Network infrastructure products, including the Company’s amplitude modulation headend/hub optical platform and line of optical nodes, and a full offering of radio frequency amplifiers, and

Content and operations management systems, including

•

Content and operations management systems, includes software, and hardware, and support for the delivery of video on demand and digital advertising as well as application-oriented, operational support software for managing bandwidth and resource utilization, network and service assurance, and mobile workforce automation. TheNetwork Services segment provides outsourced technical services for engineering, design, and deployment of advanced applications over broadband networks, including installation services, network design and engineering, network integration, outside plant and construction services, and consulting to a variety of customers. For additional information regarding the Company’s reporting segments, see Note 15.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and financial reporting policies of the Company are in conformity with U.S. generally accepted accounting principles. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Management has discussed the development and selection of the Company’s critical accounting estimates with the Audit Committee of the Company’s Board of Directors and the Audit Committee has reviewed the Company’s related disclosures. A detailed description of the Company’s significant accounting policies is set forth in the Notes to Consolidated Financial Statements in the Company’s Form 10-K for fiscal year 2006,2007, and is supplemented by the information below.

On June 30, 2007, the Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 provides recognition criteria and a related measurement model for tax positions taken by companies. In accordance with FIN 48, a tax position is a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position will be sustained upon examination. Tax positions that meet the more likely than not threshold are measured using a probability weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement (see Note 13).

Reclassifications and Revisions

Certain prior year amounts have been reclassified to conform to current year consolidated financial statement presentation.

The June 30, 2006 consolidated balance sheet was previously revised to reflect a reclassification of $8,621 from cash and cash equivalents to marketable securities due to certain securities having an original maturity greater than three months. This revision affected the condensed consolidated statement of cash flows for the thirteen-week period ending September 29, 2006. This revision did not affect the consolidated statement of operations for the fiscal year ended June 30, 2006.

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Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 establishes a recognition threshold and measurement for income tax positions recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 also prescribes a two-step evaluation process for tax positions. The first step is recognition and the second is measurement. For recognition, an enterprise judgmentally determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of related appeals or litigation processes, based on the technical merits of the position. If the tax position meets the more-likely-than-not recognition threshold, it is measured and recognized in the financial statements as the largest amount of tax benefit that is greater than 50% likely of being realized. If a tax position does not meet the more-likely-than-not recognition threshold, no benefit is recognized in the financial statements.

Tax positions that meet the more-likely-than-not recognition threshold at the effective date of FIN 48 may be recognized or, continue to be recognized, upon adoption of FIN 48. The cumulative effect of applying the provisions of FIN 48 is required to be reported as an adjustment to the opening balance of retained earnings for the fiscal year in which FIN 48 is adopted. FIN 48 will apply to fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact FIN 48 will have on its consolidated financial statements when it becomes effective for the Company in its fiscal year 2008 and is unable, at this time, to quantify the impact, if any, to the Company’s retained earnings at the time of adoption.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. This StatementSFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Earlier application is encouraged provided that the reporting entity has not yet issued financial statements for that fiscal year including financial statements for an interim period within that fiscal year. The Company is currently assessing SFAS No. 157 and has not yet determined the impact that the adoption of SFAS No. 157 will have on its results of operations and financial position when it becomes effective for the Company in fiscal year 2008.2009.

In September 2006,February 2007, the SecuritiesFASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Exchange Commission (SEC) released SEC Staff Accounting Bulletin No. 108, “ConsideringFinancial Liabilities” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the Effects of Prior Year Misstatements when Quantifying Misstatementsopportunity to mitigate volatility in Current Year Financial Statements,” (“SAB 108”), which addresses how uncorrected errors in previous years should be considered when quantifying errors in current-year financial statements. SAB 108 requires registrantsreported earnings caused by measuring related assets and liabilities differently without having to consider the effect of all carry over and reversing effects of prior-year misstatements when quantifying errors in current-year financial statements. SAB 108 does not change the SEC staff’s previous guidance on evaluating the materiality of errors. SAB 108 allows registrants to record the effects of adopting SAB 108 guidance as a cumulative-effect adjustment to retained earnings. This adjustment must be reported in the annualapply complex hedge accounting provisions. SFAS 159 is effective for financial statements of the firstissued for fiscal year endingyears beginning after November 15, 2006.2007. The Company is currently evaluatingassessing SFAS 159 and has not yet determined the impact SAB 108that the adoption of SFAS 159 will have on its consolidatedresults of operations and financial statements when it becomes effectiveposition.

