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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, 2009



| ̈ | 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    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)                                                             |  | 4-14
|                              |  |                |  | Condensed Consolidated Balance Sheets  December 31, 2008 and March 31, 2009                 |  |     
|                              |  |                |  | Condensed Consolidated Statements of Operations  Three months ended March 31, 2008 and 2009 |  |     
|                              |  |                |  | Condensed Consolidated Statements of Cash Flows  Three months ended March 31, 2008 and 2009 |  |     
|                              |  |                |  | 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 |  |                                                                                             



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ATLANTIC BROADBAND FINANCE, LLC

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)



|                                                                                          |  |                  |         |   |               |   |         |  
|----------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ------------- | - | ------- | -
|                                                                                          |  | December 31,2008 |         |   | March 31,2009 |  
|Assets                                                                                    |  |                  |         |   |               |   |         |  
|Current assets                                                                            |  |                  |         |   |               |   |         |  
|Cash and cash equivalents                                                                 |  | $                | 7,007   |   |               | $ | 2,487   |  
|Accounts receivablenet of allowance for doubtful accounts of $479 and $351, respectively |  |                  | 9,055   |   |               |   | 7,911   |  
|Prepaid expenses and other current assets                                                 |  |                  | 1,774   |   |               |   | 2,584   |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total current assets                                                                      |  |                  | 17,836  |   |               |   | 12,982  |  
|Plant, property and equipment, net                                                        |  |                  | 204,065 |   |               |   | 201,789 |  
|Franchise rights                                                                          |  |                  | 524,400 |   |               |   | 524,400 |  
|Goodwill                                                                                  |  |                  | 35,905  |   |               |   | 35,905  |  
|Other intangible assets, net                                                              |  |                  | 283     |   |               |   | 156     |  
|Debt issuance costs, net                                                                  |  |                  | 7,206   |   |               |   | 6,633   |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total assets                                                                              |  | $                | 789,695 |   |               | $ | 781,865 |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Liabilities and Members Equity                                                           |  |                  |         |   |               |   |         |  
|Current liabilities                                                                       |  |                  |         |   |               |   |         |  
|Current portion of senior debt                                                            |  | $                | 4,528   |   |               | $ | 14,290  |  
|Current portion of capital lease obligations                                              |  |                  | 199     |   |               |   | 146     |  
|Accrued interest                                                                          |  |                  | 6,874   |   |               |   | 2,976   |  
|Accounts payable                                                                          |  |                  | 13,293  |   |               |   | 12,621  |  
|Accrued expenses                                                                          |  |                  | 10,733  |   |               |   | 9,149   |  
|Unearned service revenue                                                                  |  |                  | 4,390   |   |               |   | 5,121   |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total current liabilities                                                                 |  |                  | 40,017  |   |               |   | 44,303  |  
|Long-term debt                                                                            |  |                  | 610,122 |   |               |   | 589,228 |  
|Fair value of derivative instruments                                                      |  |                  | 1,821   |   |               |   |        |  
|Other long-term liabilities                                                               |  |                  | 2,206   |   |               |   | 2,200   |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total liabilities                                                                         |  |                  | 654,166 |   |               |   | 635,731 |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Members equity                                                                           |  |                  | 164,478 |   |               |   | 164,478 |  
|Accumulated deficit                                                                       |  |                  | (28,949 | ) |               |   | (18,344 | )
|                                                                                          |  |                  |         |   |               |   |         |  
|Total members equity                                                                     |  |                  | 135,529 |   |               |   | 146,134 |  
|                                                                                          |  |                  |         |   |               |   |         |  
|Total liabilities and members equity                                                     |  | $                | 789,695 |   |               | $ | 781,865 |  
|                                                                                          |  |                  |         |   |               |   |         |  

