##### Table of Contents



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

FORM 10-Q



|[X] |  | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|--- |  | ---------------------------------------------------------------------------------------
|    |  | For the quarterly period ended September 30, 2002                                      

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 22 pages. Exhibits index appears on page 17.





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TABLE OF CONTENTS



|                               |                                                                                               |                                                                                               |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART 1  FINANCIAL INFORMATION
|                               | ITEM 1. Financial Statements                                                                 
|                               |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS  (UNAUDITED)                                          
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)  (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                    
|EX-99.(A)                     
|EX-99.(B)                     



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##### Table of Contents






PART 1  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)

|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |             |             |  
|---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | ----------- | ------------- | ----------- | ------------ | ----------- | ----------- | ----------- | -
|                                                                                                     |                                                                                                                                         |                                                 |             | September 30, |             | December 31,
|                                                                                                     |                                                                                                                                         |                                                 |             | 2002          |             | 2001        
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |             
|ASSETS                                                                                               |                                                                                                                                         |                                                 |             |               |             |              |             |            
|Current Assets:                                                                                      |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     | Cash                                                                                                                                    |                                                 | $           | 3,977,243     |             |              | $           | 2,724,099   |            
|                                                                                                     | Due from affiliates                                                                                                                     |                                                 |             | 995,797       |             |              |             | 295,650     |            
|                                                                                                     | Accounts receivable                                                                                                                     |                                                 |             | 2,339,130     |             |              |             | 3,437,560   |            
|                                                                                                     | Prepaid expenses                                                                                                                        |                                                 |             | 691,297       |             |              |             | 547,480     |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total current assets                            |             |               | 8,003,467   |              |             |             | 7,004,789   |  
|Investment in Cable Television Properties:                                                           |                                                                                                                                         |                                                 |             |               |             |              |             |            
|Property and equipment, net of accumulated
depreciation of $60,938,128 and $54,580,070,
respectively |                                                                                                                                         |                                                 | 55,259,839  |               |             |              | 57,237,151  |            
|Franchise agreements, net
of accumulated amortization of $48,279,931                                 |                                                                                                                                         |                                                 | 53,393,281  |               |             |              | 53,384,986  |            
|Goodwill, net of accumulated
amortization of $2,407,104                                              |                                                                                                                                         |                                                 | 3,937,329   |               |             |              | 3,937,329   |            
|Other intangible assets, net of accumulated
amortization of $6,157,012 and $5,372,238,
respectively  |                                                                                                                                         |                                                 | 3,583,588   |               |             |              | 4,361,939   |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total investment in cable television properties |             |               | 116,174,037 |              |             |             | 118,921,405 |  
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total assets                                    |             | $             | 124,177,504 |              |             | $           | 125,926,194 |  
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                |                                                                                                                                         |                                                 |             |               |             |              |             |            
|Current Liabilities:                                                                                 |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     | Accounts payable                                                                                                                        |                                                 | $           | 268,784       |             |              | $           | 1,103,869   |            
|                                                                                                     | Accrued expenses                                                                                                                        |                                                 |             | 8,658,779     |             |              |             | 6,395,484   |            
|                                                                                                     | Converter deposits                                                                                                                      |                                                 |             | 127,231       |             |              |             | 157,534     |            
|                                                                                                     | Subscriber prepayments                                                                                                                  |                                                 |             | 1,745,470     |             |              |             | 1,898,112   |            
|                                                                                                     | Due to affiliates                                                                                                                       |                                                 |             | 162,428       |             |              |             | 242,741     |            
|                                                                                                     | Current
portion of notes payable                                                                                                        |                                                 |             | 1,387,959     |             |              |             |            |            
|                                                                                                     | Interest rate swap agreements                                                                                                           |                                                 |             | 206,177       |             |              |             | 1,919,587   |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total current liabilities                       |             |               | 12,556,828  |              |             |             | 11,717,327  |  
|Notes payable                                                                                        |                                                                                                                                         |                                                 | 167,643,223 |               |             |              | 171,031,182 |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total liabilities                               |             |               | 180,200,051 |              |             |             | 182,748,509 |  
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|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 |                                                 |             | 12,359,377    |             |              |             | 12,359,377  |            
|                                                                                                     | Accumulated other comprehensive income                                                                                                  |                                                 |             |              |             |              |             | 268,000     |            
|                                                                                                     | Accumulated deficit                                                                                                                     |                                                 |             | (68,381,924   | )           |              |             | (69,449,692 | )          
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | Total shareholders deficit                     |             |               | (56,022,547 | )            |             |             | (56,822,315 | )
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|Total liabilities and shareholders deficit                                                          |                                                                                                                                         | $                                               | 124,177,504 |               |             | $            | 125,926,194 |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            

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 COMPREHENSIVE INCOME (LOSS)  (UNAUDITED)

