##### Table of Contents



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

FORM 10-Q/A

|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|    |  | For the quarterly period ended 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 23 pages. Exhibits index appears on page 18.





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TABLE OF CONTENTS



|                               |                                                                                               |                                                                                               |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART 1  FINANCIAL INFORMATION
|                               | ITEM 1. Financial Statements                                                                 
|                               |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS  (UNAUDITED)                                          
|                               |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)  (UNAUDITED)
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)                                
|                               |                                                                                               | NOTES TO UNAUDITED FINANCIAL STATEMENTS                                                      
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                               | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II  OTHER INFORMATION   
|                               | ITEM 1 Legal proceedings                                                                     
|                               | ITEM 2 Changes in securities                                                                 
|                               | ITEM 3 Defaults upon senior securities                                                       
|                               | ITEM 4 Submission of matters to a vote of security holders                                   
|                               | ITEM 5 Other information                                                                     
|                               | ITEM 6 Exhibits and Reports on Form 8-K                                                      
|SIGNATURES                    
|EXHIBIT 99.1                  
|EXHIBIT 99.2                  



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##### Table of Contents






PART 1  FINANCIAL INFORMATION




ITEM 1. Financial Statements




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

|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |             |             |  
|---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | ----------- | ------------- | ----------- | ------------ | ----------- | ----------- | ----------- | -
|                                                                                                     |                                                                                                                                         |                                                 |             | September 30, |             | December 31,
|                                                                                                     |                                                                                                                                         |                                                 |             | 2001          |             | 2000        
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |             
|                                                                                                     |                                                                                                                                         |                                                 |             | (restated)    |             |              |             |            
|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 swaps                                                                                                                     |                                                 |             | 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                                                                                                                     |                                                 |             | (78,786,926   | )           |              |             | (67,584,974 | )          
|                                                                                                     | Accumulated other comprehensive income                                                                                                  |                                                 |             | 374,000       |             |              |             |            |            
|                                                                                                     |                                                                                                                                         |                                                 |             |               |             |              |             |            
|                                                                                                     |                                                                                                                                         | 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 consolidated 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 AND
COMPREHENSIVE INCOME (LOSS)  (UNAUDITED)

|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |            |             |            | 
|----------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | -------------------------- | ---------- | --------------------------------------- | ---------- | ----------- | ---------- | ----------- | ---------- | 
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            | For the nine months ended September 30,
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                        
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            | 2001                                    |            | 2000       
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |            
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            | (restated)                              |            |             |            |            
|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), excluding depreciation
and amortization expense recorded below |                                                                                                      |                            | 16,333,213 |                                         |            |             | 15,546,559 |            
|                                    | General and administrative (including
$616,500 and $1,507,327, 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     |           
|                                    |                                                                                                                                                                                  | Unrealized loss on interest rate swaps                                                               |                            |            | (2,470,568                              | )          |             |            |            |           
|                                    |                                                                                                                                                                                  | Gain (loss) on disposal of assets                                                                    |                            |            | 28,320                                  |            |             |            | (94,425     | )         
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           
|                                    |                                                                                                                                                                                  |                                                                                                      | (16,136,751                | )          |                                         |            | (13,408,159 | )         
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           
|Net loss before extraordinary item  |                                                                                                                                                                                  | $                                                                                                    | (11,201,952                | )          |                                         | $          | (8,698,855  | )         
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           
|Extraordinary item:                 |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           
|Loss on extinguishment on debt, net |                                                                                                                                                                                  |                                                                                                      |                           |            |                                         |            | (2,092,944  | )         
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           
|Net loss                            |                                                                                                                                                                                  | $                                                                                                    | (11,201,952                | )          |                                         | $          | (10,791,799 | )         
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           
|Other comprehensive income (loss):  |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           
|                                    |                                                                                                                                                                                  | Cumulative effect of change in accounting principle                                                  |                            |            | 689,000                                 |            |             |            |            |           
|                                    |                                                                                                                                                                                  | Reclassification of accumulated other comprehensive
income to unrealized loss on interest rate swaps |                            |            | (315,000                                | )          |             |            |            |           
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           
|                                    |                                                                                                                                                                                  |                                                                                                      | Other comprehensive income |            |                                         | 374,000    |             |            |             |           | 
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           
|Total comprehensive loss            |                                                                                                                                                                                  | $                                                                                                    | (10,827,952                | )          |                                         | $          | (10,791,799 | )         
|                                    |                                                                                                                                                                                  |                                                                                                      |                            |            |                                         |            |             |           

