##### Table of Contents





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, 2010



| ̈ | 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

As of May 5, 2010, Atlantic Broadband Holdings I, LLC held all 1,000 outstanding membership units 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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##### Table of Contents

ATLANTIC BROADBAND FINANCE, LLC

TABLE OF CONTENTS



|                              |  |                |  |                                                                                              |  |     
|----------------------------- |  | -------------- |  | -------------------------------------------------------------------------------------------- |  | ----
|                              |  | Page          
|Part 1. Financial Information |  |               
|                              |  | Item 1.        |  |                                                                                              |  |     
|                              |  |                |  | Financial Statements (Unaudited)                                                             |  | 4-14
|                              |  |                |  | Condensed Consolidated Balance Sheets  March 31, 2010 and December 31, 2009                 |  |     
|                              |  |                |  | Condensed Consolidated Statements of Operations  Three months ended March 31, 2010 and 2009 |  |     
|                              |  |                |  | Condensed Consolidated Statements of Cash Flows  Three months ended March 31, 2010 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                                      |  | 18  
|                              |  | Item 4T.       |  | Controls and Procedures                                                                      |  | 19  
|                              | 
|Part 2. Other Information     |  |               
|                              |  | Item 1.        |  | Legal Proceedings                                                                            |  | 19  
|                              |  | Item 1A        |  | Risk Factors                                                                                 |  | 20  
|                              |  | Item 2.        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                  |  | 20  
|                              |  | Item 3.        |  | Defaults upon Senior Securities                                                              |  | 20  
|                              |  | Item 4.        |  | Reserved                                                                                     |  | 20  
|                              |  | Item 5.        |  | Other Information                                                                            |  | 20  
|                              |  | Item 6.        |  | Exhibits                                                                                     |  | 20  
|                              |  | Signatures     |  | 21                                                                                          
|                              |  | Certifications |  |                                                                                             



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ATLANTIC BROADBAND FINANCE, LLC

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)



|                                                                                          |  |               |         |                   |   |        
|----------------------------------------------------------------------------------------- |  | ------------- | ------- | ----------------- | - | -------
|                                                                                          |  | March 31,2010 |         | December 
31,2009
|Assets                                                                                    |  |               |         |                   |   |        
|Current assets                                                                            |  |               |         |                   |   |        
|Cash and cash equivalents                                                                 |  | $             | 7,735   |                   | $ | 14,696 
|Accounts receivablenet of allowance for doubtful accounts of $378 and $325, respectively |  |               | 7,487   |                   |   | 10,128 
|Prepaid expenses and other current assets                                                 |  |               | 3,196   |                   |   | 1,707  
|                                                                                          |  |               |         |                   |   |        
|Total current assets                                                                      |  |               | 18,418  |                   |   | 26,531 
|Plant, property and equipment, net                                                        |  |               | 194,524 |                   |   | 194,221
|Franchise rights                                                                          |  |               | 524,400 |                   |   | 524,400
|Goodwill                                                                                  |  |               | 35,905  |                   |   | 35,905 
|Other intangible assets, net                                                              |  |               | 1,690   |                   |   | 1,843  
|Debt issuance costs, net                                                                  |  |               | 5,497   |                   |   | 6,134  
|                                                                                          |  |               |         |                   |   |        
|Total assets                                                                              |  | $             | 780,434 |                   | $ | 789,034
|                                                                                          |  |               |         |                   |   |        
|                                                                                          |  |              
|Liabilities and Members Equity                                                           |  |               |         |                   |   |        
|Current liabilities                                                                       |  |               |         |                   |   |        
|Current portion of senior debt                                                            |  | $             | 61,718  |                   | $ | 33,601 
|Accrued interest                                                                          |  |               | 2,999   |                   |   | 6,516  
|Accounts payable                                                                          |  |               | 15,275  |                   |   | 13,034 
|Accrued expenses                                                                          |  |               | 10,435  |                   |   | 12,686 
|Unearned service revenue                                                                  |  |               | 5,518   |                   |   | 4,686  
|                                                                                          |  |               |         |                   |   |        
|Total current liabilities                                                                 |  |               | 95,945  |                   |   | 70,523 
|Long-term debt                                                                            |  |               | 527,031 |                   |   | 556,759
|Other long-term liabilities                                                               |  |               | 2,186   |                   |   | 2,190  
|                                                                                          |  |               |         |                   |   |        
|Total liabilities                                                                         |  |               | 625,162 |                   |   | 629,472
|                                                                                          |  |               |         |                   |   |        
|Members equity                                                                           |  |               | 134,138 |                   |   | 149,138
|Retained earnings                                                                         |  |               | 21,134  |                   |   | 10,424 
|                                                                                          |  |               |         |                   |   |        
|Total members equity                                                                     |  |               | 155,272 |                   |   | 159,562
|                                                                                          |  |               |         |                   |   |        
|Total liabilities and members equity                                                     |  | $             | 780,434 |                   | $ | 789,034
|                                                                                          |  |               |         |                   |   |        

