##### 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, 2006



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

For the transition period from              to
            .



---

Atlantic Broadband Finance, LLC

(Exact Name of Registrant As Specified In Charter)



---



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

One Batterymarch Park, Suite 405

Quincy, MA 02169

(Address of Principal Executive Offices, including Zip Code)

(617) 786-8800

(Registrants telephone number, including area code)



---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

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

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

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

Indicate the number of shares outstanding of each of the
registrants classes of common units, as of the last practicable date.

Atlantic Broadband Holdings I, LLC owns 100%
of the registrants equity.



---



---

##### Table of Contents

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.



2



---

##### Table of Contents

ATLANTIC BROADBAND FINANCE, LLC

TABLE OF CONTENTS



|                              |  |                |  |                                                                                              |  |     
|----------------------------- |  | -------------- |  | -------------------------------------------------------------------------------------------- |  | ----
|                              |  |                |  |                                                                                              |  | Page
|Part 1. Financial Information |  |               
|                              |  | Item 1.        |  |                                                                                              |  |     
|                              |  |                |  | Financial Statements (Unaudited)                                                             |  | 4-12
|                              |  |                |  | Condensed Consolidated Balance Sheets  December 31, 2005 and March 31, 2006                 |  |     
|                              |  |                |  | Condensed Consolidated Statements of Operations  Three months ended March 31, 2005 and 2006 |  |     
|                              |  |                |  | Condensed Consolidated Statements of Cash Flows  Three months ended March 31, 2005 and 2006 |  |     
|                              |  |                |  | Notes to Condensed Consolidated Financial Statements                                         |  |     
|                              |  | Item 2.        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations        |  | 12  
|                              |  | Item 3.        |  | Quantitative and Qualitative Disclosures of Market Risk                                      |  | 16  
|                              |  | Item 4.        |  | Controls and Procedures                                                                      |  | 16  
|                              | 
|Part 2.
Other Information     |  |               
|                              |  | Item 1.        |  | Legal Proceedings                                                                            |  | 17  
|                              |  | Item 1A        |  | Risk Factors                                                                                 |  |     
|                              |  | Item 2.        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                  |  | 17  
|                              |  | Item 3.        |  | Defaults upon Senior Securities                                                              |  | 17  
|                              |  | Item 4.        |  | Submission of Matters to a Vote of Security Holders                                          |  | 17  
|                              |  | Item 5.        |  | Other Information                                                                            |  | 17  
|                              |  | Item 6.        |  | Exhibits                                                                                     |  | 17  
|                              |  | Signatures     |  | 18                                                                                          
|                              |  | Certifications |  | 19                                                                                          



3



---

##### Table of Contents

ATLANTIC BROADBAND FINANCE, LLC

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)



|                                                                                           |  |                   |         |   |                |   |         |  
|------------------------------------------------------------------------------------------ |  | ----------------- | ------- | - | -------------- | - | ------- | -
|                                                                                           |  | December 31, 2005 |         |   | March 31, 2006 |  
|Assets                                                                                     |  |                   |         |   |                |   |         |  
|Current assets                                                                             |  |                   |         |   |                |   |         |  
|Cash and cash equivalents                                                                  |  | $                 | 6,632   |   |                | $ | 5,152   |  
|Accounts receivablenet of allowance for doubtful accounts of $529 and $ 512, respectively |  |                   | 6,417   |   |                |   | 4,578   |  
|Prepaid expenses and other current assets                                                  |  |                   | 1,613   |   |                |   | 2,041   |  
|                                                                                           |  |                   |         |   |                |   |         |  
|Total current assets                                                                       |  |                   | 14,662  |   |                |   | 11,771  |  
|Plant, property and equipment, net                                                         |  |                   | 175,996 |   |                |   | 175,571 |  
|Franchise rights                                                                           |  |                   | 509,100 |   |                |   | 509,100 |  
|Goodwill                                                                                   |  |                   | 35,757  |   |                |   | 35,757  |  
|Other intangible assets, net                                                               |  |                   | 18,527  |   |                |   | 14,686  |  
|Debt issuance costs, net                                                                   |  |                   | 11,895  |   |                |   | 11,421  |  
|Fair value of derivative instruments                                                       |  |                   | 4,083   |   |                |   | 3,613   |  
|                                                                                           |  |                   |         |   |                |   |         |  
|Total assets                                                                               |  | $                 | 770,020 |   |                | $ | 761,919 |  
|                                                                                           |  |                   |         |   |                |   |         |  
|Liabilities and Members Equity                                                            |  |                   |         |   |                |   |         |  
|Current liabilities                                                                        |  |                   |         |   |                |   |         |  
|Accounts payable                                                                           |  | $                 | 11,412  |   |                | $ | 9,545   |  
|Accrued interest                                                                           |  |                   | 8,047   |   |                |   | 4,592   |  
|Accrued expenses                                                                           |  |                   | 7,315   |   |                |   | 6,447   |  
|Current portion of senior debt                                                             |  |                   | 6,563   |   |                |   | 8,750   |  
|Current portion of capital lease obligation                                                |  |                   | 257     |   |                |   | 257     |  
|Unearned service revenue                                                                   |  |                   | 3,321   |   |                |   | 3,853   |  
|                                                                                           |  |                   |         |   |                |   |         |  
|Total current liabilities                                                                  |  |                   | 36,915  |   |                |   | 33,444  |  
|Long-term debt                                                                             |  |                   | 474,854 |   |                |   | 472,667 |  
|Capital lease obligation, net of current portion                                           |  |                   | 474     |   |                |   | 409     |  
|Other long-term liabilities                                                                |  |                   | 1,966   |   |                |   | 1,951   |  
|                                                                                           |  |                   |         |   |                |   |         |  
|Total liabilities                                                                          |  |                   | 514,209 |   |                |   | 508,471 |  
|                                                                                           |  |                   |         |   |                |   |         |  
|Members equity                                                                            |  |                   | 262,500 |   |                |   | 262,500 |  
|Accumulated deficit                                                                        |  |                   | (6,689  | ) |                |   | (9,052  | )
|                                                                                           |  |                   |         |   |                |   |         |  
|Total members equity                                                                      |  |                   | 255,811 |   |                |   | 253,448 |  
|                                                                                           |  |                   |         |   |                |   |         |  
|Total liabilities and members equity                                                      |  | $                 | 770,020 |   |                | $ | 761,919 |  
|                                                                                           |  |                   |         |   |                |   |         |  

