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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 endedSeptember 30, 2008
 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)
  þ 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 StatementsITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Continuing 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  NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 (1) Basis of Presentation
  (2) Intangible Assets
   (3) Notes Payable
   (4) Litigation




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(5) Potential Sale of Systems
       (6) Discontinued Operations




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September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCash
    
    $
    1,436,085
    
    
    $
    928,495Accounts receivable
    
    
    222,806
    
    
    
    219,229Due from affiliates
    
    
    62,326
    
    
    
    105,577Prepaid expenses
    
    
    94,460
    
    
    
    80,222Property and equipment, net of accumulated
depreciation of $14,227,543 and $13,320,422,
respectively
    
    
    5,577,407
    
    
    
    5,985,714Franchise agreements, net of accumulated
amortization of $9,995,974, respectively
    
    
    9,606,966
    
    
    
    9,606,966Loan fees and other intangibles, net of accumulated
amortization of $692,080 and $806,150, respectively
    
    
    
    
    
    
    47,800Total assets
    
    $
    17,000,050
    
    
    $
    16,974,003LIABILITIES AND PARTNERS CAPITAL (DEFICIT)Accounts payable and accrued expenses
    
    $
    748,487
    
    
    $
    825,388Due to Managing General Partner and affiliates
    
    
    123,041
    
    
    
    46,476Deposits
    
    
    24,690
    
    
    
    20,870Subscriber prepayments
    
    
    171,540
    
    
    
    157,796Notes payable
    
    
    
    
    
    
    663,299Total liabilities
    
    
    1,067,758
    
    
    
    1,713,829Partners capital (deficit):General Partners:Contributed capital, net
    
    
    (25,367
    )
    
    
    (25,367
    )Accumulated deficit
    
    
    (25,966
    )
    
    
    (32,687
    )(51,333
    )
    
    
    (58,054
    )Limited Partners capital (deficit):Contributed capital, net
    
    
    18,554,382
    
    
    
    18,554,382Accumulated deficit
    
    
    (2,570,757
    )
    
    
    (3,236,154
    )15,983,625
    
    
    
    15,318,228Total partners capital
    
    
    15,932,292
    
    
    
    15,260,174Total liabilities and partners capital
    
    $
    17,000,050
    
    
    $
    16,974,003




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##### Table of Contents



For the three months ended September 30,2008
    
    
    2007Service revenues
    
    $
    2,237,710
    
    
    $
    2,228,831Expenses:Cable system operations (including
$28,627 and $28,861 to affiliates in
2008 and 2007, respectively), excluding
depreciation and amortization shown below
    
    
    256,911
    
    
    
    207,607General and administrative (including
$246,077 and $212,698 to affiliates
in 2008 and 2007, respectively)
    
    
    611,104
    
    
    
    613,410Programming (including $3,171 and
$2,446 to affiliates in 2008 and 2007,
respectively)
    
    
    794,474
    
    
    
    783,328Depreciation
    
    
    306,828
    
    
    
    367,870Gain on disposal of assets
    
    
    
    
    
    
    (100
    )1,969,317
    
    
    
    1,972,115Income from operations
    
    
    268,393
    
    
    
    256,716Other income (expense):Interest expense and amortization of loan
fees
    
    
    
    
    
    
    5,654Interest income and other, net
    
    
    (44,086
    )
    
    
    (213,369
    )(44,086
    )
    
    
    (207,715
    )Net income
    
    $
    224,307
    
    
    $
    49,001Allocation of net income:General Partners
    
    $
    2,243
    
    
    $
    490Limited Partners
    
    $
    222,064
    
    
    $
    48,511Net income per limited
partnership unit (49,656 units):
    
    
    4
    
    
    $
    1




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For the nine months ended September 30,2008
    
    
    2007Service revenues
    
    $
    6,710,584
    
    
    $
    6,658,387Expenses:Cable system operations (including
$91,496 and $92,253 to affiliates in
2008 and 2007, respectively), excluding
depreciation and amortization shown below
    
    
    724,139
    
    
    
    612,606General and administrative (including
$721,767 and $634,811 to affiliates
in 2008 and 2007, respectively)
    
    
    1,776,497
    
    
    
    1,780,294Programming (including $9,149 and
$6,517 to affiliates in 2008 and 2007,
respectively)
    
    
    2,396,519
    
    
    
    2,372,367Depreciation
    
    
    909,513
    
    
    
    1,090,190Gain on disposal of assets
    
    
    (2,393
    )
    
    
    (1,987
    )5,804,275
    
    
    
