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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 June 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)
  (Registrants telephone number, including area code)
  (Former name, former address and former fiscal year, if changed since last report)
  Yes þ
    
    No o
  Yes o
    
    No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company þ
  Yes o
    
    No 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  
  
  
 June 30,
    
    
    December 31,2010
    
    
    2009ASSETSCash
    
    $
    765,842
    
    
    $
    1,339,369Accounts receivable, net of allowance of
$9,750 and $11,250, respectively
    
    
    239,444
    
    
    
    333,366Due from affiliates
    
    
    29,593
    
    
    
    53,628Prepaid expenses
    
    
    154,374
    
    
    
    65,405Property and equipment, net of accumulated
depreciation of $15,952,198 and $15,392,597
respectively
    
    
    6,151,487
    
    
    
    5,915,231Franchise agreements, net of accumulated
amortization of $9,995,974
    
    
    9,606,966
    
    
    
    9,606,966Total assets
    
    $
    16,947,706
    
    
    $
    17,313,965LIABILITIES AND PARTNERS CAPITAL (DEFICIT)Accounts payable and accrued expenses
    
    $
    766,535
    
    
    $
    837,047Due to Managing General Partner and affiliates
    
    
    111,472
    
    
    
    79,141Deposits
    
    
    24,655
    
    
    
    22,913Subscriber prepayments
    
    
    217,419
    
    
    
    249,443Total liabilities
    
    
    1,120,081
    
    
    
    1,188,544Partners capital (deficit):General Partners:Contributed capital, net
    
    
    (25,367
    )
    
    
    (25,367
    )Accumulated deficit
    
    
    (5,908
    )
    
    
    (11,620
    )(31,275
    )
    
    
    (36,987
    )Limited Partners:Contributed capital, net (49,656 units)
    
    
    16,444,002
    
    
    
    17,312,982Accumulated deficit
    
    
    (585,102
    )
    
    
    (1,150,574
    )15,858,900
    
    
    
    16,162,408Total partners capital
    
    
    15,827,625
    
    
    
    16,125,421Total liabilities and partners capital
    
    $
    16,947,706
    
    
    $
    17,313,965




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For the six months ended June 30,2010
    
    
    2009Service revenues
    
    $
    4,842,485
    
    
    $
    4,812,794Expenses:Cable system operations / cost of revenue
(including $66,463 and $69,573 to affiliates
in 2010 and 2009, respectively), excluding
depreciation shown below
    
    
    463,118
    
    
    
    442,185General and administrative (including
$497,619 and $507,094 to affiliates
in 2010 and 2009, respectively)
    
    
    1,301,666
    
    
    
    1,292,016Programming / cost of revenue (including
$25,283 and $16,907 to affiliates in
2010 and 2009, respectively)
    
    
    1,888,191
    
    
    
    1,792,284Depreciation / cost of revenue
    
    
    607,606
    
    
    
    601,692(Gain) loss on disposal of assets
    
    
    (377
    )
    
    
    2,6314,260,204
    
    
    
    4,130,808Income from operations
    
    
    582,281
    
    
    
    681,986Other income (expense):Other (expenses) net of interest income
    
    
    (11,097
    )
    
    
    (24,873
    )(11,097
    )
    
    
    (24,873
    )Net income
    
    $
    571,184
    
    
    $
    657,113Allocation of net income:General Partners (1%)
    
    $
    5,712
    
    
    $
    6,571Limited Partners (99%)
    
    $
    565,472
    
    
    $
    650,542Net income per limited partnership unit (49,656 units):
    
    
    11.39
    
    
    
    13.10




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For the three months ended June 30,2010
    
    
    2009Service revenues
    
    $
    2,438,958
    
    
    $
    2,433,090Expenses:Cable system operations / cost of revenue
(including $34,165 and $34,633 to affiliates
in 2010 and 2009, respectively), excluding
depreciation shown below
    
    
    232,693
    
    
    
    220,608General and administrative (including
$240,629 and $266,374 to affiliates
in 2010 and 2009, respectively)
    
    
    657,767
    
    
    
    690,690Programming / cost of revenue (including
$13,409 and $10,450 to affiliates in
2010 and 2009, respectively)
    
    
    956,309
    
    
    
    908,260Depreciation / cost of revenue
    
    
    306,322
    
    
    
    301,678Loss on disposal of assets
    
    
    
    
    
    
    2,6312,153,091
    
    
    
    2,123,867Income from operations
    
    
    285,867
    
    
    