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



4



---

##### Table of Contents

ATLANTIC BROADBAND FINANCE, LLC

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands)



|                                                                                                              |  |                              |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                              |  | Three Months Ended March 31, |       
|                                                                                                              |  | 2005                         |        |   | 2006 |  
|Cable service revenue                                                                                         |  | $                            | 46,304 |   |      | $ | 49,959 |  
|                                                                                                              |  |                              |        |   |      |   |        |  
|Operating expenses                                                                                            |  |                              |        |   |      |   |        |  
|Direct operating expenses (excluding depreciation and amortization shown separately below)                    |  |                              | 21,489 |   |      |   | 23,129 |  
|Selling, general and administrative expenses (excluding depreciation and amortization shown separately below) |  |                              | 7,650  |   |      |   | 8,300  |  
|Depreciation and amortization                                                                                 |  |                              | 9,886  |   |      |   | 11,425 |  
|                                                                                                              |  |                              |        |   |      |   |        |  
|Income from operations                                                                                        |  |                              | 7,279  |   |      |   | 7,105  |  
|Interest expense                                                                                              |  |                              | 8,103  |   |      |   | 8,998  |  
|Unrealized (gain) loss on derivative instruments                                                              |  |                              | (1,819 | ) |      |   | 470    |  
|                                                                                                              |  |                              |        |   |      |   |        |  
|Net income (loss)                                                                                             |  | $                            | 995    |   |      | $ | (2,363 | )
|                                                                                                              |  |                              |        |   |      |   |        |  

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



5



---

##### Table of Contents

ATLANTIC BROADBAND FINANCE, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)