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, |       
|                                                                                                              |  | 2010                        |        | 2009 |  
|Cable service revenue                                                                                         |  | $                           | 77,663 |      | $ | 73,767 |  
|                                                                                                              |  |                             |        |      |   |        |  
|Operating expenses                                                                                            |  |                             |        |      |   |        |  
|Direct operating expenses (excluding depreciation and amortization shown separately below)                    |  |                             | 35,821 |      |   | 33,849 |  
|Selling, general and administrative expenses (excluding depreciation and amortization shown separately below) |  |                             | 10,151 |      |   | 9,959  |  
|Depreciation and amortization                                                                                 |  |                             | 10,401 |      |   | 10,881 |  
|                                                                                                              |  |                             |        |      |   |        |  
|Income from operations                                                                                        |  |                             | 21,290 |      |   | 19,078 |  
|Interest expense, net                                                                                         |  |                             | 10,580 |      |   | 10,294 |  
|Net gain on derivative instruments                                                                            |  |                             |       |      |   | (1,821 | )
|                                                                                                              |  |                             |        |      |   |        |  
|Net income                                                                                                    |  | $                           | 10,710 |      | $ | 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, |        
|                                                                                     |  | 2010                        |         |   | 2009 |  
|Cash flows from operating activities                                                 |  |                             |         |   |      |   |         |  
|Net income                                                                           |  | $                           | 10,710  |   |      | $ | 10,605  |  
|Adjustments to reconcile net income to net cash provided by operating activities     |  |                             |         |   |      |   |         |  
|Depreciation and amortization                                                        |  |                             | 10,401  |   |      |   | 10,881  |  
|Amortization of debt issuance costs                                                  |  |                             | 637     |   |      |   | 573     |  
|Net gain on derivative instrument                                                    |  |                             |        |   |      |   | (1,821  | )
|Changes in operating assets and liabilities                                          |  |                             |         |   |      |   |         |  
|Accounts receivable                                                                  |  |                             | 2,641   |   |      |   | 1,144   |  
|Prepaid expenses and other current assets                                            |  |                             | (1,489  | ) |      |   | (810    | )
|Accounts payable, accrued expenses, other long-term liabilities and accrued interest |  |                             | (8,230  | ) |      |   | (8,432  | )
|Unearned service revenue                                                             |  |                             | 832     |   |      |   | 731     |  
|                                                                                     |  |                             |         |   |      |   |         |  
|Net cash provided by operating activities                                            |  |                             | 15,502  |   |      |   | 12,871  |  
|                                                                                     |  |                             |         |   |      |   |         |  
|Cash flows from investing activities                                                 |  |                             |         |   |      |   |         |  
|Purchases of plant, property and equipment                                           |  |                             | (5,852  | ) |      |   | (6,206  | )
|                                                                                     |  |                             |         |   |      |   |         |  
|Net cash used in investing activities                                                |  |                             | (5,852  | ) |      |   | (6,206  | )
|                                                                                     |  |                             |         |   |      |   |         |  
|Cash flows from financing activities                                                 |  |                             |         |   |      |   |         |  
|Repayments of revolving credit facility                                              |  |                             |        |   |      |   | (10,000 | )
|Repayments of debt principal                                                         |  |                             | (1,611  | ) |      |   | (1,132  | )
|Payments of capital lease obligations                                                |  |                             |        |   |      |   | (53     | )
|Dividend to members                                                                  |  |                             | (15,000 | ) |      |   |        |  
|                                                                                     |  |                             |         |   |      |   |         |  
|Net cash used in financing activities                                                |  |                             | (16,611 | ) |      |   | (11,185 | )
|                                                                                     |  |                             |         |   |      |   |         |  
|Net change in cash and equivalents                                                   |  |                             | (6,961  | ) |      |   | (4,520  | )
|Cash and cash equivalents, beginning of period                                       |  |                             | 14,696  |   |      |   | 7,007   |  
|                                                                                     |  |                             |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                             |  | $                           | 7,735   |   |      | $ | 2,487   |  
|                                                                                     |  |                             |         |   |      |   |         |  
|Supplemental disclosure of cash flow information                                     |  |                             |         |   |      |   |         |  
|Interest paid                                                                        |  | $                           | 13,460  |   |      | $ | 13,619  |  
|Supplemental disclosure of noncash investing activities                              |  |                             |         |   |      |   |         |  
|Capital expenditures included in accounts payable and accrued expenses               |  |                             | 4,699   |   |      |   | 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, 2010, the Company had approximately 275,000 cable, 139,000 residential high-speed
Internet and 65,000 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. However, the
Company can make no assurances that its business will generate sufficient cash flow from operations or that existing available cash or future borrowings will be available to it under the Senior Credit Facility in an amount sufficient to enable it to
pay its indebtedness or to fund its other liquidity needs. Should the Company fail to meet its expectations, the Company would look to draw down against the existing revolving credit facility, reduce capital expenditures, obtain additional
financing, and/or refinance existing agreements; however, these borrowings and/or rates may not be available or favorable to the Company.