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, |       
|                                                                                                              |  | 2008                        |        |   | 2009 |  
|Cable service revenue                                                                                         |  | $                           | 67,259 |   |      | $ | 73,767 |  
|                                                                                                              |  |                             |        |   |      |   |        |  
|Operating expenses                                                                                            |  |                             |        |   |      |   |        |  
|Direct operating expenses (excluding depreciation and amortization shown separately below)                    |  |                             | 31,273 |   |      |   | 33,849 |  
|Selling, general and administrative expenses (excluding depreciation and amortization shown separately below) |  |                             | 9,635  |   |      |   | 9,959  |  
|Depreciation and amortization                                                                                 |  |                             | 11,218 |   |      |   | 10,881 |  
|                                                                                                              |  |                             |        |   |      |   |        |  
|Income from operations                                                                                        |  |                             | 15,133 |   |      |   | 19,078 |  
|Interest expense                                                                                              |  |                             | 13,016 |   |      |   | 10,294 |  
|Net loss (gain) on derivative instruments                                                                     |  |                             | 3,163  |   |      |   | (1,821 | )
|                                                                                                              |  |                             |        |   |      |   |        |  
|Net (loss) income                                                                                             |  | $                           | (1,046 | ) |      | $ | 10,605 |  
|                                                                                                              |  |                             |        |   |      |   |        |  

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, |        
|                                                                                        |  | 2008                        |         |   | 2009 |  
|Cash flows from operating activities                                                    |  |                             |         |   |      |   |         |  
|Net (loss) income                                                                       |  | $                           | (1,046  | ) |      | $ | 10,605  |  
|Adjustments to reconcile net (loss) income to net cash provided by operating activities |  |                             |         |   |      |   |         |  
|Depreciation and amortization                                                           |  |                             | 11,218  |   |      |   | 10,881  |  
|Amortization of debt issuance costs                                                     |  |                             | 572     |   |      |   | 573     |  
|Net loss (gain) on derivative instrument                                                |  |                             | 3,163   |   |      |   | (1,821  | )
|Changes in operating assets and liabilities                                             |  |                             |         |   |      |   |         |  
|Accounts receivable                                                                     |  |                             | 786     |   |      |   | 1,144   |  
|Prepaid expenses and other current assets                                               |  |                             | (453    | ) |      |   | (810    | )
|Accounts payable, accrued expenses, other long-term liabilities and accrued interest    |  |                             | (10,242 | ) |      |   | (8,432  | )
|Unearned service revenue                                                                |  |                             | 155     |   |      |   | 731     |  
|                                                                                        |  |                             |         |   |      |   |         |  
|Net cash provided by operating activities                                               |  |                             | 4,153   |   |      |   | 12,871  |  
|                                                                                        |  |                             |         |   |      |   |         |  
|Cash flows from investing activities                                                    |  |                             |         |   |      |   |         |  
|Purchases of property, plant and equipment                                              |  |                             | (6,836  | ) |      |   | (6,206  | )
|                                                                                        |  |                             |         |   |      |   |         |  
|Net cash used in investing activities                                                   |  |                             | (6,836  | ) |      |   | (6,206  | )
|                                                                                        |  |                             |         |   |      |   |         |  
|Cash flows from financing activities                                                    |  |                             |         |   |      |   |         |  
|Proceeds from issuance of debt                                                          |  |                             | 4,000   |   |      |   |        |  
|Repayments of debt principal                                                            |  |                             | (1,132  | ) |      |   | (11,132 | )
|Payments of capital lease obligations                                                   |  |                             | (112    | ) |      |   | (53     | )
|Dividend to members                                                                     |  |                             | (10     | ) |      |   |        |  
|                                                                                        |  |                             |         |   |      |   |         |  
|Net cash provided by (used in) financing activities                                     |  |                             | 2,746   |   |      |   | (11,185 | )
|                                                                                        |  |                             |         |   |      |   |         |  
|Net change in cash and equivalents                                                      |  |                             | 63      |   |      |   | (4,520  | )
|Cash and cash equivalents, beginning of period                                          |  |                             | 3,390   |   |      |   | 7,007   |  
|                                                                                        |  |                             |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                                |  | $                           | 3,453   |   |      | $ | 2,487   |  
|                                                                                        |  |                             |         |   |      |   |         |  
|Supplemental disclosure of cash flow information                                        |  |                             |         |   |      |   |         |  
|Interest paid                                                                           |  | $                           | 15,668  |   |      | $ | 13,619  |  
|Supplemental disclosure of noncash investing activities                                 |  |                             |         |   |      |   |         |  
|Capital expenditures included in accounts payable and accrued expenses                  |  |                             | 3,050   |   |      |   | 2,272   |  