|                                                                                        |  |                              |        |   |      |   |        |  
|--------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                        |  | Three Months Ended March 31, |       
|                                                                                        |  | 2005                         |        |   | 2006 |  
|Cash flows from operating activities                                                    |  |                              |        |   |      |   |        |  
|Net income (loss)                                                                       |  | $                            | 995    |   |      | $ | (2,363 | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities |  |                              |        |   |      |   |        |  
|Depreciation and amortization                                                           |  |                              | 9,886  |   |      |   | 11,425 |  
|Amortization of debt issuance costs                                                     |  |                              | 473    |   |      |   | 474    |  
|Unrealized (gain) loss on derivative instrument                                         |  |                              | (1,819 | ) |      |   | 470    |  
|Changes in operating assets and liabilities                                             |  |                              |        |   |      |   |        |  
|Accounts receivable                                                                     |  |                              | 1,105  |   |      |   | 1,839  |  
|Prepaid expenses and other current assets                                               |  |                              | (327   | ) |      |   | (428   | )
|Accounts payable, accrued expenses, other long-term liabilities and accrued interest    |  |                              | (8,442 | ) |      |   | (8,241 | )
|Unearned service revenue                                                                |  |                              | (332   | ) |      |   | 532    |  
|                                                                                        |  |                              |        |   |      |   |        |  
|Net cash provided by operating activities                                               |  |                              | 1,539  |   |      |   | 3,708  |  
|                                                                                        |  |                              |        |   |      |   |        |  
|Cash flows from investing activities                                                    |  |                              |        |   |      |   |        |  
|Purchases of property, plant and equipment                                              |  |                              | (6,412 | ) |      |   | (5,123 | )
|                                                                                        |  |                              |        |   |      |   |        |  
|Net cash used in investing activities                                                   |  |                              | (6,412 | ) |      |   | (5,123 | )
|                                                                                        |  |                              |        |   |      |   |        |  
|Cash flows from financing activities                                                    |  |                              |        |   |      |   |        |  
|Payments of capital lease obligations                                                   |  |                              | (19    | ) |      |   | (65    | )
|Payment of debt issuance costs                                                          |  |                              | (32    | ) |      |   |       |  
|                                                                                        |  |                              |        |   |      |   |        |  
|Net cash used in financing activities                                                   |  |                              | (51    | ) |      |   | (65    | )
|                                                                                        |  |                              |        |   |      |   |        |  
|Net change in cash and equivalents                                                      |  |                              | (4,924 | ) |      |   | (1,480 | )
|Cash and cash equivalents, beginning of period                                          |  |                              | 12,612 |   |      |   | 6,632  |  
|                                                                                        |  |                              |        |   |      |   |        |  
|Cash and cash equivalents, end of period                                                |  | $                            | 7,688  |   |      | $ | 5,152  |  
|                                                                                        |  |                              |        |   |      |   |        |  
|Supplemental disclosure of cash flow information                                        |  |                              |        |   |      |   |        |  
|Interest paid                                                                           |  | $                            | 11,075 |   |      | $ | 11,979 |  
|Supplemental disclosure of noncash investing activities                                 |  |                              |        |   |      |   |        |  
|Equipment acquired under capital leases                                                 |  |                              | 492    |   |      |   |       |  
|Capital expenditures included in accounts payable and accrued expenses                  |  |                              | 1,390  |   |      |   | 2,036  |  

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



6



---

##### Table of Contents

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 (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.

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

The Company was capitalized during 2003 through equity contributions totaling $1,709 to fund general and administrative expenses in advance of the Systems acquisition. These activities were mainly associated with
obtaining the required consents from the related cable television franchise authorities and raising debt and equity to fund the Systems acquisition. In 2004, the Company obtained additional equity funding totaling $260,791.

On March 31, 2006, the Company had approximately 251,000 cable and 75,000 residential high-speed Internet subscribers on the Systems. The Company
has 4 subsidiaries which operate the Systems: Atlantic Broadband (Penn), LLC, Atlantic Broadband (Delmar), LLC, Atlantic Broadband (Miami), LLC and Atlantic Broadband Management, LLC (collectively, the Subsidiaries).

2. Risks and Uncertainties

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

The Company plans to continue the expansion of its existing
subscriber base through existing and new services, such as: digital cable, high speed Internet, high-definition television, and telephony services. The Company anticipates additional capital expenditures to facilitate this growth. Under current
plans and operations, additional financing in excess of existing facilities is not expected to be required. The Company expects to generate cash flow from operations in excess of capital expenditures in 2006. Operating cash flow is expected to be
sufficient to repay current obligations and outstanding debt as they become due through at least the next twelve months. Should the Company fail to meet its expectations, the Company would look to obtain additional financing, refinance existing
agreements, and/or reduce capital expenditures.

3. Summary of Significant Accounting Policies

Interim Financial Statements

The condensed consolidated financial statements as of March 31, 2006 and for the three months ended March 31, 2005 and 2006 are unaudited. However, in the opinion of management, such financial statements include all adjustments
(consisting primarily of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP)
and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the 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, 2005 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.



7



---

##### Table of Contents

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 and the recoverability of the carrying values of goodwill and other intangible assets and fixed assets. Actual results could differ from those
estimates.

Segments

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

The Company manages the Systems
operations on the basis of geographic divisional operating segments. The Company has evaluated the criteria for aggregation of the geographic operating segments under paragraph 17 of SFAS No.131. In light of the Systems similar services, means
for delivery, similarity in type of customers, the use of a unified network and similar economic characteristics 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.

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) indirect costs attributable to capitalizable activities.

Goodwill and Intangible Assets

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



8



---

##### Table of Contents

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

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

An impairment assessment of goodwill and franchise operating rights could be triggered by a significant reduction in operating results or cash flows at
one of more of the Companys systems, or a forecast of such reductions, a significant adverse change in the locations in which the Companys systems operate, or by adverse changes to ownership rules, among others. The Company completed its
annual impairment on March 1, 2006 and did not identify any impairment. No significant revisions to the underlying operating results or forecasts which would impact these annual impairment results were noted as of March 31, 2006.