3. Summary of Significant Accounting Policies

Interim Financial Statements

The condensed consolidated financial statements as of March 31, 2010 and for the three months ended March 31, 2010 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) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the condensed financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily
indicative of results for the full year. These financial statements should be read in conjunction with the annual financial statements and related notes included in the Companys Annual Report on Form 10-K. The balance sheet at
December 31, 2009 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.



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ATLANTIC BROADBAND FINANCE, LLC

Notes to Condensed Consolidated Financial Statements(Continued)

(Dollars in thousands, except where indicated)

(Unaudited)



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

The Financial Accounting Standards Board (FASB) 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 using the FASB standard. In light of the Systems similar services, means for delivery, similarity in type of customers, the use of a unified network, similar economic
characteristics 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. The Company capitalizes 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.

We amortize the capitalized labor and overhead costs over the life of the related equipment which ranges from 4-15 years. The vast
majority of these capitalized costs relate to customer installation activity and related equipment additions. Accordingly, such assets are amortized over the same five year period as the fixed assets acquired as part of the installation.

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. The Company capitalizes 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. The Company has 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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ATLANTIC BROADBAND FINANCE, LLC

Notes to Condensed Consolidated Financial Statements(Continued)

(Dollars in thousands, except where indicated)

(Unaudited)



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 determined that the adverse 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. The Company completed its annual impairment evaluation on
March 1, 2010 and did not identify any impairment or note any reporting units at risk of failing the first step.



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ATLANTIC BROADBAND FINANCE, LLC

Notes to Condensed Consolidated Financial Statements(Continued)

(Dollars in thousands, except where indicated)

(Unaudited)



Recently Issued Accounting Standards

In October 2009, the FASB issued authoritative guidance related to Multiple-Deliverable Revenue Arrangements. The guidance addresses how
to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. The guidance is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on
or after June 15, 2010. We do not expect the adoption of this guidance to have a material impact on our financial position, results of operations or cash flows.

In January 2010, the FASB issued amended guidance for fair value measurements and disclosures. The guidance requires new disclosures
about the activity in Level 3 fair value measurements and the transfers between Levels 1, 2, and 3. The guidance also clarifies existing disclosures about the different classes of assets and liabilities measured at fair value and the valuation
techniques and inputs used. This guidance is effective for interim and annual periods beginning after December 15, 2009, except for the separate disclosures of purchases, sales, issuances and settlements related to amounts reported as Level 3
fair value measurements, which is effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The adoption of this guidance did not have a material impact, nor do we expect any future material
impact to our consolidated financial statements as result of adopting the remaining guidance.

4. Fair Value Measurements

On January 1, 2008, the Company adopted authoritative guidance for fair value measurements of all financial assets and liabilities.
Our adoption of this guidance did not impact our financial position, results of operations or liquidity. In accordance with the guidance, we elected to defer until January 1, 2009 the application of the authoritative guidance to fair value
nonfinancial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis. The adoption of this guidance for nonfinancial assets and liabilities did not have a material impact on our
financial position, results of operations or liquidity.

The accounting standard for fair value measurement provides a
framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined 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. The guidance 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

In September 2006, the Company entered into four 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. Therefore, there are no financial assets or liabilities as of December 31, 2009 or March 31, 2010 that we measured at fair value on
a recurring basis.



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##### Table of Contents

ATLANTIC BROADBAND FINANCE, LLC

Notes to Condensed Consolidated Financial Statements(Continued)

(Dollars in thousands, except where indicated)

(Unaudited)



5. Acquisitions

During 2009, the Company made one small acquisition of a dial-up internet provider for a total purchase price, excluding liabilities
assumed, of $1,626, consisting mainly of subscriber relationships.

