##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A

|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|    |  | For the quarterly period ended June 30, 2001                                           

or

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[   ] |  | 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 333-43157

NORTHLAND CABLE TELEVISION, INC.

---

(Exact name of registrant as specified in its charter)


|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|STATE OF WASHINGTON                            |  | 91-1311836                          
|                                               |  |                                     
|(State or other jurisdiction of incorporation) |  | (I.R.S. Employer Identification No.)

AND SUBSIDIARY GUARANTOR:

NORTHLAND CABLE NEWS, INC.

---

(Exact name of registrant as specified in its charter)


|                                                  |  |                                     
|------------------------------------------------- |  | ------------------------------------
|STATE OF WASHINGTON                               |  | 91-1638891                          
|                                                  |  |                                     
|(State or other jurisdiction of
incorporation)    |  | (I.R.S. Employer Identification No.)
|                                                  |  |                                     
|1201 THIRD AVENUE, SUITE 3600
SEATTLE, WASHINGTON |  | 98101                               
|                                                  |  |                                     
|(Address of principal executive offices)          |  | (Zip Code)                          

Registrants telephone number, including area code: (206) 621-1351

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.

Yes   [X]   No   [   ]

This filing contains 21 pages. Exhibits index appears on page 16.





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TABLE OF CONTENTS



|                               |                                                                                               |                                                                                               |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | ITEM 1. Financial Statements                                                                 
|                               |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS  (UNAUDITED)                                          
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME   (UNAUDITED)
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)                                
|                               |                                                                                               | NOTES TO UNAUDITED FINANCIAL STATEMENTS                                                      
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                               | ITEM 4. CONTROLS AND PROCEDURES                                                              
|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                                                      
|SIGNATURES                    
|EXHIBIT 99.1                  
|EXHIBIT 99.2                  



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##### Table of Contents












PART I  FINANCIAL INFORMATION

ITEM 1. Financial Statements

NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS  (UNAUDITED)

|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |             |             |             |  
|---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | --------------------------- | ----------- | ----------- | ----------- | ------------ | ----------- | ----------- | ----------- | -
|                                                                                                     |                                                                                                                                         |                                                 |                             |             | June 30,    |             | December 31,
|                                                                                                     |                                                                                                                                         |                                                 |                             |             | 2001        |             | 2000        
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |             
|                                                                                                     |                                                                                                                                         |                                                 |                             |             | (restated)  |             |              |             |            
|ASSETS                                                                                               |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Current Assets:                                                                                      |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     | Cash                                                                                                                                    |                                                 | $                           | 2,091,436   |             |             | $            | 2,551,425   |            
|                                                                                                     | Due from affiliates                                                                                                                     |                                                 |                             | 1,315,082   |             |             |              | 1,160,446   |            
|                                                                                                     | Accounts receivable                                                                                                                     |                                                 |                             | 2,293,773   |             |             |              | 2,187,586   |            
|                                                                                                     | Prepaid expenses                                                                                                                        |                                                 |                             | 588,683     |             |             |              | 571,020     |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         | Total current assets                            |                             |             | 6,288,974   |             |              |             | 6,470,477   |            
|Investment in Cable Television Properties:                                                           |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Property and equipment, net of accumulated
depreciation of $52,283,558 and $48,199,085,
respectively |                                                                                                                                         |                                                 | 58,907,532                  |             |             |             | 56,038,530   |            
|Franchise agreements, net of accumulated
amortization of $45,183,819 and $40,107,541,
respectively   |                                                                                                                                         |                                                 | 58,206,768                  |             |             |             | 63,283,045   |            
|Goodwill, net of accumulated
amortization of $2,480,049 and $2,393,494,
respectively                 |                                                                                                                                         |                                                 | 4,444,384                   |             |             |             | 4,530,939    |            
|Other intangible assets, net of accumulated
amortization of $5,459,911 and $4,822,853,
respectively  |                                                                                                                                         |                                                 | 5,030,976                   |             |             |             | 5,674,683    |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         | Total investment in cable television properties |                             |             | 126,589,660 |             |              |             | 129,527,197 |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         | Total assets                                    |                             | $           | 132,878,634 |             |              | $           | 135,997,674 |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Current Liabilities:                                                                                 |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     | Accounts payable                                                                                                                        |                                                 |                             | 90,352      |             |             |              | 754,908     |            
|                                                                                                     | Accrued expenses                                                                                                                        |                                                 |                             | 6,348,247   |             |             |              | 6,951,496   |            
|                                                                                                     | Converter deposits                                                                                                                      |                                                 |                             | 126,344     |             |             |              | 122,674     |            
|                                                                                                     | Subscriber prepayments                                                                                                                  |                                                 |                             | 1,880,419   |             |             |              | 1,549,945   |            
|                                                                                                     | Due to affiliates                                                                                                                       |                                                 |                             | 717,166     |             |             |              | 103,098     |            
|                                                                                                     | Interest rate swaps                                                                                                                     |                                                 |                             | 1,683,529   |             |             |              |            |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         |                                                 | Total current liabilities   |             |             | 10,846,057  |              |             |             | 9,482,121   |  
|Notes payable                                                                                        |                                                                                                                                         |                                                 | 185,540,000                 |             |             |             | 182,540,000  |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         |                                                 | Total liabilities           |             |             | 196,386,057 |              |             |             | 192,022,121 |  
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Shareholders Deficit:                                                                               |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     | Common stock (par value $1.00 per share, authorized
50,000 shares; 10,000 shares issued and outstanding)
and additional paid-in capital |                                                 |                             | 11,560,527  |             |             |              | 11,560,527  |            
|                                                                                                     | Accumulated deficit                                                                                                                     |                                                 |                             | (75,547,950 | )           |             |              | (67,584,974 | )          
|                                                                                                     | Accumulated other comprehensive income                                                                                                  |                                                 |                             | 480,000     |             |             |              |            |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         |                                                 | Total shareholders deficit |             |             | (63,507,423 | )            |             |             | (56,024,447 | )
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Total liabilities and shareholders deficit                                                          |                                                                                                                                         | $                                               | 132,878,634                 |             |             | $           | 135,997,674  |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            

The accompanying notes are an integral part of these consolidated balance sheets.





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##### Table of Contents






NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
OTHER COMPREHENSIVE INCOME   (UNAUDITED)

|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |            |            |            |   | 
|--------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ------------------------ | -------------------------- | ---------- | --------------------------------- | ---------- | ---------- | ---------- | ---------- | - | 
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            | For the six months ended June 30,
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                  
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            | 2001                              |            | 2000      
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            | (restated)                        |            |            |            |           
|Revenues:                   |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|                            | Service revenues                                                                                                                                                                 |                                                                                                      | $                        | 30,930,182                 |            |                                   | $          | 29,785,925 |           
|                            | Programming and production revenues from affiliates                                                                                                                              |                                                                                                      |                          |                           |            |                                   |            | 209,943    |           
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|                            |                                                                                                                                                                                  |                                                                                                      | Total Revenues           |                            |            | 30,930,182                        |            |            |            | 29,995,868 |  
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|Expenses:                   |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|                            | Cable system operations (including $164,372 and $141,617, net paid to
affiliates in 2001 and 2000, respectively), excluding depreciation
and amortization expense recorded below |                                                                                                      |                          | 10,843,322                 |            |                                   |            | 10,276,487 |           
|                            | General and administrative (including
$465,553 and $1,116,727, net paid to affiliates
in 2001 and 2000, respectively)                                                            |                                                                                                      |                          | 4,908,848                  |            |                                   |            | 5,375,069  |           
|                            | Management fees paid to parent                                                                                                                                                   |                                                                                                      |                          | 1,546,509                  |            |                                   |            | 1,495,372  |           
|                            | Depreciation and amortization                                                                                                                                                    |                                                                                                      |                          | 10,199,118                 |            |                                   |            | 9,807,375  |           
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|                            |                                                                                                                                                                                  |                                                                                                      | Total operating expenses |                            |            | 27,497,797                        |            |            |            | 26,954,303 |  
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|Income from operations      |                                                                                                                                                                                  |                                                                                                      | 3,432,385                |                            |            |                                   | 3,041,565  |           
|Other income (expense):     |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|                            |                                                                                                                                                                                  | Interest expense                                                                                     |                          |                            | (9,281,286 | )                                 |            |            | (8,887,422 | )         
|                            |                                                                                                                                                                                  | Interest income and other, net                                                                       |                          |                            | 64,837     |                                   |            |            | 82,155     |           
|                            |                                                                                                                                                                                  | Unrealized loss on interest rate swaps                                                               |                          |                            | (2,163,529 | )                                 |            |            |           |           
|                            |                                                                                                                                                                                  | Loss on disposal of assets                                                                           |                          |                            | (15,383    | )                                 |            |            | (52,467    | )         
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|                            |                                                                                                                                                                                  |                                                                                                      | (11,395,361              | )                          |            |                                   | (8,857,734 | )         
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|Net loss                    |                                                                                                                                                                                  | $                                                                                                    | (7,962,976               | )                          |            | $                                 | (5,816,169 | )         
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|Other comprehensive income: |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|                            |                                                                                                                                                                                  | Cumulative effect of change in accounting principle                                                  |                          |                            | 689,000    |                                   |            |            |           |           
|                            |                                                                                                                                                                                  | Reclassification of accumulated other comprehensive
income to unrealized loss on interest rate swaps |                          |                            | (209,000   | )                                 |            |            |           |           
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |            |           
|                            |                                                                                                                                                                                  |                                                                                                      |                          | Other comprehensive income |            |                                   | 480,000    |            |            |            |  | 
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           
|Total comprehensive loss    |                                                                                                                                                                                  | $                                                                                                    | (7,482,976               | )                          |            | $                                 | (5,816,169 | )         
|                            |                                                                                                                                                                                  |                                                                                                      |                          |                            |            |                                   |            |           

The accompanying notes are an integral part of these consolidated statements.





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##### Table of Contents



NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
OTHER COMPREHENSIVE (LOSS)  (UNAUDITED)

|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |            |            |   |            |  
|------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------- | ---------------------------------------------------------------------------------------------------- | ------------------------ | ---------- | ----------------------------------- | ---------- | ---------- | ---------- | - | ---------- | -
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            | For the three months ended June 30,
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                    
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            | 2001                                |            | 2000      
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            | (restated)                          |            |            |            |  
|Revenues:                 |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          | Service revenues                                                                                                                                                               |                                        | $                                                                                                    | 15,524,527               |            |                                     | $          | 15,053,825 |           
|                          | Programming and production revenues from affiliates                                                                                                                            |                                        |                                                                                                      |                         |            |                                     |            | 102,033    |           
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          |                                                                                                                                                                                |                                        |                                                                                                      | Total Revenues           |            |                                     | 15,524,527 |            |            |   | 15,155,858 |  
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|Expenses:                 |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          | Cable system operations (including $79,357 and $64,006, net paid to affiliates
in 2001 and 2000, respectively), excluding depreciation
and amortization expense recorded below |                                        |                                                                                                      | 5,348,464                |            |                                     |            | 5,131,452  |           
|                          | General and administrative (including
$339,211 and $531,211, net paid to affiliates
in 2001 and 2000, respectively)                                                            |                                        |                                                                                                      | 2,552,640                |            |                                     |            | 2,676,180  |           
|                          | Management fees paid to parent                                                                                                                                                 |                                        |                                                                                                      | 776,860                  |            |                                     |            | 756,952    |           
|                          | Depreciation and amortization                                                                                                                                                  |                                        |                                                                                                      | 5,135,646                |            |                                     |            | 4,956,041  |           
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          |                                                                                                                                                                                |                                        |                                                                                                      | Total operating expenses |            |                                     | 13,813,610 |            |            |   | 13,520,625 |  
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|Income from operations    |                                                                                                                                                                                |                                        | 1,710,917                                                                                            |                          |            |                                     | 1,635,233  |           
|Other income (expense):   |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          |                                                                                                                                                                                | Interest expense                       |                                                                                                      |                          | (4,638,672 | )                                   |            |            | (4,476,341 | )
|                          |                                                                                                                                                                                | Interest income and other, net         |                                                                                                      |                          | 28,711     |                                     |            |            | 42,738     |  
|                          |                                                                                                                                                                                | Unrealized loss on interest rate swaps |                                                                                                      |                          | (92,683    | )                                   |            |            |           |  
|                          |                                                                                                                                                                                | Loss on disposal of assets             |                                                                                                      |                          | (12,194    | )                                   |            |            | (57,834    | )
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          |                                                                                                                                                                                |                                        | (4,714,838                                                                                           | )                        |            |                                     | (4,491,437 | )         
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|Net loss                  |                                                                                                                                                                                | $                                      | (3,003,921                                                                                           | )                        |            | $                                   | (2,856,204 | )         
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|Other comprehensive loss: |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          |                                                                                                                                                                                |                                        | Reclassification of accumulated other comprehensive
income to unrealized loss on interest rate swaps |                          |            | (105,000                            | )          |            |            |  |           
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          |                                                                                                                                                                                |                                        | Other comprehensive loss                                                                             |                          |            | (105,000                            | )          |            |            |  |           
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           
|                          |                                                                                                                                                                                |                                        |                                                                                                      | Total comprehensive loss |            | $                                   | (3,108,921 | )          |            | $ | (2,856,204 | )
|                          |                                                                                                                                                                                |                                        |                                                                                                      |                          |            |                                     |            |           

The accompanying notes are an integral part of these consolidated statements.





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##### Table of Contents






NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)

|                                                                            |                                                    |                                       |            |                                   |            |      |            |           |            |  
|--------------------------------------------------------------------------- | -------------------------------------------------- | ------------------------------------- | ---------- | --------------------------------- | ---------- | ---- | ---------- | --------- | ---------- | -
|                                                                            |                                                    |                                       |            | For the six months ended June 30,
|                                                                            |                                                    |                                       |            |                                  
|                                                                            |                                                    |                                       |            | 2001                              |            | 2000
|                                                                            |                                                    |                                       |            |                                   |            |     
|                                                                            |                                                    |                                       |            | (restated)                        |            |      |            |          
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |                                                    |                                       |            |                                   |            |      |            |          
|Net loss                                                                    |                                                    | $                                     | (7,962,976 | )                                 |            | $    | (5,816,169 | )        
|Adjustments to reconcile net loss to
cash provided by operating activities: |                                                    |                                       |            |                                   |            |      |            |          
|                                                                            | Depreciation and amortization                      |                                       |            | 10,199,118                        |            |      |            | 9,807,375 |           
|                                                                            | Unrealized loss on interest rate swaps             |                                       |            | 2,163,529                         |            |      |            |          |           
|                                                                            | Amortization of loan costs                         |                                       |            | 335,991                           |            |      |            | 461,892   |           
|                                                                            | Loss on disposal of assets                         |                                       |            | 15,383                            |            |      |            | 52,467    |           
|                                                                            | (Increase) decrease in operating assets:           |                                       |            |                                   |            |      |            |           |           
|                                                                            |                                                    | Accounts receivable                   |            |                                   | (106,187   | )    |            |           | 212,370    |  
|                                                                            |                                                    | Prepaid expenses                      |            |                                   | (17,663    | )    |            |           | 43,404     |  
|                                                                            |                                                    | Due from affiliates                   |            |                                   | (154,636   | )    |            |           | 5,369      |  
|                                                                            | Increase (decrease) in operating liabilities       |                                       |            |                                   |            |      |            |           |           
|                                                                            |                                                    | Accounts payable and accrued expenses |            |                                   | (1,267,805 | )    |            |           | (1,031,562 | )
|                                                                            |                                                    | Due to affiliates                     |            |                                   | 614,068    |      |            |           | 1,690,059  |  
|                                                                            |                                                    | Converter deposits                    |            |                                   | 3,670      |      |            |           | 2,806      |  
|                                                                            |                                                    | Subscriber prepayments                |            |                                   | 330,474    |      |            |           | 386,767    |  
|                                                                            |                                                    |                                       |            |                                   |            |      |            |          
|Net cash provided by operating activities                                   |                                                    |                                       | 4,152,966  |                                   |            |      | 5,814,778  |          
|                                                                            |                                                    |                                       |            |                                   |            |      |            |          
|CASH FLOWS FROM INVESTING ACTIVITIES:                                       |                                                    |                                       |            |                                   |            |      |            |          
|Acquisition of cable systems                                                |                                                    |                                       |           |                                   |            |      | (3,100,000 | )        
|Investment in cable television properties                                   |                                                    |                                       | (7,560,286 | )                                 |            |      | (4,229,555 | )        
|Proceeds from disposal of assets                                            |                                                    |                                       | 14,420     |                                   |            |      | 35,050     |          
|Franchise agreements and other intangibles                                  |                                                    |                                       | (67,089    | )                                 |            |      | (4,502     | )        
|                                                                            |                                                    |                                       |            |                                   |            |      |            |          
|Net cash used in investing activities                                       |                                                    |                                       | (7,612,955 | )                                 |            |      | (7,299,007 | )        
|                                                                            |                                                    |                                       |            |                                   |            |      |            |          
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |                                                    |                                       |            |                                   |            |      |            |          
|Proceeds from notes payable                                                 |                                                    |                                       | 3,000,000  |                                   |            |      | 3,100,000  |          
|Principal payments on borrowings, net                                       |                                                    |                                       |           |                                   |            |      | (1,500,000 | )        
|                                                                            |                                                    |                                       |            |                                   |            |      |            |          
|Net cash provided by financing activities                                   |                                                    |                                       | 3,000,000  |                                   |            |      | 1,600,000  |          
|(DECREASE) INCREASE IN CASH                                                 |                                                    |                                       | (459,989   | )                                 |            |      | 115,771    |          
|CASH, beginning of period                                                   |                                                    |                                       | 2,551,425  |                                   |            |      | 1,366,050  |          
|                                                                            |                                                    |                                       |            |                                   |            |      |            |          
|CASH, end of period                                                         |                                                    | $                                     | 2,091,436  |                                   |            | $    | 1,481,821  |          
|                                                                            |                                                    |                                       |            |                                   |            |      |            |          
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                           |                                                    |                                       |            |                                   |            |      |            |          
|                                                                            | Cash paid during the period for interest           |                                       | $          | 9,029,838                         |            |      | $          | 8,373,840 |           
|                                                                            |                                                    |                                       |            |                                   |            |      |            |          
|                                                                            | Cash paid during the period for state income taxes |                                       | $          | 12,604                            |            |      | $          | 18,967    |           
|                                                                            |                                                    |                                       |            |                                   |            |      |            |          

The accompanying notes are an integral part of these consolidated statements.





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NORTHLAND CABLE TELEVISION, INC. AND SUBSIDIARY
(A wholly owned subsidiary of Northland Telecommunications Corporation)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2001
(Unaudited)

(1)  BASIS OF PRESENTATION:

Interim Financial Reporting

These restated condensed consolidated unaudited financial statements are
being filed in conformity with Rule 10-01 of Regulation S-X regarding
interim financial statement disclosure and do not contain all of the
necessary footnote disclosures required for a fair presentation of the
balance sheets, statements of operations and statements of cash flows in
conformity with generally accepted accounting principles. However, in the
opinion of management, this data includes all adjustments, consisting only
of normal recurring accruals, necessary to present fairly the Companys
financial position at June 30, 2001, its statements of operations and cash
flows for the six and three months ended June 30, 2001 and 2000. Results
of operations for these periods are not necessarily indicative of results
to be expected for the full year. These financial statements and notes
should be read in conjunction with the Companys Annual Report on Form
10-K for the year ended December 31, 2000.

Restated Financial Statements

In July of 2002, management of Northland Cable Television, Inc. and
Subsidiary (the Company) became aware of a misclassification in the
Companys financial statements as of, and for the year ended December 31,
2001, the quarterly periods within 2001 and for the quarter ended March
31, 2002. The misclassification relates to the implementation of
Statement of Financial Accounting Standards (SFAS) No. 133, Accounting
for Derivative Instruments and Hedging Activity, on January 1, 2001 for
those interest rate swap agreements that existed at implementation.
Correction of this misclassification resulted in the initial
reclassification in the first quarter of 2001 of a non-cash item from the
Companys statement of operations to other comprehensive income in 2001,
and included as accumulated other comprehensive income, a component of
shareholders deficit. Subsequent to the initial reclassification, the
reclassified amount is thereafter recorded in the restated statements of
operations through the third quarter of 2002. This correction has no
impact on income from operations, earnings before interest, taxes,
depreciation and amortization (EBITDA) or the Companys calculations of or
compliance with the restrictive covenants under the terms of its loan
agreement for the periods affected, nor does it affect total shareholders
deficit at any date.

As of January 1, 2001 the Company had two interest rate swap agreements
that expire in August of 2002. Upon implementation of SFAS No. 133, the
Company recognized $689,000 as a non-cash, cumulative effect of change in
accounting principle in its statement of operations, which represented the
fair market value of these interest rate swap agreements at January 1,
2001. This amount should have been classified as a component of
accumulated other comprehensive income on the balance sheet upon
implementation, and then be amortized into earnings over the remaining
term of the swap agreements. Other than the impact of this
misclassification in the initial implementation of SFAS No. 133 management
believes its ongoing accounting for interest rate swap agreements has been
proper.





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##### Table of Contents



Management and the Board of Directors of the Company concluded that it was
in the best interest of the Company to reissue the financial statements
for the periods affected by this misclassification, and the financial
statements presented in this filing have been restated as follows to
correct for this matter:

|                       |                                        |                       |             |                     |             |             |             |             |             |  
|---------------------- | -------------------------------------- | --------------------- | ----------- | ------------------- | ----------- | ----------- | ----------- | ----------- | ----------- | -
|                       |                                        |                       |             | As of June 30, 2001
|                       |                                        |                       |             |                    
|                       |                                        |                       |             | As Reported         |             | As Restated
|                       |                                        |                       |             |                     |             |            
|BALANCE SHEET DATA:    |                                        |                       |             |                     |             |             |             |            
|Total assets           |                                        | $                     | 132,878,634 |                     |             | $           | 132,878,634 |            
|                       |                                        |                       |             |                     |             |             |             |            
|Total liabilities      |                                        | $                     | 196,386,057 |                     |             | $           | 196,386,057 |            
|                       |                                        |                       |             |                     |             |             |             |            
|Shareholders deficit: |                                        |                       |             |                     |             |             |             |            
|                       | Common stock                           |                       | $           | 11,560,527          |             |             | $           | 11,560,527  |            
|                       | Accumulated deficit                    |                       |             | (75,067,950         | )           |             |             | (75,547,950 | )          
|                       | Accumulated other comprehensive income |                       |             |                    |             |             |             | 480,000     |            
|                       |                                        |                       |             |                     |             |             |             |            
|                       |                                        | Shareholders deficit |             | $                   | (63,507,423 | )           |             | $           | (63,507,423 | )
|                       |                                        |                       |             |                     |             |             |             |            

|                                                                    |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |             |            |   |   |   |            |          |         | 
|------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- | --------------------------------- | ---------- | -------------------------------- | - | ------------------------------ | ---------- | ----------- | -------- | ----------- | ---------- | - | - | - | ---------- | -------- | ------- | 
|                                                                    |                                                                                                                |                                   |            | Three Months Ended June 30, 2001 |   | Six Months Ended June 30, 2001
|                                                                    |                                                                                                                |                                   |            |                                  |   |                               
|                                                                    |                                                                                                                |                                   |            | As Reported                      |   | As Restated                    |            | As Reported |          | As Restated
|                                                                    |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |            
|INCOME STATEMENT DATA:                                              |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |             |            |   |   |   |            |         
|Service revenues                                                    |                                                                                                                | $                                 | 15,524,527 |                                  |   | $                              | 15,524,527 |             |          | $           | 30,930,182 |   |   | $ | 30,930,182 |         
|Income from operations                                              |                                                                                                                | $                                 | 1,710,917  |                                  |   | $                              | 1,710,917  |             |          | $           | 3,432,385  |   |   | $ | 3,432,385  |         
|Unrealized loss on interest rate swap
agreements                    |                                                                                                                |                                   | (197,683   | )                                |   |                                | (92,683    | )           |          |             | (1,683,529 | ) |   |   | (2,163,529 | )       
|Interest income and other, net                                      |                                                                                                                |                                   | 28,711     |                                  |   |                                | 28,711     |             |          |             | (624,163   | ) |   |   | 64,837     |         
|                                                                    |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |             |            |   |   |   |            |         
|Net loss before cumulative effect of change
in accounting principle |                                                                                                                |                                   | (3,108,921 | )                                |   |                                | (3,003,921 | )           |          |             | (8,171,946 | ) |   |   | (7,962,976 | )       
|Cumulative effect of change in accounting
principle                 |                                                                                                                |                                   |           |                                  |   |                                |           |             |          |             | 689,000    |   |   |   |           |         
|                                                                    |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |             |            |   |   |   |            |         
|Net loss                                                            |                                                                                                                |                                   | (3,108,921 | )                                |   |                                | (3,003,921 | )           |          |             | (7,482,976 | ) |   |   | (7,962,976 | )       
|                                                                    |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |             |            |   |   |   |            |         
|Other comprehensive income (loss):                                  |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |             |            |   |   |   |            |         
|                                                                    | Cumulative effect of change in
accounting principle                                                            |                                   |            |                                 |   |                                |            |            |          |             |            |  |   |   |            | 689,000  |        
|                                                                    | Reclassification of accumulated other
comprehensive income to unrealized
loss on interest rate swap agreements |                                   |            |                                 |   |                                |            | (105,000    | )        |             |            |  |   |   |            | (209,000 | )      
|                                                                    |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |             |            |   |   |   |            |         
|                                                                    |                                                                                                                | Other comprehensive (loss) income |            |                                  |  |                                |            |             | (105,000 | )           |            |   |  |   |            |          | 480,000 | 
|                                                                    |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |             |            |   |   |   |            |         
|Total comprehensive loss                                            |                                                                                                                | $                                 | (3,108,921 | )                                |   | $                              | (3,108,921 | )           |          | $           | (7,482,976 | ) |   | $ | (7,482,976 | )       
|                                                                    |                                                                                                                |                                   |            |                                  |   |                                |            |             |          |             |            |   |   |   |            |         