Amortization expense on intangible assets with a definite life for the next five years as of March 31, 2006 is as follows:



|     |  |                     |       
|---- |  | ------------------- | ------
|     |  | AmortizationExpense
|2006 |  | $                   | 11,521
|2007 |  |                     | 2,835 
|2008 |  |                     | 330   

4. Acquisition

On September 3, 2003, the Company entered into a purchase agreement with affiliates of Charter to acquire the Systems. On March 1, 2004, the Company purchased substantially all of the assets of the Systems
for $724.1 million, exclusive of transaction costs. Under a retained franchise agreement executed in conjunction with the purchase agreement, the Company operated certain franchises not transferred on the initial closing date through the date such
franchise agreements were transferred. These remaining assets were acquired upon local franchise approval of the underlying license transfers on April 30, 2004 for $8.5 million, exclusive of transaction costs. Under the terms of the purchase
agreement, the final purchase price for the Systems was determined based upon a measurement of ending basic and high speed internet subscribers multiplied by a stated rate per subscriber.

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



|                                                        |  |               |        
|------------------------------------------------------- |  | ------------- | -------
|                                                        |  | March 1, 2004
|Accounts receivable                                     |  | $             | 1,241  
|Prepaid expenses and other current assets               |  |               | 138    
|Property and equipment                                  |  |               | 150,940
|Intangible assets, including franchise operating rights |  |               | 554,200
|Goodwill, including transaction costs                   |  |               | 35,299 
|                                                        |  |               |        
|Total assets acquired                                   |  |               | 741,818
|Less: Accrued liabilities assumed                       |  |               | 3,732  
|                                                        |  |               |        
|Net assets acquired                                     |  | $             | 738,086
|                                                        |  |               |        



9



---

##### Table of Contents

Of the $554,200 of acquired intangibles, $509,100 was assigned to franchise operating rights that are not
subject to amortization and $42,900 was assigned to subscriber relationships (estimated useful life of 3 years). The remaining $2,200 of acquired intangible assets have estimated useful lives of approximately 1 to 5 years.

5. Plant, Property and Equipment

Plant, property and
equipment consist of the following:



|                                     |  |                   |         |                |   |        
|------------------------------------ |  | ----------------- | ------- | -------------- | - | -------
|                                     |  | December 31, 2005 |         | March 31, 2006
|Distribution facilities              |  | $                 | 128,813 |                | $ | 133,376
|Subscriber equipment                 |  |                   | 41,124  |                |   | 42,995 
|Headend equipment                    |  |                   | 22,124  |                |   | 23,009 
|Buildings and leasehold improvements |  |                   | 7,200   |                |   | 7,207  
|Office equipment and other           |  |                   | 8,196   |                |   | 8,955  
|Vehicles and equipment               |  |                   | 5,313   |                |   | 5,491  
|Land                                 |  |                   | 1,523   |                |   | 1,523  
|Construction in progress             |  |                   | 1,851   |                |   | 1,107  
|Material inventory                   |  |                   | 3,052   |                |   | 2,692  
|                                     |  |                   |         |                |   |        
|Total plant, property and equipment  |  |                   | 219,196 |                |   | 226,355
|Less: accumulated depreciation       |  |                   | 43,200  |                |   | 50,784 
|                                     |  |                   |         |                |   |        
|Plant, property and equipment, net   |  | $                 | 175,996 |                | $ | 175,571
|                                     |  |                   |         |                |   |        

Depreciation expense for the three months ended March 31, 2005 and 2006 was $6,128 and
$7,584, respectively.

6. Intangible Assets

Intangible assets consist of the following:



|                               |  |                   |        |                |   |       
|------------------------------ |  | ----------------- | ------ | -------------- | - | ------
|                               |  | December 31, 2005 |        | March 31, 2006
|Subscriber relationships       |  | $                 | 43,888 |                | $ | 43,888
|Other intangible assets        |  |                   | 2,200  |                |   | 2,200 
|                               |  |                   |        |                |   |       
|Total intangible assets        |  |                   | 46,088 |                |   | 46,088
|Less: Accumulated amortization |  |                   | 27,561 |                |   | 31,402
|                               |  |                   |        |                |   |       
|Intangible assets, net         |  | $                 | 18,527 |                | $ | 14,686
|                               |  |                   |        |                |   |       

Amortization expense for the three months ended March 31, 2005 and 2006 was $3,758 and $3,841
, respectively.

7. Accrued Expenses

Accrued expenses consist of the following:



|                                              |  |                   |       |                |   |      
|--------------------------------------------- |  | ----------------- | ----- | -------------- | - | -----
|                                              |  | December 31, 2005 |       | March 31, 2006
|Franchise, copyright and revenue sharing fees |  | $                 | 2,100 |                | $ | 1,535
|Payroll and related taxes                     |  |                   | 2,687 |                |   | 1,491
|Accrued purchase price                        |  |                   | 500   |                |   |     
|Other accrued expenses                        |  |                   | 2,028 |                |   | 3,421
|                                              |  |                   |       |                |   |      
|Total accrued liabilities                     |  | $                 | 7,315 |                | $ | 6,447
|                                              |  |                   |       |                |   |      



10



---

##### Table of Contents

8. Debt

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

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

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

At December 31, 2005 and March 31, 2006
there was $305,000 outstanding under the Term Loans and $26,417 under the Revolver. The interest rate on the Senior Credit Facility will be, at the election of the Company, based on either a Eurodollar or a Base Rate option, each as defined in the
credit agreement, plus a spread ranging between 1.0% and 3.25%. Excluding the derivative component, the weighted average interest rate for 2005 and 2006 on the Term Note and Revolver was 6.20% and 7.35%, respectively. Interest payments on Base Rate
Loans shall be payable in arrears on the last day of each calendar quarter and at maturity. Interest payments on Eurodollar Loans shall be payable on the last day of each interest period relating to such loan and at maturity.

