##### 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 March 31, 2002                                          

or

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

Commission file number 333-43157

NORTHLAND CABLE TELEVISION, INC.

---

(Exact name of registrant as specified in its charter)


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

AND SUBSIDIARY GUARANTOR:

NORTHLAND CABLE NEWS, INC.

---

(Exact name of registrant as specified in its charter)


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

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

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

Yes   [X]   No   [   ]

This filing contains 22 pages. Exhibits index appears on page 17.





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TABLE OF CONTENTS



|                               |                                                                                               |                                                                                               |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART 1  FINANCIAL INFORMATION
|                               | ITEM 1. Financial Statements                                                                 
|                               |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS  (UNAUDITED)                                          
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)  (UNAUDITED)
|                               |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)                                
|                               |                                                                                               | NOTES TO UNAUDITED FINANCIAL STATEMENTS                                                      
|                               | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                               | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                               | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II  OTHER INFORMATION   
|                               | ITEM 1 Legal proceedings                                                                     
|                               | ITEM 2 Changes in securities                                                                 
|                               | ITEM 3 Defaults upon senior securities                                                       
|                               | ITEM 4 Submission of matters to a vote of security holders                                   
|                               | ITEM 5 Other information                                                                     
|                               | ITEM 6 Exhibits and Reports on Form 8-K                                                      
|SIGNATURES                    
|CERTIFICATIONS                
|Exhibit 99.(a)                
|Exhibit 99.(b)                



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##### Table of Contents






PART 1  FINANCIAL INFORMATION




ITEM 1. Financial Statements




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

|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |             |             |             |  
|---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | --------------------------- | ----------- | ----------- | ----------- | ------------ | ----------- | ----------- | ----------- | -
|                                                                                                     |                                                                                                                                         |                                                 |                             |             | March 31,   |             | December 31,
|                                                                                                     |                                                                                                                                         |                                                 |                             |             | 2002        |             | 2001        
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |             
|                                                                                                     |                                                                                                                                         |                                                 |                             |             | (restated)  |             | (restated)  
|ASSETS                                                                                               |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Current Assets:                                                                                      |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     | Cash                                                                                                                                    |                                                 | $                           | 5,162,131   |             |             | $            | 2,724,099   |            
|                                                                                                     | Due from affiliates                                                                                                                     |                                                 |                             | 912,944     |             |             |              | 295,650     |            
|                                                                                                     | Accounts receivable                                                                                                                     |                                                 |                             | 3,265,268   |             |             |              | 3,437,560   |            
|                                                                                                     | Prepaid expenses                                                                                                                        |                                                 |                             | 572,025     |             |             |              | 547,480     |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         | Total current assets                            |                             |             | 9,912,368   |             |              |             | 7,004,789   |            
|Investment in Cable Television Properties:                                                           |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Property and equipment, net of accumulated
depreciation of $55,976,817 and $53,518,610,
respectively |                                                                                                                                         |                                                 | 55,746,377                  |             |             |             | 57,237,151   |            
|Franchise agreements, net of accumulated
amortization of $47,705,273                                 |                                                                                                                                         |                                                 | 53,229,933                  |             |             |             | 53,229,933   |            
|Goodwill, net of accumulated
amortization of $2,407,104                                              |                                                                                                                                         |                                                 | 3,937,329                   |             |             |             | 3,937,329    |            
|Other intangible assets, net of accumulated
amortization of $6,213,372 and $5,946,896,
respectively  |                                                                                                                                         |                                                 | 4,256,942                   |             |             |             | 4,516,992    |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         | Total investment in cable television properties |                             |             | 117,170,581 |             |              |             | 118,921,405 |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         | Total assets                                    |                             | $           | 127,082,949 |             |              | $           | 125,926,194 |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Current Liabilities:                                                                                 |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     | Accounts payable                                                                                                                        |                                                 | $                           | 64,095      |             |             | $            | 1,103,869   |            
|                                                                                                     | Accrued expenses                                                                                                                        |                                                 |                             | 8,138,814   |             |             |              | 6,395,484   |            
|                                                                                                     | Converter deposits                                                                                                                      |                                                 |                             | 157,325     |             |             |              | 157,534     |            
|                                                                                                     | Subscriber prepayments                                                                                                                  |                                                 |                             | 2,277,484   |             |             |              | 1,898,112   |            
|                                                                                                     | Due to affiliates                                                                                                                       |                                                 |                             | 795,664     |             |             |              | 242,741     |            
|                                                                                                     | Interest rate swaps                                                                                                                     |                                                 |                             | 1,055,412   |             |             |              | 1,919,587   |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         |                                                 | Total current liabilities   |             |             | 12,488,794  |              |             |             | 11,717,327  |  
|Notes payable                                                                                        |                                                                                                                                         |                                                 | 171,031,182                 |             |             |             | 171,031,182  |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         |                                                 | Total liabilities           |             |             | 183,519,976 |              |             |             | 182,748,509 |  
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Shareholders Deficit:                                                                               |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     | Common stock (par value $1.00 per share, authorized
50,000 shares; 10,000 shares issued and outstanding)
and additional paid-in capital |                                                 |                             | 12,359,377  |             |             |              | 12,359,377  |            
|                                                                                                     | Accumulated deficit                                                                                                                     |                                                 |                             | (68,960,404 | )           |             |              | (69,449,692 | )          
|                                                                                                     | Accumulated other comprehensive income                                                                                                  |                                                 |                             | 164,000     |             |             |              | 268,000     |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|                                                                                                     |                                                                                                                                         |                                                 | Total shareholders deficit |             |             | (56,437,027 | )            |             |             | (56,822,315 | )
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            
|Total liabilities and shareholders deficit                                                          |                                                                                                                                         | $                                               | 127,082,949                 |             |             | $           | 125,926,194  |            
|                                                                                                     |                                                                                                                                         |                                                 |                             |             |             |             |              |            