    5,853,470Income from operations
    
    
    906,309
    
    
    
    804,917Other income (expense):Interest expense and amortization of loan fees
    
    
    (63,970
    )
    
    
    (66,278
    )Interest income and other, net
    
    
    (170,221
    )
    
    
    (212,323
    )(234,191
    )
    
    
    (278,601
    )Income from continuing operations
    
    
    672,118
    
    
    
    526,316Income from discontinued operations (note 6)
    
    
    
    
    
    
    59,928Net income
    
    $
    672,118
    
    
    $
    586,244Allocation of net income:General Partners
    
    $
    6,721
    
    
    $
    5,862Limited Partners
    
    $
    665,397
    
    
    $
    580,382Income from continuing operations per limited
partnership unit (49,656 units):
    
    $
    13
    
    
    $
    10Income from discontinued operations per limited
partnership unit (49,656 units):
    
    $
    
    
    
    $
    1




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For the nine months ended September 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    672,118
    
    
    $
    586,244Adjustments to reconcile net income to
cash provided by operating activities:Depreciation
    
    
    909,513
    
    
    
    1,090,190Loan fee amortization
    
    
    47,800
    
    
    
    28,679Gain on sale of assets
    
    
    (2,393
    )
    
    
    (1,987
    )Gain from discontinued operations
    
    
    
    
    
    
    (59,928
    )(Increase) decrease in operating assets:Accounts receivable
    
    
    (3,577
    )
    
    
    (51,902
    )Due from affiliates
    
    
    43,251
    
    
    
    27,652Prepaid expenses
    
    
    (14,238
    )
    
    
    (9,869
    )Increase (decrease) in operating liabilities:Accounts payable and accrued expenses
    
    
    (76,901
    )
    
    
    (13,525
    )Due to Managing General Partner and affiliates
    
    
    76,565
    
    
    
    39,645Deposits
    
    
    3,820
    
    
    
    6,295Subscriber prepayments
    
    
    13,744
    
    
    
    (28,918
    )Net cash provided by operating activities
    
    
    1,669,702
    
    
    
    1,612,576CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (507,513
    )
    
    
    (620,606
    )Proceeds from sale of systems
    
    
    
    
    
    
    985,955Proceeds from the sale of assets
    
    
    8,700
    
    
    
    7,557Net cash (used in) provided by investing activities
    
    
    (498,813
    )
    
    
    372,906CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on borrowings
    
    
    (663,299
    )
    
    
    (1,321,042
    )Net cash used in financing activities
    
    
    (663,299
    )
    
    
    (1,321,042
    )INCREASE IN CASH
    
    
    507,590
    
    
    
    664,440CASH, beginning of period
    
    
    928,495
    
    
    
    324,241CASH, end of period
    
    $
    1,436,085
    
    
    $
    988,681SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    $
    16,170
    
    
    $
    38,273




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PART I (continued)
 
 ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Continuing Operations
 Results of Continuing Operations  Nine Months Ended September 30, 2008 and 2007
   
    
    $5,009,487 (75%) from basic and expanded services,
    
    $351,207 (5%) from premium services
    
    $46,160 (1%) from digital services
    
    $698,180 (10%) from high speed Internet services
    
    $97,584 (1%) from telephony services
    
    $220,129 (3%) from advertising
    
    $125,239 (2%) from late fees
    
    $162,598 (3 %) from other sources.




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Results of Operations  Three Months Ended September 2008 and 2007
   
    
    $1,664,048 (74%) from basic and expanded services,
    
    $115,697 (5%) from premium services
    
    $15,050 (1%) from digital services
    
    $239,918 (11%) from high speed Internet services
    
    $34,754 (2%) from telephony services
    
    $71,225 (3%) from advertising
    
    $42,073 (2%) from late fees
    
    $54,945 (2 %) 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
    
    $
    12,129
    
    
    $
    11,196
    
    
    $
    933
    
    
    
    
    
    
    
    
 
 (a)
    
    These contractual obligations do not include accounts payable and accrued
liabilities, which are expected to be paid in 2008.




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




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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




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ITEM 5 Other information
  
 ITEM 6 Exhibits
  31 (a).
    
    Certification of Chief Executive Officer of Northland
Communications Corporation, the Managing General Partner, dated November 14,
2008 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 14, 2008 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 14,
2008 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 14,
2008 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
    
    11-14-08Richard I. Clark
    
    Assistant
Secretary/s/ GARY S. JONES
    
    President
    
    11-14-08Gary S. Jones