4. PLAN OF MERGER

On September 23, 2007, the Company entered into an Agreement and Plan of Merger (the “Agreement”) with ARRIS Group, Inc., a Delaware corporation (“ARRIS”), and Air Merger Subsidiary, Inc., a Delaware corporation and wholly owned subsidiary of ARRIS (“Merger Sub”), whereby the Company will merge with and into Merger Sub, with Merger Sub as the surviving corporation (the “Merger”). Each issued and outstanding shares of the Company’s common stock will be converted into the right to receive either $13.75 in cash or 0.9642 share of ARRIS common stock, subject to adjustment based on the average closing price of ARRIS’ common stock prior to the closing of the Merger. Shareholders may elect to receive cash, ARRIS common stock or a combination of cash and ARRIS common stock in exchange for their shares of C-COR stock. The actual aggregate consideration received by shareholders of the Company will be 51% cash and 49% ARRIS common stock and C-COR shareholder elections will be pro-rated if necessary. In addition, all outstanding options to acquire C-COR common stock, the vesting of which will accelerate as a result of the Merger, will be converted into the right to acquire shares of ARRIS common stock.

The stock component of the merger consideration is subject to adjustment in the event that the average closing price of ARRIS’ common stock for the Companyten trading-day period ending three trading days prior to the closing date of the Merger (the “Average Closing Price”) is less than $12.83 or more than $15.69, provided, however, that no further adjustments will be made in the event the Average Closing Price is less than $11.41 or more than $17.11. The adjustments to the merger consideration can be made, at ARRIS’ option and subject to certain restrictions, in cash, shares of ARRIS common stock, or a combination of both.

ARRIS and C-COR have each made customary representations, warranties and covenants in the Agreement, including, among others, covenants to conduct their businesses in the ordinary course between the execution of the Agreement and the consummation of the Merger. ARRIS also has agreed to name one nominee of C-COR to the ARRIS board of directors as soon as practicable after the Merger is complete. The Merger is subject to the approval of Junethe shareholders of both ARRIS and C-COR, as well as the receipt of regulatory approvals, including clearance under the Hart-Scott-Rodino Act. On October 29, 2007, the Company announced that it has received early termination of the waiting period under the Hart-Scott Rodino Act. The Company has set November 7, 2007 as the record date and is unable, at this time,December 14, 2007 as the meeting date for the special meeting of its shareholders to quantifyapprove the impact, if any,merger.

In addition to the Company’s resultcustomary termination provisions, the Agreement provides that either ARRIS or C-COR may terminate the Agreement in the event that the Average Closing Price is less than $11.41. Upon the termination of operations, financial position and retained earnings at the timeAgreement under specified circumstances, ARRIS or C-COR, as the case may be, would be required to pay the other party a termination fee of adoption.$22,500. No termination fee would be payable by either party in the event that either party exercises their rights to terminate in the event that the Average Closing Price is less than $11.41.

4. RESTRUCTURING COSTS5. DISCONTINUED OPERATIONS

During the thirteen weekfourth quarter of fiscal year 2007, the Company sold certain assets and twenty-six week periodsliabilities of its field services operations, the operations of which were included as a component of the Company’s Network Services segment, to Source Broadband Solutions, LLC, a privately held business in Atlanta, Georgia. During the thirteen-week period ended December 29, 2006 and December 23, 2005,September 28, 2007, the Company incurred a loss from discontinued operations of $536 primarily related to customer claims, restructuring costs, to align its workforce, facilities and operatingcertain employee costs with current business opportunities. during the period.