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





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

|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |            |            |          |            | 
|---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | --------------------------------- | ---------- | ------------------------------------ | ---------- | ---------- | ---------- | -------- | ---------- | 
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            | For the three months ended March 31,
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                     
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            | 2002                                 |            | 2001      
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            | (restated)                           |            | (restated)
|Revenues:                          |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|                                   | Service revenues                                                                                                                                                               |                                               | $                                                                                                           | 15,214,808                        |            |                                      | $          | 15,405,655 |           
|Expenses:                          |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|                                   | Cable system operations (including $78,286 and $85,016,
net paid to affiliates in 2002 and 2001, respectively),
excluding depreciation and amortization expense
recorded below |                                               |                                                                                                             | 5,744,840                         |            |                                      |            | 5,494,858  |           
|                                   | General and administrative (including
$(54,118) and $133,203 net (received from) paid
to affiliates in 2002 and 2001, respectively)                                            |                                               |                                                                                                             | 2,130,124                         |            |                                      |            | 2,356,208  |           
|                                   | Management fees paid to parent                                                                                                                                                 |                                               |                                                                                                             | 760,671                           |            |                                      |            | 769,649    |           
|                                   | Depreciation and amortization                                                                                                                                                  |                                               |                                                                                                             | 2,636,755                         |            |                                      |            | 5,063,473  |           
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|                                   |                                                                                                                                                                                |                                               |                                                                                                             | Total operating expenses          |            |                                      | 11,272,390 |            |            |          | 13,684,188 | 
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|Income from operations             |                                                                                                                                                                                |                                               | 3,942,418                                                                                                   |                                   |            |                                      | 1,721,467  |           
|Other income (expense):            |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|                                   |                                                                                                                                                                                | Interest expense                              |                                                                                                             |                                   | (4,420,306 | )                                    |            |            | (4,642,614 | )       
|                                   |                                                                                                                                                                                | Interest income and other, net                |                                                                                                             |                                   | 4,825      |                                      |            |            | 36,127     |         
|                                   |                                                                                                                                                                                | Unrealized gain (loss) on interest rate swaps |                                                                                                             |                                   | 968,175    |                                      |            |            | (2,070,846 | )       
|                                   |                                                                                                                                                                                | Loss on disposal of assets                    |                                                                                                             |                                   | (5,824     | )                                    |            |            | (3,189     | )       
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|                                   |                                                                                                                                                                                |                                               | (3,453,130                                                                                                  | )                                 |            |                                      | (6,680,522 | )         
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|Net income (loss)                  |                                                                                                                                                                                | $                                             | 489,288                                                                                                     |                                   |            | $                                    | (4,959,055 | )         
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|Other comprehensive income (loss): |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|                                   |                                                                                                                                                                                |                                               | Cumulative effect of change in accounting principle                                                         |                                   |            |                                     |            |            |            | 689,000  |           
|                                   |                                                                                                                                                                                |                                               | Reclassification of accumulated other comprehensive income
to unrealized gain (loss) on interest rate swaps |                                   |            | (104,000                             | )          |            |            | (104,000 | )         
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|                                   |                                                                                                                                                                                |                                               |                                                                                                             | Other comprehensive (loss) income |            |                                      | (104,000   | )          |            |          | 585,000    | 
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           
|Total comprehensive income (loss)  |                                                                                                                                                                                | $                                             | 385,288                                                                                                     |                                   |            | $                                    | (4,374,055 | )         
|                                   |                                                                                                                                                                                |                                               |                                                                                                             |                                   |            |                                      |            |           

