##### 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, 2001

or

|      |                                                                                                                            
|----- | ---------------------------------------------------------------------------------------------------------------------------
|[   ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from

to

Commission file number 333-43157

NORTHLAND CABLE TELEVISION, INC.

---

(Exact name of registrant as specified in its charter)


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

AND SUBSIDIARY GUARANTOR:

NORTHLAND CABLE NEWS, INC.

---

(Exact name of registrant as specified in its charter)


|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|State of Washington                            |  | 91-1638891                          
|                                               |  |                                     
|(State or other jurisdiction of incorporation) |  | (I.R.S. Employer Identification No.)

|                                                  |  |           
|------------------------------------------------- |  | ----------
|1201 Third Avenue, Suite 3600
Seattle, Washington |  | 98101     
|                                                  |  |           
|(Address of principal executive offices)          |  | (Zip Code)

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

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

Yes [X]     No [   ]

This filing contains
 pages. Exhibits index appears
on page .





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TABLE OF CONTENTS



|                               |                                                                                               |                                                               |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------- |  |  |  |  |  | 
|PART 1  FINANCIAL INFORMATION
|                               | ITEM 1. Financial Statements                                                                 
|                               |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS                        
|                               |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS  (Unaudited)
|                               |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS  (Unaudited)
|                               |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS              
|                               |                                                                                               | NOTES TO UNAUDITED FINANCIAL STATEMENTS                      
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|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                                                      



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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)
CONSOLIDATED CONDENSED BALANCE SHEETS

|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |             |             |             |  
|---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | --------------------------- | ----------- | ------------- | ----------- | ------------ | ----------- | ----------- | ----------- | -
|                                                                                                     |                                                                                                                                         |                                                 |                             |             | September 30, |             | December 31,
|                                                                                                     |                                                                                                                                         |                                                 |                             |             | 2001          |             | 2000        
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |             
|                                                                                                     |                                                                                                                                         |                                                 |                             |             | (unaudited)   |             |              |             |            
|ASSETS                                                                                               |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|Current Assets:                                                                                      |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|                                                                                                     | Cash                                                                                                                                    |                                                 | $                           | 5,583,201   |               |             | $            | 2,551,425   |            
|                                                                                                     | Due from affiliates                                                                                                                     |                                                 |                             | 1,287,746   |               |             |              | 1,160,446   |            
|                                                                                                     | Accounts receivable                                                                                                                     |                                                 |                             | 2,193,077   |               |             |              | 2,187,586   |            
|                                                                                                     | Prepaid expenses                                                                                                                        |                                                 |                             | 772,832     |               |             |              | 571,020     |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|                                                                                                     |                                                                                                                                         | Total current assets                            |                             |             | 9,836,856     |             |              |             | 6,470,477   |            
|Investment in Cable Television Properties:                                                           |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|Property and equipment, net of accumulated
depreciation of $54,580,070 and $48,199,085,
respectively |                                                                                                                                         |                                                 | 60,043,629                  |             |               |             | 56,038,530   |            
|Franchise agreements, net of accumulated
amortization of $47,721,957 and $40,107,541,
respectively   |                                                                                                                                         |                                                 | 58,498,942                  |             |               |             | 63,283,045   |            
|Goodwill, net of accumulated
amortization of $2,523,327 and $2,393,494,
respectively                 |                                                                                                                                         |                                                 | 4,401,106                   |             |               |             | 4,530,939    |            
|Other intangible assets, net of accumulated
amortization of $5,815,680 and $4,822,853,
respectively  |                                                                                                                                         |                                                 | 4,875,269                   |             |               |             | 5,674,683    |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|                                                                                                     |                                                                                                                                         | Total investment in cable television properties |                             |             | 127,818,946   |             |              |             | 129,527,197 |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|                                                                                                     |                                                                                                                                         | Total assets                                    |                             | $           | 137,655,802   |             |              | $           | 135,997,674 |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|Current Liabilities:                                                                                 |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|                                                                                                     | Accounts payable                                                                                                                        |                                                 |                             | 120,271     |               |             |              | 754,908     |            
|                                                                                                     | Accrued expenses                                                                                                                        |                                                 |                             | 9,550,587   |               |             |              | 6,951,496   |            
|                                                                                                     | Converter deposits                                                                                                                      |                                                 |                             | 149,426     |               |             |              | 122,674     |            
|                                                                                                     | Subscriber prepayments                                                                                                                  |                                                 |                             | 1,807,138   |               |             |              | 1,549,945   |            
|                                                                                                     | Due to affiliates                                                                                                                       |                                                 |                             | 823,957     |               |             |              | 103,098     |            
|                                                                                                     | Interest rate derivative                                                                                                                |                                                 |                             | 2,096,568   |               |             |              |            |            
|                                                                                                     | Note
payable to affiliate                                                                                                               |                                                 |                             | 3,670,254   |               |             |              |             |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|                                                                                                     |                                                                                                                                         |                                                 | Total current liabilities   |             |               | 18,218,201  |              |             |             | 9,482,121   |  
|                                                                                                    
|Notes payable                                                                                        |                                                                                                                                         |                                                 | 185,540,000                 |             |               |             | 182,540,000  |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|                                                                                                     |                                                                                                                                         |                                                 | Total liabilities           |             |               | 203,758,201 |              |             |             | 192,022,121 |  
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|Shareholders Deficit:                                                                               |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|                                                                                                     | Common stock (par value $1.00 per share, authorized
50,000 shares; 10,000 shares issued and outstanding)
and additional paid-in capital |                                                 |                             | 12,310,527  |               |             |              | 11,560,527  |            
|                                                                                                     | Accumulated deficit                                                                                                                     |                                                 |                             | (78,412,926 | )             |             |              | (67,584,974 | )          
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|                                                                                                     |                                                                                                                                         |                                                 | Total shareholders deficit |             |               | (66,102,399 | )            |             |             | (56,024,447 | )
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            
|Total liabilities and shareholders deficit                                                          |                                                                                                                                         | $                                               | 137,655,802                 |             |               | $           | 135,997,674  |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |               |             |              |            