    309,223Other income (expense):Other (expenses) net of interest income
    
    
    (925
    )
    
    
    (20,063
    )(925
    )
    
    
    (20,063
    )Net income
    
    $
    284,942
    
    
    $
    289,160Allocation of net income:General Partners (1%)
    
    $
    2,849
    
    
    $
    2,892Limited Partners (99%)
    
    $
    282,093
    
    
    $
    286,268Net income per limited partnership unit (49,656 units):
    
    
    5.68
    
    
    
    5.77




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For the six months ended June 30,2010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    571,184
    
    
    $
    657,113Adjustments to reconcile net income to
cash provided by operating activities:Depreciation
    
    
    607,606
    
    
    
    601,692(Gain) loss on sale of assets
    
    
    (377
    )
    
    
    2,631(Increase) decrease in operating assets:Accounts receivable
    
    
    93,922
    
    
    
    25,478Due from affiliates
    
    
    24,035
    
    
    
    (10,868
    )Prepaid expenses
    
    
    (88,969
    )
    
    
    (34,077
    )Increase (decrease) in operating liabilities:Accounts payable and accrued expenses
    
    
    (70,512
    )
    
    
    99,994Due to Managing General Partner and affiliates
    
    
    32,331
    
    
    
    32,941Deposits
    
    
    1,742
    
    
    
    1,120Subscriber prepayments
    
    
    (32,024
    )
    
    
    23,370Net cash provided by operating activities
    
    
    1,138,938
    
    
    
    1,399,394CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (845,985
    )
    
    
    (784,942
    )Proceeds from the sale of assets
    
    
    2,500
    
    
    
    Net cash used in investing activities
    
    
    (843,485
    )
    
    
    (784,942
    )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
    
    
    (573,527
    )
    
    
    (626,948
    )CASH, beginning of period
    
    
    1,339,369
    
    
    
    1,734,024CASH, end of period
    
    $
    765,842
    
    
    $
    1,107,076




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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




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(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
    
    $
    765,842
    
    
    $
    765,842
    
    
    $
    
    
    
    $
    
  Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Cash
    
    $
    1,339,369
    
    
    $
    1,339,369
    
    
    $
    
    
    
    $
    
 Fair Value Measurements and Disclosures
 (6) Accounting Pronouncements Issued Not Yet Adopted
 Revenue Arrangements with Multiple
Deliverables




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PART I (continued)
 
 ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Results of Operations  Six Months Ended June 30, 2010 and 2009
   
    
    $3,346,056 (69%) from basic and expanded video services,
    
    $686,025 (14%) from high speed Internet services
    
    $250,629 (5%) from telephony services
    
    $180,738 (4%) from premium video services
    
    $131,654 (3%) from advertising
    
    $89,795 (2%) from late fees
    
    $157,588 (3%) from other sources.




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Results of Operations  Three Months Ended June 30, 2010 and 2009
   
    
    $1,656,963 (68%) from basic and expanded video services,
    
    $355,431 (14%) from high speed Internet services
    
    $137,920 (6%) from telephony services
    
    $89,043 (4%) from premium video services
    
    $80,429 (3%) from advertising
    
    $45,696 (2%) from late fees
    
    $73,476 (3%) from other sources.
       Liquidity and Capital Resources




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Obligations and Commitments
  Payments Due By Period1  3
    
    
    3  5Total
    
    
    Less than 1 year
    
    
    Years
    
    
    years
    
    
    More than 5 yearsMinimum operating
lease payments
    
    $
    26,133
    
    
    $
    5,600
    
    
    $
    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. Capital Expenditures
   Critical Accounting Policies
  Revenue Recognition




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Property and Equipment
   Intangible Assets
   
 ITEM 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 ITEM 4.
    
    Controls and Procedures




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ITEM 1
    
    Legal proceedings
    
 ITEM 1A
    
    Risk Factors
  
 ITEM 2
    
    Changes in securities
  
 ITEM 3
    
    Defaults upon senior securities
  
 ITEM 4
    
    Submission of matters to a vote of security holders
  
 ITEM 5
    
    Other information
  
 ITEM 6
    
    Exhibits
 (a)
    
    Exhibit Index
 31 (a).
    
    Certification of Chief Executive Officer of Northland
Communications Corporation, the Managing General Partner, dated August 13,
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 August 13, 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 August 13,
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 August 13,
2010 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
    
    Executive Vice President, Treasurer and
    
    8-13-10Richard I. Clark
    
    Assistant Secretary/s/ GARY S. JONES
    
    President
    
    8-13-10Gary S. Jones