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)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (UNAUDITED)

|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |           |          |  
|------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------- | ---------------------- | ---------- | ------------------------------------ | -------- | ---------- | ---------- | --------- | -------- | -
|                                                                                     |                                                                                    |                        |            | For the three months ended March 31,
|                                                                                     |                                                                                    |                        |            |                                     
|                                                                                     |                                                                                    |                        |            | 2002                                 |          | 2001      
|                                                                                     |                                                                                    |                        |            |                                      |          |           
|                                                                                     |                                                                                    |                        |            | (restated)                           |          | (restated)
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                |                                                                                    |                        |            |                                      |          |            |            |          
|Net income (loss)                                                                    |                                                                                    | $                      | 489,288    |                                      |          | $          | (4,959,055 | )        
|Adjustments to reconcile net income (loss) to
cash provided by operating activities: |                                                                                    |                        |            |                                      |          |            |            |          
|                                                                                     | Depreciation and amortization                                                      |                        |            | 2,636,755                            |          |            |            | 5,063,473 |         
|                                                                                     | Unrealized (gain) loss on interest rate swaps                                      |                        |            | (968,175                             | )        |            |            | 2,070,846 |         
|                                                                                     | Amortization of loan costs                                                         |                        |            | 167,996                              |          |            |            | 167,995   |         
|                                                                                     | Loss on disposal of assets                                                         |                        |            | 5,824                                |          |            |            | 3,189     |         
|                                                                                     | (Increase) decrease in operating assets:                                           |                        |            |                                      |          |            |            |           |         
|                                                                                     |                                                                                    | Accounts receivable    |            |                                      | (53,796  | )          |            |           | 120,142  |  
|                                                                                     |                                                                                    | Prepaid expenses       |            |                                      | (24,545  | )          |            |           | (43,037  | )
|                                                                                     |                                                                                    | Due from affiliates    |            |                                      | (617,294 | )          |            |           | (309,703 | )
|                                                                                     | Increase (decrease) in operating liabilities
Accounts payable and accrued expenses |                        |            | 1,239,295                            |          |            |            | 519,536   |         
|                                                                                     |                                                                                    | Due to affiliates      |            |                                      | 552,923  |            |            |           | 541,440  |  
|                                                                                     |                                                                                    | Converter deposits     |            |                                      | (209     | )          |            |           | 7,139    |  
|                                                                                     |                                                                                    | Subscriber prepayments |            |                                      | 379,372  |            |            |           | 500,858  |  
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          
|Net cash provided by operating activities                                            |                                                                                    |                        | 3,807,434  |                                      |          |            | 3,682,823  |          
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                |                                                                                    |                        |            |                                      |          |            |            |          
|Investment in cable television properties                                            |                                                                                    |                        | (1,594,614 | )                                    |          |            | (4,135,974 | )        
|Proceeds from disposition of cable system                                            |                                                                                    |                        | 226,088    |                                      |          |            |           |          
|Proceeds from disposal of assets                                                     |                                                                                    |                        | 5,550      |                                      |          |            | 3,856      |          
|Franchise agreements and other intangibles                                           |                                                                                    |                        |           |                                      |          |            | (22,741    | )        
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          
|Net cash used in investing activities                                                |                                                                                    |                        | (1,362,976 | )                                    |          |            | (4,154,859 | )        
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                |                                                                                    |                        |            |                                      |          |            |            |          
|Proceeds from notes payable                                                          |                                                                                    |                        |           |                                      |          |            | 1,000,000  |          
|Loan fees and other costs incurred                                                   |                                                                                    |                        | (6,426     | )                                    |          |            |           |          
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          
|Net cash (used in) provided by financing activities                                  |                                                                                    |                        | (6,426     | )                                    |          |            | 1,000,000  |          
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          
|INCREASE IN CASH                                                                     |                                                                                    |                        | 2,438,032  |                                      |          |            | 527,964    |          
|CASH, beginning of period                                                            |                                                                                    |                        | 2,724,099  |                                      |          |            | 2,551,425  |          
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          
|CASH, end of period                                                                  |                                                                                    | $                      | 5,162,131  |                                      |          | $          | 3,079,389  |          
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                    |                                                                                    |                        |            |                                      |          |            |            |          
|                                                                                     | Cash paid during the period for interest                                           |                        | $          | 1,727,177                            |          |            | $          | 2,050,607 |         
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          
|                                                                                     | Cash paid during the period for state income taxes                                 |                        | $          | 4,881                                |          |            | $          | 5,651     |         
|                                                                                     |                                                                                    |                        |            |                                      |          |            |            |          