6. RESTRUCTURING COSTS

For the thirteen week and twenty-six weekthirteen-week periods ended DecemberSeptember 28, 2007 and September 29, 2006, and December 23, 2005, restructuring costs by category for continuing operations were as follows:

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For the thirteen weekthirteen-week period ended December 29, 2006,September 28, 2007, the Company recorded $461$205 of restructuring charges in continuing operations, representing employee severance benefits and contractual obligations, including leased facility and equipment costs, employee termination benefits associated with workforce reductions of two employees, and relocation benefits.costs.

The following table provides detail on the activity and remaining restructuring accrual balance by category as of December 29, 2006:September 28, 2007:

Amounts accrued as of December 29, 2006September 28, 2007 for employee severance and termination benefits will be paid out over bi-weekly periods during the thirdsecond quarter of fiscal year 2007. 2008.

Amounts related to contractual obligations relate to excess leased facilities and equipment, which will be paid over their remaining lease terms through 2014, unless terminated earlier.

5.7. INVENTORIES

Inventories as of December 29, 2006September 28, 2007 and June 30, 200629, 2007 consisted of the following:

6.

8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill was $131,148 and $131,209 asAs of December 29, 2006September 28, 2007 and June 30, 2006, respectively. As of December 29, 2006 and June 30, 2006,2007, goodwill was allocated by segment as follows:

$128,610 and $128,825, respectively. During the twenty-six weekthirteen-week period ended December 29, 2006,September 28, 2007, goodwill decreased $61,$215, which consisted of a decrease of $342$234 related to the divestitureutilization of certain operationsnet operating loss carryforwards, resulting in Bangalore, India, a decreasereversal of $61 related primarily to settlement of certain income tax contingencies and a valuation allowance reversalallowances associated with the acquisition of nCUBE Corporation,acquisitions, and an increase of $342$19 related to fluctuations in foreign currency exchange rates used to translate the goodwill related to foreign subsidiaries at the balance sheet date.

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Other intangible assets as of December 29, 2006September 28, 2007 and June 30, 200629, 2007 consisted of the following:

7. LONG-TERM DEBT

During the twenty-six week period ended December 29, 2006, the Company obtained $447 of additional financing through a financing company for the purchase of machinery and equipment. The borrowings have a weighted average interest rate of 9.35%. Monthly payments of principal and interest of $9 are required through 2012. The borrowings under the financing agreement are collateralized by the equipment. The principal balance at December 29, 2006 was $423.

8.9. LETTER OF CREDIT AGREEMENT

Effective November 1, 2006,2007, the Company amended its credit agreement of November 5, 2004 (as amended, the “Agreement”“Credit Agreement”) with a bank for a $10,000 revolving letter of credit facility. Under the Credit Agreement, the $10,000 may be used solely for the issuance of letters of credit which must be fully cash collateralized at the time of issuance. The Company is required to maintain with the bank cash collateral of 102% of the amount that can be drawn on the issued letters of credit. This collateral can be drawn on upon the occurrence of any event of default under the Credit Agreement. The Credit Agreement contains standard event of default provisions, but no financial covenants. The Credit Agreement is committed through November 3, 2007.October 31, 2008. The applicable margin under the Credit Agreement is 0.65%, payable quarterly in arrears. In the event that a letter of credit is drawn upon, the interest rate for any unreimbursed drawing is the bank’s floating prime rate.

As of December 29, 2006,September 28, 2007, the aggregate amount of letters of credit issued under the Agreement was $4,049.$3,608. A cash compensating balance of $4,186$4,296 (includes interest earned on account) was funded as of December 29, 2006September 28, 2007 to secure the Company’s reimbursement obligation relating to the letters of credit (see note 13)Note 14).

9.

10. ACCRUED LIABILITIES

Accrued liabilities as of December 29, 2006September 28, 2007 and June 30, 200629, 2007 consisted of the following:

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10. NET11. INCOME (LOSS) PER SHARE FROM CONTINUING OPERATIONS

Basic net income (loss) per share from continuing operations is computed by dividing net income (loss)from continuing operations by the weighted average number of common shares outstanding. Diluted net income (loss)from continuing operations per share is computed by dividing net income (loss)from continuing operations by the weighted average number of common shares outstanding and potential common shares outstanding. Potential common shares result from the assumed exercise of outstanding stock options and warrants having a dilutive effect calculated under the treasury stock method using the average market price for the period and from the potential conversion of the Company’s 3.5% senior unsecured convertible notes, calculated under the if-converted method. In addition, in computing the dilutive effect of the convertible debt,notes, the net income (loss)from continuing operations is adjusted to add back the after-tax amount of interest and amortized debt issuance costs recognized in the period associated with the senior unsecured convertible debt.notes. Any potential shares that are antidilutive are excluded from the calculationeffect of diluted net income (loss)dilutive securities.

