |                  | 196     |   |               |   | 84      |  
|Fair value of derivative instruments                                                      |  |                  | 3,039   |   |               |   | 6,202   |  
|Other long-term liabilities                                                               |  |                  | 2,216   |   |               |   | 2,208   |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total liabilities                                                                         |  |                  | 662,726 |   |               |   | 661,608 |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Members equity                                                                           |  |                  | 174,677 |   |               |   | 174,667 |  
|Accumulated deficit                                                                       |  |                  | (24,678 | ) |               |   | (25,724 | )
|                                                                                          |  |                  |         |   |               |   |         |  
|Total members equity                                                                     |  |                  | 149,999 |   |               |   | 148,943 |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total liabilities and members equity                                                     |  | $                | 812,725 |   |               | $ | 810,551 |  
|                                                                                          |  |                  |         |   |               |   |         |  

The accompanying notes are an integral part of these condensed consolidated financial statements.



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ATLANTIC BROADBAND FINANCE, LLC

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands)



|                                                                                                              |  |                             |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                              |  | Three Months EndedMarch 31, |       
|                                                                                                              |  | 2007                        |        |   | 2008 |  
|Cable service revenue                                                                                         |  | $                           | 59,917 |   |      | $ | 67,259 |  
|                                                                                                              |  |                             |        |   |      |   |        |  
|Operating expenses                                                                                            |  |                             |        |   |      |   |        |  
|Direct operating expenses (excluding depreciation and amortization shown separately below)                    |  |                             | 28,473 |   |      |   | 31,273 |  
|Selling, general and administrative expenses (excluding depreciation and amortization shown separately below) |  |                             | 9,214  |   |      |   | 9,635  |  
|Depreciation and amortization                                                                                 |  |                             | 12,912 |   |      |   | 11,218 |  
|                                                                                                              |  |                             |        |   |      |   |        |  
|Income from operations                                                                                        |  |                             | 9,318  |   |      |   | 15,133 |  
|Interest expense                                                                                              |  |                             | 12,267 |   |      |   | 13,016 |  
|Loss on extinguishment of debt                                                                                |  |                             | 370    |   |      |   |       |  
|Net loss on derivative instruments                                                                            |  |                             | 1,436  |   |      |   | 3,163  |  
|                                                                                                              |  |                             |        |   |      |   |        |  
|Net loss                                                                                                      |  | $                           | (4,755 | ) |      | $ | (1,046 | )
|                                                                                                              |  |                             |        |   |      |   |        |  

The accompanying notes are an integral part of these condensed consolidated financial statements.



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ATLANTIC BROADBAND FINANCE, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)



|                                                                                             |  |                             |         |   |      |   |         |  
|-------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                             |  | Three Months EndedMarch 31, |        
|                                                                                             |  | 2007                        |         |   | 2008 |  
|Cash flows from operating activities                                                         |  |                             |         |   |      |   |         |  
|Net loss                                                                                     |  | $                           | (4,755  | ) |      | $ | (1,046  | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities     |  |                             |         |   |      |   |         |  
|Depreciation and amortization                                                                |  |                             | 12,912  |   |      |   | 11,218  |  
|Amortization of debt issuance costs                                                          |  |                             | 1,473   |   |      |   | 572     |  
|Loss on extinguishment of debt                                                               |  |                             | 370     |   |      |   |        |  
|Net loss on derivative instrument                                                            |  |                             | 1,436   |   |      |   | 3,163   |  
|Changes in operating assets and liabilities                                                  |  |                             |         |   |      |   |         |  
|Accounts receivable                                                                          |  |                             | 345     |   |      |   | 786     |  
|Prepaid expenses and other current assets                                                    |  |                             | (158    | ) |      |   | (453    | )
|Accounts payable, accrued expenses, other long-term liabilities and accrued interest         |  |                             | (12,586 | ) |      |   | (10,242 | )
|Unearned service revenue                                                                     |  |                             | 754     |   |      |   | 155     |  
|                                                                                             |  |                             |         |   |      |   |         |  
|Net cash provided by (used in) operating activities                                          |  |                             | (209    | ) |      |   | 4,153   |  
|                                                                                             |  |                             |         |   |      |   |         |  
|Cash flows from investing activities                                                         |  |                             |         |   |      |   |         |  
|Purchases of property, plant and equipment                                                   |  |                             | (8,268  | ) |      |   | (6,836  | )
|Acquisition of cable systems                                                                 |  |                             | 298     |   |      |   |        |  
|                                                                                             |  |                             |         |   |      |   |         |  
|Net cash used in investing activities                                                        |  |                             | (7,970  | ) |      |   | (6,836  | )
|                                                                                             |  |                             |         |   |      |   |         |  
|Cash flows from financing activities                                                         |  |                             |         |   |      |   |         |  
|Proceeds from issuance of debt                                                               |  |                             | 81,500  |   |      |   | 4,000   |  
|Repayments of debt principal                                                                 |  |                             | (126    | ) |      |   | (1,132  | )
|Payments of capital lease obligations                                                        |  |                             | (111    | ) |      |   | (112    | )
|Dividend to members                                                                          |  |                             | (77,628 | ) |      |   | (10     | )
|Payment of debt issuance costs                                                               |  |                             | (1,853  | ) |      |   |        |  
|                                                                                             |  |                             |         |   |      |   |         |  
|Net cash provided by financing activities                                                    |  |                             | 1,782   |   |      |   | 2,746   |  
|                                                                                             |  |                             |         |   |      |   |         |  
|Net change in cash and equivalents                                                           |  |                             | (6,397  | ) |      |   | 63      |  
|Cash and cash equivalents, beginning of period                                               |  |                             | 10,250  |   |      |   | 3,390   |  
|                                                                                             |  |                             |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                                     |  | $                           | 3,853   |   |      | $ | 3,453   |  
|                                                                                             |  |                             |         |   |      |   |         |  
|Supplemental disclosure of cash flow information                                             |  |                             |         |   |      |   |         |  
|Interest paid                                                                                |  | $                           | 16,598  |   |      | $ | 15,668  |  
|Supplemental disclosure of noncash investing activities                                      |  |                             |         |   |      |   |         |  
|Capital expenditures included in accounts payable and accrued expenses                       |  |                             | 3,453   |   |      |   | 3,050   |  
|Supplemental disclosure of noncash financing activities                                      |  |                             |         |   |      |   |         |  
|Reduction in Seller Note in conjunction with final cable system purchase price determination |  |                             | 45      |   |      |   |        |  

The accompanying notes are an integral part of these condensed consolidated financial statements.