As of March 31, 2006, there was approximately $63,583 of unused commitments under the Revolver, respectively, all of which could be drawn in
compliance with the financial covenants under the Senior Credit Facility. In order to maintain the revolving lines of credit, the Company is obligated to pay certain commitment fees at nominal interest rates on the unused portions of the loans.

The Company can make no assurances that it will be able to satisfy and comply with the covenants under the Senior Credit Facility. The
Companys ability to maintain its liquidity and maintain compliance with its covenants under the Senior Credit Facility is dependent upon its ability to successfully execute its current business plan. The Company can make no assurances,
however, that its business will generate sufficient cash flow from operations or that existing available cash or future borrowings will be available to it under the Senior Credit Facility in an amount sufficient to enable it to pay its indebtedness
or to fund its other liquidity needs. As of March 31, 2006, the Company was in compliance with its covenants under the Senior Credit Facility.

Term Loan installments start on June 30, 2006. The Revolver shall be paid such that the amount outstanding shall not exceed $67,500 from March 1, 2009 until the termination date. The Revolver shall be paid in full on the
termination date of March 1, 2010. Principal payments under the Senior Credit Facility for each year ending December 31, 2006 through 2012 are as follows:



|     |  |   |        
|---- |  | - | -------
|2006 |  | $ | 6,563  
|2007 |  |   | 8,750  
|2008 |  |   | 8,750  
|2009 |  |   | 8,750  
|2010 |  |   | 100,135
|2011 |  |   | 198,469
|2012 |  |   |       
|     |  |   |        
|     |  | $ | 331,417
|     |  |   |        

Senior Subordinated Notes

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



11



---

##### Table of Contents

Interest Rate Swap Agreements

The Company entered into three swap agreements on March 17, 2004 for a total notional value of $230,000 with a term of three years at a fixed rate of
1.25% for the first year, 2.25% for the second year and rates ranging from 3.53% to 3.58% for the third year. The marking-to-market of the interest rate swap agreements resulted in the recognition of $1,819 in other income for the three months ended
March 31, 2005 and $470 in other expense for the three months ended March 31, 2006.

9. Members Equity

The Parent owns all 1,000 units issued by the Company. The Parent contributed $1,709 in 2003 to effect its formation. In 2004, the Parent contributed
$260,791 which the Company used to acquire the Systems.

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

Atlantic Broadband Finance, LLC is a wholly-owned subsidiary of Atlantic Broadband Group, LLC. On September 3, 2003, Atlantic entered into an agreement with affiliates of Charter Communications, Inc. to acquire cable systems in
Pennsylvania, Florida, Delaware, Maryland, New York and West Virginia. The sale of all of the cable systems excluding those in New York closed on March 1, 2004, while Atlantic operated the New York system under a retained franchise operating
agreement commencing in conjunction with the acquisition of the other systems until this remaining sale closed on April 30, 2004.

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

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

Historical Performance

Operating Data



|                                               |  |                |   |  |                   |   |  |                |  
|---------------------------------------------- |  | -------------- | - |  | ----------------- | - |  | -------------- | -
|                                               |  | March 31, 2005 |   |  | December 31, 2005 |   |  | March 31, 2006 |  
|Equivalent Basic Units (EBUs)               |  | 217,082        |   |  | 213,396           |   |  | 213,520        |  
|Digital subscribers                            |  | 76,756         |   |  | 73,985            |   |  | 74,830         |  
|High Speed Data (HSD) subscribers            |  | 55,782         |   |  | 69,018            |   |  | 75,114         |  
|Telephone subscribers                          |  |               |   |  |                  |   |  | 1,381          |  
|Homes passed                                   |  | 430,593        |   |  | 438,404           |   |  | 439,593        |  
|Internet-ready homes passed                    |  | 388,169        |   |  | 424,253           |   |  | 425,366        |  
|Basic subscribers                              |  | 252,658        |   |  | 249,754           |   |  | 251,467        |  
|                                               |  |                |  
|Basic penetration of homes passed              |  | 58.7           | % |  | 57.0              | % |  | 57.2           | %
|Digital penetration of basic subscribers       |  | 30.4           | % |  | 29.6              | % |  | 29.8           | %
|HSD penetration of internet-ready homes passed |  | 14.4           | % |  | 16.3              | % |  | 17.7           | %