6. Plant, Property and Equipment

Plant, property and equipment consist of the following:



|                                     |  |               |         |                   |   |        
|------------------------------------ |  | ------------- | ------- | ----------------- | - | -------
|                                     |  | March 31,2010 |         | December 
31,2009
|Distribution facilities              |  | $             | 230,041 |                   | $ | 226,767
|Subscriber equipment                 |  |               | 64,299  |                   |   | 62,752 
|Headend equipment                    |  |               | 45,627  |                   |   | 43,816 
|Buildings and leasehold improvements |  |               | 10,418  |                   |   | 10,393 
|Office equipment and other           |  |               | 20,512  |                   |   | 18,075 
|Vehicles and equipment               |  |               | 11,178  |                   |   | 10,906 
|Land                                 |  |               | 1,996   |                   |   | 1,996  
|Construction in progress             |  |               | 405     |                   |   | 52     
|Material inventory                   |  |               | 3,380   |                   |   | 3,453  
|                                     |  |               |         |                   |   |        
|Total plant, property and equipment  |  |               | 387,856 |                   |   | 378,210
|Less: accumulated depreciation       |  |               | 193,332 |                   |   | 183,989
|                                     |  |               |         |                   |   |        
|Plant, property and equipment, net   |  | $             | 194,524 |                   | $ | 194,221
|                                     |  |               |         |                   |   |        

Depreciation expense for the three months ended
March 31, 2010 and 2009 was $10,248 and $10,754, respectively.

7. Goodwill and Intangible Assets

The carrying value of goodwill at March 31, 2010 and December 31, 2009 was $35,905. For the three months ended March 31,
2010 and 2009, there were no historical impairments and no additional goodwill recognized.

The carrying value of franchise
rights at March 31, 2010 and December 31, 2009 was $524,400. For the three months ended March 31, 2010 and 2009, there were no historical impairments and no additional franchise rights recognized.

Intangible assets consist of the following as of March 31, 2010:



|                                     |  |      |        |                         |   |         |                    |  |   |      
|------------------------------------ |  | ---- | ------ | ----------------------- | - | ------- | ------------------ |  | - | -----
|                                     |  | Cost |        | AccumulatedAmortization |   |         | Netintangibleasset
|Subscriber relationships             |  | $    | 47,254 |                         | $ | (45,564 | )                  |  | $ | 1,690
|Other intangible assets              |  |      | 2,200  |                         |   | (2,200  | )                  |  |   |     
|                                     |  |      |        |                         |   |         |                    |  |   |      
|Total finite lived intangible assets |  | $    | 49,454 |                         | $ | (47,764 | )                  |  | $ | 1,690
|                                     |  |      |        |                         |   |         |                    |  |   |      

Intangible assets consist of the following as of
December 31, 2009:



|                                     |  |      |        |                         |   |         |                    |  |   |      
|------------------------------------ |  | ---- | ------ | ----------------------- | - | ------- | ------------------ |  | - | -----
|                                     |  | Cost |        | AccumulatedAmortization |   |         | Netintangibleasset
|Subscriber relationships             |  | $    | 47,254 |                         | $ | (45,411 | )                  |  | $ | 1,843
|Other intangible assets              |  |      | 2,200  |                         |   | (2,200  | )                  |  |   |     
|                                     |  |      |        |                         |   |         |                    |  |   |      
|Total finite lived intangible assets |  | $    | 49,454 |                         | $ | (47,611 | )                  |  | $ | 1,843
|                                     |  |      |        |                         |   |         |                    |  |   |      



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ATLANTIC BROADBAND FINANCE, LLC

Notes to Condensed Consolidated Financial Statements(Continued)

(Dollars in thousands, except where indicated)

(Unaudited)



Amortization expense for the three months ended March 31, 2010 and 2009 was $153
and $127, respectively.

8. Accrued Expenses

Accrued expenses consist of the following:



|                                              |  |               |        |                   |   |       
|--------------------------------------------- |  | ------------- | ------ | ----------------- | - | ------
|                                              |  | March 31,2010 |        | December 
31,2009
|Franchise, copyright and revenue sharing fees |  | $             | 2,162  |                   | $ | 2,752 
|Payroll and related taxes                     |  |               | 2,438  |                   |   | 3,753 
|Other accrued expenses                        |  |               | 5,835  |                   |   | 6,181 
|                                              |  |               |        |                   |   |       
|Total accrued liabilities                     |  | $             | 10,435 |                   | $ | 12,686
|                                              |  |               |        |                   |   |       

9. Debt

On February 10, 2004, the Company entered into $305.0 million of term loans (the Term Loans) and a $90.0 million
revolving credit facility (the Revolver) with a group of banks and institutional investors led by Merrill Lynch & Company, General Electric Capital Corporation, Societe Generale and Calyon Corporate and Investment Bank. These
two facilities are governed by a single credit agreement dated as of February 10, 2004 (collectively, the Senior Credit Facility), which was amended and restated as of February 9, 2005 under substantially the same terms.