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ATLANTIC BROADBAND FINANCE, LLC

Notes to Condensed Consolidated Financial Statements

(Dollars in thousands, except where indicated)

(Unaudited)

1. Description of Business

Atlantic Broadband Finance, LLC (the Company) was formed in Delaware on August 26, 2003. The Company is a wholly-owned subsidiary of Atlantic Broadband Holdings I, LLC (the Parent). The
Company and the Parent are wholly-owned indirect subsidiaries of Atlantic Broadband Group, LLC.

On September 3, 2003, the Company
entered into a definitive asset purchase agreement with affiliates of Charter Communications, Inc. (Charter) to purchase certain cable systems in Pennsylvania, Florida, Maryland, West Virginia, Delaware and New York (together with the
Aiken, SC system referred to below, the Systems) for approximately $738.1 million, subject to closing adjustments. The Company obtained equity and debt financing to fund the acquisition, which was consummated on March 1, 2004. On
July 13, 2006, the Company entered into a definitive asset purchase agreement to purchase substantially all of the assets of G Force LLC, owner of certain cable systems in South Carolina for approximately $61.0 million. We obtained additional
debt financing and issued a note payable to the seller of the assets to fund this transaction which was consummated on November 1, 2006.

The Systems offer their customers traditional cable video programming as well as high-speed data and telephony services and other advanced video related broadband services such as high definition television. The Systems sell their video
programming, high-speed data, telephony and advanced broadband cable services on a subscription basis.

On March 31, 2008, the Company
had approximately 288,000 cable, 118,000 residential high-speed Internet and 36,000 telephone subscribers on the Systems. The Company has 5 subsidiaries which operate the Systems: Atlantic Broadband (Penn), LLC, Atlantic Broadband (Delmar), LLC,
Atlantic Broadband (Miami), LLC, Atlantic Broadband (SC), LLC and Atlantic Broadband Management, LLC (collectively, the Subsidiaries).

2.
Risks and Uncertainties

The Companys future operations involve a number of risks and uncertainties. Factors that could affect
future operating results and cause actual results to vary from historical results include, but are not limited to, growth of its subscriber base and the Companys ability to service its debt and operations with existing cash flows.

The Company plans to continue the expansion of its existing subscriber base through existing and new services, such as: digital cable, high speed
Internet, high-definition television, and telephony services. The Company anticipates additional capital expenditures to facilitate this growth. Under current plans and operations, additional financing in excess of existing facilities is not
expected to be required. The Company expects to generate cash flow from operations in excess of capital expenditures in 2008. Operating cash flow is expected to be sufficient to repay current obligations and outstanding debt as they become due
through at least the next twelve months. Should the Company fail to meet its expectations, the Company would look to draw down against the existing revolving line of credit, obtain additional financing, refinance existing agreements, and/or reduce
capital expenditures.

3. Summary of Significant Accounting Policies

Interim Financial Statements

The condensed consolidated financial statements as of
March 31, 2008 and for the three months ended March 31, 2007 and 2008 are unaudited. However, in the opinion of management, such financial statements include all adjustments (consisting primarily of normal recurring adjustments) necessary
for the fair statement of the financial information included herein in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC). The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim
periods are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the annual financial statements and related notes included in the Companys Annual Report on Form 10-K. The
balance sheet at December 31, 2007 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.



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Basis of Presentation

The financial statements presented herein include the consolidated accounts of Atlantic Broadband Finance, LLC and its Subsidiaries. Intercompany accounts
and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to
make assumptions and estimates that affect the reported amounts of assets and liabilities, derivative financial instruments and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The most significant estimates relate to useful lives of property, plant and equipment and finite-lived intangible assets, the recoverability of the carrying values of goodwill, other intangible
assets and fixed assets (which include capitalized labor and overhead costs) and commitments and contingencies. Actual results could differ from those estimates.

Segments

SFAS No. 131, Disclosure about Segments of an Enterprise and Related
Information, established standards for reporting information about operating segments in annual financial statements and in interim financial reports issued to shareholders. Operating segments are defined as components of an enterprise about
which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance of
the segment.

The Company manages the Systems operations on the basis of geographic divisional operating segments. The Company has
evaluated the criteria for aggregation of the geographic operating segments under paragraph 17 of SFAS No.131. In light of the Systems similar services, means for delivery, similarity in type of customers, the use of a unified network and
other considerations across its geographic divisional operating structure, management has determined that the Systems have one reportable segment, broadband services.

Capitalization of Labor and Overhead Costs

The cable industry is capital intensive, and a
large portion of our resources are spent on capital activities associated with extending, building and upgrading the cable network. Costs associated with network construction, initial customer installations, installation refurbishments and the
addition of network equipment necessary to enable advanced services are capitalized. Costs capitalized as part of initial customer installations include materials, direct labor costs associated with capital projects and certain indirect costs. We
capitalize direct labor costs associated with personnel based upon the specific time devoted to construction and customer installation activities. Indirect costs are associated with the activities of personnel who assist in connecting and activating
the new service and consist of compensation and overhead costs associated with these support functions. The costs of disconnecting service at a customers dwelling or reconnecting service to a previously installed dwelling are charged to
operating expense in the period incurred. Costs for repairs and maintenance are charged to operating expense as incurred, while equipment replacement and betterments, including replacement of cable drops from the pole to dwelling, are capitalized.

