##### 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, 2010
 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




---



TABLE OF CONTENTS  PART 1  FINANCIAL INFORMATIONITEM 1. Financial StatementsITEM 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.AEX-31.BEX-32.AEX-32.B    Table of Contents  
  
  
 September 30,
    
    
    December 31,2010
    
    
    2009ASSETSCash
    
    $
    654,153
    
    
    $
    1,339,369Accounts receivable, net of allowance of
$9,750 and $11,250, respectively
    
    
    240,725
    
    
    
    333,366Due from affiliates
    
    
    54,641
    
    
    
    53,628Prepaid expenses
    
    
    145,894
    
    
    
    65,405Property and equipment, net of accumulated
depreciation of $16,196,598 and $15,392,597
respectively
    
    
    6,379,640
    
    
    
    5,915,231Franchise agreements, net of accumulated
amortization of $9,995,974
    
    
    8,991,966
    
    
    
    9,606,966Total assets
    
    $
    16,467,019
    
    
    $
    17,313,965LIABILITIES AND PARTNERS CAPITAL (DEFICIT)Accounts payable and accrued expenses
    
    $
    727,572
    
    
    $
    837,047Due to Managing General Partner and
affiliates
    
    
    110,275
    
    
    
    79,141Deposits
    
    
    23,930
    
    
    
    22,913Subscriber prepayments
    
    
    189,588
    
    
    
    249,443Total liabilities
    
    
    1,051,365
    
    
    
    1,188,544Partners capital (deficit):General Partners:Contributed capital, net
    
    
    (25,367
    )
    
    
    (25,367
    )Accumulated deficit
    
    
    (10,028
    )
    
    
    (11,620
    )(35,395
    )
    
    
    (36,987
    )Limited Partners:Contributed capital, net (49,656 units)
    
    
    16,444,002
    
    
    
    17,312,982Accumulated deficit
    
    
    (992,953
    )
    
    
    (1,150,574
    )15,451,049
    
    
    
    16,162,408Total partners capital
    
    
    15,415,654
    
    
    
    16,125,421Total liabilities and partners capital
    
    $
    16,467,019
    
    
    $
    17,313,965




---



##### Table of Contents



For the nine months ended September 30,2010
    
    
    2009Service revenues
    
    $
    7,216,663
    
    
    $
    7,187,906Expenses:Cable system operations / cost of revenue
(including $121,026 and $97,788 to affiliates
in 2010 and 2009, respectively), excluding
depreciation shown below
    
    
    696,174
    
    
    
    675,270General and administrative (including
$731,400 and $752,277 to affiliates
in 2010 and 2009, respectively)
    
    
    1,977,310
    
    
    
    1,945,895Programming / cost of revenue (including
$39,054 and $27,419 to affiliates in
2010 and 2009, respectively)
    
    
    2,831,102
    
    
    
    2,684,532Depreciation / cost of revenue
    
    
    924,455
    
    
    
    907,744Loss on impairment of franchise agreement
    
    
    615,000
    
    
    
    Loss on disposal of assets
    
    
    1,248
    
    
    
    5,7817,045,289
    
    
    
    6,219,222Income from operations
    
    
    171,374
    
    
    
    968,684Other income (expense):Other (expenses) net of interest income
    
    
    (12,161
    )
    
    
    (48,616
    )(12,161
    )
    
    
    (48,616
    )Net income
    
    $
    159,213
    
    
    $
    920,068Allocation of net income:General Partners (1%)
    
    $
    1,592
    
    
    $
    9,201Limited Partners (99%)
    
    $
    157,621
    
    
    $
    910,867Net income per limited
partnership unit (49,656 units):
    
    
    3.17
    
    
    
    18.34




---



##### Table of Contents



For the three months ended September 30,2010
    
    
    2009Service revenues
    
    $
    2,374,178
    
    
    $
    2,375,112Expenses:Cable system operations / cost of revenue
(including $54,563 and $28,215 to affiliates
in 2010 and 2009, respectively), excluding
depreciation shown below
    
    
    233,056
    
    
    
    233,085General and administrative (including
$245,493 and $245,182 to affiliates
in 2010 and 2009, respectively)
    
    
    675,644
    
    
    
    653,879Programming / cost of revenue (including
$13,771 and $10,512 to affiliates in
2010 and 2009, respectively)
    
    
    942,912
    
    
    
    892,247Depreciation / cost of revenue
    
    
    316,850
    
    
    
    306,052Loss on impairment of franchise agreement
    
    
    615,000
    
    
    
    Loss on disposal of assets
    
    
    1,625
    
    
    
    3,1502,785,087
    
    
    
    2,088,413(Loss) Income from operations
    
    
    (410,909
    )
    
    
    286,699Other income (expense):Other (expenses) net of interest income
    
    
    (1,063
    )
    
    
    (23,744
    )(1,063
    )
    
    
    (23,744
    )Net (loss) income
    
    $
    (411,972
    )
    
    $
    262,955Allocation of net (loss) income:General Partners (1%)
    
    $
    (4,120
    )
    
    $
    2,630Limited Partners (99%)
    
    $
    (407,852
    )
    
    $
    260,325Net (loss) income per limited
partnership unit (49,656 units):
    