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

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

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

On
June 8, 2009, the Company amended its Senior Credit Facility to extend the maturity date of $325.0 million in Term Loan principal from September 2011 to June 2013 (the Extended Term Loans). The remaining outstanding Term Loan debt
of $118.8 million remained unchanged, and matures in September 2011. In addition, $40.0 million in revolving credit commitment was extended from March 1, 2010 to March 1, 2012 (the Extended Revolving Credit Commitments). As a
result of the modification to the Senior Credit Facility, the Company incurred $5.9 million of debt financing costs, $4.6 million of which was expensed as a loss on extinguishment of debt and the remaining $1.3 million is being amortized to interest
expense over the remaining life of the Senior Credit Facility.

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 March 31, 2010, there was $438.7 million
outstanding under the Term Loans and no borrowings under the Revolver. At December 31, 2009, there was $440.4 million outstanding under the Term Loans and no borrowings under the Revolver. The carrying value of the Senior Credit Facility at
March 31, 2010 and December 31, 2009 approximates fair value. 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 2010 and 2009 on the Term Loan and Revolver was 5.62% and 4.82%, 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.



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##### Table of Contents

ATLANTIC BROADBAND FINANCE, LLC

Notes to Condensed Consolidated Financial Statements(Continued)

(Dollars in thousands, except where indicated)

(Unaudited)



As of March 31, 2010, there was approximately $40.0 million 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.

Term Loan installments began on June 30, 2006. The Revolver shall be paid such that the amount outstanding shall not exceed $40.0
million until the termination date of March 1, 2012. The Revolver shall be paid in full on the termination date of March 1, 2012. Principal payments under the Senior Credit Facility for each year ending December 31, 2010 through
maturity are as follows:



|     |  |   |        
|---- |  | - | -------
|2010 |  | $ | 31,990 
|2011 |  |   | 91,223 
|2012 |  |   | 3,313  
|2013 |  |   | 312,223
|     |  |   |        
|     |  | $ | 438,749
|     |  |   |        

Senior Subordinated Notes

On February 10, 2004, the Company and Atlantic Broadband Finance, Inc., a 100% owned finance subsidiary of the
Company, co-issued $150.0 million 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 guaranteed by each of the Companys existing and future
domestic subsidiaries on a senior subordinated basis to the Senior Credit Facility. The guarantees are full and unconditional and joint and several. Each of the subsidiary guarantors are 100% owned by the Company and the Company has no
independent assets or operations other than those of its Subsidiaries. The proceeds of the offering were used to finance the acquisition of the Systems. The carrying value of the Notes at March 31, 2010 and December 31, 2009 approximates
fair value.

Interest Rate Swap Agreements

In September 2006, the Company entered into four swap agreements with a forward start date of March 19, 2007 for a total notional
value of $225.0 million 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 $1,821 in other income for the three months
ended March 31, 2009.

Debt Covenants

The Senior Credit Agreement and the Notes described above contain covenants which require the Company to comply with certain financial
ratios, capital expenditures and other limits. The Company was in compliance with all such covenants at March 31, 2010 and December 31, 2009.

On March 6, 2007, the Company further amended its Senior Credit Agreement to increase capital expenditure limits and to adjust
certain financial covenant ratios for periods beginning in 2007. The amended financial covenant ratios are less restrictive than the previously effective ratios.

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 had an interest rate of 6%, payable semi-annually, and was repaid on the third anniversary of the acquisition date in November 2009.



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##### Table of Contents

ATLANTIC BROADBAND FINANCE, LLC

Notes to Condensed Consolidated Financial Statements(Continued)

(Dollars in thousands, except where indicated)

(Unaudited)



10. Members Equity

The Parent owns all 1,000 units issued by the Company. The Parent contributed $1.7 million in 2003 to effect its formation. In 2004, the
Parent contributed $260.8 million which the Company used to acquire the Systems. In March 2007, the Company provided a dividend to its members of $77.6 million. The Company provided additional dividends totaling $10.1 million during the remainder of
2007, $10.1 million during the second quarter of 2008, $0.2 million during the second quarter of 2009, $15.1 million during the fourth quarter of 2009 and $15.0 million during the first quarter of 2010.