Judgment is required to determine the extent to which indirect costs, or overhead, are incurred as a result of specific capital activities
and, therefore, should be capitalized. We capitalize overhead based upon an allocation of the portion of indirect costs that contribute to capitalizable activities using an overhead rate applied to the amount of direct labor capitalized. We have
established overhead rates based on an analysis of the nature of costs incurred in support of capitalizable activities and a determination of the portion of costs which is directly attributable to capitalizable activities. The primary costs that are
included in the determination of overhead rates are (i) employee benefits and payroll taxes associated with capitalized direct labor, (ii) direct variable costs associated with capitalizable activities, consisting primarily of installation
and construction vehicle costs, (iii) the cost of support personnel, such as dispatch that directly assist with capitalizable installation activities, and (iv) other costs directly attributable to capitalizable activities.

Goodwill and Intangible Assets

Intangible assets consist primarily of acquired franchise operating rights and subscriber relationships. Franchise operating rights represent the value attributable to agreements with local franchising authorities, which allows access to
homes in the public right of way acquired through a business combination. Subscriber relationships represent the value to the Company of the benefit of acquiring the existing cable television subscriber base. The Company considers franchise
operating rights to have an indefinite useful life.



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The Company reached its conclusion regarding the indefinite useful life of its franchise operating rights principally because (i) there are no known or
expected legal, regulatory, contractual, competitive, economic, or other factors limiting the period over which these rights will continue to contribute to the Companys cash flows, (ii) as an incumbent franchisee, the Companys
renewal applications are granted by the local franchising authority on their own merits and not as part of a comparative process with competing applications and (iii) under the 1984 Cable Act, a local franchising authority may not unreasonably
withhold the renewal of a cable system franchise. The Company will reevaluate the expected life of its cable franchise rights each reporting period to determine whether events and circumstances continue to support an indefinite useful life. The
subscriber relationships are being amortized over the estimated useful life of the subscriber base. The useful life for the subscriber relationships is estimated to be approximately three years and at the end of each reporting period, or earlier if
circumstances warrant, the Company reassesses the estimated useful life of the relationships.

The Company tests the impairment of its
goodwill and franchise operating rights annually or whenever events or changes in circumstances indicate that these assets might be impaired. The first step of the goodwill impairment test compares the fair value of a system with its carrying
amount, including goodwill. If the fair value of the system exceeds its carrying amount, goodwill is not considered impaired. If the carrying amount of the system exceeds its fair value, the second step of the goodwill impairment test is performed
to measure the amount of the impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined by
performing an assumed purchase price allocation, using the systems fair value (as determined in the first step) as the purchase price. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an
amount equal to that excess. Franchise operating rights are tested for impairment comparing the fair value to the carrying amount of the asset on a system by system basis. The fair value of each system is determined using the discounted cash flow
valuation method.

An impairment assessment of goodwill and franchise operating rights could be triggered by a significant reduction in
operating results or cash flows at one of more of the Companys systems, or a forecast of such reductions, a significant adverse change in the locations in which the Companys systems operate, or by adverse changes to ownership rules,
among others. The Company completed its annual impairment test as of March 1, 2008 and did not identify any impairment.

Amortization
expense on intangible assets with a definite life for the next five years as of March 31, 2008 is as follows:



|           |  |                     |    
|---------- |  | ------------------- | ---
|           |  | AmortizationExpense
|2008       |  | $                   | 627
|2009       |  |                     | 283
|Thereafter |  |                     |   

Recently Issued Accounting Standards

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157 (SFAS 157) Fair Value
Measurements, which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 does not require any new fair value measurements but rather eliminates
inconsistencies in guidance found in various prior accounting pronouncements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. However, on February 6, 2008, the FASB issued FSP FAS 157-2 which defers the effective
date of SFAS 157 for one year for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. For 2008, we have adopted SFAS 157 except as it applies to those
nonfinancial assets and nonfinancial liabilities as noted in FSP FAS 157-2. The partial adoption of SFAS 157 did not have a material impact on our financial position, results of operations or cash flows. We are currently evaluating the impact of
adopting SFAS 157 on nonfinancial assets and nonfinancial liabilities.

On February 15, 2007, FASB issued SFAS No. 159,
The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). This Statement is a fair value option for financial assets and financial liabilities and includes an amendment of FAS Statement
No. 115 which covers accounting for certain investments in debt and equity securities. The Statement permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. If the fair
value option is elected, a business entity shall report unrealized gains and losses on elected items in earnings at each subsequent reporting date. Upon initial adoption of this Statement an entity is permitted to elect the fair value option for
available-for-sale and held-to-maturity securities previously accounted for under SFAS 115, Accounting for Certain investments in Debt and Equity



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Securities. The effect of reclassifying those securities into the trading category should be included in a cumulative-effect adjustment of
retained earnings and not in current-period earnings and should be separately disclosed. SFAS No. 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. We did not elect the fair value option for
any or our financial assets or liabilities.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations (SFAS 141(R)). SFAS 141 (R) replaces SFAS No. 141, Business Combinations. SFAS 141 (R) requires that the acquiring entity in a business combination recognize the full fair value of assets acquired
and liabilities assumed in the transaction; requires certain contingent assets and liabilities acquired to be recognized at their fair values on the acquisition date; requires contingent consideration to be recognized at its fair value on the
acquisition date and changes in the fair value to be recognized in earnings until settled; requires the expensing of most transaction and restructuring costs; and generally requires the reversal of valuation allowances related to acquired deferred
tax assets and changes to acquired income tax uncertainties to also be recognized in earnings. This accounting standard is effective for financial statements issued for fiscal years beginning after December 15, 2008. We are currently evaluating
the impact of adopting SFAS 141 (R).

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activitiesan amendment of FASB Statement No. 133 (SFAS 161). This Statement requires enhanced disclosures about an entitys derivative and hedging activities, including (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133), and its related
interpretations, and (c) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008. The Company is in the process of evaluating the effect, if any, the adoption of SFAS 161 will have on its financial statements.

4. Fair Value Measurements

On January 1, 2008, we adopted SFAS No. 157, Fair Value
Measurements (SFAS No. 157), for our financial assets and liabilities. Our adoption of SFAS No. 157 did not impact our financial position, results of operations or liquidity. In accordance with FASB Staff Position No.
FAS 157-2, Effective Date of FASB Statement No. 157 (FSP FAS 157-2), we elected to defer until January 1, 2009 the adoption of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities that
are not recognized or disclosed at fair value in the financial statements on a recurring basis. The adoption of SFAS No. 157 for financial assets and liabilities did not have a material impact on our financial position, results of operations or
liquidity.