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(2)  NORTHLAND CABLE NEWS:

Northland Cable News, Inc. (NCN), a wholly owned subsidiary of the
Company, develops and distributes local news, sports and information
programming to Northland Cable Television, Inc. and certain of the
Companys affiliates. The Companys payment obligations under the $100
million of senior notes are fully and unconditionally, jointly and
severally guaranteed on a senior subordinated basis by NCN. The guarantee
of NCN is subordinated to the prior payment in full of all senior debt of
NCN (as of June 30, 2001, NCN had no senior debt outstanding) and the
amounts for which NCN will be liable under the guarantee issued from time
to time with respect to senior debt. Separate financial statements of NCN
have not been presented because management believes that they would not be
material to financial statement readers. Summary financial information of
NCN is presented below.

|                                                                                                                                                                                |  |   |                                     |   |                                   |   |          |   |      |   |        |   |  |   |          |   | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ----------------------------------- | - | --------------------------------- | - | -------- | - | ---- | - | ------ | - |  | - | -------- | - | 
|                                                                                                                                                                                |  |   | For the three months ended June 30, |   | For the six months ended June 30,
|                                                                                                                                                                                |  |   |                                     |   |                                  
|                                                                                                                                                                                |  |   | 2001                                |   | 2000                              |   | 2001     |   | 2000
|                                                                                                                                                                                |  |   |                                     |   |                                   |   |          |   |     
|INCOME STATEMENT INFORMATION:                                                                                                                                                   |  |   |                                     |   |                                   |   |          |   |      |   |        |   |  |   |          |  
|Revenues from affiliates (including
$92,772
and $198,296 of intercompany revenue
eliminated in consolidation during the
three and six months ended June 30, 2000, respectively) |  | $ |                                    |   |                                   | $ | 194,805  |   |      | $ |       |   |  | $ | 408,239  |  
|Operating expenses                                                                                                                                                              |  |   | (99                                 | ) |                                   |   | (150,587 | ) |      |   | (2,651 | ) |  |   | (329,877 | )
|Other, net                                                                                                                                                                      |  |   |                                    |   |                                   |   | (3,043   | ) |      |   |       |   |  |   | (13,925  | )
|                                                                                                                                                                                |  |   |                                     |   |                                   |   |          |   |      |   |        |   |  |   |          |   | 
|Net income (loss)                                                                                                                                                               |  | $ | (99                                 | ) |                                   | $ | 41,175   |   |      | $ | (2,651 | ) |  | $ | 64,437   |  
|                                                                                                                                                                                |  |   |                                     |   |                                   |   |          |   |      |   |        |   |  |   |          |   | 

|                               |  |          |            |              |  |   |            |  
|------------------------------ |  | -------- | ---------- | ------------ |  | - | ---------- | -
|                               |  | June 30, |            | December 31,
|                               |  | 2001     |            | 2000        
|                               |  |          |            |             
|BALANCE SHEET INFORMATION:     |  |          |            |              |  |   |            |  
|Current assets                 |  |          | 2,152,571  |              |  |   | 2,229,287  |  
|Less: intercompany elimination |  |          | (2,042,522 | )            |  |   | (2,018,237 | )
|                               |  |          |            |              |  |   |            |  
|Total assets                   |  | $        | 110,049    |              |  | $ | 211,050    |  
|                               |  |          |            |              |  |   |            |  
|Total liabilities              |  | $        | 125        |              |  | $ | 70,188     |  
|                               |  |          |            |              |  |   |            |  

(3)  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards (SFAS) No. 133  In June 1998,
the Financial Accounting Standards Board issued SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities (SFAS No. 133) and in
June 2000 issued SFAS No. 138, amendment of SFAS No. 133. These
statements establish accounting and reporting standards requiring that
every derivative instrument (including certain derivative instruments
embedded in other contracts) be recorded on the balance sheet as either an
asset or liability measured at its fair value. These statements require
that changes in the derivatives fair value be recognized currently in
earnings unless specific hedge accounting criteria are met.





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##### Table of Contents



Pursuant to SFAS No. 137, Accounting for Derivative Instruments and
Hedging Activities  Deferral of the Effective Date of FASB No. 133  an
Amendment to FASB Statement No. 133, the effective date of SFAS No. 133
has been deferred until fiscal years beginning after January 15, 2000.
SFAS No. 133 cannot be applied retroactively. SFAS No. 133 must be
applied to (a) derivative instruments and (b) certain derivative
instruments embedded in hybrid contracts that were issued, acquired, or
substantively modified after December 31, 1998 (and, at the Companys
election, before January 1, 1999).

The Company has elected not to designate its derivatives as hedges under
SFAS 133. Accordingly, the Company has recorded a liability equal to the
fair market value of its derivatives, $689,000 as other comprehensive
income related to the cumulative effect of a change in accounting
principle, which is being amortized into earnings over the life of the
interest rate swap agreements, and other expense of approximately $2.2
million due to the change in value of its derivatives during the six
months ended June 30, 2001, offset by the amortization of the change in
accounting principle of $209,000.