12



---

##### 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. |       
|                                                                                                         |  | 2005                         |        |   | 2006 |      
|                                                                                                         |  | Amount                       |        |   | %    |       |   | Amount |   |        | % | 
|                                                                                                         |  | (dollars in thousands)       |       
|Revenue:                                                                                                 |  |                              |        |   |      |       |   |        |   |        |   |  |       |  
|Video                                                                                                    |  | $                            | 31,636 |   |      | 68.3  | % |        | $ | 32,549 |   |  | 65.2  | %
|High Speed Data                                                                                          |  |                              | 5,144  |   |      | 11.1  |   |        |   | 7,207  |   |  | 14.4  |  
|Telephone                                                                                                |  |                              |       |   |      | 0.0   |   |        |   | 98     |   |  | 0.2   |  
|Advertising Sales                                                                                        |  |                              | 1,402  |   |      | 3.0   |   |        |   | 1,330  |   |  | 2.7   |  
|Commercial                                                                                               |  |                              | 3,794  |   |      | 8.2   |   |        |   | 4,165  |   |  | 8.3   |  
|Other                                                                                                    |  |                              | 4,328  |   |      | 9.4   |   |        |   | 4,610  |   |  | 9.2   |  
|                                                                                                         |  |                              |        |   |      |       |   |        |   |        |   |  |       |  
|Total revenue                                                                                            |  | $                            | 46,304 |   |      | 100.0 | % |        | $ | 49,959 |   |  | 100.0 | %
|                                                                                                         |  |                              |        |  
|Costs and expenses:                                                                                      |  |                              |        |   |      |       |   |        |   |        |   |  |       |  
|Operating (excluding depreciation and amortization and selling, general and administrative listed below) |  |                              | 21,489 |   |      | 46.4  | % |        |   | 23,129 |   |  | 46.3  | %
|Selling, general and administrative                                                                      |  |                              | 7,650  |   |      | 16.5  | % |        |   | 8,300  |   |  | 16.6  | %
|Depreciation and amortization                                                                            |  |                              | 9,886  |   |      | 21.4  | % |        |   | 11,425 |   |  | 22.9  | %
|                                                                                                         |  |                              |        |   |      |       |   |        |   |        |   |  |       |  
|Income from operations                                                                                   |  |                              | 7,279  |   |      |       |   |        |   | 7,105  |   |  |       |  
|                                                                                                         |  |                              |        |  
|Other Income (expenses):                                                                                 |  |                              |        |   |      |       |   |        |   |        |   |  |       |  
|Gain (loss) from derivative instruments                                                                  |  |                              | 1,819  |   |      |       |   |        |   | (470   | ) |  |       |  
|Interest expense, net                                                                                    |  |                              | (8,103 | ) |      |       |   |        |   | (8,998 | ) |  |       |  
|                                                                                                         |  |                              |        |   |      |       |   |        |   |        |   |  |       |  
|Income (loss) before income taxes                                                                        |  | $                            | 995    |   |      |       |   |        | $ | (2,363 | ) |  |       |  
|                                                                                                         |  |                              |        |   |      |       |   |        |   |        |   |  |       |  

Three Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005.

Revenue for the three months ended March 31, 2006 was $50.0 million as compared to $46.3 million for the three months ended March 31, 2005, an
increase of $3.7 million or 7.9%. This increase was mainly the result of a $2.1 million increase in high-speed data revenue resulting from continued marketing focus for this service offering driving HSD subscriber growth, coupled with a $0.9 million
increase in video revenues of the Company driven mainly by digital revenue growth. We expect revenues to continue to increase as a result of the continuing demand for our HSD service and further increases in homes passed with telephone capabilities.

Operating expenses for the three months ended March 31, 2006 were $23.1 million as compared to $21.5 million for the same period in
2005. The $1.6 million increase was mainly the result of increased programming costs in conjunction with annual contractual increases, coupled with a net increase of $0.7 million as the company incurred additional expenditures in connection with
increased product demand in the Delmar system after the completion of the rebuild of that system, as well as the incurrence of costs associated with our launch of cable telephony service. 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, 2006 were $8.3 million as compared to $7.7 million for the three months ended March 31, 2005, an increase of $0.6 million.
This increase resulted mainly from a $0.4 million increase in marketing costs to continue driving revenue and subscriber levels. We expect to see continued increases in selling, general and administrative expenses as we increase marketing spending
to continue subscriber growth trends, with levels remaining relatively consistent as a percentage of revenues.

Depreciation of property
and equipment and amortization expense was $11.4 million for the three months ended March 31, 2006, compared with $9.9 million for the same period in 2005, an increase of $1.5 million. This increase was the result of an overall increase in
capital expenditures due mainly to the system rebuild in Delmar.



13



---

##### Table of Contents

Income from operations for the three months ended March 31, 2006 was $7.1 million as compared to
$7.3 million for the same period in 2005 for the reasons described above.