Income per share.

Net income (loss) per share from continuing operations is calculated as follows:

For the thirteen weekthirteen-week periods ended DecemberSeptember 28, 2007 and September 29, 2006, and December 23, 2005, total potential common shares of 1,318,9243,841,197 and 9,027,395,6,143,852, respectively, were excluded from the diluted net income (loss) per share from continuing operations calculation because they were antidilutive.

For the twenty-six week periods ended December 29, 2006 and December 23, 2005, total potential common shares of 5,150,471 and 9,058,823, respectively, were excluded from the diluted net income (loss) per share calculation because they were antidilutive.

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11.12. COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive income, net of tax, if applicable, are as follows:

The components of comprehensive income (loss) for the thirteen week and twenty-six weekthirteen-week periods ended DecemberSeptember 28, 2007 and September 29, 2006 and December 23, 2005 are as follows:

The Company accounts for certain intercompany loans that are denominated in foreign currencies as being permanent in nature, as settlement is not planned or anticipated in the foreseeable future. As such, foreign currency translation gains and losses related to these loans are excluded from net income (loss) and reported as a component of other comprehensive income (loss).

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12.13. INCOME TAXES

The Company determines income taxes for each of the jurisdictions in which it operates. This determination involves estimating the Company'sCompany’s actual current income tax payable and assessing temporary differences resulting from differing treatment of items, such as reserves and accruals, for tax and accounting purposes. Deferred taxes arise due to temporary differences in the basisbases of assets and liabilities and from net operating loss and tax credit carryforwards. In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company'sCompany’s statement of operations become deductible expenses under applicable income tax laws or net operating loss or tax credit carryforwards are utilized. Accordingly, realization of deferred tax assets is dependent on future taxable income against which these deductions, net operating losses and tax credits can be utilized. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Historical operating losses, scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies are considered in making this assessment.

In fiscal year 2006, the Company recognized deferred tax liabilities of $200 related to unremitted earnings of foreign subsidiaries that may be repatriated in the foreseeable future. Income taxes are not provided on the unremitted earnings of the Company’s foreign subsidiaries where such earnings have been indefinitely reinvested in its foreign operations. In future periods, deferred tax liabilities for domestic income tax and foreign withholding tax will be recognized for undistributed earnings and basis differences of foreign subsidiaries when the Company no longer intends to permanently reinvest such unremitted earnings.

As a result of cumulative losses the Company incurred in prior years, management previously recorded a valuation allowance against net deferred tax assets. The Company expects to maintain the valuation allowance on deferred tax assets until it can sustain a level of profitability in the applicable tax jurisdictions that demonstrates its ability to utilize these assets. As of December 29, 2006,September 28, 2007, a valuation allowance on substantially all of the deferred tax assets remains, except in certain foreign jurisdictions where the Company has been consistently profitable.

Income tax expense for the thirteen week and twenty-six week periodsthirteen-week period ended December 29, 2006September 28, 2007 arose primarily from the following: recognition of additional valuation allowance, current taxes paid or payable for federal alternative minimum tax, for which any credit is offset by a valuation allowance and state and foreign income tax in those jurisdictions where offsetting loss carryforwards are not available or are limited.limited, and from a decrease in valuation allowance due to the utilization of acquired net operating loss carryforwards for which the tax benefit is recorded as a decrease in goodwill.