SFAS No. 157 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. SFAS
No. 157 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the
measurement date. SFAS No. 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that we use
to measure fair value, as well as the assets and liabilities that we value using those levels of inputs.



|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level 1: |  | Quoted prices in active markets for identical assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         | 
|Level 2: |  | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can
be corroborated by observable market data for substantially the full term of the related assets or liabilities. Our Level 2 assets are interest rate swaps whose fair value we determine using a pricing model predicated upon observable market inputs.
The Companys derivative instruments are pay-fixed, receive-variable interest rate swaps based on LIBOR swap rate. The LIBOR swap rate is observable at commonly quoted intervals for the full term of the swaps and therefore is considered a level
2 item.
|         | 
|Level 3: |  | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



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The following table sets forth the financial assets and liabilities as of March 31, 2008 that we measured at fair
value on a recurring basis by level within the fair value hierarchy. As required by SFAS No. 157, assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their
fair value measurement (dollars in thousands):



|                    |  |         |  |         |  |         |  |                            
|------------------- |  | ------- |  | ------- |  | ------- |  | ---------------------------
|                    |  | Level 1 |  | Level 2 |  | Level 3 |  | Balance as ofMarch 31, 2008
|Liabilities         |  |         |  |         |  |         |  |                            
|Interest Rate Swaps |  |        |  | 6,202   |  |        |  | 6,202                      

5. Acquisition

G Force LLC

On July 13, 2006, the Company entered into a definitive asset purchase agreement to purchase
substantially all of the assets of G Force LLC, owner of certain cable systems in Aiken, South Carolina. The Company financed the acquisition through an increase in its Senior Credit Facility and the issuance of a $6.9 million note payable to the
seller of the assets. The transaction was consummated on November 1, 2006. The total purchase price for the assets acquired, excluding liabilities assumed, was $62,269.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition. The Company
obtained third-party valuations of certain acquired intangible assets from Grant Thornton LLP.



|                                                        |  |                 |       
|------------------------------------------------------- |  | --------------- | ------
|                                                        |  | November 1,2006
|Accounts receivable                                     |  | $               | 1,028 
|Prepaid expenses and other current assets               |  |                 | 82    
|Property and equipment                                  |  |                 | 21,631
|Intangible assets, including franchise operating rights |  |                 | 39,528
|                                                        |  |                 |       
|Total assets acquired                                   |  |                 | 62,269
|Less: Accrued liabilities assumed                       |  |                 | 1,240 
|                                                        |  |                 |       
|Net assets acquired                                     |  | $               | 61,029
|                                                        |  |                 |       

Of the $39,528 of acquired intangibles, $38,728 was assigned to franchise operating rights that
are not subject to amortization and $800 was assigned to subscriber relationships (estimated useful life of approximately 3 years).

6. Plant, Property
and Equipment

Plant, property and equipment consist of the following:



|                                     |  |                  |         |               |   |        
|------------------------------------ |  | ---------------- | ------- | ------------- | - | -------
|                                     |  | December 31,2007 |         | March 31,2008
|Distribution facilities              |  | $                | 190,474 |               | $ | 194,591
|Subscriber equipment                 |  |                  | 54,128  |               |   | 56,290 
|Headend equipment                    |  |                  | 34,307  |               |   | 35,879 
|Buildings and leasehold improvements |  |                  | 9,566   |               |   | 9,667  
|Office equipment and other           |  |                  | 13,782  |               |   | 14,211 
|Vehicles and equipment               |  |                  | 8,373   |               |   | 8,737  
|Land                                 |  |                  | 1,972   |               |   | 1,976  
|Construction in progress             |  |                  | 80      |               |   | 211    
|Material inventory                   |  |                  | 3,538   |               |   | 3,500  
|                                     |  |                  |         |               |   |        
|Total plant, property and equipment  |  |                  | 316,220 |               |   | 325,062
|Less: accumulated depreciation       |  |                  | 110,748 |               |   | 120,712
|                                     |  |                  |         |               |   |        
|Plant, property and equipment, net   |  | $                | 205,472 |               | $ | 204,350
|                                     |  |                  |         |               |   |        



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##### Table of Contents

Depreciation expense for the three months ended March 31, 2007 and 2008 was $10,193 and $11,008,
respectively.

7. Finite-Lived Intangible Assets

Intangible assets consist of the following:



|                               |  |                  |        |               |   |       
|------------------------------ |  | ---------------- | ------ | ------------- | - | ------
|                               |  | December 31,2007 |        | March 31,2008
|Subscriber relationships       |  | $                | 45,411 |               | $ | 45,411
|Other intangible assets        |  |                  | 2,200  |               |   | 2,200 
|                               |  |                  |        |               |   |       
|Total intangible assets        |  |                  | 47,611 |               |   | 47,611
|Less: Accumulated amortization |  |                  | 46,491 |               |   | 46,701
|                               |  |                  |        |               |   |       
|Intangible assets, net         |  | $                | 1,120  |               | $ | 910   
|                               |  |                  |        |               |   |       

Amortization expense for the three months ended March 31, 2007 and 2008 was $2,718 and $210,
respectively.

8. Accrued Expenses

Accrued expenses consist of the following:



|                                              |  |                  |        |               |   |      
|--------------------------------------------- |  | ---------------- | ------ | ------------- | - | -----
|                                              |  | December 31,2007 |        | March 31,2008
|Franchise, copyright and revenue sharing fees |  | $                | 2,605  |               | $ | 2,022
|Payroll and related taxes                     |  |                  | 3,418  |               |   | 1,929
|Accrued purchase price                        |  |                  | 167    |               |   |     
|Other accrued expenses                        |  |                  | 4,445  |               |   | 4,492
|                                              |  |                  |        |               |   |      
|Total accrued liabilities                     |  | $                | 10,635 |               | $ | 8,443
|                                              |  |                  |        |               |   |      

9. Debt

On February 10, 2004, the Company entered into $305,000 of term loans (the Term Loans) and a $90,000 revolving credit facility (the Revolver) with a group of banks and institutional
investors led by Merrill Lynch & Company, General Electric Capital Corporation, Societe Generale and Calyon Corporate and Investment Bank. These two facilities are governed by a single credit agreement dated as of February 10, 2004
(collectively, the Senior Credit Facility), which was amended and restated as of February 9, 2005 under substantially the same terms.

The net proceeds from the Senior Credit Facility were primarily used to acquire and operate the Systems.

On August 23, 2006, the Company amended its Senior Credit Facility to increase the Term Loan commitment by $50.0 million in anticipation of the pending acquisition of G Force LLC. The acquisition closed and the additional Term Loan
borrowings occurred on November 1, 2006. The additional borrowings were made under the same conditions as the original Term Loans.

On
March 6, 2007, the Company amended its Senior Credit Facility and increased the Term Loan commitment and borrowings by $104.5 million. The proceeds of the additional Term Loans were used to provide a dividend to our members of $77.6 million and
to reduce outstanding Revolver borrowings by $23.0 million. The balance of the proceeds were used for working capital purposes. The additional borrowings were made under substantially the same conditions as the original Term Loans.

The Senior Credit Facility contains certain restrictive financial covenants that, among other things, require the Company to maintain certain debt
service coverage, interest coverage, fixed charge coverage, leverage ratios and a certain level of EBITDA and places certain limitations on additional debt and investments. The Senior Credit Facility contains conditions precedent to borrowing,
events of default (including change of control) and covenants customary for facilities of this nature. The Senior Credit Facility is collateralized by substantially all of the assets of the Company and its subsidiaries.

At December 31, 2007, there was $449,416 outstanding under the Term Loans and $14,917 under the Revolver. At March 31, 2008, there was $448,284
outstanding under the Term Loans and $18,917 under the Revolver. The interest rate on the Senior



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##### Table of Contents

Credit Facility will be, at the election of the Company, based on either a Eurodollar or a Base Rate option, each as defined in the credit agreement, plus a
spread ranging between 1.0% and 3.25%. Excluding the interest rate swaps, the weighted average interest rate for 2007 and 2008 on the Term Note and Revolver was 8.28% and 7.18%, respectively. Interest payments on Base Rate Loans shall be payable in
arrears on the last day of each calendar quarter and at maturity. Interest payments on Eurodollar Loans shall be payable on the last day of each interest period relating to such loan and at maturity.

As of March 31, 2008, there was approximately $71,083 of unused commitments under the Revolver all of which could be drawn in compliance with the
financial covenants under the Senior Credit Facility. In order to maintain the revolving lines of credit, the Company is obligated to pay certain commitment fees at nominal interest rates on the unused portions of the loans.

The Company can make no assurances that it will be able to satisfy and comply with the covenants under the Senior Credit Facility. The Companys
ability to maintain its liquidity and maintain compliance with its covenants under the Senior Credit Facility is dependent upon its ability to successfully execute its current business plan. The Company can make no assurances, however, that its
business will generate sufficient cash flow from operations or that existing available cash or future borrowings will be available to it under the Senior Credit Facility in an amount sufficient to enable it to pay its indebtedness or to fund its
other liquidity needs. As of March 31, 2008, the Company was in compliance with its covenants under the Senior Credit Facility.

Term
Loan installments began on June 30, 2006. The Revolver shall be paid such that the amount outstanding shall not exceed $67,500 from March 1, 2009 until the termination date. The Revolver shall be paid in full on the termination date of
March 1, 2010. Principal payments under the Senior Credit Facility for each year ending December 31, 2008 through 2011 are as follows:



|     |  |   |        
|---- |  | - | -------
|2008 |  | $ | 3,396  
|2009 |  |   | 4,528  
|2010 |  |   | 130,422
|2011 |  |   | 328,855
|     |  |   |        
|     |  | $ | 467,201
|     |  |   |        

Senior Subordinated Notes

On February 10, 2004, the Company issued $150,000 of 93/8% senior subordinated notes (the Notes). The Notes mature on
January 15, 2014. Interest is payable every six months in arrears on January 15 and July 15. The Notes are general unsecured senior subordinated obligations subordinated to the Senior Credit Facility. The proceeds of the offering were
used to finance the acquisition of the Systems.

Interest Rate Swap Agreements

The Company entered into three interest rate swap agreements on March 17, 2004 for a total notional value of $230,000 with a term of three years at a
fixed rate of 1.25% for the first year, 2.25% for the second year and rates ranging from 3.53% to 3.58% for the third year. These agreements ended on March 16, 2007. In September 2006, the Company entered into four additional swap agreements
with a forward start date of March 19, 2007 for a total notional value of $225,000 with a term of two years at a fixed rate of 5.08% The marking-to-market of the interest rate swap agreements resulted in the recognition of $1,436 and $3,163 in
other expense for the three months ended March 31, 2007 and 2008, respectively.

Seller Note

In conjunction with the November 1, 2006 acquisition of G Force, LLC, the Company issued to the seller a note in the amount of $6.9 million. This
note has an interest rate of 6%, payable semi-annually, and is payable on the third anniversary of the acquisition date.

10. Members Equity

The Parent owns all 1,000 units issued by the Company. The Parent contributed $1,709 in 2003 to effect its formation. In 2004, the Parent
contributed $260,791 which the Company used to acquire the Systems. In March 2007, the Company provided a dividend to its members of $77,628. The Company provided additional dividends totaling $10,095 during the remainder of 2007 and $10 during the
first quarter of 2008.



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##### Table of Contents

|ITEM 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion and analysis is based upon our unaudited interim consolidated financial statements, and our review of the business and operations
of each of the Systems.

Overview of Operations

The operating revenue of the Company is derived primarily from monthly subscription fees charged to customers for video, data and telephony services, equipment rental and ancillary services provided by the Systems. Generally, the customer
subscriptions may be discontinued by the customer at any time. In addition, the Company derives revenue from installation and reconnection fees charged to customers to commence and reinstate service, pay-per-view programming where users are charged
a fee for individual programs viewed, advertising revenues and franchise fee revenues, which are collected by the Systems and then paid to local franchising authorities.