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

MARCH 31, 2002
(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 March 31, 2002, its statements of operations for the
three months ended March 31, 2002 and 2001 and its statements of cash
flows for the three months ended March 31, 2002 and 2001. Results of
operations for these periods are not necessarily indicative of results to
be expected for the full year. These financial statements and notes
should be read in conjunction with the Companys Annual Report on Form
10-K/A for the year ended December 31, 2001.

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 statement 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 March 31, 2002 |             | As of December 31, 2001
|                           |                            |                       |             |                      |             |                        
|                           |                            |                       |             | As Reported          |             | As Restated             |             | As Reported |             | As Restated
|                           |                            |                       |             |                      |             |                         |             |             |             |            
|BALANCE SHEET INFORMATION: |                            |                       |             |                      |             |                         |             |             |             |             |             |             |             |   |             |            
|Total assets               |                            | $                     | 127,082,949 |                      |             | $                       | 127,082,949 |             |             | $           | 125,926,194 |             |             | $ | 125,926,194 |            
|                           |                            |                       |             |                      |             |                         |             |             |             |             |             |             |             |   |             |            
|Total liabilities          |                            | $                     | 183,519,976 |                      |             | $                       | 183,519,976 |             |             | $           | 182,748,509 |             |             | $ | 182,748,509 |            
|                           |                            |                       |             |                      |             |                         |             |             |             |             |             |             |             |   |             |            
|Shareholders deficit:     |                            |                       |             |                      |             |                         |             |             |             |             |             |             |             |   |             |            
|                           | Common stock               |                       | $           | 12,359,377           |             |                         | $           | 12,359,377  |             |             | $           | 12,359,377  |             |   | $           | 12,359,377  |            
|                           | Accumulated deficit        |                       |             | (68,796,404          | )           |                         |             | (68,960,404 | )           |             |             | (69,181,692 | )           |   |             | (69,449,692 | )          
|                           | Other comprehensive income |                       |             |                     |             |                         |             | 164,000     |             |             |             |            |             |   |             | 268,000     |            
|                           |                            |                       |             |                      |             |                         |             |             |             |             |             |             |             |   |             |            
|                           |                            | Shareholders deficit |             | $                    | (56,437,027 | )                       |             | $           | (56,437,027 | )           |             | $           | (56,822,315 | ) |             | $           | (56,822,315 | )
|                           |                            |                       |             |                      |             |                         |             |             |             |             |             |             |             |   |             |            