In November 2005,

Effect of Recently Issued Accounting Standards

On June 30, 2007, the Company adopted the provisions of FASB issued Staff Position (“FSP”) FAS123(R)-3, “Transition Election toInterpretation No. 48, Accounting for theUncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 provides recognition criteria and a related measurement model for tax positions taken by companies. In accordance with FIN 48, a tax position is a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax Effectspositions are recognized only when it is more likely than not (likelihood of Share-Based Payment Awards”. This FSP requires an entity to follow either the transition guidance for the additional-paid-in-capital pool as prescribed in SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”greater than 50%), orbased on technical merits, that the alternative transition methodposition will be sustained upon examination. Tax positions that meet the more likely than not threshold are measured using a probability weighted approach as described in the FSP. An entitylargest amount of tax benefit that adopts SFAS 123(R) using the modified prospective application may make a one-time election to adopt the transition method described in this FSP. An entity may take up to one year from the lateris greater than 50% likely of its initial adoptionbeing realized upon settlement.

The total amount of SFAS No. 123(R) or the effective date of this FSP to evaluate its available transition alternatives and make its one-time election. The Company has elected the alternative transition method to establish the initial pool of excessunrecognized tax benefits which would be available to absorb tax deficiencies recognized subsequent to the adoption of SFAS 123R. The pool of excess tax benefits was determined to be zeroincluding interest and penalties, as of the date of adoption.adoption, was $4,242, of which $4,005 had been previously reserved under FASB Statement 5 and FASB Statement No. 109, prior to adoption of FIN 48. As a result of the implementation of FIN 48, the Company recognized a $237 increase in the liability, which was primarily related to an accrual for potential interest and penalties not previously accrued. The increase of $237 was accounted for as a reduction to retained earnings and a $159 increase to the non current tax liability, and a $78 increase was recorded as a current tax liability as it relates to anticipated audit settlements. In addition, there was a reduction of deferred tax assets and the corresponding valuation allowance of $4,005, which was reclassified to comply with FIN 48.

13.Included in the balance of unrecognized tax benefits at June 30, 2007, was $357 of tax benefits that, if recognized, would impact the effective tax rate. With regard to the unrecognized tax benefits at June 30, 2007, the Company believes that it is reasonably possible that such unrecognized tax benefits may decrease by $614 in the next 12 months due to anticipated audit settlements, the expiration of statutes of limitations, and other events.

The Company classifies interest and penalties related to unrecognized tax benefits in tax expense. The Company had $190 interest and penalties accrued at June 30, 2007. For the quarter ended September 28, 2007, there was no material change to the unrecognized tax benefits or the accrued interest and penalties.

The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. With no material exceptions, the Company is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2002.

14. COMMITMENTS AND CONTINGENCIES

Letters of Credit and Bank Guarantees:

The Company has outstanding letters of credit and bank guarantees which are collateralized by restricted cash. As of December 29, 2006,September 28, 2007, the commitments and restricted cash associated with outstanding letters of credit and bank guarantees arewere as follows:

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14.15. GUARANTEES

As of December 29, 2006,September 28, 2007, the Company did not have any outstanding guarantees, except for product warranties. The Company warrants its products against defects in materials and workmanship, generally for one-to-fiveone to five years depending upon product lines and geographic regions. A provision for estimated future costs related to warranty activities is recorded when the product is shipped, based upon historical experience of product failure rates and historical costs incurred in correcting product failures. In addition, from time to time, the recorded amount is adjusted for specifically identified warranty exposures when unforeseen technical problems arise.

Changes in the Company’s warranty liability during the twenty-six weekthirteen-week period ended December 29, 2006, areSeptember 28, 2007 is as follows:

In the normal course of business, the Company is party to certain off-balance sheet arrangements, including indemnification obligations and financial instruments with off-balance sheet risk, such as bank letters of credit and performance or surety bonds (see Notes 89 and 13)14). Liabilities related to these arrangements are not reflected in the consolidated balance sheets, and the Company does not expect any material impact on its cash flows, results of operations or financial condition to result from these off-balance sheet arrangements.

The Company’s Network Services segment uses surety bonds to secure performance obligations as a contractor in various state and local jurisdictions. To the extent that surety bonds become unavailable, the Company would need to replace the surety bonds or seek to secure the bonds or the Company’s obligation to reimburse the surety with letters of credit, cash deposits, or other suitable forms of collateral. As of December 29, 2006, the Company had $1,752 of outstanding surety bonds.