    
    (8.21
    )
    
    
    5.24




---



##### Table of Contents



For the nine months ended September 30,2010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    159,213
    
    
    $
    920,068Adjustments to reconcile net income to
cash provided by operating activities:Depreciation
    
    
    924,455
    
    
    
    907,744Loss on sale of assets
    
    
    1,248
    
    
    
    5,781Loss on impairment of franchise agreement
    
    
    615,000
    
    
    
    (Increase) decrease in operating assets:Accounts receivable
    
    
    92,641
    
    
    
    22,890Due from affiliates
    
    
    (1,013
    )
    
    
    (71,385
    )Prepaid expenses
    
    
    (80,489
    )
    
    
    (38,887
    )Increase (decrease) in operating liabilities:Accounts payable and accrued expenses
    
    
    (109,475
    )
    
    
    50,092Due to Managing General Partner and affiliates
    
    
    31,134
    
    
    
    8,593Deposits
    
    
    1,017
    
    
    
    113Subscriber prepayments
    
    
    (59,855
    )
    
    
    (42,488
    )Net cash provided by operating activities
    
    
    1,573,876
    
    
    
    1,762,521CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (1,392,612
    )
    
    
    (1,194,478
    )Proceeds from the sale of assets
    
    
    2,500
    
    
    
    Net cash used in investing activities
    
    
    (1,390,112
    )
    
    
    (1,194,478
    )CASH FLOWS FROM FINANCING ACTIVITIES:Distribution to limited partners
    
    
    (868,980
    )
    
    
    (1,241,400
    )Net cash used in financing activities
    
    
    (868,980
    )
    
    
    (1,241,400
    )DECREASE IN CASH
    
    
    (685,216
    )
    
    
    (673,357
    )CASH, beginning of period
    
    
    1,339,369
    
    
    
    1,734,024CASH, end of period
    
    $
    654,153
    
    
    $
    1,060,667




---



##### Table of Contents



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




---



##### Table of Contents



(5) Fair Value of Assets
  
    
    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
    
    $
    654,153
    
    
    $
    654,153
    
    
    $
    
    
    
    $
    
  Total
    
    Level 1
    
    Level 2
    
    Level 3Cash
    
    $
    1,339,369
    
    
    $
    1,339,369
    
    
    $
    
    
    
    $
    
   Total
    
    Level 1
    
    Level 2
    
    Level 3
    
    ImpairmentToccoa Franchise
Intangible
    
    $
    3,888,205
    
    
    $
    
    
    
    $
    
    
    
    $
    3,888,205
    
    
    $
    615,000




---



##### Table of Contents



Fair Value Measurements and Disclosures
 (6) Accounting Pronouncements Issued Not Yet Adopted
 Revenue Arrangements with Multiple
Deliverables
 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, 2010 and 2009
   
    
    $4,930,767 (68%) from basic and expanded video services,
    
    $1,046,666 (14%) from high speed Internet services
    
    $412,492 (6%) from telephony services
    
    $263,822 (4%) from premium video services
    
    $194,087 (3%) from advertising
    
    $135,603 (2%) from late fees
    
    $233,226 (3% ) from other sources.




---



##### Table of Contents



Results of Operations  Three Months Ended September 30, 2010 and 2009
   
    
    $1,584,711 (67%) from basic and expanded video services,
    
    $360,641 (15%) from high speed Internet services
    
    $161,863 (7%) from telephony services
    
    $83,084 (3%) from premium video services
    
    $62,432 (3%) from advertising
    
    $45,808 (2%) from late fees
    
    $75,639 (3% ) from other sources.




---



##### Table of Contents



Liquidity and Capital Resources
     Obligations and Commitments
  Payments Due By Period1 - 3
    
    3 - 5Total
    
    Less than 1 year
    
    Years
    
    years
    
    More than 5 yearsMinimum operating lease payments
    
    $
    23,333
    
    
    $
    2,800
    
    
    $
    20,533
    
    
    
    
    
    
    
    
 (a)
    
    These contractual obligations do not include accounts payable and accrued
liabilities, which are expected to be paid in 2010.(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 as pole
rentals are based on pole usage and are cancelable on short notice. The Partnership
does however anticipate that such rentals will recur. Pole rental expense was $207,735
in 2009.




---



##### Table of Contents



Capital Expenditures
   Critical Accounting Policies
  Revenue Recognition
  Property and Equipment
   Intangible Assets




---



##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  
 ITEM 4. Controls and Procedures




---



##### Table of Contents



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 15,
2010 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 15, 2010 pursuant to section 302 of the Sarbanes-Oxley Act32 (a).
    
    Certification of Chief Executive Officer of Northland
Communications Corporation, the Managing General Partner, dated November 15,
2010 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 15,
2010 pursuant to section 906 of the Sarbanes-Oxley Act




---



##### Table of Contents



SIGNATURES
  NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
 
 SIGNATURES
    
    
    
    CAPACITIES
    
    DATE/s/ RICHARD I. CLARK
    
    
    
    Executive Vice President, Treasurer and
    
    11-15-10Richard I. Clark
    
    
    
    Assistant Secretary/s/ GARY S. JONES
    
    
    
    President
    
    11-15-10Gary S. Jones