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 $62.0 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, 2009, the Company had approximately 287,000 cable, 131,000
residential high-speed Internet and 55,000 residential 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 to fund operations or capital expenditures. 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 credit facility, obtain additional financing, refinance existing agreements, and/or reduce capital expenditures. The existing $90.0 million revolving
credit facility reduced to $67.5 million on March 1, 2009, and terminates on March 1, 2010. The remaining term borrowing under the Senior Credit Facility begin significant quarterly principal reductions on December 31, 2010, with the
credit facility terminating in full on September 1, 2011. The Company believes that it will be able to obtain new financing to the extent it is unable to satisfy the Term Debt obligation in full during 2011 through cash generated from
operations, although there can be no assurance that the Company will be able to obtain such financing.

3. Summary of Significant Accounting Policies

Interim Financial Statements

The condensed consolidated financial statements as of March 31, 2009 and for the three months ended March 31, 2008 and 2009 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



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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, 2008 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.

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.



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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 life. The Company reached its conclusion regarding the indefinite useful life of its franchise operating rights principally because
(i) there are no 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 lives 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.

Goodwill impairment is
determined using a two-step process. The first step involves a comparison of the estimated fair value of each of the Companys four reporting units to its carrying amount, including goodwill. In performing the first step, the Company determines
the fair value of a reporting unit using a combination of a discounted cash flow (DCF) analysis and a market-based approach. Determining fair value requires the exercise of significant judgment, including judgment about appropriate
discount rates, perpetual growth rates, the amount and timing of expected future cash flows, as well as relevant comparable company earnings multiples for the market-based approach. The cash flows employed in the DCF analyses are based on the
Companys most recent budget and, for years beyond the budget, the Companys estimates, which are based on assumed growth rates. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the future cash
flows of the respective reporting units. In addition, the market-based approach utilizes comparable company public trading values, research analyst estimates and, where available, values observed in private market transactions. If the estimated fair
value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its estimated fair value, then the
second step of the goodwill impairment test must be performed. The second step of the goodwill impairment test compares the implied fair value of the reporting units goodwill with its carrying amount to measure the amount of impairment, if
any. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. In other words, the estimated fair value of the reporting unit is allocated to all of the assets and liabilities
of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid. If the carrying amount of the reporting
units goodwill exceeds the implied fair value of that goodwill, an impairment is recognized in an amount equal to that excess.

The
impairment test for other intangible assets not subject to amortization involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an
impairment loss is recognized in an amount equal to that excess. The estimates of fair value of intangible assets not subject to amortization are determined using a DCF valuation analysis. The DCF methodology used to value cable franchise rights
entails identifying the projected discrete cash flows related to such cable franchise rights and discounting them back to the valuation date. Significant judgments inherent in this analysis include the selection of appropriate discount rates,
estimating the amount and timing of estimated future cash flows attributable to cable franchise rights and identification of appropriate terminal growth rate assumptions. The discount rates used in the DCF analyses are intended to reflect the risk
inherent in the projected future cash flows generated by the respective intangible assets.