The Company’s Broadband Systems Solutions segment licenses software to its customers under written agreements. Each agreement contains the relevant terms of the contractual arrangement with the customer, and generally includes provisions for indemnifying the customer against losses, expenses, and liabilities from damages that may be awarded against the customer in the event the software is found to infringe upon certain intellectual property rights of a third party. Each agreement generally limits the scope of and remedies for such indemnification obligations in a variety of industry-standard respects. The Company has not identified any losses that are probable under these provisions and, accordingly, no liability related to these indemnification provisions has been recorded.

15. SEGMENT INFORMATION16. GAIN ON LITIGATION JUDGMENT

On April 20, 2006, the Company received a payment of $8,021 as a settlement resulting from litigation against SeaChange International, Inc. for patent infringement. The “management approach” required under SFAS No. 131, “Disclosures About Segmentsaward included damages, enhanced damages, interest and a percentage of an Enterprise and Related Information,” has been used to present the following segment information. This approach is based upon the way the managementattorney fees. Portions of the award were subject to contractual agreements with two third parties that provided for payment to each third party of a portion of the award amount. The Company organizes segments within an enterprise for making operating decisions and assessing performance.

Prior torecorded a gain of $1,238, net of a recovery of attorney fees of $407, from the distribution as a component of other income in its consolidated statement of operations during the fourth quarter of its fiscal year ended June 30, 2006. An initial distribution of a portion of the award was made to one of the third parties on June 30, 2006 in the amount of $3,168. On September 28, 2007, a payment was made by the Company to the other third-party in the amount of $3,200 as final distribution of the funds received in the litigation judgment. The Company recorded an additional gain of $8 as of September 28, 2007.

17. LITIGATION AND PENDING OR THREATENED LITIGATION

On July 23, 2007, the Company reportedreceived correspondence from attorneys for the Adelphia Recovery Trust (“the Trust”), that the Company may have received $29,108 in transfers from Adelphia Cablevision, LLC (“Cablevision”), one of the Adelphia debtors, during the year prior to its filing of a chapter 11 petition on June 25, 2002 (the “Petition Date”). The correspondence further asserts that information obtained during the course of the Adelphia chapter 11 proceedings indicates that Cablevision was insolvent during the year prior to the Petition Date and, accordingly, the Trust intends to assert that the payments made to the Company were fraudulent transfers under section 548 (a) of the Bankruptcy Code that may be recovered for the benefit of Cablevision’s bankruptcy estate pursuant to section 550 of the Bankruptcy Code.

To date, no suit has been commenced by the Trust and the Company has requested documents supporting the Trust’s position which have not yet been provided. In the event suit is commenced, the Company intends to contest the case vigorously; however, it cannot be sure that it would be successful in its defense. The Company understands that a similar letter was received by other Adelphia suppliers and we may seek to enter into a joint defense agreement to share legal expenses if a suit is commenced. No estimate can be made of the possible range of loss, if any, associated with a resolution of these assertions, and, accordingly, the Company has not recorded a liability as of September 28, 2007. An unfavorable outcome of this matter could have a material adverse effect on the Company’s business, financial position and results of operations.

From time to time, the Company is a party to litigation and pending or threatened litigation that arise in the ordinary course of business. In the opinion of management, the ultimate resolution of these matters will not have a material effect on the Company’s business, its financial position or its results of operations based upon three operating segments: C-COR Access and Transport, C-COR Solutions, and C-COR Network Services. In an effort to improve operational efficiencies across the organization and reduce costs, the Company has reorganized aspects of its business and combined the C-COR Access and Transport and C-COR Solutions segment into the Broadband Systems Solutions segment. As a result, beginning in fiscal year 2007, the Company began reporting its results of operations based upon two operating segments: Broadband Systems Solutions and Network Services. Prior year segment data has been restated to reflect this change.

The following costs and asset categories are not allocated to segments and are reflected in the table as “unallocated items”:

14operations.

Information about the Company’s industry segments for the thirteen week and twenty-six week periods ended December 29, 2006 and December 23, 2005 is as follows: