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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 endedJune 30, 2005
 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, Seattle, Washington
    
    98065(Address of Principal Executive Offices)
    
    (Zip Code)
  
   
   þ o
  o þ




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TABLE OF CONTENTS  ITEM 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)




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For the six months ended June 30,2005
    
    
    2004Service revenues
    
    $
    4,234,699
    
    
    $
    4,366,625Expenses:Cable system operations (including
$64,131and $68,004 to affiliates in
2005 and 2004, respectively), excluding
depreciation and amortization shown below
    
    
    380,629
    
    
    
    375,864General and administrative (including
$431,531 and $432,100 to affiliates
in 2005 and 2004, respectively)
    
    
    1,076,485
    
    
    
    1,085,545Programming (including $1,054 and
$2,112 to affiliates in 2005 and 2004,
respectively)
    
    
    1,381,628
    
    
    
    1,349,472Depreciation and amortization
    
    
    781,964
    
    
    
    759,897(Gain) loss on disposal of assets
    
    
    (21,213
    )
    
    
    9,8043,599,493
    
    
    
    3,580,582Income from operations
    
    
    635,206
    
    
    
    786,043Other income (expense):Interest expense and amortization of loan fees
    
    
    (165,356
    )
    
    
    (219,570
    )Interest income and other, net
    
    
    268
    
    
    
    3,524(165,088
    )
    
    
    (216,046
    )Income from continuing operations
    
    
    470,118
    
    
    
    569,997Discontinued operations (note 3)Income (loss) from operations of Brenham and Bay
City systems, net (including gain on sale of systems of
$7,253,829 in 2005)
    
    
    7,162,355
    
    
    
    (13,669
    )Net income
    
    $
    7,632,473
    
    
    $
    556,328Allocation of net income:General Partners
    
    $
    76,325
    
    
    $
    5,563Limited Partners
    
    $
    7,556,148
    
    
    $
    550,765Income from continuing operations per limited
partnership unit (49,656 units):
    
    $
    9
    
    
    $
    11Income from discontinued operations per limited
partnership unit (49,656 units):
    
    $
    143
    
    
    $
    (0
    )Net income per limited partnership unit:
(49,656 units)
    
    $
    152
    
    
    $
    11




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For the three months ended June 30,2005
    
    
    2004Service revenues
    
    $
    2,121,584
    
    
    $
    2,187,309Expenses:Cable system operations (including
$31,071 and $35,924 to affiliates in
2005 and 2004, respectively), excluding
depreciation and amortization shown below
    
    
    196,710
    
    
    
    183,486General and administrative (including
$222,466 and $217,923 to affiliates
in 2005 and 2004, respectively)
    
    
    547,140
    
    
    
    548,187Programming (including $652 and
$51 to affiliates in 2005 and 2004,
respectively)
    
    
    686,240
    
    
    
    667,743Depreciation and amortization
    
    
    390,729
    
    
    
    381,127(Gain) loss on disposal of assets
    
    
    3,029
    
    
    
    4,7571,823,848
    
    
    
    1,785,300Income from operations
    
    
    297,736
    
    
    
    402,009Other income (expense):Interest expense and amortization of loan fees
    
    
    (85,938
    )
    
    
    (103,658
    )Interest income and other, net
    
    
    272
    
    
    
    (274
    )(85,666
    )
    
    
    (103,932
    )Income from continuing operations
    
    
    212,070
    
    
    
    298,077Discontinued operations (note 3)Income from operations of Brenham and Bay City
systems, net (including gain on sale of systems of
$7,254,239 in 2005)
    
    
    7,174,896
    
    
    
    2,032Net income
    
    $
    7,386,966
    
    
    $
    300,109Allocation of net income:General Partners
    
    $
    73,870
    
    
    $
    3,001Limited Partners
    
    $
    7,313,096
    
    
    $
    297,108Income from continuing operations per limited
partnership unit (49,656 units):
    
    $
    4
    
    
    $
    6Income from discontinued operations per limited
partnership unit (49,656 units):
    
    $
    143
    
    
    $
    0Net income per limited partnership unit:
(49,656 units)
    
    $
    147
    
    
    $
    6




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For the six months ended June 30,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    7,632,473
    
    
    $
    556,328Adjustments to reconcile net income to
cash provided by operating activities:Depreciation and amortization
    
    
    857,842
    
    
    
    1,094,873Loan fee amortization
    
    
    73,978
    
    
    
    70,060(Gain) loss on sale of assets
    
    
    (7,275,042
    )
    
    
    9,803Other
    
    
    20,686
    
    
    
    13,237(Increase) decrease in operating assets:Accounts receivable
    
    
    41,613
    
    
    
    77,447Due from affiliates
    
    
    (55,758
    )
    
    
    (50,283
    )Prepaid expenses
    
    
    (78,259
    )
    
    
    (76,663
    )Increase (decrease) in operating liabilitiesAccounts payable and accrued expenses
    
    
    (196,504
    )
    
    
    (43,711
    )Due to Managing General Partner and affiliates
    
    
    (6,691
    )
    
    
    12,203Deposits
    
    
    1,570
    
    
    
    1,947Subscriber prepayments
    
    
    58,480
    
    
    
    23,265Net cash provided by operating activities
    
    
    1,074,388
    
    
    
    1,688,506CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (660,882
    )
    
    
    (770,302
    )Proceeds from sale of systems
    
    
    8,448,517
    
    
    
    708,894Proceeds from related party insurance fund and sale of assets
    
    
    24,992
    
    
    
    1,000Net cash provided by (used in) investing activities
    
    
    7,812,627
    
    
    
    (60,408
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on borrowings
    
    
    (8,113,073
    )
    
    
    (1,612,500
    )Loan fees
    
    
    (137,062
    )
    
    
    (3,652
    )Net cash used in financing activities
    
    
    (8,250,135
    )
    
    
    (1,616,152
    )INCREASE IN CASH
    
    
    636,880
    
    
    
    11,946CASH, beginning of period
    
    
    65,547
    
    
    
    758,694CASH, end of period
    
    $
    702,427
    
    
    $
    770,640SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    $
    864,773
    
    
    $
    644,550




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NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 (1) Basis of Presentation
   (2) Intangible Assets
   2005 (6 months)
    
    $
    48,3992006
    
    
    96,7972007
    
    
    96,7972008
    
    
    96,7972009
    
    
    24,200$
    362,990
 (3) System Sales




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As of
    
    
    As ofJune 30, 2005
    
    
    December 31, 2004Cash
    
    $
    46,926
    
    
    $
    16,893Accounts receivable
    
    
    60,000
    
    
    
    179,757Prepaid expenses
    
    
    50,942
    
    
    
    54,039Property and equipment (net of accumulated
depreciation of $3,616,160 and $8,336,538)
    
    
    1,984,487
    
    
    
    3,695,924Franchise agreements (net of accumulated
amortization of $101)
    
    
    189
    
    
    
    189Total assets
    
    $
    2,142,544
    
    
    $
    3,946,802Accounts payable and accrued expenses
    
    $
    170,115
    
    
    $
    433,206Deposits
    
    
    5,956
    
    
    
    6,552Subscriber prepayments
    
    
    114,802
    
    
    
    176,969Total liabilities
    
    $
    290,873
    
    
    $
    616,727




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For the six months ended June 30,2005
    
    
    2004Service revenues
    
    $
    2,556,822
    
    
    $
    2,665,908Expenses:Operating (including $26,288 and $18,209 received from
affiliates in 2005 and 2004, respectively)
    
    
    189,461
    
    
    
    193,225General and administrative (including $229,127 and
$234,313 paid to affiliates in 2005 and 2004,
respectively)
    
    
    632,295
    
    
    
    673,917Programming (including $991 paid to affiliates and $69
received from affiliates in 2005 and 2004,
respectively)
    
    
    1,049,575
    
    
    
    1,024,675Depreciation and amortization
    
    
    75,878
    
    
    
    334,976Gain on disposal of assets
    
    
    (7,253,829
    )
    
    
    (5,306,620
    )
    
    
    2,226,793Income from operations
    
    
    7,863,442
    
    
    
    439,115Other income (expense):Interest expense and amortization of loan fees
    
    
    (701,087
    )
    
    
    (452,784
    )Income (loss) from operations of
Brenham and Bay City systems, net
    
    $
    7,162,355
    
    
    $
    (13,669
    )
 For the three months ended June 30,2005
    
    
    2004Service revenues
    
    $
    1,275,042
    
    
    $
    1,341,371Expenses:Operating (including $12,658 and $11,720 received from
affiliates in 2005 and 2004, respectively)
    
    
    96,211
    
    
    
    96,216General and administrative (including $116,887 and
$119,188 paid to affiliates in 2005 and 2004,
respectively)
    
    
    310,316
    
    
    
    335,877Programming (including $603 paid to affiliates and $69
Received from affiliates in 2005 and 2004, respectively)
    
    
    524,154
    
    
    
    511,646Depreciation and amortization
    
    
    
    
    
    
    168,560Gain on disposal of assets
    
    
    (7,254,239
    )
    
    
    (6,323,558
    )
    
    
    1,112,299Income from operations
    
    
    7,598,600
    
    
    
    229,072Other income (expense):Interest expense and amortization of loan fees
    
    
    (423,704
    )
    
    
    (227,040
    )Income from operations of
Brenham and Bay City systems, net
    
    $
    7,174,896
    
    
    $
    2,032




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(4) Notes Payable
     2005
    
    $
    111,2922006
    
    
    974,6962007
    
    
    1,204,1802008
    
    
    1,433,4402009
    
    
    344,115$
    4,067,723




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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  Six Months Ended June 30, 2005 and 2004
   
    
    $3,055,951 (72%) from basic services
    
    $436,736 (10%) from expanded basic services
    
    $266,691 (6%) from premium services
    
    $133,272 (3%) from advertising
    
    $82,502 (2%) from high speed Internet services
    
    $78,181 (2%) from late fees
    
    $46,350 (1%) from digital services
    
    $135,016 (4%) from other sources




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Results of Continuing Operations  Three Months Ended June 30, 2005 and 2004
   
    
    $1,560,794 (74%) from basic services
    
    $186,229 (9%) from expanded basic services
    
    $131,022 (6%) from premium services
    
    $69,730 (3%) from advertising
    
    $48,150 (2%) from high speed Internet services
    
    $39,146 (2%) from late fees
    
    $25,287 (1%) from digital services
    
    $61,226 (3%) from other sources




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Liquidity and Capital Resources
     Notes Payable
     2005
    
    $
    111,2922006
    
    
    974,6962007
    
    
    1,204,1802008
    
    
    1,433,4402009
    
    
    344,115$
    4,067,723




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System Sales




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Obligations and Commitments
  Payments Due By PeriodLess than 1
    
    
    1  3
    
    
    3  5
    
    
    More thanTotal
    
    
    year
    
    
    years
    
    
    years
    
    
    5 yearsNotes payable
    
    $
    4,067,723
    
    
    $
    598,640
    
    
    $
    2,408,248
    
    
    $
    1,060,835
    
    
    $
    Minimum operating lease payments
    
    
    23,310
    
    
    
    18,090
    
    
    
    5,220
    
    
    
    
    
    
    
    Total
    
    $
    4,091,033
    
    
    $
    616,730
    
    
    $
    2,413,468
    
    
    $
    1,060,835
    
    
    $
    
 
 (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
   Recently Issued Accounting Pronouncements
  Critical Accounting Policies
  Revenue Recognition




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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. C ontrols and Procedures




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Legal proceedings
   Changes in securities
  Defaults upon senior securities
  Submission of matters to a vote of security holders
  Other information
  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 August 15, 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 August 15, 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 August 15, 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 August 15,
2005 pursuant to section 906 of the Sarbanes-Oxley Act
 (b)
    
    Reports on Form 8-KForm 8-K filed on August 5, 2005 disclosing completion of sale of Brenham systemForm 8-K filed on July 7, 2005 disclosing completion of sale of Bay City system




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SIGNATURES
  NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
 
 SIGNATURES
    
    CAPACITIES
    
    DATE/S/ RICHARD I. CLARK
    
    Executive Vice President, Treasurer and
    
    8-15-05Richard I. Clark
    

    Assistant Secretary/S/ GARY S. JONES
    
    President
    
    8-15-05Gary S. Jones