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





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##### Table of Contents



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

|                                    |                                                                                                                                                                                |                          |            |                                          |            |      |            |            |            | 
|----------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------ | ---------- | ---------------------------------------- | ---------- | ---- | ---------- | ---------- | ---------- | 
|                                    |                                                                                                                                                                                |                          |            | For the three months ended September 30,
|                                    |                                                                                                                                                                                |                          |            |                                         
|                                    |                                                                                                                                                                                |                          |            | 2001                                     |            | 2000
|                                    |                                                                                                                                                                                |                          |            |                                          |            |     
|                                    |                                                                                                                                                                                |                          |            | (restated)                               |            |      |            |           
|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), excluding depreciation
and amortization expense recorded below |                          |            | 5,489,892                                |            |      |            | 5,269,772  |           
|                                    | General and administrative (including
$150,948 and $390,600, 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     |           
|                                    | Unrealized loss on interest rate swaps                                                                                                                                         |                          |            | (307,039                                 | )          |      |            |           |           
|                                    | Gain (loss) on disposal of assets                                                                                                                                              |                          |            | 43,704                                   |            |      |            | (41,958    | )         
|                                    |                                                                                                                                                                                |                          |            |                                          |            |      |            |           
|                                    |                                                                                                                                                                                |                          | (4,741,389 | )                                        |            |      | (4,550,426 | )         
|                                    |                                                                                                                                                                                |                          |            |                                          |            |      |            |           
|Extraordinary item:                 |                                                                                                                                                                                |                          |            |                                          |            |      |            |           
|Loss on extinguishment on debt, net |                                                                                                                                                                                |                          |           |                                          |            |      | (2,092,944 | )         
|                                    |                                                                                                                                                                                |                          |            |                                          |            |      |            |           
|Net loss                            |                                                                                                                                                                                | $                        | (3,238,976 | )                                        |            | $    | (4,975,331 | )         
|                                    |                                                                                                                                                                                |                          |            |                                          |            |      |            |           
|Other comprehensive loss:           |                                                                                                                                                                                |                          |            |                                          |            |      |            |           
|                                    | Reclassification of accumulated other comprehensive
income to unrealized loss on interest rate swaps                                                                           |                          |            | (106,000                                 | )          |      |            |           |           
|                                    |                                                                                                                                                                                |                          |            |                                          |            |      |            |           
|                                    |                                                                                                                                                                                | Other comprehensive loss |            |                                          | (106,000   | )    |            |            |           | 
|                                    |                                                                                                                                                                                |                          |            |                                          |            |      |            |           
|Total comprehensive loss            |                                                                                                                                                                                | $                        | (3,344,976 | )                                        |            | $    | (4,975,331 | )         
|                                    |                                                                                                                                                                                |                          |            |                                          |            |      |            |           

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





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##### Table of Contents






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

|                                                                            |                                                    |                                       |             |                                         |           |      |             |            |           |  
|--------------------------------------------------------------------------- | -------------------------------------------------- | ------------------------------------- | ----------- | --------------------------------------- | --------- | ---- | ----------- | ---------- | --------- | -
|                                                                            |                                                    |                                       |             | For the nine months ended September 30,
|                                                                            |                                                    |                                       |             |                                        
|                                                                            |                                                    |                                       |             | 2001                                    |           | 2000
|                                                                            |                                                    |                                       |             |                                         |           |     
|                                                                            |                                                    |                                       |             | (restated)                              |           |      |             |           
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |                                                    |                                       |             |                                         |           |      |             |           
|Net loss                                                                    |                                                    | $                                     | (11,201,952 | )                                       |           | $    | (10,791,799 | )         
|Adjustments to reconcile net loss to
cash provided by operating activities: |                                                    |                                       |             |                                         |           |      |             |           
|                                                                            | Depreciation and amortization                      |                                       |             | 15,370,850                              |           |      |             | 14,782,302 |          
|                                                                            | Unrealized loss on interest rate swaps             |                                       |             | 2,470,568                               |           |      |             |           |          
|                                                                            | 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 provided by 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 agreements 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 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.

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





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




NOTES TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2001
(Unaudited)

(1) BASIS OF PRESENTATION:

Interim Financial Statements

These restated condensed consolidated unaudited financial statements are
being filed in conformity with Rule 10-01 of Regulation S-X regarding
interim financial statement disclosure and do not contain all of the
necessary footnote disclosures required for a fair presentation of the
balance sheets, statements of operations and statements of cash flows in
conformity with generally accepted accounting principles. However, in the
opinion of management, this data includes all adjustments, consisting only
of normal recurring accruals, necessary to present fairly the Companys
financial position at 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.

Restated Financial Statements

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

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





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##### Table of Contents



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

|                           |                                        |                       |             |                          |             |             |             |             |             |  
|-------------------------- | -------------------------------------- | --------------------- | ----------- | ------------------------ | ----------- | ----------- | ----------- | ----------- | ----------- | -
|                           |                                        |                       |             | As of September 30, 2001
|                           |                                        |                       |             |                         
|                           |                                        |                       |             | As Reported              |             | As Restated
|                           |                                        |                       |             |                          |             |            
|BALANCE SHEET INFORMATION: |                                        |                       |             |                          |             |             |             |            
|Total assets               |                                        | $                     | 137,655,802 |                          |             | $           | 137,655,802 |            
|                           |                                        |                       |             |                          |             |             |             |            
|Total liabilities          |                                        | $                     | 203,758,201 |                          |             | $           | 203,758,201 |            
|                           |                                        |                       |             |                          |             |             |             |            
|Shareholders deficit:     |                                        |                       |             |                          |             |             |             |            
|                           | Common stock                           |                       | $           | 12,310,527               |             |             | $           | 12,310,527  |            
|                           | Accumulated deficit                    |                       |             | (78,412,926              | )           |             |             | (78,786,926 | )          
|                           | Accumulated other comprehensive income |                       |             |                         |             |             |             | 374,000     |            
|                           |                                        |                       |             |                          |             |             |             |            
|                           |                                        | Shareholders deficit |             | $                        | (66,102,399 | )           |             | $           | (66,102,399 | )
|                           |                                        |                       |             |                          |             |             |             |            

|                                                                    |                                                                                                    |                                   |            |                    |   |                    |            |             |          |             |             |   |   |   |             |          |         | 
|------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------------------------- | ---------- | ------------------ | - | ------------------ | ---------- | ----------- | -------- | ----------- | ----------- | - | - | - | ----------- | -------- | ------- | 
|                                                                    |                                                                                                    |                                   |            | Three Months Ended |   | Nine Months Ended 
|                                                                    |                                                                                                    |                                   |            | September 30, 2001 |   | September 30, 2001
|                                                                    |                                                                                                    |                                   |            |                    |   |                   
|                                                                    |                                                                                                    |                                   |            | As Reported        |   | As Restated        |            | As Reported |          | As Restated
|                                                                    |                                                                                                    |                                   |            |                    |   |                    |            |             |          |            
|INCOME STATEMENT INFORMATION:                                       |                                                                                                    |                                   |            |                    |   |                    |            |             |          |             |             |   |   |   |             |         
|Service revenues                                                    |                                                                                                    | $                                 | 15,454,301 |                    |   | $                  | 15,454,301 |             |          | $           | 46,384,483  |   |   | $ | 46,384,483  |         
|Income from operations                                              |                                                                                                    | $                                 | 1,502,413  |                    |   | $                  | 1,502,413  |             |          | $           | 4,934,799   |   |   | $ | 4,934,799   |         
|Unrealized loss on interest rate swap agreements                    |                                                                                                    |                                   | (413,039   | )                  |   |                    | (307,039   | )           |          |             | (2,785,568  | ) |   |   | (2,470,568  | )       
|Net loss before cumulative effect of change in
accounting principle |                                                                                                    |                                   | (3,344,976 | )                  |   |                    | (3,238,976 | )           |          |             | (11,516,952 | ) |   |   | (11,201,952 | )       
|Cumulative effect of change in accounting principle                 |                                                                                                    |                                   |           |                    |   |                    |           |             |          |             | 689,000     |   |   |   |            |         
|                                                                    |                                                                                                    |                                   |            |                    |   |                    |            |             |          |             |             |   |   |   |             |         
|Net loss                                                            |                                                                                                    | $                                 | (3,344,976 | )                  |   | $                  | (3,238,976 | )           |          | $           | (10,827,952 | ) |   | $ | (11,201,952 | )       
|                                                                    |                                                                                                    |                                   |            |                    |   |                    |            |             |          |             |             |   |   |   |             |         
|Other comprehensive income:                                         |                                                                                                    |                                   |            |                    |   |                    |            |             |          |             |             |   |   |   |             |         
|                                                                    | Cumulative effect of change in accounting principle                                                |                                   |            |                   |   |                    |            |            |          |             |             |  |   |   |             | 689,000  |        
|                                                                    | Reclassification of other comprehensive income to
unrealized loss on interest rate swap agreements |                                   |            |                   |   |                    |            | (106,000    | )        |             |             |  |   |   |             | (315,000 | )      
|                                                                    |                                                                                                    |                                   |            |                    |   |                    |            |             |          |             |             |   |   |   |             |         
|                                                                    |                                                                                                    | Other comprehensive (loss) income |            |                    |  |                    |            |             | (106,000 | )           |             |   |  |   |             |          | 374,000 | 
|                                                                    |                                                                                                    |                                   |            |                    |   |                    |            |             |          |             |             |   |   |   |             |         
|Total comprehensive loss                                            |                                                                                                    | $                                 | (3,344,976 | )                  |   | $                  | (3,344,976 | )           |          | $           | (10,827,952 | ) |   | $ | (10,827,952 | )       
|                                                                    |                                                                                                    |                                   |            |                    |   |                    |            |             |          |             |             |   |   |   |             |         





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(2) NORTHLAND CABLE NEWS:

Northland Cable News, Inc. (NCN), a wholly owned subsidiary of the
Company, develops and distributes local news, sports and information
programming to Northland Cable Television, Inc. and certain of the
Companys affiliates. The Companys payment obligations under the $100
million of senior notes are fully and unconditionally, jointly and
severally guaranteed on a senior subordinated basis by NCN. The guarantee
of NCN is subordinated to the prior payment in full of all senior debt of
NCN (as of 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 believes that they would not be
material to financial statement readers. Summary financial information of
NCN is presented below.

|                                                                                                                                                                                      |  |                            |      |                           |  |      |          |      |  |   |        |   |  |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ---- | ------------------------- |  | ---- | -------- | ---- |  | - | ------ | - |  | - | -------- | -
|                                                                                                                                                                                      |  | For the three months ended |      | For the nine months ended
|                                                                                                                                                                                      |  | September 30,              |      | September 30,            
|                                                                                                                                                                                      |  |                            |      |                          
|                                                                                                                                                                                      |  | 2001                       |      | 2000                      |  | 2001 |          | 2000
|                                                                                                                                                                                      |  |                            |      |                           |  |      |          |     
|INCOME STATEMENT INFORMATION:                                                                                                                                                         |  |                            |      |                           |  |      |          |      |  |   |        |   |  |   |          |  
|Revenues from affiliates (including $90,026
and $288,322 of intercompany revenue
eliminated in consolidation during the
three and nine months ended
September 30, 2000, respectively) |  |                            |      |                           |  | $    | 194,057  |      |  | $ |       |   |  | $ | 602,295  |  
|Operating expenses                                                                                                                                                                    |  |                            | (226 | )                         |  |      | (161,061 | )    |  |   | (2,877 | ) |  |   | (490,939 | )
|Other, net                                                                                                                                                                            |  |                            |     |                           |  |      | (6,016   | )    |  |   |       |   |  |   | (19,940  | )
|                                                                                                                                                                                      |  |                            |      |                           |  |      |          |      |  |   |        |   |  |   |          |  
|Net income (loss)                                                                                                                                                                     |  | $                          | (226 | )                         |  | $    | 26,980   |      |  | $ | (2,877 | ) |  | $ | 91,416   |  
|                                                                                                                                                                                      |  |                            |      |                           |  |      |          |      |  |   |        |   |  |   |          |  

|                               |  |               |            |              |  |   |            |  
|------------------------------ |  | ------------- | ---------- | ------------ |  | - | ---------- | -
|                               |  | September 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    |  
|                               |  |               |            |              |  |   |            |  
|Total liabilities              |  | $             |           |              |  | $ | 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 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.





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##### Table of Contents



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 Months Ended September 30, |            | Nine Months Ended September 30,
|                         |  |                                  |            |                                
|                         |  | 2001                             |            | 2000                            |  | 2001 |            | 2000
|                         |  |                                  |            |                                 |  |      |            |     
|Service revenues         |  | $                                | 15,800,000 |                                 |  | $    | 15,600,000 |      |  | $ | 47,400,000  |   |  | $ | 46,200,000  |  
|                         |  |                                  |            |                                 |  |      |            |      |  |   |             |   |  |   |             |  
|Net loss                 |  | $                                | (3,200,000 | )                               |  | $    | (4,900,000 | )    |  | $ | (11,100,000 | ) |  | $ | (10,600,000 | )
|                         |  |                                  |            |                                 |  |      |            |      |  |   |             |   |  |   |             |  
|Total comprehensive loss |  | $                                | (3,300,000 | )                               |  | $    | (4,900,000 | )    |  | $ | (10,800,000 | ) |  | $ | (10,600,000 | )
|                         |  |                                  |            |                                 |  |      |            |      |  |   |             |   |  |   |             |  

(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 133. Accordingly, the Company has recorded a liability equal to the
fair market value of its derivatives, $689,000 as other comprehensive
income related to the cumulative effect of a change in accounting
principle, which is being amortized into earnings over the life of the
interest rate swap agreements, and other expense of approximately $2.5
million due to the change in value of its derivatives during the nine
months ended September 30, 2001, offset by the amortization of the change
in accounting principle of $315,000.





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##### Table of Contents



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
amortization of existing goodwill will cease on December 31, 2001. Any
goodwill resulting from acquisitions completed after June 30, 2001 will
not be amortized. SFAS No. 142 also establishes a new method of testing
goodwill for impairment on an annual basis or on an interim basis if an
event occurs or circumstances change that would reduce the fair value of a
reporting unit below its carrying value. The adoption of SFAS No. 142
will result in the Companys discontinuation of amortization of its
goodwill; however, the Company will be required to test its goodwill for
impairment under the new standard beginning in the first quarter of 2002,
which could have an adverse effect on the Companys future results of
operations if an impairment occurs. The Company is in the process of
evaluating the financial statement impact of adoption of SFAS No. 142.

Statement of Financial Accounting Standards (SFAS) No. 143  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.

Statement of Financial Accounting Standards (SFAS) No. 144  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

RESTATEMENT

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

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





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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.

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 133. Accordingly, the Company has recorded a liability equal to the
fair value of its derivatives, $689,000 as other comprehensive income
related to the cumulative effect of a change in accounting principle,
which is being amortized into earnings over the life of the interest rate
swap agreements, and other expense of approximately $2.5 million due to
the change in value of its derivatives during the nine months ended
September 30, 2001, offset by the amortization of the change in accounting
principle of $315,000.

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





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##### Table of Contents



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.

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 133. Accordingly, the Company has recorded a liability
equal to the fair value of its derivatives, $689,000 as other
comprehensive income related to the cumulative effect of a change in
accounting principle, which is being amortized into earnings over the
life of the interest rate swap agreements, and other expense of
approximately $307,000 due to the change in value of its derivatives
during the three months ended September 30, 2001, offset by the
amortization of the change in accounting principle of $106,000.

LIQUIDITY AND CAPITAL RESOURCES

The cable television business generally requires substantial capital for
the construction, expansion and maintenance of the signal distribution
system. In addition, the Company has pursued, and intends to pursue, a
business strategy which includes selective acquisitions. The Company has
financed these expenditures through a combination of cash flow from
operations, borrowings under the revolving credit and term loan facility
provided by a variety of banks and the issuance of senior subordinated
notes. The Companys debt service obligations for the year ended
December 31, 2001 are expected to be approximately $18 million. The
Company





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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 $11.2 million net
loss for the period to reconcile to net cash provided by operating
activities consisted primarily of $15.9 million of depreciation and
amortization, $2.5 million relating to interest rate derivatives and
increases in operating liabilities of approximately $2.7 million.

Net cash used in investing activities was $9.5 million for the nine
months ended September 30, 2001, and 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.





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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
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 November 14, 2001, interest rates on
the Senior Credit Facility were as follows: $20 million fixed at 9.54%
under the terms of an interest rate swap agreement with the Companys
lender expiring August 20, 2002, $20 million fixed at 9.62% under the
terms of an interest rate swap agreement with the Companys lender
expiring August 17, 2002, $42.5 million fixed at 7.92% under the terms
of an interest rate swap agreement with the Companys lender expiring
February 2, 2002; and $3 million fixed at a LIBOR based rate of 6.31%
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.

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 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





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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.





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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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




ITEM 4. CONTROLS AND PROCEDURES

Not applicable.





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##### Table of Contents






PART II  OTHER INFORMATION




ITEM 1 Legal proceedings

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




ITEM 2 Changes in securities

None




ITEM 3 Defaults upon senior securities

None




ITEM 4 Submission of matters to a vote of security holders

None




ITEM 5 Other information

None




ITEM 6 Exhibits and Reports on Form 8-K

(a)  Exhibit Index

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

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





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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 |  | 11-8-02
|                                      
|/s/   Gary S. JonesGary S. Jones       |  | President                                                   |  | 11-8-02





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CERTIFICATIONS

I, John Whetzell certify that:



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

Date: November 8, 2002

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





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##### Table of Contents



I, Gary Jones certify that:



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

Date: November 8, 2002

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