11. Management Services Agreement

On September 14, 2009, a majority investor of the Company acquired a majority interest in Grande Communications Networks, LLC
(Grande), a retail and wholesale provider of cable video programming, high speed data, telephony and other advanced broadband services. Concurrent with this acquisition, the Company entered into a Management Services Agreement (the
Agreement) with Grande and Grande Manager LLC to provide management and other services to Grande. Under the terms of the Agreement, designated personnel of the Company will provide general managerial oversight and such management
services as mutually agreed upon by and between the Company and Grande with respect to the business and operations of Grande, subject to the authority of Grandes board of directors. In consideration for the Company providing such services,
Grande agreed to pay to the Company on a quarterly basis a fee equal to the lesser of 50% of the quarterly expenses associated with the designated Company personnel providing managerial services to Grande, or 5.5% of Grandes total quarterly
revenue less certain expenses as further described in the Agreement (the Management Fee). The Management Fee contemplates the recovery of costs to provide managerial services and may not be indicative of the service fee charged by an
independent party. The Agreement commenced upon execution and will terminate upon certain events specified within the Agreement, or as mutually agreed upon by the Company and Grande. Any Management Fee earned by the Company will reduce the related
selling, general and administrative expense during the period recognized. $367 in Management Fees were recorded during the three months ended March 31, 2010. As of March 31, 2010, $433.0 in management fees and reimbursable expenses were
unpaid and recorded in accounts receivable.

12. Contingencies

In the normal course of business, there are various legal proceedings outstanding. In the opinion of management, these proceedings will
not have a material adverse effect on the financial position or results of operations or liquidity of the Company.



|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.



14



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##### Table of Contents

Historical Performance

Operating Data



|                                                      |  |               |   |  |                  |   |  |               |  
|----------------------------------------------------- |  | ------------- | - |  | ---------------- | - |  | ------------- | -
|                                                      |  | March 31,2010 |   |  | December 31,2009 |   |  | March 31,2009 |  
|Equivalent Basic Units (EBUs)                      |  | 210,982       |   |  | 213,226          |   |  | 223,086       |  
|Digital subscribers                                   |  | 87,379        |   |  | 86,745           |   |  | 90,220        |  
|High Speed Data (HSD) residential subscribers       |  | 139,238       |   |  | 134,517          |   |  | 131,057       |  
|Telephone residential subscribers                     |  | 64,538        |   |  | 62,290           |   |  | 54,969        |  
|Homes passed                                          |  | 506,517       |   |  | 506,365          |   |  | 504,068       |  
|Internet-ready homes passed                           |  | 498,916       |   |  | 498,764          |   |  | 496,467       |  
|Telephone-ready homes passed                          |  | 490,092       |   |  | 489,954          |   |  | 481,132       |  
|Basic subscribers                                     |  | 275,301       |   |  | 276,924          |   |  | 286,673       |  
|                                                      |  |               |  
|Basic penetration of homes passed                     |  | 54.4          | % |  | 54.7             | % |  | 56.9          | %
|Digital penetration of basic subscribers              |  | 31.7          | % |  | 31.3             | % |  | 31.5          | %
|HSD penetration of internet-ready homes passed        |  | 27.9          | % |  | 27.0             | % |  | 26.4          | %
|Telephone penetration of telephone-ready homes passed |  | 13.2          | % |  | 12.7             | % |  | 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. |        
|                                                                                                         |  | 2010                         |         |   | 2009 |      
|                                                                                                         |  | Amount                       |         |   | %    |       |   | Amount |   |         | % | 
|                                                                                                         |  | (dollars in thousands)       |        
|Revenue:                                                                                                 |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Video                                                                                                    |  | $                            | 40,708  |   |      | 52.4  | % |        | $ | 40,872  |   |  | 55.4  | %
|High Speed Data                                                                                          |  |                              | 14,550  |   |      | 18.7  |   |        |   | 12,851  |   |  | 17.4  |  
|Telephone                                                                                                |  |                              | 6,518   |   |      | 8.4   |   |        |   | 5,582   |   |  | 7.6   |  
|Advertising Sales                                                                                        |  |                              | 1,893   |   |      | 2.4   |   |        |   | 1,662   |   |  | 2.3   |  
|Commercial                                                                                               |  |                              | 7,971   |   |      | 10.3  |   |        |   | 6,939   |   |  | 9.4   |  
|Other                                                                                                    |  |                              | 6,023   |   |      | 7.8   |   |        |   | 5,861   |   |  | 7.9   |  
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Total revenue                                                                                            |  | $                            | 77,663  |   |      | 100.0 | % |        | $ | 73,767  |   |  | 100.0 | %
|                                                                                                         |  |                              |         |  
|Costs and expenses:                                                                                      |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Operating (excluding depreciation and amortization and selling, general and administrative listed below) |  |                              | 35,821  |   |      | 46.1  | % |        |   | 33,849  |   |  | 45.9  | %
|                                                                                                         |  |                              |         |  
|Selling, general and administrative                                                                      |  |                              | 10,151  |   |      | 13.1  | % |        |   | 9,959   |   |  | 13.5  | %
|Depreciation and amortization                                                                            |  |                              | 10,401  |   |      | 13.4  | % |        |   | 10,881  |   |  | 14.8  | %
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Income from operations                                                                                   |  |                              | 21,290  |   |      |       |   |        |   | 19,078  |   |  |       |  
|                                                                                                         |  |                              |         |  
|Other Income (expenses):                                                                                 |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|                                                                                                         |  |                              |         |  
|Gain from derivative instruments                                                                         |  |                              |        |   |      |       |   |        |   | 1,821   |   |  |       |  
|                                                                                                         |  |                              |         |  
|Interest expense, net                                                                                    |  |                              | (10,580 | ) |      |       |   |        |   | (10,294 | ) |  |       |  
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  
|Net income                                                                                               |  | $                            | 10,710  |   |      |       |   |        | $ | 10,605  |   |  |       |  
|                                                                                                         |  |                              |         |   |      |       |   |        |   |         |   |  |       |  

Three Months Ended March 31, 2010 Compared to Three Months Ended March 31, 2009.

Revenue for the three months ended March 31, 2010 was $77.7 million as compared to $73.8 million for the three months
ended March 31, 2009, an increase of $3.9 million or 5.3%. This increase was mainly the result of (i) an increase in high-speed data revenue of $1.7 million or 13.2% from continued marketing focus for this service offering driving HSD
subscriber growth; (ii) a $0.9 million increase in telephone revenue generated by increases in subscriber levels and (iii) a $1.0 million increase in commercial revenue as we continue to expand our non-residential customer base through
targeted marketing efforts. We expect revenues to continue to increase resulting from subscriber growth in our residential digital and residential and commercial high-speed data and telephone service offerings.

Operating expenses for the three months ended March 31, 2010 were $35.8 million as compared to $33.8 million for the same period in
2009. The $2.0 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, 2010 were $10.2 million as compared to $10.0
million for the three months ended March 31, 2009, an increase of $0.2 million or 2.0%. This slight increase resulted from a $0.7 million increase in general and administrative costs mainly related to increases in salary and benefit costs,
somewhat offset by a $0.5 million decrease in sales and marketing expenses due to the non-recurrence of certain one-time marketing campaign specific spending made in 2009. 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.



16



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##### Table of Contents

Depreciation of property and equipment and amortization expense was $10.4 million for the
three months ended March 31, 2010, compared with $10.9 million for the same period in 2009, a decrease of $0.5 million or 4.4%. 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, 2010 was $21.3 million as compared to $19.1 million
for the same period in 2009 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 no swaps were in place during the three months ended March 31, 2010, there was no charge for this corresponding period

Interest expense, including amortization of debt financing costs, for the three months ended March 31, 2010 was $10.6 million as
compared to $10.3 million for the three months ended March 31, 2009. This increase was primarily attributable to higher interest rate spreads resulting from the June 2009 amendment to our Senior Credit Agreement.

As a result of the factors described above, the net income was $10.7 million for the three months ended March 31, 2010 as compared
to $10.6 million for the three months ended March 31, 2009.

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 of $40.0 million at March 31, 2010, 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
9 3/8% Senior Subordinated Notes. Interest
payments on this indebtedness will significantly reduce our cash flows from operations. As of March 31, 2010, the Company has total debt outstanding of $588.7 million.

We have a $478.7 million Senior Credit Facility, consisting of a $40.0 million Revolver and a $438.7 million Term Loan. At March 31,
2010, none of the Revolver was outstanding, with $40.0 million of unused senior credit commitments under the revolving credit facility. The Revolver commitment terminates on March 1, 2012. 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 Extended Term Loans mature on June 2013, and the remaining outstanding Term Loan debt of $117.4 million matures in September 2011.

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.

