Crown Media Holdings, Inc.

Crown Media Holdings, Inc. owns and operates cable television channels in the U.S. dedicated to high-quality, broad appeal, entertainment programming. The Company currently distributes Hallmark Channel in the U.S. to 86 million subscribers through more than 5,300 cable systems and communities as well as direct-to-home satellite services across the country. Our popular and award-winning programming includes classic series, original movies, mini-series and first-run presentations from third parties. We believe that the demand for and appeal of Hallmark Channel has been confirmed by the steady and significant growth in the number of our subscribers, our television ratings and the number of companies who choose to advertise on Hallmark Channel. Hallmark Channel currently ranks among the top ten cable networks in terms of ratings and household dlelivery for both Total Day and Prime Time among all 73 ad-supported cable channels according to Nielsen.

Crown Media Holdings also operate a second 24-hour linear channel, Hallmark Movie Channel in botyh Standard and High-Definition formats. Hallmark Movie Channel airs programming primarily from longer form programming which also airs on Hallmark Channel. Hallmark Movie Channel is distributed to 16 million subscribers.Crown Media derives revenues primarily from subscriber fees paid by television distributors for the right to carry the Hallmark Channel, the sale of advertising time on our channels. For 2008, our revenues were $281.8.3 million, reflecting a 20% increase in revenues as compared to 2007. The success of our programming generates increases in ratings, supports distribution expansion and provides for increased CPM’s to consistently deliver strong growth in advertising revenues. For the first time in our history, Crown Media reported significant positive EBITDA of $66.2 million for the year.