The marking-to-market of the interest rate swap agreements
resulted in the recognition of $0.5 million in other expense for the three months ended March 31, 2006 as compared to $1.8 million in other income for the three months ended March 31, 2005 due to fluctuations in market interest rates.

Interest expense, including amortization of debt financing costs, for the three months ended March 31, 2006 was $9.0 million as
compared to $8.1 million for the three months ended March 31, 2005. This $0.9 million increase was primarily attributable to higher interest rates in 2006.

As a result of the factors described above, the net loss was $2.4 million for the three months ended March 31, 2006 as compared to a net income of $1.0 million for the three months ended March 31, 2005.

Liquidity and Capital Resources

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

In connection with the acquisition of the Systems, we have incurred substantial amounts of debt,
including amounts outstanding under our senior credit facility and our 93/8% Senior Subordinated Notes. Interest
payments on this indebtedness will significantly reduce our cash flows from operations. As of March 31, 2006, the Company has total debt outstanding of $482.1 million (including capital lease obligations).

We have a $395.0 million senior credit facility, consisting of a $90 million revolving credit facility, a $30 million term loan A tranche and a $275
million term loan B tranche. At March 31, 2006, $26.4 million of the revolving credit facility (the Revolver) was outstanding, with $63.6 million of unused senior credit commitments under the revolving credit facility. The Revolver
shall be paid such that the amount outstanding shall not exceed $67,500 from March 1, 2009 until the termination date of March 1, 2010. We will be able to prepay revolving credit loans and reborrow amounts that are repaid, up to the amount
of the revolving credit commitment then in effect, subject to customary conditions.

The borrowings under the term loans A and B mature on
March 1, 2011 and October 1, 2011, respectively. These term loans are payable in quarterly installments commencing on June 30, 2006.

We expect to incur capital expenditures in 2006 at a level relatively consistent with those in 2005 as we launch a digital voice offering in the Systems as well as other capital items. We then expect subsequent year capital expenditure
levels to reduce, reflecting more maintenance and discretionary capital spending.

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

Contractual Obligations

The following table sets forth our long-term contractual cash obligations as of March 31, 2006
(dollars in thousands):



|                                         |  |                           |         |                   |   |        |  |      |        |      |   |        |  |            |        |  |   |         |  |   |        
|---------------------------------------- |  | ------------------------- | ------- | ----------------- | - | ------ |  | ---- | ------ | ---- | - | ------ |  | ---------- | ------ |  | - | ------- |  | - | -------
|                                         |  | Years Ending December 31,
|                                         |  | Total                     |         | Remainder of 2006 |   | 2007   |  | 2008 |        | 2009 |   | 2010   |  | Thereafter
|Senior secured credit facilities         |  | $                         | 331,417 |                   | $ | 6,563  |  | $    | 8,750  |      | $ | 8,750  |  | $          | 8,750  |  | $ | 100,135 |  | $ | 198,469
|93/8%
Senior Subordinated Notes due 2014 |  |                           | 150,000 |                   |   |       |  |      |       |      |   |       |  |            |       |  |   |        |  |   | 150,000
|Cash interest                            |  |                           | 226,447 |                   |   | 27,772 |  |      | 38,209 |      |   | 37,966 |  |            | 37,299 |  |   | 34,894  |  |   | 50,307 
|Capitalized leases (including interest)  |  |                           | 666     |                   |   | 192    |  |      | 258    |      |   | 211    |  |            | 5      |  |   |        |  |   |       
|Operating leases                         |  |                           | 2,377   |                   |   | 443    |  |      | 482    |      |   | 438    |  |            | 306    |  |   | 274     |  |   | 434    
|                                         |  |                           |         |                   |   |        |  |      |        |      |   |        |  |            |        |  |   |         |  |   |        
|Total cash contractual obligations       |  | $                         | 710,907 |                   | $ | 34,970 |  | $    | 47,699 |      | $ | 47,365 |  | $          | 46,360 |  | $ | 135,303 |  | $ | 399,210
|                                         |  |                           |         |                   |   |        |  |      |        |      |   |        |  |            |        |  |   |         |  |   |        



14



---

##### Table of Contents

Cash Flows

Cash provided by operations increased to $3.7 million for the three months ended March 31, 2006 as compared to $1.5 million for the same period in 2005. This is mainly the result of increases in revenue outpacing increases in combined
operating and selling, general and administrative expenses.

Cash used in investing activities decreased to $5.1 million for the three
months ended March 31, 2006 from $6.4 million for the same period in 2005. This increase is mainly the result of the timing of capital expenditure payments, with $2.0 million in accounts payable and accrued expenses at quarter end in 2006 as
compared to only $1.4 million in 2005.

