##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September 30, 2009
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File Number: 0-16718
 Northland Cable Properties Seven Limited Partnership
 
  Washington
    
    91-1366564(State of Organization)
    
    (I.R.S. Employer Identification No.)101 Stewart Street, Suite 700, Seattle, Washington
    
    98101(Address of Principal Executive Offices)
    
    (Zip Code)
 
 
  þ o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)
Smaller Reporting Company þ  o þ




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TABLE OF CONTENTS  PART 1  FINANCIAL INFORMATIONITEM 1. Financial StatementsPART I (continued)ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsITEM 3. Quantitative and Qualitative Disclosures About Market RiskITEM 4. Controls and ProceduresPART II  OTHER INFORMATIONITEM 1 Legal proceedingsITEM 1A Risk FactorsITEM 2 Changes in securitiesITEM 3 Defaults upon senior securitiesITEM 4 Submission of matters to a vote of security holdersITEM 5 Other informationITEM 6 ExhibitsSIGNATURESEX-31.(A)EX-31.(B)EX-32.(A)EX-32.(B)    Table of Contents  
  
  
 September 30,
    
    
    December 31,2009
    
    
    2008ASSETSCash
    
    $
    1,060,667
    
    
    $
    1,734,024Accounts receivable, net of allowance of
$11,000 and $8,500, respectively
    
    
    249,067
    
    
    
    271,957Due from affiliates
    
    
    99,011
    
    
    
    27,626Prepaid expenses
    
    
    100,787
    
    
    
    61,900Property and equipment, net of accumulated
depreciation of $15,189,459 and
$14,304,219, respectively
    
    
    5,851,116
    
    
    
    5,570,163Franchise agreements, net of accumulated
amortization of $9,995,974
    
    
    9,606,966
    
    
    
    9,606,966Total assets
    
    $
    16,967,614
    
    
    $
    17,272,636LIABILITIES AND PARTNERS CAPITAL
(DEFICIT)Accounts payable and accrued expenses
    
    $
    788,806
    
    
    $
    738,714Due to Managing General Partner and
affiliates
    
    
    97,712
    
    
    
    89,119Deposits
    
    
    24,708
    
    
    
    24,595Subscriber prepayments
    
    
    182,859
    
    
    
    225,347Total liabilities
    
    
    1,094,085
    
    
    
    1,077,775Partners capital (deficit):General Partners:Contributed capital, net
    
    
    (25,367
    )
    
    
    (25,367
    )Accumulated deficit
    
    
    (14,139
    )
    
    
    (23,340
    )(39,506
    )
    
    
    (48,707
    )Limited Partners:Contributed capital, net
    
    
    17,312,982
    
    
    
    18,554,382Accumulated deficit
    
    
    (1,399,947
    )
    
    
    (2,310,814
    )15,913,035
    
    
    
    16,243,568Total partners capital
    
    
    15,873,529
    
    
    
    16,194,861Total liabilities and partners capital
    
    $
    16,967,614
    
    
    $
    17,272,636




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For the three months ended September 30,2009
    
    
    2008Service revenues
    
    $
    2,375,112
    
    
    $
    2,237,710Expenses:Cable system operations / cost of revenue
(including $28,215 and $28,627 to affiliates
in 2009 and 2008, respectively), excluding
depreciation shown below
    
    
    233,085
    
    
    
    256,911General and administrative (including
$245,182 and $246,077 to affiliates
in 2009 and 2008, respectively)
    
    
    653,879
    
    
    
    611,104Programming / cost of revenue (including
$10,512 and $3,171 to affiliates in
2009 and 2008, respectively)
    
    
    892,247
    
    
    
    794,474Depreciation / cost of revenue
    
    
    306,052
    
    
    
    306,828Loss on disposal of assets
    
    
    3,150
    
    
    
    2,088,413
    
    
    
    1,969,317Income from operations
    
    
    286,699
    
    
    