The Company tests for impairment of its
goodwill and franchise operating rights annually or whenever events or changes in circumstances indicate that these assets might be impaired. 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s 2008 annual impairment test, which was performed as of March 2008, did not result in any goodwill or cable franchise rights impairment. The Company determined that the adverse macro business climate
experienced during the end of the fiscal year ended December 31, 2008 was a significant event that indicated that the carrying amount of the goodwill and cable franchise rights might not be recoverable. An interim impairment test as of
December 31, 2008 did not result in any goodwill impairments, but did result in a noncash pretax impairment on its cable franchise rights of $23.4 million

As a result of the cable franchise rights impairment taken in 2008, the carrying values of the Companys impaired cable franchise rights (which represented two of the Companys four operating systems) were
re-set to their estimated fair values as of December 31, 2008. Consequently, any further decline in the estimated fair values of these cable franchise rights could result in



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additional cable franchise rights impairments. Management has no reason to believe that any one system is more likely than any other to incur further
impairments of its cable franchise rights. It is possible that such impairments, if required, could be material and may need to be recorded prior to the first quarter of 2010 (i.e., during an interim period) if the Companys results of
operations or other factors require such assets to be tested for impairment at an interim date. The Company completed its annual impairment test as of March 1, 2009 and did not identify any additional impairment.

Amortization expense on intangible assets with a definite life for the next five years as of March 31, 2009 is as follows:



|           |  |                     |    
|---------- |  | ------------------- | ---
|           |  | AmortizationExpense
|2009       |  | $                   | 156
|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 except for those items that are recognized or disclosed at fair value in the financial statements on a recurring basis at least annually. For 2008, we did adopt 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. The
adoption of FSB FAS 157-2 in 2009 did not have a material impact on our financial position, results of operations or cash flows.

In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (Statement No. 160). Statement
No. 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Statement No. 160 is effective as of
January 1, 2009 for the Company. The adoption of SFAS 160 did not have a material impact on our consolidated financial position, results of operations or cash flows.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (Statement No. 161). Statement No. 161 requires specific disclosures
regarding the location and amounts of derivative instruments in the Companys financial statements; how derivative instruments and related hedged items are accounted for; and how derivative instruments and related hedged items affect the
Companys financial position, financial performance, and cash flows. Statement No. 161 is effective for the Company on January 1, 2009. We have provided the required disclosures regarding derivative instruments in 2009 in
Note 8.

In April 2008, the FASB issued FASB Staff Position (FSP) No. FAS 142-3, Determination of the Useful
Life of Intangible Assets. FSP No. FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142, Goodwill
and Other Intangible Assets. FSP No. FAS 142-3 is effective for the Company on January 1, 2009. The adoption of FSP No. FAS 142 did not have a material impact on our consolidated financial position, results of
operations or cash flows.



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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 to 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. The Company will apply this accounting standard
prospectively to any business combination with an acquisition date, as defined therein, that is subsequent to the effective date of the accounting.

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. 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 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.
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------

The following table sets forth the financial assets and liabilities as of March 31, 2009 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 ofDecember 31, 2008 |  | Balance as ofMarch 31, 2009
|Liabilities         |  |         |  |         |  |         |  |                                |  |                            
|Interest Rate Swaps |  |        |  |        |  |        |  | 1,821                          |  |                           

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% These agreements ended in March 2009.



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5. Plant, Property and Equipment

Plant, property and equipment consist of the following:



|                                     |  |                  |         |               |   |        
|------------------------------------ |  | ---------------- | ------- | ------------- | - | -------
|                                     |  | December 31,2008 |         | March 31,2009
|Distribution facilities              |  | $                | 210,237 |               | $ | 214,225
|Subscriber equipment                 |  |                  | 60,475  |               |   | 62,067 
|Headend equipment                    |  |                  | 39,918  |               |   | 40,357 
|Buildings and leasehold improvements |  |                  | 10,012  |               |   | 10,062 
|Office equipment and other           |  |                  | 16,406  |               |   | 17,063 
|Vehicles and equipment               |  |                  | 9,485   |               |   | 9,723  
|Land                                 |  |                  | 1,992   |               |   | 1,991  
|Construction in progress             |  |                  | 3       |               |   | 216    
|Material inventory                   |  |                  | 3,316   |               |   | 3,326  
|                                     |  |                  |         |               |   |        
|Total plant, property and equipment  |  |                  | 351,844 |               |   | 359,030
|Less: accumulated depreciation       |  |                  | 147,779 |               |   | 157,241
|                                     |  |                  |         |               |   |        
|Plant, property and equipment, net   |  | $                | 204,065 |               | $ | 201,789
|                                     |  |                  |         |               |   |        

Depreciation expense for the three months ended March 31, 2008 and 2009 was $11,008 and
$10,754, respectively.

6. Finite-Lived Intangible Assets

Intangible assets consist of the following:



|                               |  |                  |        |               |   |       
|------------------------------ |  | ---------------- | ------ | ------------- | - | ------
|                               |  | December 31,2008 |        | March 31,2009
|Subscriber relationships       |  | $                | 45,411 |               | $ | 45,411
|Other intangible assets        |  |                  | 2,200  |               |   | 2,200 
|                               |  |                  |        |               |   |       
|Total intangible assets        |  |                  | 47,611 |               |   | 47,611
|Less: Accumulated amortization |  |                  | 47,328 |               |   | 47,455
|                               |  |                  |        |               |   |       
|Intangible assets, net         |  | $                | 283    |               | $ | 156   
|                               |  |                  |        |               |   |       

Amortization expense for the three months ended March 31, 2008 and 2009 was $210 and $127,
respectively.

7. Accrued Expenses

Accrued expenses consist of the following:



|                                              |  |                  |        |               |   |      
|--------------------------------------------- |  | ---------------- | ------ | ------------- | - | -----
|                                              |  | December 31,2008 |        | March 31,2009
|Franchise, copyright and revenue sharing fees |  | $                | 2,693  |               | $ | 2,058
|Payroll and related taxes                     |  |                  | 3,030  |               |   | 2,107
|Other accrued expenses                        |  |                  | 5,010  |               |   | 4,984
|                                              |  |                  |        |               |   |      
|Total accrued liabilities                     |  | $                | 10,733 |               | $ | 9,149
|                                              |  |                  |        |               |   |      

8. 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.



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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, 2008, there was $444,888 outstanding under the Term Loans and $12,917 under the Revolver. At March 31, 2009, there was $443,756 outstanding under the Term Loans and $2,917 under the Revolver. The interest rate on the Senior
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 2008 and 2009 on the Term Note and Revolver was 7.18% and 3.72%, 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,
2009, there was approximately $64,583 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 believes that the cash generated from operations will be sufficient to meet its debt service, capital expenditures and working capital requirements for at least the next
twelve months. The Companys existing $90.0 million revolving credit facility reduced to $67.5 million on March 1, 2009, and terminates on March 1, 2010 at which time any outstanding balance must be repaid in full. The remaining term
borrowing under the Senior Credit Facility begin significant quarterly principal reductions on December 31, 2010, with the credit facility terminating in full on September 1, 2011 at which time any outstanding balance must be repaid in
full. To the extent it is unable to satisfy the Term Debt obligation in full during 2011 through cash generated from operations, the Company believes that it will be able to obtain new financing, although there can be no assurance that the Company
will be able to obtain such financing.

As of March 31, 2009, 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, 2009 through
2011 are as follows:



|     |  |   |        
|---- |  | - | -------
|2009 |  | $ | 3,396  
|2010 |  |   | 114,422
|2011 |  |   | 328,855
|     |  |   |        
|     |  | $ | 446,673
|     |  |   |        

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.



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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% These agreements ended in March 2009. The marking-to-market of the interest rate swap agreements resulted in
the recognition of $3,163 in other expense for the three months ended March 31, 2008, and $1,821 in other income for the three months ended March 31, 2009.