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

Our discussion and analysis of our financial condition and results of operations are based upon financial statements which have been
prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of
contingent liabilities. On an ongoing basis, we evaluate our estimates, including those related to allowance for bad debts, the recoverability of long-term assets such as franchises and intangible assets, depreciation and amortization periods,
income taxes, commitments and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the following critical accounting policies affect
our more significant judgments and estimates used in the preparation of the financial statements.

Capitalization of Labor and Overhead
Costs

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

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

Valuation of Property, Plant and Equipment

We evaluate the recoverability of property, plant and
equipment for impairment when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Such events or changes in circumstances could include such factors as changes in technological advances,
fluctuations in the fair value of such assets, adverse changes in relationships with local franchise authorities, adverse changes in market conditions or poor operating results. If a review indicates that the carrying value of an asset is not
recoverable from estimated undiscounted cash flows, the carrying value of such asset is reduced to its estimated fair value. While we believe that our estimates of future cash flows are reasonable, different assumptions regarding such cash flows
could materially affect our evaluation of asset recoverability.

Valuation of Franchises and Intangible Assets

We have significant intangible assets on our balance sheet. If the value of these assets was impaired by some factor, such as the loss of a franchise or
an adverse change in the advertising marketplace, we may be required to record an impairment charge.



15



---

##### Table of Contents

In determining whether our franchises have an indefinite life, we considered the exclusivity of the
franchise, the expected costs of franchise renewals, and the technological state of the associated cable systems to determine whether we are in compliance with any technologically required upgrades. We have concluded that our franchise rights
qualify for indefinite life treatment under SFAS 142.

We test the impairment of our franchise rights annually (on March 1) or
whenever events or changes in circumstances indicate that franchise rights might be impaired. The franchise impairment test compares the fair value of the franchise with its carrying amount. The fair value of a franchise is determined through the
use of a discounted cash flow analysis. The valuation assumptions used in the discounted cash flow model reflect anticipated future operating results and cash flows based on the Systems business plans. If the fair value of the franchise
exceeds its carrying amount, it is not considered impaired. If the carrying amount of the franchise exceeds its fair value, an impairment loss is recognized in an amount equal to the excess.

We periodically evaluate the net realizable value of long-lived assets, including tangible and intangible assets, relying on a number of factors
including operating results, business plans, economic projections and anticipated future cash flows. An impairment in the carrying value of an asset is recognized when the expected future operating cash flow derived from the asset is less than its
carrying value.

Inflation and Changing Prices

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

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

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

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



|                                          |  |                        |        |                            |   |                        |        |   |         |  |   |        |  |   |       
|----------------------------------------- |  | ---------------------- | ------ | -------------------------- | - | ---------------------- | ------ | - | ------- |  | - | ------ |  | - | ------
|                                          |  | Interest rate decrease |        | No change to interest rate |   | Interest rate increase
|                                          |  | 100 BPS                |        | 50 BPS                     |   |                        | 50 BPS |   | 100 BPS
|                                          |  | (dollars in thousands)
|Senior credit facilities                  |  | $                      | 20,975 |                            | $ | 21,482                 |        | $ | 21,989  |  | $ | 22,496 |  | $ | 23,003
|9.375% senior subordinated notes due 2014 |  |                        | 14,063 |                            |   | 14,063                 |        |   | 14,063  |  |   | 14,063 |  |   | 14,063
|                                          |  |                        |        |                            |   |                        |        |   |         |  |   |        |  |   |       
|                                          |  | $                      | 35,038 |                            | $ | 35,545                 |        | $ | 36,052  |  | $ | 36,559 |  | $ | 37,066
|                                          |  |                        |        |                            |   |                        |        |   |         |  |   |        |  |   |       

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

At
March 31, 2006, we had in effect three interest rate swaps with three separate commercial banks, with a total notional amount of $230.0 million. These interest rate swap agreements require us to pay a fixed rate and receive a floating rate
thereby creating fixed rate debt. The difference to be paid or received on the swaps are accrued as an adjustment to interest expense. We are exposed to credit loss in the event of nonperformance by the counterparty. The net fair value of the
interest rate swap agreements, which represents the cash we would receive to settle the agreements, was approximately $3.6 million and $4.1 million at March 31, 2006 and December 31, 2005, respectively.

ITEM 4. Controls and Procedures

The Companys Chief Executive Officer and Chief Financial Officer, after evaluating
the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934) as of the end of the period covered by this quarterly report, have concluded that
the Companys disclosure controls and



16



---

##### Table of Contents

procedures are effective to ensure that the information required to be disclosed by the Company in the reports that it
files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in rules and forms of the SEC.

There have not been any changes in the Companys internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that
have materially affected, or are reasonably likely to materially affect the Companys 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.

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 2005 Form 10-K.

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

None.

ITEM 3. Defaults upon Senior Securities

None.

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

None.

ITEM 5. Other Information

None.

ITEM 6. Exhibits



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



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



17



---

##### Table of Contents

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 15, 2006.



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




18