##### 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 1934For the quarterly period endedSeptember 30, 2005
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For 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, Seattle, Washington
    
    98101(Address of Principal Executive Offices)
    
    (Zip Code)
  
  
   þ o
  o 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 2 Changes in securitiesITEM 3 Defaults upon senior securitiesITEM 4 Submission of matters to a vote of security holdersITEM 5 Other informationITEM 6 Exhibits and Reports on Form 8-KSIGNATURESEXHIBIT 31.(A)EXHIBIT 31.(B)EXHIBIT 32.(A)EXHIBIT 32.(B)    Table of Contents  
  
  
 September 30,
    
    
    December 31,2005
    
    
    2004ASSETSCash
    
    $
    702,517
    
    
    $
    65,547Accounts receivable, net
    
    
    188,782
    
    
    
    341,965Due from affiliates
    
    
    128,054
    
    
    
    111,960Prepaid expenses
    
    
    99,081
    
    
    
    134,282System sale receivable
    
    
    1,646,706
    
    
    
    411,600Property and equipment, net of accumulated
depreciation of $10,090,261 and $17,294,389
respectively
    
    
    6,731,248
    
    
    
    10,591,016Franchise agreements, net of accumulated
amortization of $9,995,974 and $10,321,249,
respectively
    
    
    9,606,966
    
    
    
    9,607,185Loan fees and other intangibles, net of accumulated
amortization of $720,114 and $852,973, respectively
    
    
    133,836
    
    
    
    586,327Total assets
    
    $
    19,237,190
    
    
    $
    21,849,882LIABILITIES AND PARTNERS CAPITALAccounts payable and accrued expenses
    
    $
    839,171
    
    
    $
    1,262,921Due to Managing General Partner and affiliates
    
    
    64,282
    
    
    
    69,425Deposits
    
    
    16,360
    
    
    
    20,852Subscriber prepayments
    
    
    200,794
    
    
    
    346,281Notes payable
    
    
    3,883,644
    
    
    
    18,275,000Total liabilities
    
    
    5,004,251
    
    
    
    19,974,479Partners capital (deficit):General Partners:Contributed capital, net
    
    
    (25,367
    )
    
    
    (25,367
    )Accumulated deficit
    
    
    (44,772
    )
    
    
    (168,347
    )(70,139
    )
    
    
    (193,714
    )Limited Partners:Contributed capital, net
    
    
    18,735,576
    
    
    
    18,735,576Accumulated deficit
    
    
    (4,432,498
    )
    
    
    (16,666,459
    )14,303,078
    
    
    
    2,069,117Total partners capital
    
    
    14,232,939
    
    
    
    1,875,403Total liabilities and partners capital
    
    $
    19,237,190
    
    
    $
    21,849,882




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For the nine months ended September 30,2005
    
    
    2004Service revenues
    
    $
    6,298,226
    
    
    $
    6,507,780Expenses:Cable system operations (including
$98,829 and $101,779 to affiliates in
2005 and 2004, respectively), excluding
depreciation and amortization shown below
    
    
    587,923
    
    
    
    579,348General and administrative (including
$654,324 and $643,178 to affiliates
in 2005 and 2004, respectively)
    
    
    1,656,646
    
    
    
    1,628,567Programming (including $1,788 and
$2,162 to affiliates in 2005 and 2004,
respectively)
    
    
    2,052,218
    
    
    
    1,992,289Depreciation and amortization
    
    
    1,177,103
    
    
    
    1,141,961(Gain) loss on disposal of assets
    
    
    (36,692
    )
    
    
    12,2965,437,198
    
    
    
    5,354,461Income from operations
    
    
    861,028
    
    
    
    1,153,319Other income (expense):Interest expense and amortization of loan fees
    
    
    (258,308
    )
    
    
    (317,177
    )Interest income and other, net
    
    
    858
    
    
    
    4,279(257,450
    )
    
    
    (312,898
    )Income from continuing operations
    
    
    603,578
    
    
    
    840,421Discontinued operations (note 3)Income (loss) from operations of Brenham and Bay
City systems, net (including gain on sale of systems of
$12,388,296 in 2005)
    
    
    12,066,929
    
    
    
    (50,300
    )Loss on sale of Washington Systems
    
    
    (312,971
    )
    
    
    Net income
    
    $
    12,357,536
    
    
    $
    790,121Allocation of net income:General Partners
    
    $
    123,575
    
    
    $
    7,901Limited Partners
    
    $
    12,233,961
    
    
    $
    782,220Income from continuing operations per limited
partnership unit (49,656 units):
    
    $
    12
    
    
    $
    17Income (loss) from discontinued operations per limited
partnership unit (49,656 units):
    
    $
    234
    
    
    $
    (1
    )Net income per limited partnership unit:(49,656 units)
    
    $
    246
    
    
    $
    16




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For the three months ended September 30,2005
    
    
    2004Service revenues
    
    $
    2,063,527
    
    
    $
    2,141,149Expenses:Cable system operations (including
$34,698 and $33,775 to affiliates in
2005 and 2004, respectively), excluding
depreciation and amortization shown below
    