    268,393Other income (expense):Interest income and other, net
    
    
    (23,744
    )
    
    
    (44,086
    )(23,744
    )
    
    
    (44,086
    )Net income
    
    $
    262,955
    
    
    $
    224,307Allocation of net income:General Partners (1%)
    
    $
    2,630
    
    
    $
    2,243Limited Partners (99%)
    
    $
    260,325
    
    
    $
    222,064Net income
per limited partnership unit (49,656 units):
    
    
    5.24
    
    
    
    4.47




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For the nine months ended September 30,2009
    
    
    2008Service revenues
    
    $
    7,187,906
    
    
    $
    6,710,584Expenses:Cable system operations / cost of revenue
(including $97,788 and $91,496 to affiliates
in 2009 and 2008, respectively), excluding
depreciation shown below
    
    
    675,270
    
    
    
    724,139General and administrative (including
$752,277 and $721,767 to affiliates
in 2009 and 2008, respectively)
    
    
    1,945,895
    
    
    
    1,776,497Programming / cost of revenue (including
$27,419 and $9,149 to affiliates in
2009 and 2008, respectively)
    
    
    2,684,532
    
    
    
    2,396,519Depreciation / cost of revenue
    
    
    907,744
    
    
    
    909,513Loss (gain) on disposal of assets
    
    
    5,781
    
    
    
    (2,393
    )6,219,222
    
    
    
    5,804,275Income from operations
    
    
    968,684
    
    
    
    906,309Other income (expense):Interest expense and amortization of loan fees
    
    
    
    
    
    
    (63,970
    )Interest income and other, net
    
    
    (48,616
    )
    
    
    (170,221
    )(48,616
    )
    
    
    (234,191
    )Net income
    
    $
    920,068
    
    
    $
    672,118Allocation of net income:General Partners (1%)
    
    $
    9,201
    
    
    $
    6,721Limited Partners (99%)
    
    $
    910,867
    
    
    $
    665,397Net income
per limited partnership unit (49,656 units):
    
    
    18.34
    
    
    
    13.40




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For the nine months ended September 30,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    920,068
    
    
    $
    672,118Adjustments to reconcile net income to
cash provided by operating activities:Depreciation
    
    
    907,744
    
    
    
    909,513Loan fee amortization
    
    
    
    
    
    
    47,800Loss (gain) on sale of assets
    
    
    5,781
    
    
    
    (2,393
    )(Increase) decrease in operating assets:Accounts receivable
    
    
    22,890
    
    
    
    (3,577
    )Due from affiliates
    
    
    (71,385
    )
    
    
    43,251Prepaid expenses
    
    
    (38,887
    )
    
    
    (14,238
    )Increase (decrease) in operating liabilities:Accounts payable and accrued expenses
    
    
    50,092
    
    
    
    (76,901
    )Due to Managing General Partner and affiliates
    
    
    8,593
    
    
    
    76,565Deposits
    
    
    113
    
    
    
    3,820Subscriber prepayments
    
    
    (42,488
    )
    
    
    13,744Net cash provided by operating activities
    
    
    1,762,521
    
    
    
    1,669,702CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (1,194,478
    )
    
    
    (507,513
    )Proceeds from the sale of assets
    
    
    
    
    
    
    8,700Net cash used in investing activities
    
    
    (1,194,478
    )
    
    
    (498,813
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on borrowings
    
    
    
    
    
    
    (663,299
    )Distribution to limited partners
    
    
    (1,241,400
    )
    
    
    Net cash used in financing activities
    
    
    (1,241,400
    )
    
    
    (663,299
    )(DECREASE) INCREASE IN CASH
    
    
    (673,357
    )
    
    
    507,590CASH, beginning of period
    
    
    1,734,024
    
    
    
    928,495CASH, end of period
    
    $
    1,060,667
    
    
    $
    1,436,085SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    $
    
    
    
    $
    16,170




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NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 (1) Basis of Presentation
  (2) Intangible Assets
   (3) Notes Payable
  (4) Litigation
  (5) Potential Sale of Systems




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(6) Fair Value of Assets and Liabilities
  
    
    Level 1  inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities.
    