Statement of Financial Accounting Standards (SFAS) No. 141 and 142  In
June 2001, the Financial Accounting Standards Board approved Statement of
Financial Accounting Standard(SFAS) No. 141, Business Combinations, and
SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141
prospectively prohibits the pooling of interest method of accounting for
business combinations initiated after June 30, 2001. The amortization of
existing goodwill will cease on December 31, 2001. Any goodwill resulting
from acquisitions completed after June 30, 2001 will not be amortized.
SFAS No. 142 also establishes a new method of testing goodwill for
impairment on an annual basis or on an interim basis if an event occurs or
circumstances change that would reduce the fair value of a reporting unit
below its carrying value. The adoption of SFAS No. 142 will result in the
Companys discontinuation of amortization of its goodwill; however, the
Company will be required to test its goodwill for impairment under the new
standard beginning in the first quarter of 2002, which could have an
adverse effect on the Companys future results of operations if an
impairment occurs. The Company is in the process of evaluating the
financial statement impact of adoption of SFAS No. 142.





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##### Table of Contents



PART I (continued)




ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESTATEMENT

As discussed in Note 1 to the condensed consolidates financial
statements, in July of 2002, management of the Company became aware
of a misclassification in the Companys financial statements as of,
and for the year ended December 31, 2001, the quarterly periods
within 2001 and for the quarter ended March 31, 2002. The
misclassification relates to the implementation of Statement of
Financial Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activity, on January 1, 2001 for
those interest rate swap agreements that existed at implementation.
Correction of this misclassification resulted in the initial
reclassification in the first quarter of 2001 of a non-cash item from
the Companys statement of operations to other comprehensive income
in 2001, and included as accumulated other comprehensive income, a
component of shareholders deficit. Subsequent to the initial
reclassification, the reclassified amount is thereafter recorded in
the restated statements of operations through the third quarter of
2002. Management and the Board of Directors of the Company concluded
that it was in the best interest of the Company to reissue the
financial statements for the periods affected by this
misclassification. The financial statements and disclosures
presented in this filing have been restated to correct for this
matter.

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2001 AND 2000

As of June 30, 2001 the Companys cable systems served approximately
119,975 basic subscribers, and 43,950 premium subscribers and passed
an estimated 201,000 homes.

Revenues increased approximately $1.1 million or 4% from $29.8
million to $30.9 million for the six months ended June 30, 2001. Of
these revenues, approximately $21.1 million (68%) was derived from
basic services, $2.1 million (7%) from premium services, $4.3 million
(14%) from expanded basic services, $621,000 (2%) from service
maintenance contracts, $1.3 million (4%) from advertising and $1.5
million (5%) from other sources. The operations of NCN were
completely discontinued during the first quarter of 2001. Taking
this into account, revenues for the six months ended June 30, 2001
would have increased approximately $1.5 million, or 5% over the same
period in 2000. The increase in revenues is primarily attributable
to rate increases implemented during the first quarter of 2001 as
well as increased revenue from higher penetration of new product
tiers. Average monthly revenue per average basic subscriber increased
$2.87 or 7%, from $39.52 to $42.39 for the six months ended June 30,
2001.

Cable system operations, which include costs related to programming,
technical personnel, repairs and maintenance and advertising sales,
increased approximately $500,000 or 5% from $10.3 million to $10.8
million for the six months ended June 30, 2001. Taking into
consideration the discontinuation of NCN operations, operating
expense for the six months ended June 30, 2001 would have increased
approximately $900,000 or 9% over the same





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period in 2000. This increase is primarily attributable to: (i)
increases in salary and benefit expenses due to annual cost of living
adjustments, (ii) increased programming costs resulting from rate
increases by certain programming vendors as well as the launch of new
programming services in various systems; (iii) increases in agency
fees, which is directly related to increases in advertising revenues.

General and administrative expenses, which include on-site office and
customer service personnel costs, customer billing, postage,
marketing expenses and franchise fees, decreased approximately
$500,000 or 9% from $5.4 million to $4.9 million for the six months
ended June 30, 2001. The decrease is primarily attributable to
reductions in administrative service expenses offset by increases in
administrative salaries, revenue based expenditures such as franchise
fees and property taxes.

The increase in management fees for the six months ended June 30,
2001 as compared to the same period in the previous year, are
directly attributable to the aforementioned revenue increases.
Management fees are calculated at 5.0% of gross revenues.

Depreciation and amortization expenses increased approximately
$400,000 or 4% from $9.8 million to $10.2 million for the six months
ended June 30, 2001. Such increase is attributable to depreciation
on recent equipment purchases related to plant and equipment
upgrades. Increases in depreciation expense are offset by certain
assets becoming fully depreciated.

The Company has elected not to designate its derivatives as hedges under
SFAS 133. Accordingly, the Company has recorded a liability equal to the
fair value of its derivatives, $689,000 as other comprehensive income
related to the cumulative effect of a change in accounting principle,
which is being amortized into earnings over the life of the interest rate
swap agreements, and other expense of approximately $2.2 million due to
the change in value of its derivatives during the six months ended June
30, 2001, offset by the amortization of the change in accounting principle
of $209,000.

THREE MONTHS ENDED JUNE 30, 2001 AND 2000

Revenues increased approximately $400,000 or 2.6%, from $15.1 million to
$15.5 million for the three months ended June 30, 2001. The operations
of NCN were completely discontinued during the first quarter of 2001.
Taking this into account, revenues for the three months ended June 30,
2001 would have increased approximately $470,000 or 3.1% over the same
period in 2000. Of these revenues, approximately $10.5 million (67.9%)
was derived from basic services, $1.1 million (7.1%) from premium
services, $2.2 million (14.0%) from expanded basic services, $305,000
(2.0%) from service maintenance contracts, $673,000 (4.3%) from
advertising, and $733,000 (4.7%) from other sources. The increase in
revenues was primarily attributable to: (i) rate increases implemented
in a majority of the Companys systems and (ii) revenue from higher
penetration of new product tiers. Average monthly revenue per average
basic subscriber increased $2.39 or 6.0%, from $39.85 to $42.24 for the
three months ended June 30, 2001.

Cable system operations, which include costs related to programming,
technical personnel, repairs and maintenance and advertising sales,
increased approximately $200,000 or 3.9%, from $5.1 million to $5.3
million for the three months ended June 30, 2001. Taking into account
the discontinuation of NCN operations in the first quarter of 2001,
operating expenses would have increased approximately $300,000 or 6%
over second quarter 2000 results. This
increase is primarily attributable to: (i) annual cost of living wage
and benefit increases; and





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(ii) higher programming costs resulting from
rate increases by certain programming vendors and the launch of new
programming services in various systems.

General and administrative expenses, which include on-site office and
customer service personnel costs, customer billing, postage, marketing
expenses and franchise fees, decreased approximately $100,000 or 3.7%,
from $2.7 million to $2.6 million for the three months ended June 30,
2001. This decrease is primarily attributable to reductions in
administrative service expenses offset by: (i) increased franchise fees
resulting from increases in revenue as previously noted; and (ii)
increased property taxes due to higher assessments in property values.

Management fees increased approximately $20,000 or 3%, from
approximately $757,000 to $777,000 for the three months ended June 30,
2001. This increase is directly attributable to the aforementioned
revenue increases. Management fees are calculated at 5.0% of gross
revenues.

Depreciation and amortization expenses increased approximately $100,000
or 2.0%, from $5.0 million to $5.1 million for the three months ended
June 30, 2001. Such increase is attributable to depreciation of recent
equipment purchases in upgrading plant and equipment, offset by assets
becoming fully depreciated.

Interest expense increased approximately $162,000 (3.6%) for the three
months ended June 30, 2001 compared to the same period in 2000. Average
outstanding indebtedness increased $7.4 million from $177.1 million to
$184.5 million for the three months ended June 30, 2000 and 2001,
respectively.

The Company has elected not to designate its derivatives as hedges under
SFAS 133. Accordingly, the Company has recorded a liability equal to the
fair value of its derivatives, $689,000 as other comprehensive income
related to the cumulative effect of a change in accounting principle,
which is being amortized into earnings over the life of the interest rate
swap agreements, and other expense of approximately $93,000 due to the
change in value of its derivatives during the three months ended June 30,
2001, offset by the amortization of the change in accounting principle of
$105,000.

LIQUIDITY AND CAPITAL RESOURCES

The cable television business generally requires substantial capital for
the construction, expansion and maintenance of the signal distribution
system. In addition, the Company has pursued, and intends to pursue, a
business strategy, which includes selective acquisitions. The Company
has financed these expenditures through a combination of cash flow from
operations, borrowings under the revolving credit and term loan facility
provided by a variety of banks and the issuance of senior subordinated
notes. The Companys debt service obligations for the year ended
December 31, 2001 are expected to be approximately $18 million. The
Company anticipates that cash flow from operations will be sufficient to
service its debt through December 31, 2001. The Company believes that
cash flow from operations will be adequate to meet the Companys
long-term liquidity requirements, excluding acquisitions and certain
levels of capital expenditures, prior to the maturity of its long-term
indebtedness, although no assurance can be given in this regard.





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Net cash provided by operating activities was $4.2 million for the six
months ended June 30, 2001. Adjustments to the $7.9 million net loss for
the period to reconcile to net cash provided by operating activities
consisted primarily of $10.5 million of depreciation and amortization,
$2.2 million relating to interest rate derivatives and increases in
operating liabilities of approximately $320,000.

Net cash used in investing activities was $7.6 million for the six
months ended June 30, 2001, and consisted of $7.6 million in capital
expenditures and the addition of intangible assets.

Net cash provided by financing activities was approximately $3.0 million
for the six months ended June 30, 2001. The Company had $3.0 million in
borrowings of long term debt to finance planned capital expenditures.

Earnings before charges for interest, taxes, depreciation and
amortization (EBITDA) increased approximately $800,000 or 6.2%, from
$12.8 million to $13.6 million for the six months ended June 30, 2001.
Had the operation of NCN been discontinued in the first quarter of 2000,
EBITDA would have increased approximately $600,000 or 4.6%, from $13.0
million to $13.6 million for the six months ended June 30, 2001. EBITDA
as a percentage of revenues (EBITDA Margin) increased from 42.8% to
44.1% for the six months ended June 30, 2001. Assuming NCN operations
were discontinued in the first quarter of 2000, EBITDA as a percentage
of revenue would have increased from approximately 43.2% to 44.1% for
the six months ended June 30, 2001. These changes were attributable
primarily to the aforementioned increases in revenue. Industry analysts
generally consider EBITDA to be an appropriate measure of the
performance of multi-channel television operations. EBITDA is not
presented in accordance with generally accepted accounting principles
and should not be considered an alternative to, or more meaningful than,
operating income or operating cash flow as an indication of the
Companys operating performance.

Net cash provided by operating activities was $5.8 million for six
months ended June 30, 2000. Adjustments to the $5.8 million net loss for
the period to reconcile to net cash provided by operating activities
consisted primarily of $10.25 million of depreciation and amortization
and an increase in operating liabilities of $1.05 million.

Net cash used in investing activities was $7.3 million for the six
months ended June 30, 2000, and consisted of $3.1 million used in the
acquisition of the Kingston, Washington system and approximately $4.2
million in capital expenditures.

Net cash provided by financing activities was approximately $1.6 million
for the six months ended June 30, 2000. The Company had $3.1 million in
borrowings of long term debt to finance the Kingston, Washington
acquisition and made $1.5 million of principal payments on notes
payable.

On August 14, 2000, the Company refinanced its existing senior bank
indebtedness. The original indebtedness was repaid with borrowings under
the Revised Senior Credit Facility. The revised Senior Credit Facility
establishes a $35 million 364-day revolving credit loan. At the end of
the 364-day period, the revolver converts to a term loan due on June 30,
2007. The other two components consist of a seven-year revolving term
loan in the aggregate principal amount of $40 million and a seven-year
term loan in the aggregate principal amount of $35 million. Amounts
outstanding under the Revised Senior Credit Facility mature on June 30,
2007. The Revised Senior Credit Facility is collateralized by a first
lien position on all present





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and future assets and stock of the Company. Interest rates vary
based on certain financial covenants; currently 9.512% (weighted
average). Graduated principal and interest payments are due quarterly,
beginning September 30, 2003, until maturity on June 30, 2007. The
estimated fair value of the revolving credit and term loan facility is
equal to its carrying value because of its variable interest rate
nature. As of June 30, 2001, $24,460,000 was available to borrow by the
Company under the revolving credit facility.

Under the revolving credit and term loan agreement, the Company has
agreed to restrictive covenants which require the maintenance of
certain ratios, including a Pro Forma Debt Service ratio not less
than 1.25 to 1.0 and a Leverage Ratio of no greater than 6.75 to 1.0,
among other restrictions. The Company submits quarterly debt
compliance reports to its creditor under this arrangement. As of
June 30, 2001, the Company was in compliance with the terms of the
loan agreements.

At June 30, 2001, the outstanding balance under the Senior Credit
Facility was $85.5 million. As of August 14, 2001, interest rates on the
Senior Credit Facility were as follows: $20 million fixed at 9.54% under
the terms of an interest rate swap agreement with the Companys lender
expiring August 20, 2002, $20 million fixed at 9.62% under the terms of
an interest rate swap agreement with the Companys lender expiring
August 17, 2002, $42.5 million fixed at 7.92% under the terms of an
interest rate swap agreement with the Companys lender expiring February
2, 2002; and $3 million fixed at a LIBOR based rate of 6.58% expiring
August 13, 2001. The above rates include a margin paid to the lender
based on overall leverage and may increase or decrease as the Companys
overall leverage fluctuates.

CAPITAL EXPENDITURES

For the six months ended June 30, 2001, the Company incurred capital
expenditures of approximately $7.6 million. Capital expenditures
included: (i) new product digital launches, (ii) expansion and
improvements of cable properties; (iii) additions to plant and
equipment; and (iv) line drops, extensions and installations of cable
plant facilities.

The Company plans to invest approximately $3.9 million in capital
expenditures for the remainder of 2001. This represents anticipated
expenditures for upgrading and rebuilding certain distribution facilities,
new product digital launches, extensions of distribution facilities to add
new subscribers and general maintenance. To fund planned 2001 capital
expenditures the Company plans to borrow approximately $3.0 million in
2001 from its Senior Credit Facility.

SUBSEQUENT EVENT

On June 14, 2001 the Company executed an asset purchase agreement to
acquire a cable system serving the areas in and around Highlands, North
Carolina from an affiliated limited partnership.

The aggregate value of the assets being acquired is $4.6 million and
will be financed through a $3.6 million borrowing under the Companys
revolving credit facility, $100,000 of cash on hand and an equity
contribution from the Companys parent of $900,000. As of June 30,
2001, the cable system served approximately 3,158 basic subscribers.

Closing is expected to occur September 30, 2001 and is conditioned upon
the approval of the sellers limited partners and compliance by the
Company with the financial covenants of its senior loan agreement.





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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to market risks arising from changes in interest
rates. The Companys primary interest rate exposure results from
changes in LIBOR or the prime rate which are used to determine the
interest rate applicable to the Companys debt facilities. As of August
14, 2001, the Company had entered into three interest rate swap
agreements for $20,000,000, $20,000,000, and $42,540,000 of these
borrowings, to partially mitigate interest rate exposure. Interest rate
swaps have the effect of converting the applicable variable rate
obligations to fixed or other variable rate obligations. The potential
loss over one year that would result from a hypothetical, instantaneous
and unfavorable change of 100 basis points in the interest rate of all
of the Companys variable rate obligations would be approximately
$893,000, of which $825,000 is mitigated by interest rate swap
agreements currently in place.

The Company does not use financial instruments for trading or other
speculative purposes.

Cautionary statement for purposes of the Safe Harbor provisions of the
Private Litigation Reform Act of 1995. Statements contained or
incorporated by reference in this document that are not based on
historical fact are forward-looking statements within the meaning of
the Private Securities Reform Act of 1995. Forward-looking statements
may be identified by use of forward-looking terminology such as
believe, intends, may, will, expect, estimate, anticipate,
continue, or similar terms, variations of those terms or the negative
of those terms.




ITEM 4. CONTROLS AND PROCEDURES

Not applicable.





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##### Table of Contents






PART II  OTHER INFORMATION




ITEM 1 Legal proceedings

The Company is a party to ordinary and routine litigation proceedings
that are incidental to the Companys business. Management believes that
the outcome of all pending legal proceedings will not, individually or
in the aggregate, have a material adverse effect on the Company, its
financial condition, prospects and debt service ability.




ITEM 2 Changes in securities

None




ITEM 3 Defaults upon senior securities

None




ITEM 4 Submission of matters to a vote of security holders

None




ITEM 5 Other information

None




ITEM 6 Exhibits and Reports on Form 8-K

(a)  Exhibit Index

|       |  |                                                                                                                                                                                     
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|99(a). |  | Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350, As
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002                                   
|      
|99(b). |  | Certification of the President (Principal
Financial and Accounting Officer) Pursuant to 18 U.S.C.
Section 1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

(b)  No reports on Form 8-K have been filed during the quarter
ended June 30, 2001.





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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Northland Cable Television, Inc. and Subsidiary

|                                       |  |                                                             |  |        
|-------------------------------------- |  | ----------------------------------------------------------- |  | -------
|SIGNATURES                             |  | CAPACITIES                                                  |  | DATE   
|                                       |  |                                                             |  |        
|                                      
|/s/ Richard I. Clark

Richard I. Clark |  | Executive Vice President,
Treasurer and Assistant
Secretary |  | 11-8-02
|                                      
|/s/ Gary S. Jones                      |  | President                                                   |  | 11-8-02
|Gary S. Jones                          |  |                                                             |  |        





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##### Table of Contents



CERTIFICATIONS

I, John Whetzell certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q/A of Northland Cable
Television, Inc., and Subsidiary;                                                                                                                                                                                                                     
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report.                   

Date: November 8, 2002

| |  |                                         
| |  | ----------------------------------------
| |  | /s/ JOHN S. WHETZELL                    
| |  |                                         
| |  | John S. Whetzell
Chief Executive Officer





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##### Table of Contents



I, Gary Jones certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q/A of Northland Cable
Television, Inc., and Subsidiary;                                                                                                                                                                                                                     
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report.                   

Date: November 8, 2002

| |  |                                                                     
| |  | --------------------------------------------------------------------
| |  | /s/ GARY S. JONES                                                   
| |  |                                                                     
| |  | Gary S. Jones
President
(Principal Financial and
Accounting Officer)