    
    207,294
    
    
    
    203,485General and administrative (including
$222,793 and $211,078 to affiliates
in 2005 and 2004, respectively)
    
    
    580,161
    
    
    
    543,027Programming (including $734 and
$50 to affiliates in 2005 and 2004,
respectively)
    
    
    670,590
    
    
    
    642,816Depreciation and amortization
    
    
    395,139
    
    
    
    382,065(Gain) loss on disposal of assets
    
    
    (15,479
    )
    
    
    2,4921,837,705
    
    
    
    1,773,885Income from operations
    
    
    225,822
    
    
    
    367,264Other income (expense):Interest expense and amortization of loan fees
    
    
    (92,952
    )
    
    
    (96,976
    )Interest income and other, net
    
    
    590
    
    
    
    755(92,362
    )
    
    
    (96,221
    )Income from continuing operations
    
    
    133,460
    
    
    
    271,043Discontinued operations (note 3)Income (loss) from operations of Brenham and Bay
City systems, net (including gain on sale of
systems of $5,134,467 in 2005)
    
    
    4,904,574
    
    
    
    (37,250
    )Loss on sale of Washington Systems
    
    
    (312,971
    )
    
    
    Net income
    
    $
    4,725,063
    
    
    $
    233,793Allocation of net income:General Partners
    
    $
    47,251
    
    
    $
    2,338Limited Partners
    
    $
    4,677,812
    
    
    $
    231,455Income from continuing operations per limited
partnership unit (49,656 units):
    
    $
    3
    
    
    $
    5Income (loss) from discontinued operations per limited
partnership unit (49,656 units):
    
    $
    92
    
    
    $
    (1
    )Net income per limited partnership unit:(49,656 units)
    
    $
    94
    
    
    $
    5




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For the nine months ended September 30,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    12,357,536
    
    
    $
    790,121Adjustments to reconcile net income to
cash provided by operating activities:Depreciation and amortization
    
    
    1,252,981
    
    
    
    1,645,803Loan fee amortization
    
    
    88,421
    
    
    
    105,094(Gain) loss on sale of assets
    
    
    (12,147,754
    )
    
    
    12,296Other
    
    
    26,645
    
    
    
    29,817(Increase) decrease in operating assets, net of systems sold:Accounts receivable
    
    
    101,502
    
    
    
    89,451Due from affiliates
    
    
    (16,094
    )
    
    
    (31,623
    )Prepaid expenses
    
    
    20,846
    
    
    
    (164,180
    )Increase (decrease) in operating liabilities, net of systems sold:Accounts payable and accrued expenses
    
    
    (684,122
    )
    
    
    (20,911
    )Due to Managing General Partner and affiliates
    
    
    (5,143
    )
    
    
    (41,474
    )Deposits
    
    
    2,699
    
    
    
    2,312Subscriber prepayments
    
    
    (17,703
    )
    
    
    (14,030
    )Net cash provided by operating activities
    
    
    979,814
    
    
    
    2,402,676CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (1,079,519
    )
    
    
    (1,144,517
    )Proceeds from sale of systems
    
    
    15,214,680
    
    
    
    708,894Proceeds from related party insurance fund and sale of assets
    
    
    50,413
    
    
    
    1,600Net cash provided by (used in) investing activities
    
    
    14,185,574
    
    
    
    (434,023
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on borrowings
    
    
    (14,391,356
    )
    
    
    (2,418,750
    )Loan fees
    
    
    (137,062
    )
    
    
    (3,652
    )Net cash used in financing activities
    
    
    (14,528,418
    )
    
    
    (2,422,402
    )INCREASE (DECREASE) IN CASH
    
    
    636,970
    
    
    
    (453,749
    )CASH, beginning of period
    
    
    65,547
    
    
    
    758,694CASH, end of period
    
    $
    702,517
    
    
    $
    304,945SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    $
    1,197,552
    
    
    $
    936,745




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NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 (1) Basis of Presentation
   (2) Intangible Assets
   2005 (3 months)
    
    $
    9,5602006
    
    
    38,2392007
    
    
    38,2392008
    
    
    38,2392009
    
    
    9,559$
    133,836
 (3) System Sales




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As ofDecember 31, 2004Cash
    
    $
    16,893Accounts receivable
    
    
    179,757Prepaid expenses
    
    
    54,039Property and equipment (net of accumulated
depreciation of $3,616,160 and $8,336,538)
    
    
    3,695,924Franchise agreements (net of accumulated
amortization of $101)
    
    
    189Total assets
    
    $
    3,946,802Accounts payable and accrued expenses
    
    $
    433,206Deposits
    
    
    6,552Subscriber prepayments
    
    
    176,969Total liabilities
    
    $
    616,727




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For the nine months ended September 30,2005
    
    
    2004Service revenues
    
    $
    2,750,502
    
    
    $
    3,968,210Expenses:Operating (including $35,270 and $30,260 received from
affiliates in 2005 and 2004, respectively)
    
    
    244,957
    
    
    