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





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##### Table of Contents






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

|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |            |             |            | 
|------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------------------------ | ---------- | --------------------------------------- | ---------- | ----------- | ---------- | ----------- | ---------- | 
|                                                                    |                                                                                                                         |                                   |                          |            | For the nine months ended September 30,
|                                                                    |                                                                                                                         |                                   |                          |            |                                        
|                                                                    |                                                                                                                         |                                   |                          |            | 2001                                    |            | 2000       
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |            
|                                                                    |                                                                                                                         |                                   |                          |            | (unaudited)                            
|Revenues:                                                           |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|                                                                    | Service revenues                                                                                                        |                                   | $                        | 46,384,483 |                                         |            | $           | 44,913,365 |            
|                                                                    | Programming and production revenues from affiliates                                                                     |                                   |                          |           |                                         |            |             | 313,973    |            
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|                                                                    |                                                                                                                         |                                   | Total Revenues           |            |                                         | 46,384,483 |             |            |             | 45,227,338 | 
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|Expenses:                                                           |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|                                                                    | Cable system operations (including
$206,193 and $211,526, net paid to affiliates
in 2001 and 2000, respectively)        |                                   |                          | 16,333,213 |                                         |            |             | 15,546,559 |            
|                                                                    | General and administrative (including
$2,935,725 and $3,764,066, net paid to affiliates
in 2001 and 2000, respectively) |                                   |                          | 7,426,397  |                                         |            |             | 7,932,434  |            
|                                                                    | Management fees paid to parent                                                                                          |                                   |                          | 2,319,224  |                                         |            |             | 2,256,739  |            
|                                                                    | Depreciation and amortization                                                                                           |                                   |                          | 15,370,850 |                                         |            |             | 14,782,302 |            
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|                                                                    |                                                                                                                         |                                   | Total operating expenses |            |                                         | 41,449,684 |             |            |             | 40,518,034 | 
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|Income from operations                                              |                                                                                                                         |                                   | 4,934,799                |            |                                         |            | 4,709,304   |           
|Other income (expense):                                             |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|                                                                    |                                                                                                                         | Interest expense                  |                          |            | (13,790,081                             | )          |             |            | (13,422,670 | )         
|                                                                    |                                                                                                                         | Interest income and other, net    |                          |            | 95,578                                  |            |             |            | 108,936     |           
|                                                                    |                                                                                                                         | Interest rate derivative          |                          |            | (2,785,568                              | )          |             |            |            |           
|                                                                    |                                                                                                                         | Gain (loss) on disposal of assets |                          |            | 28,320                                  |            |             |            | (94,425     | )         
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|                                                                    |                                                                                                                         |                                   | (16,451,751              | )          |                                         |            | (13,408,159 | )         
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|Net loss before cumulative effect of change in accounting principle |                                                                                                                         |                                   | (11,516,952              | )          |                                         |            | (8,698,855  | )         
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|Cumulative effect of change in accounting principle                 |                                                                                                                         |                                   | 689,000                  |            |                                         |            |            |           
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|Extraordinary item:                                                 |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|Loss on extinguishment of debt, net                                 |                                                                                                                         |                                   |                         |            |                                         |            | (2,092,944  | )         
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           
|Net Loss                                                            |                                                                                                                         | $                                 | (10,827,952              | )          |                                         | $          | (10,791,799 | )         
|                                                                    |                                                                                                                         |                                   |                          |            |                                         |            |             |           

The accompanying notes are an integral part of these statements.





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##### Table of Contents






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

|                                    |                                                                                                                       |   |                          |            |                                          |            |            |            |   |            | 
|----------------------------------- | --------------------------------------------------------------------------------------------------------------------- | - | ------------------------ | ---------- | ---------------------------------------- | ---------- | ---------- | ---------- | - | ---------- | 
|                                    |                                                                                                                       |   |                          |            | For the three months ended September 30,
|                                    |                                                                                                                       |   |                          |            |                                         
|                                    |                                                                                                                       |   |                          |            | 2001                                     |            | 2000      
|                                    |                                                                                                                       |   |                          |            |                                          |            |           
|                                    |                                                                                                                       |   |                          |            | (unaudited)                             
|Revenues:                           |                                                                                                                       |   |                          |            |                                          |            |            |           
|                                    | Service revenues                                                                                                      |   | $                        | 15,454,301 |                                          |            | $          | 15,127,440 |  
|                                    | Programming and production revenues from affiliates                                                                   |   |                          |           |                                          |            |            | 104,031    |  
|                                    |                                                                                                                       |   |                          |            |                                          |            |            |           
|                                    |                                                                                                                       |   | Total Revenues           |            |                                          | 15,454,301 |            |            |   | 15,231,471 | 
|                                    |                                                                                                                       |   |                          |            |                                          |            |            |           
|Expenses:                           |                                                                                                                       |   |                          |            |                                          |            |            |           
|                                    | Cable system operations (including
$29,488 and $69,658, net paid to affiliates
in 2001 and 2000, respectively)        |   |                          | 5,489,892  |                                          |            |            | 5,269,772  |  
|                                    | General and administrative (including
$923,663 and $1,151,967, net paid to affiliates
in 2001 and 2000, respectively) |   |                          | 2,517,549  |                                          |            |            | 2,557,366  |  
|                                    | Management fees paid to parent                                                                                        |   |                          | 772,715    |                                          |            |            | 761,367    |  
|                                    | Depreciation and amortization                                                                                         |   |                          | 5,171,732  |                                          |            |            | 4,974,927  |  
|                                    |                                                                                                                       |   |                          |            |                                          |            |            |           
|                                    |                                                                                                                       |   | Total operating expenses |            |                                          | 13,951,888 |            |            |   | 13,563,432 | 
|                                    |                                                                                                                       |   |                          |            |                                          |            |            |           
|Income from operations              |                                                                                                                       |   | 1,502,413                |            |                                          |            | 1,668,039  |           
|Other income (expense):             |                                                                                                                       |   |                          |            |                                          |            |            |           
|                                    | Interest expense                                                                                                      |   |                          | (4,508,795 | )                                        |            |            | (4,535,248 | )
|                                    | Interest income and other, net                                                                                        |   |                          | 30,741     |                                          |            |            | 26,780     |  
|                                    | Interest rate derivative                                                                                              |   |                          | (413,039   | )                                        |            |            |           |  
|                                    | Gain (loss) on disposal of assets                                                                                     |   |                          | 43,704     |                                          |            |            | (41,958    | )
|                                    |                                                                                                                       |   |                          |            |                                          |            |            |           
|                                    |                                                                                                                       |   | (4,847,389               | )          |                                          |            | (4,550,426 | )         
|                                    |                                                                                                                       |   |                          |            |                                          |            |            |           
|Extraordinary item:                 |                                                                                                                       |   |                          |            |                                          |            |            |           
|Loss on extinguishment of debt, net |                                                                                                                       |   |                         |            |                                          |            | (2,092,944 | )         
|                                    |                                                                                                                       |   |                          |            |                                          |            |            |           
|Net Loss                            |                                                                                                                       | $ | (3,344,976               | )          |                                          | $          | (4,975,331 | )         
|                                    |                                                                                                                       |   |                          |            |                                          |            |            |           

The accompanying notes are an integral part of these statements.





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##### Table of Contents






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

|                                                                            |                                                     |                                       |             |                                         |           |      |             |            |           |  
|--------------------------------------------------------------------------- | --------------------------------------------------- | ------------------------------------- | ----------- | --------------------------------------- | --------- | ---- | ----------- | ---------- | --------- | -
|                                                                            |                                                     |                                       |             | For the nine months ended September 30,
|                                                                            |                                                     |                                       |             |                                        
|                                                                            |                                                     |                                       |             | 2001                                    |           | 2000
|                                                                            |                                                     |                                       |             |                                         |           |     
|                                                                            |                                                     |                                       |             | (unaudited)                            
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |                                                     |                                       |             |                                         |           |      |             |           
|Net loss                                                                    |                                                     | $                                     | (10,827,952 | )                                       |           | $    | (10,791,799 | )         
|Adjustments to reconcile net loss to
cash provided by operating activities: |                                                     |                                       |             |                                         |           |      |             |           
|                                                                            | Depreciation and amortization                       |                                       |             | 15,370,850                              |           |      |             | 14,782,302 |          
|                                                                            | Cumulative effect of change in accounting principle |                                       |             | (689,000                                | )         |      |             |           |          
|                                                                            | Interest rate derivative                            |                                       |             | 2,785,568                               |           |      |             |           |          
|                                                                            | Amortization of loan costs                          |                                       |             | 503,987                                 |           |      |             | 650,194    |          
|                                                                            | Loss on extinguishment of debt                      |                                       |             |                                        |           |      |             | 2,092,944  |          
|                                                                            | (Gain) loss on disposal of assets                   |                                       |             | (28,320                                 | )         |      |             | 94,425     |          
|                                                                            | (Increase) decrease in operating assets:            |                                       |             |                                         |           |      |             |            |          
|                                                                            |                                                     | Accounts receivable                   |             |                                         | 18,994    |      |             |            | 114,254   |  
|                                                                            |                                                     | Prepaid expenses                      |             |                                         | (193,119  | )    |             |            | (380,908  | )
|                                                                            |                                                     | Due from affiliates                   |             |                                         | (127,300  | )    |             |            | (164,342  | )
|                                                                            | Increase (decrease) in operating liabilities        |                                       |             |                                         |           |      |             |            |          
|                                                                            |                                                     | Accounts payable and accrued expenses |             |                                         | 1,943,563 |      |             |            | 2,348,561 |  
|                                                                            |                                                     | Due to affiliates                     |             |                                         | 720,859   |      |             |            | 254,764   |  
|                                                                            |                                                     | Converter deposits                    |             |                                         | 23,987    |      |             |            | 11,703    |  
|                                                                            |                                                     | Subscriber prepayments                |             |                                         | 63,666    |      |             |            | (69,173   | )
|                                                                            |                                                     |                                       |             |                                         |           |      |             |           
|Net cash from operating activities                                          |                                                     |                                       | 9,565,783   |                                         |           |      | 8,942,925   |           
|                                                                            |                                                     |                                       |             |                                         |           |      |             |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                                       |                                                     |                                       |             |                                         |           |      |             |           
|Acquisition of cable systems                                                |                                                     |                                       |            |                                         |           |      | (3,100,000  | )         
|Investment in cable television properties                                   |                                                     |                                       | (9,604,380  | )                                       |           |      | (6,819,460  | )         
|Proceeds from disposal of assets                                            |                                                     |                                       | 210,888     |                                         |           |      | 35,250      |           
|Franchise fees and other intangibles                                        |                                                     |                                       | (96,494     | )                                       |           |      | (77,027     | )         
|                                                                            |                                                     |                                       |             |                                         |           |      |             |           
|Net cash used in investing activities                                       |                                                     |                                       | (9,489,986  | )                                       |           |      | (9,961,237  | )         
|                                                                            |                                                     |                                       |             |                                         |           |      |             |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |                                                     |                                       |             |                                         |           |      |             |           
|Proceeds from notes payable                                                 |                                                     |                                       | 3,000,000   |                                         |           |      | 81,790,000  |           
|Principal payments on borrowings, net                                       |                                                     |                                       |            |                                         |           |      | (77,955,106 | )         
|Loan fees and other costs incurred                                          |                                                     |                                       | (44,021     | )                                       |           |      | (2,053,001  | )         
|                                                                            |                                                     |                                       |             |                                         |           |      |             |           
|Net cash provided by financing activities                                   |                                                     |                                       | 2,955,979   |                                         |           |      | 1,781,893   |           
|                                                                           
|INCREASE IN CASH                                                            |                                                     |                                       | 3,031,776   |                                         |           |      | 763,581     |           
|                                                                           
|CASH, beginning of period                                                   |                                                     |                                       | 2,551,425   |                                         |           |      | 1,366,050   |           
|                                                                            |                                                     |                                       |             |                                         |           |      |             |           
|CASH, end of period                                                         |                                                     | $                                     | 5,583,201   |                                         |           | $    | 2,129,631   |           
|                                                                            |                                                     |                                       |             |                                         |           |      |             |           
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                           |                                                     |                                       |             |                                         |           |      |             |           
|                                                                            | Cash paid during the period for interest            |                                       | $           | 10,716,151                              |           |      | $           | 9,406,959  |          
|                                                                            |                                                     |                                       |             |                                         |           |      |             |           
|                                                                            | Cash paid during the period for state income taxes  |                                       | $           | 13,051                                  |           |      | $           | 25,136     |          
|                                                                            |                                                     |                                       |             |                                         |           |      |             |           

On September 30, 2001 the Company acquired a cable system
serving the areas in and around Highlands, North Carolina from an
affiliated limited partnership. The system was acquired at an adjusted purchase
price of approximately $4.45 million and was financed with a note due
to a related party of approximately $3.7 million and an equity
contribution from the Companys parent of $750,000. The note was paid
in October of 2001. As of September 30, 2001, the cable system
served approximately 3,226 basic subscribers.

The accompanying notes are an integral part of these 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, 2001
(Unaudited)

(1)  BASIS OF PRESENTATION:

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

(2)  NORTHLAND CABLE NEWS:

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

|                              |                |   |                                   |   |                                  |   |         |         |      |   |        |   |  |   |          |         | 
|----------------------------- | -------------- | - | --------------------------------- | - | -------------------------------- | - | ------- | ------- | ---- | - | ------ | - |  | - | -------- | ------- | 
|                              |                |   | Three month period ended Sept 30, |   | Nine month period ended Sept 30,
|                              |                |   |                                   |   |                                 
|                              |                |   | 2001                              |   | 2000                             |   | 2001    |         | 2000
|                              |                |   |                                   |   |                                  |   |         |         |     
|INCOME STATEMENT
INFORMATION: |                |   |                                   |   |                                  |   |         |         |      |   |        |   |  |   |          |        
|Revenues from affiliates      |                | $ | 0                                 |   |                                  | $ | 194,057 |         |      | $ | 0      |   |  | $ | 602,295  |        
|Less: intercompany revenue    |                |   | 0                                 |   |                                  |   | (90,026 | )       |      |   | 0      |   |  |   | (288,322 | )      
|                              |                |   |                                   |   |                                  |   |         |         |      |   |        |   |  |   |          |        
|                              | Total revenues |   |                                   | 0 |                                  |   |         | 104,031 |      |   |        | 0 |  |   |          | 313,973 | 
|Operating expenses            |                |   | 226                               |   |                                  |   | 161,061 |         |      |   | 2,877  |   |  |   | 490,939  |        
|Other, net                    |                |   | 0                                 |   |                                  |   | 6,016   |         |      |   | 0      |   |  |   | 19,940   |        
|                              |                |   |                                   |   |                                  |   |         |         |      |   |        |   |  |   |          |        
|Net loss                      |                | $ | (226                              | ) |                                  | $ | (63,046 | )       |      | $ | (2,877 | ) |  | $ | (196,906 | )      
|                              |                |   |                                   |   |                                  |   |         |         |      |   |        |   |  |   |          |        





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##### Table of Contents



|                           |                                |              |   |            |         |              |   |            |         | 
|-------------------------- | ------------------------------ | ------------ | - | ---------- | ------- | ------------ | - | ---------- | ------- | 
|                           |                                |              |   | Sept 30,   |         | December 31,
|                           |                                |              |   | 2001       |         | 2000        
|                           |                                |              |   |            |         |             
|BALANCE SHEET INFORMATION: |                                |              |   |            |         |              |   |           
|                           | Current assets                 |              | $ | 2,152,470  |         |              | $ | 2,229,287  |        
|                           | Less: intercompany elimination |              |   | (1,971,763 | )       |              |   | (2,018,237 | )      
|                           |                                |              |   |            |         |              |   |           
|                           |                                | Total Assets |   | $          | 180,707 |              |   | $          | 211,050 | 
|                           |                                |              |   |            |         |              |   |           
|                           | Current and total liabilities  |              | $ | 0          |         |              | $ | 70,188     |        
|                           |                                |              |   |            |         |              |   |           

(3)  ACQUISITION

On September 30, 2001 the Company acquired a
cable system serving the areas in and around Highlands, North
Carolina from an affiliated limited partnership. The system was
acquired at a purchase price of approximately $4.45 million and was
financed with a note due to the related party of approximately $3.7
million and an equity contribution from the Company's parent of
$750,000. The note was paid in October of 2001. As of
September 30, 2001, the cable system served approximately 3,226
basic subscribers.

Pro forma operating results of the Company for the
three and nine months ending September 30, 2001 and 2000,
assuming the acquisition the Highlands System as of the beginning of
2000, are as follows:

| |                  |  |      |                                   |      |                                  |      |            |      |  |   |             |   |  |   |             |  
| | ---------------- |  | ---- | --------------------------------- | ---- | -------------------------------- | ---- | ---------- | ---- |  | - | ----------- | - |  | - | ----------- | -
| |                  |  |      | Three
Month Period Ended Sept 30, |      | Nine
Month Period Ended Sept 30,
| |                  |  |      |                                   |      |                                 
| |                  |  | 2000 |                                   | 2001 |                                  | 2000 |            | 2001
| |                  |  |      |                                   |      |                                  |      |            |     
| | Service
revenues |  | $    | 15,600,000                        |      |                                  | $    | 15,800,000 |      |  | $ | 46,200,000  |   |  | $ | 47,400,000  |  
| |                  |  |      |                                   |      |                                  |      |            |     
| | Net
loss         |  | $    | (4,900,000                        | )    |                                  | $    | (3,300,000 | )    |  | $ | (10,600,000 | ) |  | $ | (10,800,000 | )
| |                  |  |      |                                   |      |                                  |      |            |     

(4)  SUBSEQUENT EVENT

On October 25, 2001 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 $19,680,000. Substantially
all of the proceeds from the sale will be utilized to reduce amounts
outstanding under the Senior Credit Facility. The sale is expected to
close by the end of 2001.

(5)  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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

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

The Company has elected not to designate its derivatives as hedges under
SFAS No. 133. Accordingly, the Company has recorded a liability equal to
the fair market value of its derivatives, $689,000 in income related to
the cumulative effect of a change in accounting principle, and other
expense of $2,785,568 due to the change in value during the nine months
ended September 30, 2001. Each quarter the change in the market value of
the Companys derivatives will be recorded as other income or expense.

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

In August 2001, the FASB issued Statement of
Financial Accounting Standards No. 143, Accounting for Asset
Retirement Obligations. Statement 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 fiscal
2003. The company has not yet estimated the impact of implementation
on its financial position, results of operations or cash flows.

In October 2001, the FASB issued Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. Statement No. 144 addresses
financial accounting and reporting for the impairment of long-lived
assets and for long-lived assets to be disposed of. Statement No. 144
supercedes Statement No. 121, Accounting for the Impairment of
Long-lived Assets and for Long-Lived Assets to Be Disposed Of and
supercedes the accounting and reporting provisions of Accounting
Principles Board Opinion No. 30, Reporting the Results of Operations  Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and
Transactions, for segments of a business to be disposed of.
Implementation of Statement No. 144, which is effective for fiscal
2002, is not expected to have a material impact on the company's
financial position, results of operations or cash flows.





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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, 2001 AND 2000

As of September 30, 2001 the Companys cable systems served
approximately 118,813 basic subscribers, 48,045 premium subscribers,
7,681 digital subscribers and passed an estimated 201,000 homes.

Revenues increased approximately $1.2 million or 3% from $45.2
million to $46.4 million for the nine months ended September 30,
2001. Of these revenues, approximately $31.5 million (68%) was
derived from basic services, $3.3 million (7%) from premium services,
$6.4 million (14%) from expanded basic services, $908,000 (2%) from
service maintenance contracts, $2.0 million (4%) from advertising and
$2.3 million (5%) from other sources. The operations of NCN were
completely discontinued during the first quarter of 2001. Taking
this into account, revenues for the nine months ended September 30,
2001 would have increased approximately $1.5 million over the same
period in 2000. The increase in revenues is primarily attributable
to rate increases implemented during the first quarter of 2001 as
well as increased revenue from higher penetration of new product
tiers. Average monthly revenue per average basic subscriber increased
$2.63 or 7%, from $39.94 to $42.57 for the nine months ended
September 30, 2001.

Cable system operation expenses, which include costs related to
programming, technical personnel, repairs and maintenance and
advertising sales, increased approximately $800,000 or 5% from $15.5
million to $16.3 million for the nine months ended September 30,
2001. Taking into consideration the discontinuation of NCN
operations, operating expense for the nine months ended September 30,
2001 would have increased approximately $1.3 million or 9% over the
same period in 2000. This increase is primarily attributable to: (i)
increases in salary and benefit expenses due to annual cost of living
adjustments, (ii) increased programming costs resulting from rate
increases by certain programming vendors as well as the launch of new
programming services in various systems.

General and administrative expenses, which include on-site office and
customer service personnel costs, customer billing, postage,
marketing expenses and franchise fees, decreased approximately
$500,000 or 6% from $7.9 million to $7.4 million for the nine months
ended September 30, 2001. The decrease is primarily attributable to
reductions in administrative service expenses offset by increases in
administrative salaries and revenue based expenditures such as
franchise fees.





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##### Table of Contents



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

Depreciation and amortization expenses increased approximately
$600,000 or 4% from $14.8 million to $15.4 million for the nine
months ended September 30, 2001. Such increase is attributable to
depreciation on recent equipment purchases related to plant and
equipment upgrades. Increases in depreciation expense are offset by
certain assets becoming fully depreciated.

Interest expense increased approximately $400,000 or 3%, from $13.4
million to $13.8 million for the nine months ended September 30, 2001.
Average outstanding indebtedness increased $7.3 million from
$176.7 million to $184 million for the nine months ended September 30, 2000 and
2001, respectively. The Companys effective interest rate decreased
from 10.12% in 2000 to 9.99% in 2001.

The Company has elected not to designate its derivatives as hedges under
SFAS No. 133. Accordingly, the Company has recorded a liability equal to
the fair market value of its derivatives, $689,000 in income related to
the cumulative effect of a change in accounting principle, and other
expense of $2,785,568 due to the change in value during the nine months
ended September 30, 2001.

THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

Revenues increased approximately $200,000 or 1.3%, from $15.2 million to
$15.4 million for the three months ended September 30, 2001. The
operations of NCN were completely discontinued during the first quarter
of 2001. Taking this into account, revenues for the three months ended
September 30, 2001 would have increased approximately $330,000 or 2.2%
over the same period in 2000. Of these revenues, approximately $10.3
million (67%) was derived from basic services, $1.1 million (7.1%)
from premium services, $2.1 million (13.7%) from expanded basic
services, $287,000 (1.9%) from service maintenance contracts, $693,000
(4.5%) from advertising, and $873,000 (5.8%) from other sources. The
increase in revenues was primarily attributable to: (i) rate increases
implemented in a majority of the Companys systems and (ii) revenue from
higher penetration of new product tiers. Average monthly revenue per
average basic subscriber increased $2.93 or 7.2%, from $40.52 to $43.45
for the three months ended September 30, 2001.

Cable system operation expenses, which include costs related to
programming, technical personnel, repairs and maintenance and
advertising sales, increased approximately $200,000 or 3.8%, from $5.3
million to $5.5 million for the three months ended September 30, 2001.
Taking into account the discontinuation of NCN operations in the first
quarter of 2001, operating expenses would have increased approximately
$362,000 or 7.1% over third quarter 2000 results. This increase is
primarily attributable to: (i) annual cost of living wage and benefit
increases; and (ii) higher programming costs resulting from rate
increases by certain programming vendors and the launch of new
programming services in various systems.





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##### Table of Contents



General and administrative expenses, which include on-site office and
customer service personnel costs, customer billing, postage, marketing
expenses and franchise fees, remained consistent with the same period in
2000. Increases in bad debt expense and certain revenue based expenses
such as franchise fees and copyright fees were offset by reductions in
administrative service expenses.

Management fees increased approximately $12,000 or
1.6%, from
approximately $761,000 to $773,000 for the three months ended September
30, 2001. This increase is directly attributable to the aforementioned
revenue increases. Management fees are calculated at 5.0% of gross
revenues.

Depreciation and amortization expenses increased approximately $200,000
or 4.0%, from $5.0 million to $5.2 million for the three months ended
September 30, 2001. Such increase is attributable to depreciation of
recent equipment purchases in upgrading plant and equipment, offset by
assets becoming fully depreciated.

Interest expense remained consistent with the same period in 2000.
Average outstanding indebtedness increased $7.8 million from $177.7
million to $185.5 million for the three months ended September 30, 2000
and 2001, respectively. The Companys effective interest rate decreased
from 10.21% in 2000 to 9.72% in 2001.

The Company has elected not to designate its derivatives as hedges under
SFAS No. 133. Accordingly, the Company has recorded a liability equal to
the fair market value of its derivatives and other expense of
approximately $413,000 due to the change in value during the third
quarter of 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 pursued, and intends to pursue, a
business strategy which includes selective acquisitions. The Company has
financed these expenditures through a combination of cash flow from
operations, borrowings under the revolving credit and term loan facility
provided by a variety of banks and the issuance of senior subordinated
notes. The Companys debt service obligations for the year ended
December 31, 2001 are expected to be approximately $18 million. The
Company anticipates that cash flow from operations will be sufficient to
service its debt through December 31, 2001. The Company believes that
cash flow from operations will be adequate to meet the Companys
long-term liquidity requirements, excluding acquisitions and certain
levels of capital expenditures, prior to the maturity of its long-term
indebtedness, although no assurance can be given in this regard.

Net cash provided by operating activities was $9.6 million for the nine
months ended September 30, 2001. Adjustments to the $10.8 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, $2.1 million relating to interest rate derivatives and
increases in operating liabilities of approximately $2.7 million.





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##### Table of Contents



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

Net cash provided by financing activities was approximately $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.

Earnings before charges for interest, taxes, depreciation and
amortization (EBITDA) increased approximately $800,000 or 4.1%, from
$19.5 million to $20.3 million for the nine months ended September 30,
2001. Had the operation of NCN been discontinued in the first quarter
of 2000, EBITDA would have increased approximately $600,000 or 3.1%,
from $19.7 million to $20.3 million for the nine months ended September
30, 2001. EBITDA as a percentage of revenues (EBITDA Margin)
increased from 43.1% to 43.8% for the nine months ended September 30,
2001. Assuming NCN operations were discontinued in the first quarter of
2000, EBITDA as a percentage of revenue would have remained consistent
with the same period in 2000. Industry analysts generally consider
EBITDA to be an appropriate measure of the performance of multi-channel
television operations. EBITDA is not presented in accordance with
generally accepted accounting principles and should not be considered an
alternative to, or more meaningful than, operating income or operating
cash flow as an indication of the Companys operating performance.

Net cash provided by operating activities was $8.9 million for the nine
months ended September 30, 2000. Adjustments to the $10.8 million net
loss for the period to reconcile to net cash provided by operating
activities consisted primarily of $15.4 million of depreciation and
amortization, $2.1 million loss on refinance of notes payable and
increases in operating liabilities of $2.5 million.

Net cash used in investing activities was $10 million for the nine
months ended September 30, 2000, and consisted of $3.1 million used in
the acquisition of the Kingston System and approximately $6.8 million in
capital expenditures.

Net cash provided by financing activities was approximately $1.8 million
for the nine months ended September 30, 2000. The Company had $3.1
million in borrowings of long term debt to finance the Kingston,
Washington acquisition and made approximately $1.5 million of principal
payments on notes payable. The Company received approximately $78.7
million from the refinance of its senior credit facility and used the
proceeds to: (i) repay approximately $76.7 million in amounts
outstanding under its old senior credit facility; and (ii) pay loan fees
and expenses incurred in the refinance of approximately $2 million.

On August 14, 2000, the Company refinanced its existing senior bank
indebtedness The original indebtedness was repaid with borrowings under
the Revised Senior Credit Facility. The revised Senior Credit Facility
establishes a $35 million 364-day revolving credit loan. At the end of
the 364-day period, the revolver converts to a term loan due on June 30,
2007. The other two components consist of a seven-year revolving term
loan in the aggregate principal amount of $40 million and a seven-year
term loan in the aggregate principal amount of $35 million. Amounts
outstanding under the Revised Senior Credit Facility mature on June 30,
2007. The Revised Senior Credit Facility is collateralized by a first
lien position on all present and future assets and stock of the Company.
Interest rates vary based on certain financial covenants; currently
9.508% (weighted average). Graduated principal and interest payments





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##### Table of Contents



are due quarterly, beginning September 30, 2003, until maturity on June
30, 2007. The estimated fair value of the revolving credit and term
loan facility is equal to its carrying value because of its variable
interest rate nature. As of September 30, 2001, $9,460,000 was
available to borrow by the Company under the revolving credit facility.

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

At September 30, 2001, the outstanding balance under the Senior Credit
Facility was $85.5 million. As of the date of this filing, interest
rates on the Senior Credit Facility were as follows: $20 million fixed
at 9.54% under the terms of an interest rate swap agreement with the
Companys lender expiring August 20, 2002, $20 million fixed at 9.62%
under the terms of an interest rate swap agreement with the Companys
lender expiring August 17, 2002, $42.5 million fixed at 7.92% under the
terms of an interest rate swap agreement with the Companys lender
expiring February 2, 2002; and $3 million fixed at a LIBOR based rate of
6.31% expiring November 19, 2001. The above rates include a margin paid
to the lender based on overall leverage and may increase or decrease as
the Companys overall leverage fluctuates.

CAPITAL EXPENDITURES

For the nine months ended September 30, 2001, the Company incurred
capital expenditures of approximately $9.6 million. Capital expenditures
included: (i) new product digital launches, (ii) expansion and
improvements of cable properties; (iii) additions to plant and
equipment; and (iv) line drops, extensions and installations of cable
plant facilities.

The Company plans to invest approximately $1.9 million in capital
expenditures for the remainder of 2001. This represents anticipated
expenditures for upgrading and rebuilding certain distribution facilities,
new product digital launches, extensions of distribution facilities to add
new subscribers and general maintenance.

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 three interest rate
swap agreements for $20,000,000, $20,000,000, and $42,540,000 of these
borrowings, 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 these 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 the
Companys variable rate obligations would be approximately $825,000.

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





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##### Table of Contents



ACQUISITION

On September 28, 2001 the Company acquired a
cable system serving the areas in and around Highlands, North
Carolina from an affiliated limited partnership. The system was
acquired at an adjusted purchase price of approximately $4.45 million and
was financed with a note due to a related party of approximately
$3.7 million and an equity contribution from the Company's
parent of $750,000. The note was paid in October of 2001. As of
September 30, 2001, the cable system served approximately 3,226
basic subscribers.

Pro forma operating results of the Company for the
three and nine months ended September 30, 2001 and 2000,
assuming the acquisition of the Highlands System of 2000, are
disclosed in Note (3) to the financial statements.

SUBSEQUENT EVENT

On October 25, 2001 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
$19,680,000. Substantially all of the proceeds from the sale will be
utilized to reduce amounts outstanding under the Senior Credit Facility.
The sale is expected to close by the end of 2001.

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.





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





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##### Table of Contents



SIGNATURES

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

Northland Cable Television, Inc. and Subsidiary

|                                          |  |                                                             |  |                 
|----------------------------------------- |  | ----------------------------------------------------------- |  | ----------------
|SIGNATURES                                |  | CAPACITIES                                                  |  | DATE            
|                                          |  |                                                             |  |                 
|/s/      Richard I. ClarkRichard I. Clark |  | Executive Vice President, Treasurer and Assistant Secretary |  | November 9, 2001
|                                         
|/s/      Gary S. JonesGary S. Jones       |  | President                                                   |  |