Expenses consist primarily of operating costs, selling, general and administrative expenses, depreciation and amortization expenses and interest expense. Operating costs primarily include programming costs, the cost
of the Systems workforce, cable service related expenses, franchise fees and expenses related to customer billings.

Historical Performance

Operating Data



|                                                      |  |               |   |  |                  |   |  |               |  
|----------------------------------------------------- |  | ------------- | - |  | ---------------- | - |  | ------------- | -
|                                                      |  | March 31,2007 |   |  | December 31,2007 |   |  | March 31,2008 |  
|Equivalent Basic Units (EBUs)                      |  | 230,660       |   |  | 227,137          |   |  | 227,610       |  
|Digital subscribers                                   |  | 80,382        |   |  | 83,629           |   |  | 87,252        |  
|High Speed Data (HSD) subscribers                   |  | 98,416        |   |  | 111,583          |   |  | 118,094       |  
|Telephone subscribers                                 |  | 16,777        |   |  | 30,520           |   |  | 36,321        |  
|Homes passed                                          |  | 494,762       |   |  | 500,662          |   |  | 501,322       |  
|Internet-ready homes passed                           |  | 470,016       |   |  | 490,696          |   |  | 492,455       |  
|Telephone-ready homes passed                          |  | 364,053       |   |  | 406,927          |   |  | 454,960       |  
|Basic subscribers                                     |  | 288,694       |   |  | 286,593          |   |  | 288,068       |  
|                                                      |  |               |  
|Basic penetration of homes passed                     |  | 58.4          | % |  | 57.2             | % |  | 57.5          | %
|Digital penetration of basic subscribers              |  | 27.8          | % |  | 29.2             | % |  | 30.3          | %
|HSD penetration of internet-ready homes passed        |  | 20.9          | % |  | 22.7             | % |  | 24.0          | %
|Telephone penetration of telephone-ready homes passed |  | 4.6           | % |  | 7.5              | % |  | 8.0           | %



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##### Table of Contents

Results of Operations

The following tables set forth a summary of the Systems operations for the periods indicated and their percentages of total revenue:



|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|-------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | ----- | - | ------ | - | ------- | - |  | ----- | -
|                                                                                                         |  | Three Months Ended March 31. |        
|                                                                                                         |  | 2007                         |         |   | 2008 |      
|                                                                                                         |  | Amount                       |         |   | %    |       |   | Amount |   |         | % | 
|                                                                                                         |  | (dollars in thousands)       |        
|Revenue:                                                                                                 |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Video                                                                                                    |  | $                            | 37,387  |   |      | 62.4  | % |        | $ | 39,410  |   |  | 58.6  | %
|High Speed Data                                                                                          |  |                              | 9,220   |   |      | 15.4  |   |        |   | 11,035  |   |  | 16.4  |  
|Telephone                                                                                                |  |                              | 1,648   |   |      | 2.7   |   |        |   | 3,729   |   |  | 5.5   |  
|Advertising Sales                                                                                        |  |                              | 1,631   |   |      | 2.7   |   |        |   | 1,534   |   |  | 2.3   |  
|Commercial                                                                                               |  |                              | 5,083   |   |      | 8.5   |   |        |   | 5,866   |   |  | 8.7   |  
|Other                                                                                                    |  |                              | 4,948   |   |      | 8.3   |   |        |   | 5,685   |   |  | 8.5   |  
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Total revenue                                                                                            |  | $                            | 59,917  |   |      | 100.0 | % |        | $ | 67,259  |   |  | 100.0 | %
|                                                                                                         |  |                              |         |  
|Costs and expenses:                                                                                      |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Operating (excluding depreciation and amortization and selling, general and administrative listed below) |  |                              | 28,473  |   |      | 47.5  | % |        |   | 31,273  |   |  | 46.5  | %
|Selling, general and administrative                                                                      |  |                              | 9,214   |   |      | 15.4  | % |        |   | 9,635   |   |  | 14.3  | %
|Depreciation and amortization                                                                            |  |                              | 12,912  |   |      | 21.5  | % |        |   | 11,218  |   |  | 16.7  | %
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Income from operations                                                                                   |  |                              | 9,318   |   |      |       |   |        |   | 15,133  |   |  |       |  
|Other expenses:                                                                                          |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Loss from derivative instruments                                                                         |  |                              | (1,436  | ) |      |       |   |        |   | (3,163  | ) |  |       |  
|Loss on extinguishment of debt                                                                           |  |                              | (370    | ) |      |       |   |        |   |        |   |  |       |  
|Interest expense, net                                                                                    |  |                              | (12,267 | ) |      |       |   |        |   | (13,016 | ) |  |       |  
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Loss before income taxes                                                                                 |  | $                            | (4,755  | ) |      |       |   |        | $ | (1,046  | ) |  |       |  
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  

Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007.

Revenue for the three months ended March 31, 2008 was $67.3 million as compared to $59.9 million for the three months ended March 31, 2007, an
increase of $7.4 million or 12.4%. This increase was mainly the result of (i) a $2.0 million increase in video revenue resulting from increases in digital, Digital Video Recorder and high definition subscribers coupled with increased video on
demand usage; (ii) an increase in high-speed data revenue of $1.8 million or 19.7% from continued marketing focus for this service offering driving HSD subscriber growth and (iii) a $2.1 million increase in telephone revenue generated by
increases in subscriber levels. We expect revenues to continue to increase as video subscriber levels stabilize while we expect to continue to see subscriber growth in our digital, high-speed data and telephone service offerings.

Operating expenses for the three months ended March 31, 2008 were $31.3 million as compared to $28.5 million for the same period in 2007. The $2.8
million increase was mainly the result of increased programming costs in conjunction with annual contractual increases. We expect operating expenses to continue to increase as growth in total revenue generating units will result in increased direct
expenses, while technical and customer support levels should remain relatively stable.

Selling, general and administrative expenses for
the three months ended March 31, 2008 were $9.6 million as compared to $9.2 million for the three months ended March 31, 2007, an increase of $0.4 million. This increase resulted mainly from increases in staffing and related costs in sales
and marketing to support the growth in our customer base. We expect to see continued increases in selling, general and administrative expenses as we increase marketing spending to continue subscriber growth trends, with levels remaining relatively
consistent as a percentage of revenues.

Depreciation of property and equipment and amortization expense was $11.2 million for the three
months ended March 31, 2008, compared with $12.9 million for the same period in 2007, a decrease of $1.7 million. This decrease was the result of reduced amortization expense as certain finite lived intangible assets reached the end of their
initial estimated lives. This decrease in amortization expense is slightly offset by an overall increase in depreciation expense as a result of higher capital expenditures in 2007 due mainly to the system rebuild in Aiken and additional deployment
of customer premise equipment, offset by approximately $3.7 million of plant assets which were written off in conjunction with the Aiken Cluster rebuild.



15



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##### Table of Contents

Income from operations for the three months ended March 31, 2008 was $15.1 million as compared to
$9.3 million for the same period in 2007 for the reasons described above.

The marking-to-market of the interest rate swap agreements
resulted in the recognition of $3.2 million in other expense for the three months ended March 31, 2008 as compared to $1.4 million for the three months ended March 31, 2007 due to fluctuations in market interest rates.

Interest expense, including amortization of debt financing costs, for the three months ended March 31, 2008 was $13.0 million as compared to $12.3
million for the three months ended March 31, 2007. This increase was primarily attributable to increased borrowing to finance the March 2007 members dividend.

In connection with the March 2007 refinancing, the Company recognized a loss of $0.4 related to the expensing of previously capitalized debt issuance costs.

As a result of the factors described above, the net loss was $1.0 million for the three months ended March 31, 2008 as compared to $4.8 million for
the three months ended March 31, 2007.

Liquidity and Capital Resources

The Companys primary source of liquidity is cash flow from operations. We also have available funds under our revolving credit facility, subject to
certain conditions. Our primary liquidity requirements will be for debt service, capital expenditures and working capital.

In connection with the acquisition of the Systems, we have incurred substantial amounts of debt,
including amounts outstanding under our senior credit facility and our 93/8% Senior Subordinated Notes. Interest payments on this indebtedness will significantly reduce our cash flows from operations. As of March 31, 2008, the Company has total debt outstanding of $624.5 million
(including capital lease obligations).

We have a $538.2 million senior credit facility, consisting of a $90 million revolving credit
facility and a $448.2 million term loan B tranche. At March 31, 2008, $18.9 million of the revolving credit facility (the Revolver) was outstanding, with $71.1 million of unused senior credit commitments under the revolving credit
facility. The Revolver shall be paid such that the amount outstanding shall not exceed $67,500 from March 1, 2009 until the termination date of March 1, 2010. We will be able to prepay revolving credit loans and reborrow amounts that are
repaid, up to the amount of the revolving credit commitment then in effect, subject to customary conditions.

The borrowings under the term
loan B mature on October 1, 2011 and are payable in quarterly installments which began on June 30, 2006.

We expect to incur
capital expenditures in 2008 at a level less than 2007 as we completed the approximate $7.0 million upgrade of the Aiken Cluster during 2007. We expect subsequent year capital expenditure levels to remain relatively consistent, reflecting more
maintenance and discretionary capital spending.

We believe that the cash generated from operations will be sufficient to meet our debt
service, capital expenditures and working capital requirements for the foreseeable future. Subject to restrictions on our senior secured credit facilities and the indenture governing our Senior Subordinated Notes, we may incur more debt for working
capital, capital expenditures, acquisitions and for other purposes. In addition, we may require additional financing if our plans materially change in an adverse manner or prove to be materially inaccurate. There can be no assurance that such
financing, if permitted under the terms of our debt agreement, will be available on terms acceptable to us or at all.

Contractual
Obligations

The following table sets forth our long-term contractual cash obligations as of March 31, 2008 (dollars in thousands):



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##### Table of Contents

|                                          |  |                           |         |                  |   |        |  |      |        |      |   |         |  |            |         |  |   |        |  |   |        
|----------------------------------------- |  | ------------------------- | ------- | ---------------- | - | ------ |  | ---- | ------ | ---- | - | ------- |  | ---------- | ------- |  | - | ------ |  | - | -------
|                                          |  | Years Ending December 31,
|                                          |  | Total                     |         | Remainderof 2008 |   | 2009   |  | 2010 |        | 2011 |   | 2012    |  | Thereafter
|Senior secured credit facilities          |  | $                         | 467,201 |                  | $ | 3,396  |  | $    | 4,528  |      | $ | 130,422 |  | $          | 328,855 |  | $ |       |  | $ |       
|6% Seller Note                            |  |                           | 6,845   |                  |   |       |  |      | 6,845  |      |   |        |  |            |        |  |   |       |  |   |       
|9 3/8% Senior
Subordinated Notes due 2014 |  |                           | 150,000 |                  |   |       |  |      |       |      |   |        |  |            |        |  |   |       |  |   | 150,000
|Cash interest                             |  |                           | 152,610 |                  |   | 28,612 |  |      | 37,533 |      |   | 35,961  |  |            | 21,793  |  |   | 14,063 |  |   | 14,648 
|Capitalized leases (including interest)   |  |                           | 473     |                  |   | 270    |  |      | 193    |      |   | 10      |  |            |        |  |   |       |  |   |       
|Operating leases                          |  |                           | 2,066   |                  |   | 497    |  |      | 508    |      |   | 411     |  |            | 315     |  |   | 155    |  |   | 180    
|                                          |  |                           |         |                  |   |        |  |      |        |      |   |         |  |            |         |  |   |        |  |   |        
|Total cash contractual obligations        |  | $                         | 779,195 |                  | $ | 32,775 |  | $    | 49,607 |      | $ | 166,804 |  | $          | 350,963 |  | $ | 14,218 |  | $ | 164,828
|                                          |  |                           |         |                  |   |        |  |      |        |      |   |         |  |            |         |  |   |        |  |   |        

Cash Flows

Cash provided by operations increased to $4.2 million for the three months ended March 31, 2008 as compared to cash used by operations of $0.2 million for the same period in 2007. This is mainly the result of the
decrease in the Companys Net Loss as discussed above.

Cash used in investing activities decreased to $6.8 million for the three
months ended March 31, 2008 from $8.0 million for the same period in 2007. This decrease is mainly the result of the completion of the rebuild of the South Carolina systems in 2007.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or
financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited
purposes.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the
reported amount of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reported period. In making these estimates and
assumptions, management employs critical accounting policies. Our critical accounting policies and estimates are discussed in our Annual Report on Form 10-K for the year ended December 31, 2007 and we have updated our critical accounting policy
with respect to the valuation of investments as follows:

Fair Value Measurements

We have derivative instruments outstanding as of March 31, 2008. SFAS No. 157 provides a framework for measuring fair value and requires
expanded disclosures regarding fair value measurements. SFAS No. 157 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market
in an orderly transaction between market participants on the measurement date. SFAS No. 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. .Judgment is required in
estimating the fair value of the asset or liability related to these instruments included in our balance sheet, and we have used these guidelines in determining such estimates.

Inflation and Changing Prices

Our costs and expenses will be subject to inflation and price
fluctuations. We do not expect that such changes are likely to have a material effect on our results of operations.



|ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

We are exposed to certain market risks as part of our ongoing business operations. Primary exposure will include changes in interest rates as borrowings under our senior secured credit facilities bear interest at floating rates based on
LIBOR or the base rate, in each case plus an applicable borrowing margin. We manage our interest rate risk by balancing the amount of fixed-rate and floating-rate debt. For fixed-rate debt, interest rate changes do not affect earnings or cash flows.
Conversely, for floating-rate debt, interest rate changes generally impact our earnings and cash flows, assuming other factors are held constant.



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The following table estimates the changes to cash flow from operations if interest rates were to
fluctuate by 100 or 50 basis points, or BPS (where 100 basis points represents one percentage point), for a twelve-month period after giving effect to the interest rate swap agreements described below:



|                                          |  |                        |        |        |   |                           |  |        |        |         |   |        |  |   |       
|----------------------------------------- |  | ---------------------- | ------ | ------ | - | ------------------------- |  | ------ | ------ | ------- | - | ------ |  | - | ------
|                                          |  | Interest rate decrease |        |        |   | Interest rate increase   
|                                          |  | 100 BPS                |        | 50 BPS |   | No change tointerest rate |  | 50 BPS |        | 100 BPS
|                                          |  | (dollars in thousands)
|Senior credit facilities                  |  | $                      | 26,521 |        | $ | 27,732                    |  | $      | 28,943 |         | $ | 30,154 |  | $ | 31,365
|9.375% senior subordinated notes due 2014 |  |                        | 14,063 |        |   | 14,063                    |  |        | 14,063 |         |   | 14,063 |  |   | 14,063
|                                          |  |                        |        |        |   |                           |  |        |        |         |   |        |  |   |       
|                                          |  | $                      | 40,584 |        | $ | 41,795                    |  | $      | 43,006 |         | $ | 44,217 |  | $ | 45,428
|                                          |  |                        |        |        |   |                           |  |        |        |         |   |        |  |   |       

We use derivative instruments to manage our exposure to interest rate risks. Our objective for
holding derivatives is to minimize the risks using the most effective methods to eliminate or reduce the impacts of these exposures. We use interest rate swap agreements, not designated as hedging instruments under SFAS No. 133
Accounting for Derivative Instruments and Hedging Activities, in connection with our variable rate senior credit facility. We do not use derivative financial instruments for speculative or trading purposes.

At March 31, 2008, we had in effect four interest rate swaps with three separate commercial banks, with a total notional amount of $225.0 million
with a term of two years beginning March 2007 at a fixed rate of 5.08%. These interest rate swap agreements require us to pay a fixed rate and receive a floating rate thereby creating fixed rate debt. The difference to be paid or received on the
swaps are accrued as an adjustment to interest expense. We are exposed to credit loss in the event of nonperformance by the counterparty. The net fair value of the interest rate swap agreements, which represents the cash we would receive or pay to
settle the agreements, was a liability of approximately $6.2 million and $3.0 million at March 31, 2008 and December 31, 2007, respectively.



|ITEM 4T. | Controls and Procedures
|-------- | -----------------------

The Companys
management, with the participation of the Companys chief executive officer and chief financial officer, evaluated the effectiveness of the Companys disclosure controls and procedures as of March 31, 2008. The term disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the companys management, including its principal
executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable
assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of the Companys disclosure controls and procedures
as of March 31, 2008 the Companys chief executive officer and chief financial officer concluded that, as of such date, the Companys disclosure controls and procedures were effective at the reasonable assurance level.

There was no change in the internal control over financial reporting that occurred during the period ended March 31, 2008 that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART 2. OTHER INFORMATION



|ITEM 1. | Legal Proceedings
|------- | -----------------

In the normal course of
business, the Company is party to various claims and legal proceedings. The Company records a reserve for these matters when an adverse outcome is probable and they can reasonably estimate its potential liability. Although the ultimate outcome of
these matters is currently not determinable, the Company does not believe that the resolution of these matters in a manner adverse to their interest will have a material effect upon their financial condition, results of operations or cash flows for
an interim or annual period.



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|ITEM 1A. | Risk Factors
|-------- | ------------

For a more detailed explanation of
the factors affecting our business, please refer to the Risk Factors section in Item 1A of our 2007 Form 10-K.



|ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|ITEM 3. | Defaults upon Senior Securities
|------- | -------------------------------

None.



|ITEM 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



|ITEM 5. | Other Information
|------- | -----------------

None.



|ITEM 6. | Exhibits
|------- | --------



| | (a) | Exhibits
| | --- | --------



|     |  |                                                                                                                                                  
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of David J. Keefe pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                       
|     | 
|31.2 |  | Certification of Patrick Bratton pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                      
|     | 
|32.1 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  Chief Executive Officer.
|     | 
|32.2 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  Chief Financial Officer.



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of
1934 the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized on May 7, 2008.



Atlantic Broadband Finance, LLC/s/ David J. KeefeDavid J. KeefeChief Executive Officer and Director/s/ Patrick BrattonPatrick BrattonChief Financial Officer




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