|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |             |          |            | 
|---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------- | --------------------------------- | ----------- | --------------------------------------- | ---------- | ----------- | ----------- | -------- | ---------- | 
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             | For the nine months ended September 30,
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                        
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             | 2002                                    |            | 2001       
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |            
|Service revenues                   |                                                                                                                                                                          | $                                                                                                           | 45,998,690                        |             |                                         | $          | 46,384,483  |            
|Expenses:                          |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|                                   | Cable system operations (including
$248,345 and $206,193, net paid to affiliates
in 2002 and 2001, respectively), exclusive of
depreciation and amortization shown below |                                                                                                             |                                   | 17,429,116  |                                         |            |             | 16,333,213  |         
|                                   | General and administrative (including
$100,574 and $616,500 net paid to affiliates
in 2002 and 2001, respectively)                                                       |                                                                                                             |                                   | 6,670,094   |                                         |            |             | 7,426,397   |         
|                                   | Management fees paid to parent                                                                                                                                           |                                                                                                             |                                   | 2,299,934   |                                         |            |             | 2,319,224   |         
|                                   | Depreciation and amortization                                                                                                                                            |                                                                                                             |                                   | 7,973,371   |                                         |            |             | 15,370,850  |         
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|                                   |                                                                                                                                                                          |                                                                                                             | Total operating expenses          |             |                                         | 34,372,515 |             |             |          | 41,449,684 | 
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|Income from operations             |                                                                                                                                                                          |                                                                                                             | 11,626,175                        |             |                                         |            | 4,934,799   |            
|Other income (expense):            |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|                                   | Interest expense                                                                                                                                                         |                                                                                                             |                                   | (12,318,498 | )                                       |            |             | (13,790,081 | )       
|                                   | Interest income and other, net                                                                                                                                           |                                                                                                             |                                   | 37,977      |                                         |            |             | 95,578      |         
|                                   | Unrealized gain (loss) on interest rate swap agreements                                                                                                                  |                                                                                                             |                                   | 1,981,411   |                                         |            |             | (2,470,568  | )       
|                                   | (Loss) gain on disposal of assets                                                                                                                                        |                                                                                                             |                                   | (259,297    | )                                       |            |             | 28,320      |         
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|                                   |                                                                                                                                                                          |                                                                                                             | (10,558,407                       | )           |                                         |            | (16,136,751 | )          
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|Net income (loss)                  |                                                                                                                                                                          |                                                                                                             | 1,067,768                         |             |                                         |            | (11,201,952 | )          
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|Other comprehensive income (loss): |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|                                   |                                                                                                                                                                          | Cumulative effect of change in accounting principle                                                         |                                   |             |                                        |            |             |             | 689,000  |           
|                                   |                                                                                                                                                                          | Reclassification of accumulated other comprehensive
income to unrealized gain (loss) on interest rate swaps |                                   |             | (268,000                                | )          |             |             | (315,000 | )         
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|                                   |                                                                                                                                                                          |                                                                                                             | Other comprehensive (loss) income |             |                                         | (268,000   | )           |             |          | 374,000    | 
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            
|Total comprehensive income (loss)  |                                                                                                                                                                          | $                                                                                                           | 799,768                           |             |                                         | $          | (10,827,952 | )          
|                                   |                                                                                                                                                                          |                                                                                                             |                                   |             |                                         |            |             |            

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 COMPREHENSIVE INCOME (LOSS)  (UNAUDITED)

|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |            |          |            |  
|--------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ------------------------ | ---------- | ---------------------------------------- | ---------- | ---------- | ---------- | -------- | ---------- | -
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            | For the three months ended September 30,
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                         
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            | 2002                                     |            | 2001      
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |           
|Service revenues                  |                                                                                                                                                                        | $                                                                                                           | 15,301,621               |            |                                          | $          | 15,454,301 |           
|Expenses:                         |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|                                  | Cable system operations (including
$87,224 and $29,488, net paid to affiliates
in 2002 and 2001, respectively), exclusive of
depreciation and amortization shown below |                                                                                                             |                          | 5,896,448  |                                          |            |            | 5,489,892  |         
|                                  | General and administrative (including
$111,394, net received from affiliates in 2002,
and $150,947, net paid to affiliates 2001)                                       |                                                                                                             |                          | 2,150,732  |                                          |            |            | 2,517,549  |         
|                                  | Management fees paid to parent                                                                                                                                         |                                                                                                             |                          | 765,080    |                                          |            |            | 772,715    |         
|                                  | Depreciation and amortization                                                                                                                                          |                                                                                                             |                          | 2,674,976  |                                          |            |            | 5,171,732  |         
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|                                  |                                                                                                                                                                        |                                                                                                             | Total operating expenses |            |                                          | 11,487,236 |            |            |          | 13,951,888 |  
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|Income from operations            |                                                                                                                                                                        |                                                                                                             | 3,814,385                |            |                                          |            | 1,502,413  |           
|Other income (expense):           |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|                                  | Interest expense                                                                                                                                                       |                                                                                                             |                          | (3,876,532 | )                                        |            |            | (4,508,795 | )       
|                                  | Interest income and other, net                                                                                                                                         |                                                                                                             |                          | 13,733     |                                          |            |            | 30,741     |         
|                                  | Unrealized gain (loss) on interest rate swap agreements                                                                                                                |                                                                                                             |                          | 600,754    |                                          |            |            | (307,039   | )       
|                                  | (Loss) gain on disposal of assets                                                                                                                                      |                                                                                                             |                          | (243,421   | )                                        |            |            | 43,704     |         
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|                                  |                                                                                                                                                                        |                                                                                                             | (3,505,466               | )          |                                          |            | (4,741,389 | )         
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|Net income (loss)                 |                                                                                                                                                                        |                                                                                                             | 308,919                  |            |                                          |            | (3,238,976 | )         
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|Other comprehensive loss:         |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|                                  |                                                                                                                                                                        | Reclassification of accumulated other comprehensive
income to unrealized gain (loss) on interest rate swaps |                          |            | (59,000                                  | )          |            |            | (106,000 | )         
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|                                  |                                                                                                                                                                        |                                                                                                             | Other comprehensive loss |            |                                          | (59,000    | )          |            |          | (106,000   | )
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           
|Total comprehensive income (loss) |                                                                                                                                                                        | $                                                                                                           | 249,919                  |            |                                          | $          | (3,344,976 | )         
|                                  |                                                                                                                                                                        |                                                                                                             |                          |            |                                          |            |            |           

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 nine months ended September 30,
|                                                                                     |                                                         |                                       |            |                                        
|                                                                                     |                                                         |                                       |            | 2002                                    |           | 2001
|                                                                                     |                                                         |                                       |            |                                         |           |     
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                |                                                         |                                       |            |                                         |           |      |             |           
|Net income (loss)                                                                    |                                                         | $                                     | 1,067,768  |                                         |           | $    | (11,201,952 | )         
|Adjustments to reconcile net income (loss) to
cash provided by operating activities: |                                                         |                                       |            |                                         |           |      |             |           
|                                                                                     | Depreciation and amortization                           |                                       |            | 7,973,371                               |           |      |             | 15,370,850 |          
|                                                                                     | Unrealized (gain) loss on interest rate swap agreements |                                       |            | (1,981,411                              | )         |      |             | 2,470,568  |          
|                                                                                     | Amortization of loan costs                              |                                       |            | 503,987                                 |           |      |             | 503,987    |          
|                                                                                     | Loss (gain) on disposal of assets                       |                                       |            | 259,297                                 |           |      |             | (28,320    | )        
|                                                                                     | (Increase) decrease in operating assets:                |                                       |            |                                         |           |      |             |            |          
|                                                                                     |                                                         | Accounts receivable                   |            |                                         | (127,658  | )    |             |            | 18,994    |  
|                                                                                     |                                                         | Prepaid expenses                      |            |                                         | (143,817  | )    |             |            | (193,119  | )
|                                                                                     |                                                         | Due from affiliates                   |            |                                         | (700,147  | )    |             |            | (127,300  | )
|                                                                                     | Increase (decrease) in operating liabilities            |                                       |            |                                         |           |      |             |            |          
|                                                                                     |                                                         | Accounts payable and accrued expenses |            |                                         | 1,428,210 |      |             |            | 1,943,563 |  
|                                                                                     |                                                         | Due to affiliates                     |            |                                         | (80,313   | )    |             |            | 720,859   |  
|                                                                                     |                                                         | Converter deposits                    |            |                                         | (30,303   | )    |             |            | 23,987    |  
|                                                                                     |                                                         | Subscriber prepayments                |            |                                         | (152,642  | )    |             |            | 63,666    |  
|                                                                                     |                                                         |                                       |            |                                         |           |      |             |           
|Net cash provided by operating activities                                            |                                                         |                                       | 8,016,342  |                                         |           |      | 9,565,783   |           
|                                                                                     |                                                         |                                       |            |                                         |           |      |             |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                |                                                         |                                       |            |                                         |           |      |             |           
|Investment in cable television properties                                            |                                                         |                                       | (5,753,630 | )                                       |           |      | (9,604,380  | )         
|Proceeds from December 2001 disposition of cable system                              |                                                         |                                       | 999,562    |                                         |           |      |            |           
|Proceeds from disposal of assets                                                     |                                                         |                                       | 5,588      |                                         |           |      | 210,888     |           
|Franchises and other intangibles                                                     |                                                         |                                       | (14,718    | )                                       |           |      | (96,494     | )         
|                                                                                     |                                                         |                                       |            |                                         |           |      |             |           
|Net cash used in investing activities                                                |                                                         |                                       | (4,763,198 | )                                       |           |      | (9,489,986  | )         
|                                                                                     |                                                         |                                       |            |                                         |           |      |             |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                |                                                         |                                       |            |                                         |           |      |             |           
|Proceeds from notes payable                                                          |                                                         |                                       |           |                                         |           |      | 3,000,000   |           
|Principal payments on borrowings                                                     |                                                         |                                       | (2,000,000 | )                                       |           |      |            |           
|Loan fees and other costs incurred                                                   |                                                         |                                       |           |                                         |           |      | (44,021     | )         
|                                                                                     |                                                         |                                       |            |                                         |           |      |             |           
|Net cash (used in) provided by financing activities                                  |                                                         |                                       | (2,000,000 | )                                       |           |      | 2,955,979   |           
|INCREASE IN CASH                                                                     |                                                         |                                       | 1,253,144  |                                         |           |      | 3,031,776   |           
|CASH, beginning of period                                                            |                                                         |                                       | 2,724,099  |                                         |           |      | 2,551,425   |           
|                                                                                     |                                                         |                                       |            |                                         |           |      |             |           
|CASH, end of period                                                                  |                                                         | $                                     | 3,977,243  |                                         |           | $    | 5,583,201   |           
|                                                                                     |                                                         |                                       |            |                                         |           |      |             |           
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                    |                                                         |                                       |            |                                         |           |      |             |           
|                                                                                     | Cash paid during the period for interest                |                                       | $          | 9,700,616                               |           |      | $           | 10,716,151 |          
|                                                                                     |                                                         |                                       |            |                                         |           |      |             |           
|                                                                                     | Cash paid during the period for state income taxes      |                                       | $          | 9,363                                   |           |      | $           | 13,051     |          
|                                                                                     |                                                         |                                       |            |                                         |           |      |             |           

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)




NOTES TO UNAUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(Unaudited)

(1)  BASIS OF PRESENTATION:

Interim Financial Reporting

These unaudited condensed consolidated financial statements are being
filed in conformity with Rule 10-01 of Regulation S-X regarding interim
financial statement disclosures and do not contain all of the necessary
footnote disclosures required for a fair presentation of the consolidated
balance sheets, statements of operations and comprehensive income (loss)
and statements of cash flows in conformity with accounting principles
generally accepted in the United States of America. However, in the
opinion of management, this data includes all adjustments, consisting only
of normal recurring accruals, necessary to present fairly the Companys
consolidated financial position at September 30, 2002, its consolidated
statements of operations and comprehensive income (loss) for the nine and
three months ended September 30, 2002 and 2001 and its consolidated
statements of cash flows for the nine months ended September 30, 2002 and
2001. 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/A for the year ended December 31, 2001 filed on
November 8, 2002.

(2)  ACQUISITION OF SYSTEMS AND DISPOSITION OF ASSETS

On September 30, 2001 the Company acquired a cable system serving the
areas in and around Highlands, North Carolina, serving approximately 3,200
basic subscribers, from an affiliated Limited Partnership. The system was
acquired at a price of approximately $4,600,000 and was financed with
approximately $3,800,000 of cash on hand and an in-kind equity
contribution from the Companys parent of $798,850.

On December 21, 2001, the Company sold its cable system serving the areas
of Bainbridge Island, Kingston and Hansville, Washington, which
represented approximately 6,450 basic subscribers, to TCI Cable Partners
of St. Louis, L.P. The systems were sold at a price of approximately
$19,800,000. The Company recognized a gain of approximately $12,700,000
related to the transaction.

Pro forma operating results of the Company for 2001, assuming the
acquisition and dispositions described above had occurred at the beginning
of 2001, follow:

|                 |  |                    |             |                    |  |   |            |  
|---------------- |  | ------------------ | ----------- | ------------------ |  | - | ---------- | -
|                 |  | Nine Months Ended  |             | Three Months Ended
|                 |  | September 30, 2001 |             | September 30, 2001
|                 |  |                    |             |                   
|                 |  | (unaudited)       
|Service Revenues |  | $                  | 44,700,000  |                    |  | $ | 15,000,000 |  
|                 |  |                    |             |                    |  |   |            |  
|Net Loss         |  | $                  | (10,500,000 | )                  |  | $ | (3,000,000 | )
|                 |  |                    |             |                    |  |   |            |  





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(3)  INTANGIBLE ASSETS  SFAS NO. 142

Effective January 1, 2002, the Company adopted SFAS No. 142, Goodwill and
Other Intangible Assets. SFAS No. 142 requires that the Company cease
amortization of goodwill and other intangible assets determined to have
indefinite lives, and establishes a new method of testing these assets 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 or if the fair values of intangible assets with
indefinite lives falls below their carrying value on an annual basis. The
amortization of existing goodwill ceased on December 31, 2001. The
Company determined that its franchises met the definition of indefinite
lived assets. Accordingly, amortization of these assets also ceased on
December 31, 2001. The Company tested these intangibles for impairment
upon adoption of the new standard and determined that the fair value of
the assets exceeded their carrying value. The Company will continue to
test these assets for impairment annually, or more frequently as warranted
by events or changes in circumstances. The book value of the Companys
intangible assets is presented in the following table:

|                                    |                         |   |                    |             |                   |   |             |             |          |   |              |            |          |   |             |             |     |   |             |             |   |   |            |            | 
|----------------------------------- | ----------------------- | - | ------------------ | ----------- | ----------------- | - | ----------- | ----------- | -------- | - | ------------ | ---------- | -------- | - | ----------- | ----------- | --- | - | ----------- | ----------- | - | - | ---------- | ---------- | 
|                                    |                         |   | September 30, 2002 |             | December 31, 2001
|                                    |                         |   |                    |             |                  
|                                    |                         |   | Gross              |             |                   |   |             |             | Net      |   | Gross        |            |          |   |             |             | Net
|                                    |                         |   | Carrying           |             | Accumulated       |   | Carrying    |             | Carrying |   | Accumulated  |            | Carrying
|                                    |                         |   | Amount             |             | Amortization      |   | Amount      |             | Amount   |   | Amortization |            | Amount  
|                                    |                         |   |                    |             |                   |   |             |             |          |   |              |            |         
|Indefinite-lived intangible assets: |                         |   |                    |             |                   |   |             |             |          |   |              |            |          |   |             |             |     |   |             |             |   |   |            |           
|                                    | Franchises              |   | $                  | 101,673,212 |                   |   | $           | (48,279,931 | )        |   | $            | 53,393,281 |          |   | $           | 101,664,917 |     |   | $           | (48,279,931 | ) |   | $          | 53,384,986 | 
|                                    | Goodwill                |   |                    | 6,344,433   |                   |   |             | (2,407,104  | )        |   |              | 3,937,329  |          |   |             | 6,344,433   |     |   |             | (2,407,104  | ) |   |            | 3,937,329  | 
|                                    |                         |   |                    |             |                   |   |             |             |          |   |              |            |          |   |             |             |     |   |             |             |   |   |            |           
|                                    |                         |   | 108,017,645        |             |                   |   | (50,687,035 | )           |          |   | 57,330,610   |            |          |   | 108,009,350 |             |     |   | (50,687,035 | )           |   |   | 57,322,315 |           
|Definite-lived intangible assets:   |                         |   |                    |             |                   |   |             |             |          |   |              |            |          |   |             |             |     |   |             |             |   |   |            |           
|                                    | Other
intangible assets |   |                    | 9,740,600   |                   |   |             | (6,157,012  | )        |   |              | 3,583,588  |          |   |             | 9,734,177   |     |   |             | (5,372,238  | ) |   |            | 4,361,939  | 
|                                    |                         |   |                    |             |                   |   |             |             |          |   |              |            |          |   |             |             |     |   |             |             |   |   |            |           
|                                    |                         | $ | 117,758,245        |             |                   | $ | (56,844,047 | )           |          | $ | 60,914,198   |            |          | $ | 117,743,527 |             |     | $ | (56,059,273 | )           |   | $ | 61,684,254 |           
|                                    |                         |   |                    |             |                   |   |             |             |          |   |              |            |          |   |             |             |     |   |             |             |   |   |            |           

As required by SFAS No. 142, the statement has not been retroactively
applied to the results for periods prior to adoption. A reconciliation of
net income (loss) for the nine and three months ended September 30, 2002,
and for the twelve months ended December 31, 2001, 2000 and 1999, as if
amortization of goodwill and franchises had not been recorded is presented
below:

|                                                      |  |                    |             |                    |  |      |            |      |  |                                  |            |   |  |   |             |   |  |   |             |  
|----------------------------------------------------- |  | ------------------ | ----------- | ------------------ |  | ---- | ---------- | ---- |  | -------------------------------- | ---------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                                      |  |                    |             |                    |  |      |            |      |  | Twelve Months Ended December 31,
|                                                      |  | Nine Months Ended  |             | Three Months Ended |  |     
|                                                      |  | September 30, 2001 |             | September 30, 2001 |  | 2001 |            | 2000 |  | 1999                            
|                                                      |  |                    |             |                    |  |      |            |      |  |                                 
|                                                      |  | (unaudited)        |             | (unaudited)       
|NET LOSS:                                             |  |                    |             |                    |  |      |            |      |  |                                  |            |   |  |   |             |   |  |   |             |  
|Reported net loss                                     |  | $                  | (11,201,952 | )                  |  | $    | (3,238,976 | )    |  | $                                | (1,864,718 | ) |  | $ | (14,268,443 | ) |  | $ | (11,776,281 | )
|Add back: amortization of
indefinite-lived franchises |  |                    | 7,711,858   |                    |  |      | 2,570,611  |      |  |                                  | 10,343,687 |   |  |   | 10,351,363  |   |  |   | 10,137,025  |  
|Add back: amortization of goodwill                    |  |                    | 129,833     |                    |  |      | 43,278     |      |  |                                  | 171,903    |   |  |   | 173,111     |   |  |   | 173,111     |  
|                                                      |  |                    |             |                    |  |      |            |      |  |                                  |            |   |  |   |             |   |  |   |             |  
|Adjusted net (loss) income                            |  | $                  | (3,360,261  | )                  |  | $    | (625,087   | )    |  | $                                | 8,650,872  |   |  | $ | (3,743,969  | ) |  | $ | (1,466,145  | )
|                                                      |  |                    |             |                    |  |      |            |      |  |                                  |            |   |  |   |             |   |  |   |             |  





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Amortization expense including amortization of loan
fees for each of the next five years is expected to be
approximately as follows:

|     |  |   |           | 
|---- |  | - | --------- | 
|2003 |  | $ | 746,000   | 
|2004 |  |   | 706,000   | 
|2005 |  |   | 706,000   | 
|2006 |  |   | 700,000   | 
|2007 |  |   | 466,000   | 
|     |  |   |           | 
|     |  | $ | 3,324,000 | 
|     |  |   |           | 

(4)  NOTES PAYABLE

In August of 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 established a $35 million 364-day revolving credit loan. In
August of 2001, the revolver converted to a term loan due on September
30, 2007. The other two components consisted originally 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.
The allowable borrowings on the $40 million revolver were reduced by
approximately $17.3 million during 2001. Amounts outstanding under the
Revised Senior Credit Facility mature on September 30, 2007. The
Revised Senior Credit Facility is collateralized by a first lien
position on all present and future assets and stock of the Company.
Interest rates vary based on certain financial covenants; currently
8.032% (weighted average). Graduated principal and interest payments
are due quarterly, beginning September 30, 2003, until maturity on
September 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 September 30, 2002, approximately
$5,695,000 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 6.50 to 1.0, among other restrictions.
The Company submits quarterly debt compliance reports to its creditor
under this arrangement. As of September 30, 2002, the Company was in
compliance with the terms of the loan agreements.

As of September 30, 2002, the outstanding balance under the Revised Senior
Credit Facility was approximately $69 million. As of the date of this
filing, interest rates on the Revised Senior Credit Facility were as
follows: $20 million fixed at a LIBOR based rate of 4.25% expiring
February 20, 2003; $27 million fixed at 5.668% under the terms of an
interest rate swap agreement with the Companys lender expiring February
20, 2003; $5.5 million fixed at a LIBOR based rate of 4.19% expiring
February 18, 2003; $16 million fixed at LIBOR based rate of 4.33% expiring
November 19, 2002; $600,000 fixed at a LIBOR based rate of 4.33% expiring
November 19, 2002. 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.





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(5)  SUBSEQUENT EVENT

On October 28, 2002 the Company entered into an agreement to sell certain
cable operations representing approximately 5% of its subscriber base to
an unaffiliated third party. The sales price of the system is
$11,716,000, which will result in the recognition of a gain. The closing
of the sale is contingent upon the buyer obtaining financing, approval by
the Board of Directors and the transfer of franchise operating agreements.
Upon closing, substantially all of the proceeds from the sale will be
utilized to reduce amounts outstanding under the Senior Credit Facility.
The sale is not expected to close until 2003.





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##### Table of Contents



PART I (continued)




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

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

As of September 30, 2002, the Companys systems served approximately
109,727 basic subscribers, 51,081 premium subscribers, 11,174 digital
subscribers, and passed an estimated 192,000 homes.

Revenues totaled $46.0 million for the nine months ended September 30,
2002. Of these revenues, $30.9 million (67%) was derived from basic
services, $3.4 million (7%) from premium services, $6.2 million (14%) from
expanded basic services, $900,000 (2%) from digital services, $400,000
(1%) from service maintenance contracts, $2.3 million (5%) from
advertising and $1.9 million (4%) from other sources.

Average monthly revenue per subscriber increased $3.18 or 7.5% from $42.58
to $45.76 for the nine months ended September 30, 2002. The December 2001
disposition of cable television systems serving approximately 6,450 basic
subscribers in and around Bainbridge Island, Washington (the Bainbridge
Systems) decreased revenues approximately $2.7 million or 5.8%. The
September 2001 acquisition of a cable system serving approximately 3,200
basic subscribers in and around Highlands, North Carolina (the Highlands
System) increased revenues approximately $1.0 million or 2.2%. On a pro
forma basis, effecting for the sale of the Bainbridge Systems and the
Highlands System acquisition: (i) revenues would have increased
approximately $1.3 million or 2.9%; and (ii) average monthly revenue per
average basic subscriber would have increased $3.40 or 8.0%, from $42.36
to $45.76 for the nine months ended September 30, 2002. This increase is
primarily attributable to rate increases implemented during the first
quarter of 2002, increased revenue from higher penetration of new product
tiers and a 26% increase in advertising revenue per basic subscriber.

Cable system operation expenses, which include costs related to
programming, technical personnel, repairs and maintenance and advertising
sales, increased approximately $1.1 million or 6.7% from $16.3 million to
$17.4 million for the nine months ended September 30, 2002. On a pro
forma basis, excluding the impact of the sale of the Bainbridge Systems
and the Highlands System acquisition, operating expenses would have
increased approximately $1.7 million or 10.8%. Programming costs
increased approximately $1.6 million or 14% on a pro forma basis resulting
from rate increases by certain programming vendors, the launch of new
programming services in various systems and the launch of digital
programming services.

General and administrative expenses, which include on-site office and
customer service personnel costs, corporate overhead, customer billing,
postage, marketing expenses and franchise fees, decreased approximately
$700,000 or 9.5% from $7.4 million to $6.7 million for the nine months
ended September 30, 2002. On a pro forma basis, excluding the impact of
the sale of the Bainbridge Systems and the Highlands System acquisition,
general and administrative expenses





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would have decreased approximately
$500,000 or 6.9%. The decrease is primarily attributable to reductions in
corporate overhead and property taxes, offset by a 55% increase in
marketing expense.

Management fees for the nine months ended September 30, 2002 were
consistent with the same period in the previous year. Management fees are
calculated at 5.0% of gross revenues.

Depreciation and amortization expenses decreased approximately $7.4
million or 48.0% from $15.4 million to $8.0 million for the nine months
ended September 31, 2002. Such decrease is primarily attributable to the
Companys implementation of SFAS No. 142. As of December 31, 2001, the
Company discontinued amortizing its franchises and goodwill in accordance
with SFAS No. 142 resulting in a decrease of approximately $7.8 million in
amortization expense for the nine months ended September 30, 2002.

Interest expense decreased approximately $1.5 million or 10.9%, from
$13.8 million to $12.3 million for the nine months ended September 30,
2002. Average outstanding indebtedness decreased $13.6 million from
$184.2 million to $170.6 million for the nine months ended September 30,
2001 and 2002, respectively. This is primarily attributable to the fact
that approximately $19.3 million of the proceeds from the sale of the
Bainbridge Systems were used to pay down amounts outstanding under the
Companys revised Senior Credit Facility offset by approximately $6.8
million in borrowings during 2001 to replenish working capital.

The Company has elected not to designate its interest rate swap agreements
as hedges under SFAS No. 133. Accordingly, the Company has recorded a
liability equal to the fair market value to settle the agreements and a
corresponding charge in its statement of operations. Each quarter, the
change in the market value of the Companys swap agreements is recorded as
other income or expense. The market value adjustment for the nine months
ended September 30, 2002 was a credit of approximately $1.7 million. In
addition, the Company recorded $268,000 of income for the nine months
ended September 30, 2002 resulting from the reclassification to earnings
of accumulated other comprehensive income recorded upon implementation of
SFAS No. 133 on January 1, 2001.

THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

Revenues totaled $15.3 million for the three months ended September 30,
2002 remaining constant with the same period in 2001. Of these revenues,
$10.3 million (67%) was derived from basic services, $1.1 million (8%)
from premium services, $2.0 million (13%) from expanded basic services,
$300,000 (2%) from digital services, $100,000 (1%) from service
maintenance contracts, $800,000 (5%) from advertising and $700,000 (4%)
from other sources.

Average monthly revenue per subscriber increased $2.83 or 6.5% from $43.45
to $46.28 for the three months ended September 30, 2002. The December
2001 disposition of the Bainbridge Systems serving approximately 6,450
basic subscribers decreased revenues approximately $900,000 or 5.9%. The
September 2001 acquisition of the Highlands System serving approximately
3,200 basic subscribers increased revenues approximately $400,000 or 2.6%.
On a pro forma basis, effecting for the sale of the Bainbridge Systems
and the Highlands System acquisition: (i) revenues would have increased
approximately $600,000 or 11.3%; and (ii) average monthly revenue per
average basic subscriber would have increased $3.06 or 7.1%, from $43.22
to $46.28 for the three months ended September 30, 2002. This increase is
primarily attributable to rate increases implemented during the first
quarter of 2002, increased revenue





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from higher penetration of new product
tiers and a 30% increase in advertising revenue per basic subscriber.

Cable system operation expenses increased approximately $400,000 or 7.3%
from $5.5 million to $5.9 million for the three months ended September 30,
2002. On a pro forma basis, excluding the impact of the sale of the
Bainbridge Systems and the Highlands System acquisition, operating
expenses would have increased approximately $600,000 or 11.4%.
Programming costs increased $500,000 or 13.8% on a pro forma basis
resulting from rate increases by certain programming vendors as well as
the launch of new analog programming services and the launch of digital
programming services.

General and administrative expenses decreased approximately $400,000 or
16.0% from $2.5 million to $2.1 million for the three months ended
September 30, 2002. On a pro forma basis, excluding the impact of the
sale of the Bainbridge Systems and the Highlands System acquisition,
general and administrative expenses would have decreased approximately
$300,000 or 12.5%. The decrease is attributable to reductions in
corporate overhead and property taxes, offset by a 63% increase in
marketing expense.

Management fees for the three months ended September 30, 2002 were
consistent with the same period in the previous year. Management fees are
calculated at 5.0% of gross revenues.

Depreciation and amortization expenses decreased approximately $2.5
million or 48.1% from $5.2 million to $2.7 million for the three months
ended September 30, 2002. Such decrease is primarily attributable to the
Companys implementation of SFAS No. 142. As of December 31, 2001, the
Company discontinued amortizing its franchises and goodwill accordance
with SFAS No. 142 resulting in a decrease of approximately $2.6 million in
amortization expense for the three months ended September 30, 2002.

Interest expense decreased approximately $600,000 or 13.3%, from $4.5
million to $3.9 million for the three months ended September 30, 2002.
Average outstanding indebtedness decreased $14 million from $185.5
million to $169.7 million for the three months ended September 30, 2001
and 2002, respectively. This is primarily attributable to the fact that
approximately $19.3 million in proceeds from the sale of the Bainbridge
Systems were used to pay down amounts outstanding under the Companys
revised Senior Credit Facility offset by approximately $6.8 million in
borrowings to replenish working capital.

The Company has elected not to designate its interest rate swap agreements
as hedges under SFAS No. 133. Accordingly, the Company has recorded a
liability equal to the fair market value to settle the agreements and a
corresponding charge in its statement of operations. Each quarter, the
change in the market value of the Companys swap agreements is recorded as
other income or expense. The market value adjustment for the three months
ended September 30, 2002 was a credit of approximately $550,000. In
addition, the Company recorded $59,000 of income for the three months
ended September 30, 2002 resulting from the reclassification to earnings
of accumulated other comprehensive income recorded upon implementation of
SFAS No. 133 on January 1, 2001.

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





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pursued 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 remainder of 2002 are
expected to be approximately $3.4 million. The Company anticipates that
cash flow from operations will be sufficient to service its debt through
December 31, 2003. The Company believes that cash flow from operations
will be adequate to meet the Companys long-term liquidity requirements
prior to the maturity of its long-term indebtedness, although no
assurance can be given in this regard.

Net cash provided by operating activities was $8.0 million for the nine
months ended September 30, 2002. Adjustments to the $1.1 net income for
the period to reconcile to net cash provided by operating activities
consisted primarily of $8.5 million of depreciation and amortization and
increases in operating liabilities of approximately 1.2 million, offset
by $2.0 relating to interest rate swap agreements and increases in
operating assets of approximately $1.0 million.

Net cash used in investing activities was $4.8 million for the nine
months ended September 30, 2002, and substantially consisted of $5.8
million in capital expenditures offset by the receipt of $1.0 million
from a hold back note related to the sale of the Bainbridge Systems.

Net cash used in financing activities consisted of $2.0 million in
principal prepayments on the Senior Credit Facility.

Net cash provided by operating activities was $9.6 million for the nine
months ended September 30, 2001. Adjustments to the $11.2 million net
loss for the period to reconcile to net cash provided by operating
activities consisted primarily of $15.9 million of depreciation and
amortization, $2.5 million related to interest rate swap agreements and
increases in operating liabilities of approximately $2.7 million.

Net cash used in investing activities was $9.5 million for the nine
months ended September 30, 2001 and consisted primarily of $9.6 million
in capital expenditures and additions of intangible assets.

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

Operating income before charges for interest, taxes, depreciation and
amortization (EBITDA) decreased approximately $700,000 or 3.5%, from
$20.3 million to $19.6 million for the nine months ended September 30,
2002. EBITDA as a percentage of revenues (EBITDA Margin) decreased
from 43.8% to 42.6% for the nine months ended September 30, 2002. On a
pro forma basis, excluding the impact of the sale of the Bainbridge
Systems and the Highlands System acquisition, EBITDA would have remained
relatively constant. The aforementioned increases in pro forma revenues
were offset by higher programming costs resulting from rate increases by
certain programming vendors as well as the launch of new programming
services in various systems. 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
accounting principles generally accepted in the United States of America
and





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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.

CAPITAL EXPENDITURES

For the nine months ended September 30, 2002, the Company incurred capital
expenditures of approximately $5.8 million. Capital expenditures included:
(i) continued deployment of new product digital services, (ii) expansion
and improvement 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 $3.5 million in capital
expenditures for the remainder of 2002. This represents anticipated
expenditures for upgrading and rebuilding certain distribution facilities,
which will allow for the continued deployment of new products, such as
digital and Internet services in selected markets. Furthermore, capital
expenditures will involve extensions of distribution facilities to add new
subscribers.

RECENTLY ISSUED ACCOUNTING STANDARDS

Statement of Financial Accounting Standards No. 143 In September 2001,
the FASB issued SFAS No. 143 Accounting for Asset Retirement
Obligations. SFAS No. 143 requires entities to record the fair value of
a liability for an asset retirement obligation in the period in which it
is incurred. The associated asset retirement costs are capitalized as
part of the carrying amount of the long-lived asset. Statement No. 143
will be effective for the Company beginning January 1, 2003. The Company
has not yet estimated the impact of implementation on its financial
position or results of operations.

Statement of Financial Accounting Standards No. 145 In April 2002, the
FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and
64, Amendment of FASB Statement No. 13, and Technical Corrections. SFAS
No. 145 provides for the rescission of several previously issued
accounting standards, new accounting guidance for the accounting for
certain lease modifications and various technical corrections that are not
substantive in nature to existing pronouncements. SFAS No. 145 will be
effective beginning January 1, 2003, except for the provisions relating to
the amendment of SFAS No.13, which will be effective for transactions
occurring subsequent to May 15, 2002. Adoption of SFAS No. 145 will not
have a material impact on the Companys financial statements.

Statement of Financial Accounting Standards No. 146- In June 2002, the
FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or
Disposal Activities. SFAS No. 146 requires that a liability for a cost
associated with an exit or disposal activity is recognized at fair value
when the liability is incurred and is effective for exit or disposal
activities that are initiated after December 31, 2002. The Partnership
has not yet estimated the impact of implementation on its financial
position or results of operations.

CRITICAL ACCOUNTING POLICIES

This discussion and analysis of our financial condition and results of
operations is based on the Companys financial statements, which have been
prepared in accordance with accounting principles generally accepted in
the United States of America. The preparation of these financial
statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of





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the financial statements
and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The following
critical accounting policies, which have been chosen among alternatives,
require a more significant amount of management judgment than other
accounting policies the Company employs.

Revenue Recognition  Cable television service revenue is recognized in
the month service is provided to the customer. Advance payments on cable
services to be rendered are recorded as subscriber prepayments. Revenues
resulting from the sale of local spot advertising are recognized when the
related advertisements or commercials appear before the public.

Long-lived Assets  Property and equipment are stated at cost less
accumulated depreciation. Costs of additions and substantial improvements
to property and equipment are capitalized. Expenditures for maintenance
and repairs are charged to operating expense as incurred. Depreciation is
computed using the straight-line method over the equipments estimated
useful lives. The Company evaluates the depreciation periods of property
and equipment to determine whether events or circumstances warrant revised
estimates of useful lives.

The costs associated with the construction of cable transmission and
distribution facilities and new cable service installations are
capitalized. Costs include direct labor and materials as well as certain
indirect costs. The amount of indirect costs that are capitalized, which
include employee benefits, travel and other costs, are estimated based on
historical construction costs. The Company periodically performs
evaluations of these estimates to determine whether they are reflective of
current construction costs. At the time of retirements, sales or other
dispositions of property, the original cost and related accumulated
depreciation are removed from the respective accounts, and the gains and
losses are presented in the statement of operations and comprehensive
income (loss).

The Company periodically reviews the carrying value of its long-lived
assets, including property and equipment and intangible assets, whenever
events or changes in circumstances indicate that the carrying value may
not be recoverable. As of March 31, 2002, there has been no indication of
such impairment.

On January 1, 2002, the Company adopted SFAS No. 142 Goodwill and Other
Intangibles. Under this statement, goodwill and franchises are no longer
being amortized, but are tested for impairment annually, or more
frequently as warranted by events or changes in circumstances. As of
September 30, 2002, there was no indication of such impairment.

SUBSEQUENT EVENT

On October 28, 2002 the Company entered into an agreement to sell certain
cable operations representing approximately 5% of its subscriber base to
an unaffiliated third party. The sales price of the system is
$11,716,000, which will result in the recognition of a gain. The closing
of the sale is contingent upon the buyer obtaining financing, approval by
the Board of Directors and the transfer of franchise operating agreements.
Upon closing, substantially all of the proceeds from the sale will be
utilized to reduce amounts outstanding under the Senior Credit Facility.
The sale is not expected to close until 2003.





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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 the
date of this filing, the Company had entered into one interest rate swap
agreement for $27,000,000 to partially hedge interest rate exposure.
Interest rate swaps have the effect of converting the applicable
variable rate obligations to fixed or other variable rate obligations.
Had the Company not entered into this fixed rate agreements, 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 $690,000 of which, $270,000 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

Within 90 days prior to the date of filing this report, an evaluation was
performed under the supervision and with the participation of the
Partnerships management, including the Chief Executive Officer and
President (Principal Financial and Accounting Officer), of the
effectiveness of the design and operation of the Partnerships disclosure
controls and procedures (as defined in Rule 13a-14(c) of the Exchange
Act). Based on and as of the time of such evaluation, the Partnerships
management, including the Chief Executive Officer and President (Principal
Financial and Accounting Officer), concluded that the Partnerships
disclosure controls and procedures were effective in timely alerting them
to material information relating to the Partnership required to be
included in the Partnerships reports filed or submitted by it under the
Exchange Act. There have been no significant changes in the Partnerships
internal controls or in other factors that could significantly affect
internal controls subsequent to the time of such evaluation.





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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 Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002          

(b)  Reports on Form 8-K



| | (i)  |  | Form 8-K originally filed on July 15, 2002, and
amended on July 19, 2002, announcing the dismissal of Arthur
Andersen LLP as the Companys independent auditors, and the
appointment of KPMG LLP to serve as the Companys independent
auditors.                                                
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | Form 8-K filed July 18, 2002 reporting the
misclassification in the financial statements as of, and for the
year ended December 31, 2001, and for the quarter ended March
31, 2002, and managements intentions to reissue the financial
statements and audit report for those periods affected.





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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 |                         |  | Executive Vice President, Treasurer |  | 11-12-02
|           |                  | and Assistant Secretary |  |                                    
|           | Richard I. Clark |                         |  |                                     |  |         
|           |                  |                         |  |                                     |  |         
|/s/        | GARY S. JONES    |                         |  | President                           |  | 11-12-02
|           |                  |                         |  |                                    
|           | Gary S. Jones    |                         |  |                                     |  |         





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##### Table of Contents



CERTIFICATIONS

I, Gary Jones certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q 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;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                      



| | a) |  | Designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | c) |  | Presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and board of
directors:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants
auditors any material weakness in internal controls; and
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                       



|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 12, 2002



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





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##### Table of Contents



I, John Whetzell certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q 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;                   
|  
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                      



| | a) |  | Designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the
Evaluation Date); and                                                                                                  
|
| | c) |  | Presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and board of
directors:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report
financial data and have identified for the registrants
auditors any material weakness in internal controls; and
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material that involves
management or other employees who have a significant role in
the registrants internal controls; and                                                                                                                                       



|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 12, 2002



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