    Level 2  quoted prices for similar instruments in active markets or quoted prices
for identical or similar instruments in markets that are not active.
    
    Level 3  significant inputs are unobservable for the asset or liability.
  Total
    
    Level 1
    
    Level 2
    
    Level 3Cash
    
    $
    1,060,667
    
    
    $
    1,060,667
    
    
    $
    
    
    
    $
    
 Interim Disclosures
About Fair Value of Financial Instruments)
 (7) Subsequent Events




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PART I (continued)
 
 ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Results of Operations  Nine Months Ended September 30, 2009 and 2008
   
    
    $5,192,585 (72%) from basic and expanded services,
    
    $299,321 (4%) from premium services
    
    $871,296 (12%) from high speed Internet services
    
    $218,903 (3%) from telephony services
    
    $241,010 (4%) from advertising
    
    $133,665 (2%) from late fees
    
    $231,126 (3% ) from other sources.




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Results of Operations  Three Months Ended September 30, 2009 and 2008
   
    
    $1,690,652 (71%) from basic and expanded services,
    
    $94,678 (4%) from premium services
    
    $299,273 (13%) from high speed Internet services
    
    $79,016 (3%) from telephony services
    
    $91,650 (4%) from advertising
    
    $44,774 (2%) from late fees
    
    $75,069 (3% ) from other sources.




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Liquidity and Capital Resources
     Notes Payable
  Obligations and Commitments
  Payments Due By PeriodLess than 1
    
    1 - 3
    
    3 - 5
    
    More thanTotal
    
    year
    
    Years
    
    years
    
    5 yearsMinimum operating
lease payments
    
    $
    38,121
    
    
    $
    14,796
    
    
    $
    22,392
    
    
    $
    933
    
    
    
    
 (a)
    
    These contractual obligations do not include accounts payable and accrued
liabilities, which are expected to be paid in 2009.(b)
    
    The Partnership also rents utility poles in its operations. Amounts due
under these agreements are not included in the above minimum operating lease payments
amounts as, generally, pole rentals are cancelable on short notice. The Partnership
does however anticipate that such rentals will recur. Pole rental expense was
$154,843 in 2008.
 Capital Expenditures




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Critical Accounting Policies
  Revenue Recognition
  Property and Equipment
   Intangible Assets
   
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk




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ITEM 4. C ontrols and Procedures




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Legal proceedings
    
 Risk Factors
  
 Changes in securities
  
 Defaults upon senior securities
  
 Submission of matters to a vote of security holders
  
 Other information
  
 Exhibits
 (a)
    
    Exhibit Index
 31
    (a).
    Certification of Chief Executive Officer of Northland
Communications Corporation, the Managing General Partner, dated November 12,
2009 pursuant to section 302 of the Sarbanes-Oxley Act31
    (b).
    Certification of President (Principal Financial and Accounting
Officer) of Northland Communications Corporation, the Managing General Partner,
dated November 12, 2009 pursuant to section 302 of the Sarbanes-Oxley Act




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32
    (a).
    Certification of Chief Executive Officer of Northland
Communications Corporation, the Managing General Partner, dated November 12,
2009 pursuant to section 906 of the Sarbanes-Oxley Act32
    (b).
    Certification of President (Principal Financial and Accounting
Officer) of Northland Communications Corporation, the Managing General Partner, dated November 12,
2009 pursuant to section 906 of the Sarbanes-Oxley Act




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SIGNATURES
  NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
 
 SIGNATURES
    
    CAPACITIES
    
    DATE/S/ RICHARD I. CLARK

Richard I. Clark
    
    Executive Vice President, Treasurer and
Assistant Secretary
    
    11-12-09/S/ GARY S. JONES

Gary S. Jones
    
    President
    
    11-12-09