    286,761General and administrative (including $243,342 and
$348,679 paid to affiliates in 2005 and 2004,
respectively)
    
    
    779,764
    
    
    
    1,003,779Programming (including $787 paid to affiliates and $286
received from affiliates in 2005 and 2004,
respectively)
    
    
    1,132,189
    
    
    
    1,529,418Depreciation and amortization
    
    
    75,878
    
    
    
    503,842Gain on disposal of assets
    
    
    (12,388,296
    )
    
    
    (10,155,508
    )
    
    
    3,323,800Income from operations
    
    
    12,906,010
    
    
    
    644,410Other income (expense):Interest expense and amortization of loan fees
    
    
    (839,081
    )
    
    
    (694,710
    )Income (loss) from operations of
Brenham and Bay City systems, net
    
    $
    12,066,929
    
    
    $
    (50,300
    )
 For the three months ended September 30,2005
    
    
    2004Service revenues
    
    $
    193,680
    
    
    $
    1,302,305Expenses:Operating (including $8,982 and $12,051 received from
affiliates in 2005 and 2004, respectively)
    
    
    55,496
    
    
    
    93,535General and administrative (including $14,215 and
$114,366 paid to affiliates in 2005 and 2004,
respectively)
    
    
    147,469
    
    
    
    329,855Programming (including $204 and $217 received from
affiliates in 2005 and 2004, respectively)
    
    
    82,614
    
    
    
    504,743Depreciation and amortization
    
    
    
    
    
    
    168,866Gain on disposal of assets
    
    
    (5,134,467
    )
    
    
    (4,848,888
    )
    
    
    1,096,999Income from operations
    
    
    5,042,568
    
    
    
    205,306Other income (expense):Interest expense and amortization of loan fees
    
    
    (137,994
    )
    
    
    (242,556
    )Income (loss) from operations of
Brenham and Bay City systems, net
    
    $
    4,904,574
    
    
    $
    (37,250
    )




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(4) Notes Payable




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2005
    
    $
    53,8652006
    
    
    943,4952007
    
    
    1,165,6332008
    
    
    1,387,5542009
    
    
    333,097$
    3,883,644




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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, 2005 and 2004
   
    
    $4,571,942 (73%) from basic services
    
    $614,347 (10%) from expanded basic services
    
    $389,346 (6%) from premium services
    
    $199,354 (3%) from advertising
    
    $138,501 (2%) from high speed Internet services
    
    $118,981 (2%) from late fees
    
    $70,920 (1%) from digital services
    
    $194,835 (3%) from other sources




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Results of Continuing Operations  Three Months Ended September 30, 2005 and 2004
   
    
    $1,515,989 (73%) from basic services
    
    $177,611 (9%) from expanded basic services
    
    $122,655 (6%) from premium services
    
    $66,082 (3%) from advertising
    
    $55,999 (3%) from high speed Internet services
    
    $40,800 (2%) from late fees
    
    $24,570 (1%) from digital services
    
    $59,821 (3%) from other sources




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Liquidity and Capital Resources
     Notes Payable




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2005
    
    $
    53,8652006
    
    
    943,4952007
    
    
    1,165,6332008
    
    
    1,387,5542009
    
    
    333,097$
    3,883,644
    System Sales




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Obligations and Commitments
  Payments Due By PeriodLess than
    
    
    1 - 3
    
    
    3 - 5
    
    
    More thanTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 yearsNotes payable
    
    $
    3,883,644
    
    
    $
    761,486
    
    
    $
    2,442,172
    
    
    $
    679,986
    
    
    $
    Minimum operating lease payments
    
    
    17,436
    
    
    
    15,015
    
    
    
    2,421
    
    
    
    
    
    
    
    Total
    
    $
    3,901,080
    
    
    $
    776,501
    
    
    $
    2,444,593
    
    
    $
    679,986
    
    
    $
    
 (a)
    
    These contractual obligations do not include accounts payable and accrued liabilities,
which are expected to be paid in 2005.(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.(c)
    
    Note that obligations related to the Partnerships notes payable exclude interest
expense.
 Capital Expenditures
   Solicitation of Interest From Potential Purchasers




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Recently Issued Accounting Pronouncements
  Critical Accounting Policies
  Revenue
Recognition
 Property and Equipment
  Intangible Assets
  Allocation of Interest Expense to Discontinued Operations




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




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PART
II  OTHER INFORMATION
 
 ITEM 1
Legal proceedings
  
 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 and Reports on Form 8-K
 (a)
    
    Exhibit Index
 31(a).
    
    Certification of Chief Executive Officer of Northland
Communications Corporation, the Managing General Partner, dated November 14,
2005 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, 2005 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,
2005 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,
2005 pursuant to section 906 of the Sarbanes-Oxley Act
 (b)
    
    Reports on Form 8-KForm 8-K filed on September 23, 2005 disclosing the settlement of the litigation with
the buyer of the Washington Systems.




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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
    
    11-14-05/S/ GARY S. JONES

Gary S. Jones
    
    President
    
    11-14-05