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.

9. 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 $10,199 during 2008.



|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 31,2008 |   |  | December 31,2008 |   |  | March 31,2009 |  
|Equivalent Basic Units (EBUs)                      |  | 227,610       |   |  | 223,583          |   |  | 223,086       |  
|Digital subscribers                                   |  | 87,252        |   |  | 89,854           |   |  | 91,194        |  
|High Speed Data (HSD) residential subscribers       |  | 118,094       |   |  | 126,143          |   |  | 131,057       |  
|Telephone residential subscribers                     |  | 36,321        |   |  | 50,692           |   |  | 54,969        |  
|Homes passed                                          |  | 501,322       |   |  | 504,931          |   |  | 505,157       |  
|Internet-ready homes passed                           |  | 492,455       |   |  | 497,330          |   |  | 497,556       |  
|Telephone-ready homes passed                          |  | 454,960       |   |  | 476,845          |   |  | 482,221       |  
|Basic subscribers                                     |  | 288,068       |   |  | 285,540          |   |  | 286,673       |  
|                                                      |  |               |  
|Basic penetration of homes passed                     |  | 57.5          | % |  | 56.6             | % |  | 56.7          | %
|Digital penetration of basic subscribers              |  | 30.3          | % |  | 31.5             | % |  | 31.8          | %
|HSD penetration of internet-ready homes passed        |  | 24.0          | % |  | 25.4             | % |  | 26.3          | %
|Telephone penetration of telephone-ready homes passed |  | 8.0           | % |  | 10.6             | % |  | 11.4          | %



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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. |        
|                                                                                                         |  | 2008                         |         |   | 2009 |      
|                                                                                                         |  | Amount                       |         |   | %    |       |   | Amount |   |         | % | 
|                                                                                                         |  | (dollars in thousands)       |        
|Revenue:                                                                                                 |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Video                                                                                                    |  | $                            | 39,410  |   |      | 58.6  | % |        | $ | 40,872  |   |  | 55.4  | %
|High Speed Data                                                                                          |  |                              | 11,035  |   |      | 16.4  |   |        |   | 12,851  |   |  | 17.4  |  
|Telephone                                                                                                |  |                              | 3,729   |   |      | 5.5   |   |        |   | 5,582   |   |  | 7.6   |  
|Advertising Sales                                                                                        |  |                              | 1,534   |   |      | 2.3   |   |        |   | 1,662   |   |  | 2.3   |  
|Commercial                                                                                               |  |                              | 5,866   |   |      | 8.7   |   |        |   | 6,939   |   |  | 9.4   |  
|Other                                                                                                    |  |                              | 5,685   |   |      | 8.5   |   |        |   | 5,861   |   |  | 7.9   |  
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Total revenue                                                                                            |  | $                            | 67,259  |   |      | 100.0 | % |        | $ | 73,767  |   |  | 100.0 | %
|                                                                                                         |  |                              |         |  
|Costs and expenses:                                                                                      |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Operating (excluding depreciation and amortization and selling, general and administrative listed below) |  |                              | 31,273  |   |      | 46.5  | % |        |   | 33,849  |   |  | 45.9  | %
|Selling, general and administrative                                                                      |  |                              | 9,635   |   |      | 14.3  | % |        |   | 9,959   |   |  | 13.5  | %
|Depreciation and amortization                                                                            |  |                              | 11,218  |   |      | 16.7  | % |        |   | 10,881  |   |  | 14.8  | %
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Income from operations                                                                                   |  |                              | 15,133  |   |      |       |   |        |   | 19,078  |   |  |       |  
|Other Income (expenses):                                                                                 |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Gain (loss) from derivative instruments                                                                  |  |                              | (3,163  | ) |      |       |   |        |   | 1,821   |   |  |       |  
|Interest expense                                                                                         |  |                              | (13,016 | ) |      |       |   |        |   | (10,294 | ) |  |       |  
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Net (loss) income                                                                                        |  | $                            | (1,046  | ) |      |       |   |        | $ | 10,605  |   |  |       |  
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  

Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008.