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

We expect to incur capital expenditures in 2010 at a level consistent with
that of 2009 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 to
remain relatively consistent, reflecting more maintenance and discretionary capital spending.



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

Contractual
Obligations

The following table sets forth our long-term contractual cash obligations as of March 31, 2010 (dollars
in thousands):



|                                          |  |                           |         |                  |   |        |  |      |         |      |   |        |  |            |         |  |   |         |  |   |    
|----------------------------------------- |  | ------------------------- | ------- | ---------------- | - | ------ |  | ---- | ------- | ---- | - | ------ |  | ---------- | ------- |  | - | ------- |  | - | ---
|                                          |  | Years Ending December 31,
|                                          |  | Total                     |         | Remainderof 2010 |   | 2011   |  | 2012 |         | 2013 |   | 2014   |  | Thereafter
|Senior secured credit facilities          |  | $                         | 438,749 |                  | $ | 31,990 |  | $    | 91,223  |      | $ | 3,313  |  | $          | 312,223 |  | $ |        |  | $ |   
|9 3/8% Senior Subordinated Notes due 2014 |  |                           | 150,000 |                  |   |       |  |      |        |      |   |       |  |            |        |  |   | 150,000 |  |   |   
|Cash interest                             |  |                           | 124,273 |                  |   | 29,012 |  |      | 36,564  |      |   | 35,277 |  |            | 22,834  |  |   | 586     |  |   |   
|Operating leases                          |  |                           | 1,953   |                  |   | 514    |  |      | 571     |      |   | 356    |  |            | 282     |  |   | 113     |  |   | 117
|                                          |  |                           |         |                  |   |        |  |      |         |      |   |        |  |            |         |  |   |         |  |   |    
|Total cash contractual obligations        |  | $                         | 714,975 |                  | $ | 61,516 |  | $    | 128,358 |      | $ | 38,946 |  | $          | 335,339 |  | $ | 150,699 |  | $ | 117
|                                          |  |                           |         |                  |   |        |  |      |         |      |   |        |  |            |         |  |   |         |  |   |    

Cash Flows

Cash provided by operations increased to $15.5 million for the three months ended March 31, 2010 as compared to $12.9 million for the
same period in 2009. This is mainly the result of the increase in the Companys Income from Operations as discussed above.

Cash used in investing activities decreased to $5.9 million for the three months ended March 31, 2010 from $6.2 million for the same
period in 2009. 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.

Cash used in financing activities
for the three months ended March 31, 2010 included a $15.0 million dividend to its members.

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, 2009.

Inflation and Changing Prices

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



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

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



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



|                                          |  |                        |        |                           |   |                        |        |   |         |  |   |        |  |   |       
|----------------------------------------- |  | ---------------------- | ------ | ------------------------- | - | ---------------------- | ------ | - | ------- |  | - | ------ |  | - | ------
|                                          |  | Interest rate decrease |        | No change tointerest rate |   | Interest rate increase
|                                          |  | 100 BPS                |        | 50 BPS                    |   |                        | 50 BPS |   | 100 BPS
|                                          |  | (dollars in thousands)
|Senior credit facilities                  |  | $                      | 20,327 |                           | $ | 22,527                 |        | $ | 24,727  |  | $ | 26,927 |  | $ | 29,127
|9.375% senior subordinated notes due 2014 |  |                        | 14,063 |                           |   | 14,063                 |        |   | 14,063  |  |   | 14,063 |  |   | 14,063
|                                          |  |                        |        |                           |   |                        |        |   |         |  |   |        |  |   |       
|                                          |  | $                      | 34,390 |                           | $ | 36,590                 |        | $ | 38,790  |  | $ | 40,990 |  | $ | 43,190
|                                          |  |                        |        |                           |   |                        |        |   |         |  |   |        |  |   |       

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 the authoritative guidance associated with accounting for derivative instruments and hedging activities, in connection with our variable rate senior credit facility. We do not use derivative financial instruments for speculative or
trading purposes. At March 31, 2010, the Company had no interest rate swap agreements in place.



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

The Companys management, with the participation of the Companys chief executive officer and chief financial officer, evaluated
the effectiveness of the Companys disclosure controls and procedures as of March 31, 2010. 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, 2010 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, 2010 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 2009 Form 10-K.



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

None.



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

None.



|ITEM 4. | Reserved
|------- | --------



|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 5, 2010.



Atlantic Broadband Finance, LLC/S/    DAVID J.
KEEFEDavid J. KeefeChief Executive Officer and Director/S/    PATRICK
BRATTONPatrick BrattonChief Financial Officer




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