Revenue for the three months ended March 31, 2009 was $73.8 million as compared to $67.3 million for the three months ended March 31, 2008, an
increase of $6.5 million or 9.7%. This increase was mainly the result of (i) a $1.5 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 16.5% from continued marketing focus for this service offering driving HSD subscriber growth and (iii) a $1.9 million increase in telephone revenue generated by
increases in subscriber levels. We expect revenues to continue to increase resulting from subscriber growth in our digital, high-speed data and telephone service offerings.

Operating expenses for the three months ended March 31, 2009 were $33.8 million as compared to $31.3 million for the same period in 2008. The $2.5
million increase was mainly the result of increased programming costs in conjunction with annual contractual increases, coupled with increased HSD and telephone direct costs. 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, 2009 were $10.0 million as compared to $9.6 million for the three months ended March 31, 2008, an increase of $0.4 million. This increase resulted
mainly from a 14.0% increase in sales and marketing expenses to support the growth in our customer base. We expect to see continued increases in selling, general and administrative expenses as we maintain higher levels of marketing spending coupled
with subscriber growth trends, with levels remaining relatively consistent as a percentage of revenues.



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##### Table of Contents

Depreciation of property and equipment and amortization expense was $10.9 million for the three months
ended March 31, 2009, compared with $11.2 million for the same period in 2008, a decrease of $0.3 million or 2.7%. This slight decrease is the result of lower levels of capital expenditures in recent years moderating depreciation expense.

Income from operations for the three months ended March 31, 2009 was $19.1 million as compared to $15.1 million for the same period
in 2008 for the reasons described above.

The marking-to-market of the interest rate swap agreements resulted in the recognition of $1.8
million in other income for the three months ended March 31, 2009 as compared to other expense of $3.2 million for the three months ended March 31, 2008 due to fluctuations in market interest rates.

Interest expense, including amortization of debt financing costs, for the three months ended March 31, 2009 was $10.3 million as compared to $13.0
million for the three months ended March 31, 2008. This decrease was primarily attributable to lower market interest rates.

As a
result of the factors described above, the net income was $10.6 million for the three months ended March 31, 2009 as compared to a net loss of $1.0 million for the three months ended March 31, 2008.

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, 2009, the Company has total debt outstanding of $603.7 million (including capital lease obligations).

We have a
$511.3 million senior credit facility, consisting of a $67.5 million revolving credit facility and a $443.8 million term loan B tranche. At March 31, 2009, $2.9 million of the revolving credit facility (the Revolver) was
outstanding, with $64.6 million of unused senior credit commitments under the revolving credit facility. The Revolver termination date is March 1, 2010 at which time all related borrowings must be repaid. Until this termination date, 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 September 1, 2011 and are payable in quarterly installments which began on June 30, 2006.

We expect to incur capital expenditures in 2009 at a level lower than that of 2008 as we have substantially completed the deployment of
all major product offerings, including high-speed data, telephone and video on demand services to the majority of our systems. We expect subsequent year capital expenditure levels also to remain at a relatively consistent level, 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 at least the next twelve months. Our existing $67.5 million revolving credit facility terminates on March 1, 2010. The remaining term borrowing under our Senior Credit Facility
begin significant quarterly principal reductions on December 31, 2010, with the credit facility terminating in full on September 1, 2011. To the extent we are unable to satisfy the Term Debt obligation in full during 2011 through cash
generated from operations, we believe that we will be able to obtain new financing, although there can be no assurance that we will be able to obtain such financing.



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##### Table of Contents

Contractual Obligations

The following table sets forth our long-term contractual cash obligations as of March 31, 2009 (dollars in thousands):



|                                         |  |                           |         |                  |   |        |  |      |         |      |   |         |  |            |        |  |   |        |  |   |        
|---------------------------------------- |  | ------------------------- | ------- | ---------------- | - | ------ |  | ---- | ------- | ---- | - | ------- |  | ---------- | ------ |  | - | ------ |  | - | -------
|                                         |  | Years Ending December 31,
|                                         |  | Total                     |         | Remainderof 2009 |   | 2010   |  | 2011 |         | 2012 |   | 2013    |  | Thereafter
|Senior secured credit facilities         |  | $                         | 446,673 |                  | $ | 3,396  |  | $    | 114,422 |      | $ | 328,855 |  | $          |       |  | $ |       |  | $ |       
|6% Seller Note                           |  |                           | 6,845   |                  |   | 6,845  |  |      |        |      |   |        |  |            |       |  |   |       |  |   |       
|93/8% Senior Subordinated Notes due 2014 |  |                           | 150,000 |                  |   |       |  |      |        |      |   |        |  |            |       |  |   |       |  |   | 150,000
|Cash interest                            |  |                           | 99,917  |                  |   | 22,415 |  |      | 29,308  |      |   | 19,482  |  |            | 14,063 |  |   | 14,063 |  |   | 586    
|Capitalized leases (including interest)  |  |                           | 150     |                  |   | 150    |  |      |        |      |   |        |  |            |       |  |   |       |  |   |       
|Operating leases                         |  |                           | 1,685   |                  |   | 416    |  |      | 453     |      |   | 385     |  |            | 167    |  |   | 82     |  |   | 182    
|                                         |  |                           |         |                  |   |        |  |      |         |      |   |         |  |            |        |  |   |        |  |   |        
|Total cash contractual obligations       |  | $                         | 705,270 |                  | $ | 33,222 |  | $    | 144,183 |      | $ | 348,722 |  | $          | 14,230 |  | $ | 14,145 |  | $ | 150,768
|                                         |  |                           |         |                  |   |        |  |      |         |      |   |         |  |            |        |  |   |        |  |   |        

Cash Flows

Cash provided by operations increased to $12.9 million for the three months ended March 31, 2009 as compared to $4.2 million for the same period in 2008. This is mainly the result of the decrease in the
Companys Net Loss as discussed above.

Cash used in investing activities decreased to $6.2 million for the three months ended
March 31, 2009 from $6.8 million for the same period in 2008. This decrease is the result of capital expenditures decreasing to a level consistent with a maintenance mode of operating, with higher percentages of spending on customer premise
equipment and additional infrastructure costs associated with subscriber levels as opposed to major rebuild and product launch projects.

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, 2008.

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.

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 |        | No change tointerest rate |   | Interest rate increase
|                                          |  | 100 BPS                |        | 50 BPS                    |   |                        | 50 BPS |   | 100 BPS
|                                          |  | (dollars in thousands)
|Senior credit facilities                  |  | $                      | 13,824 |                           | $ | 16,365                 |        | $ | 18,907  |  | $ | 21,448 |  | $ | 23,989
|9.375% senior subordinated notes due 2014 |  |                        | 14,063 |                           |   | 14,063                 |        |   | 14,063  |  |   | 14,063 |  |   | 14,063
|                                          |  |                        |        |                           |   |                        |        |   |         |  |   |        |  |   |       
|                                          |  | $                      | 27,887 |                           | $ | 30,428                 |        | $ | 32,970  |  | $ | 35,511 |  | $ | 38,052
|                                          |  |                        |        |                           |   |                        |        |   |         |  |   |        |  |   |       



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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 December 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% which expired in March 2009. These interest rate swap agreements required 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 was accrued as an adjustment to interest expense. We were 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 $1.8 million at December 31, 2008.



|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 September 30, 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, 2009 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, 2009 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 2008 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 6, 2009.



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




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