|                                                                    |                                                                                                                       |                          |            |                                   |   |                                   |            |             |          |             |            |   |   |   |            |          |         | 
|------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | ------------------------ | ---------- | --------------------------------- | - | --------------------------------- | ---------- | ----------- | -------- | ----------- | ---------- | - | - | - | ---------- | -------- | ------- | 
|                                                                    |                                                                                                                       |                          |            | Three Months Ended March 31, 2002 |   | Three Months Ended March 31, 2001
|                                                                    |                                                                                                                       |                          |            |                                   |   |                                  
|                                                                    |                                                                                                                       |                          |            | As Reported                       |   | As Restated                       |            | As Reported |          | As Restated
|                                                                    |                                                                                                                       |                          |            |                                   |   |                                   |            |             |          |            
|INCOME STATEMENT INFORMATION:                                       |                                                                                                                       |                          |            |                                   |   |                                   |            |             |          |             |            |   |   |   |            |         
|Service revenues                                                    |                                                                                                                       | $                        | 15,214,808 |                                   |   | $                                 | 15,214,808 |             |          | $           | 15,405,655 |   |   | $ | 15,405,655 |         
|Income from operations                                              |                                                                                                                       | $                        | 3,942,418  |                                   |   | $                                 | 3,942,418  |             |          | $           | 1,721,467  |   |   | $ | 1,721,467  |         
|Unrealized loss on interest
rate swap agreements                    |                                                                                                                       |                          | 864,175    |                                   |   |                                   | 968,175    |             |          |             | (2,174,846 | ) |   |   | (2,070,846 | )       
|                                                                    |                                                                                                                       |                          |            |                                   |   |                                   |            |             |          |             |            |   |   |   |            |         
|Net loss before cumulative effect
of change in accounting principle |                                                                                                                       |                          | 385,288    |                                   |   |                                   | 489,288    |             |          |             | (5,063,055 | ) |   |   | (4,959,055 | )       
|Cumulative effect of change in
accounting principle                 |                                                                                                                       |                          |           |                                   |   |                                   |           |             |          |             | 689,000    |   |   |   |           |         
|                                                                    |                                                                                                                       |                          |            |                                   |   |                                   |            |             |          |             |            |   |   |   |            |         
|Net income (loss)                                                   |                                                                                                                       | $                        | 385,288    |                                   |   | $                                 | 489,288    |             |          | $           | (4,374,055 | ) |   | $ | (4,959,055 | )       
|                                                                    |                                                                                                                       |                          |            |                                   |   |                                   |            |             |          |             |            |   |   |   |            |         
|Other comprehensive income (loss):                                  |                                                                                                                       |                          |            |                                   |   |                                   |            |             |          |             |            |   |   |   |            |         
|                                                                    | Cumulative effect of change in
accounting principle                                                                   |                          |            |                                  |   |                                   |            |            |          |             |            |  |   |   |            | 689,000  |        
|                                                                    | Reclassification of accumulated other
comprehensive income to unrealized
gain (loss) on interest rate swap
agreements |                          |            |                                  |   |                                   |            | (104,000    | )        |             |            |  |   |   |            | (104,000 | )      
|                                                                    |                                                                                                                       |                          |            |                                   |   |                                   |            |             |          |             |            |   |   |   |            |         
|                                                                    |                                                                                                                       | Other comprehensive loss |            |                                   |  |                                   |            |             | (104,000 | )           |            |   |  |   |            |          | 585,000 | 
|Total comprehensive income (loss)                                   |                                                                                                                       | $                        | 385,288    |                                   |   | $                                 | 385,288    |             |          | $           | (4,374,055 | ) |   | $ | (4,374,055 | )       
|                                                                    |                                                                                                                       |                          |            |                                   |   |                                   |            |             |          |             |            |   |   |   |            |         





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(2)  INTANGIBLE ASSETS  SFAS No. 142

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

|                                    |            |                                       |             |                |           |                   |             |             |            |          |            |              |           |          |             |             |           |     |             |             |            |   |            |            |           | 
|----------------------------------- | ---------- | ------------------------------------- | ----------- | -------------- | --------- | ----------------- | ----------- | ----------- | ---------- | -------- | ---------- | ------------ | --------- | -------- | ----------- | ----------- | --------- | --- | ----------- | ----------- | ---------- | - | ---------- | ---------- | --------- | 
|                                    |            |                                       |             | March 31, 2002 |           | December 31, 2001
|                                    |            |                                       |             |                |           |                  
|                                    |            |                                       |             | Gross          |           |                   |             |             |            | Net      |            | Gross        |           |          |             |             |           | Net
|                                    |            |                                       |             | Carrying       |           | Accumulated       |             | Carrying    |            | Carrying |            | Accumulated  |           | Carrying
|                                    |            |                                       |             | Amount         |           | Amortization      |             | Amount      |            | Amount   |            | Amortization |           | Amount  
|                                    |            |                                       |             |                |           |                   |             |             |            |          |            |              |           |         
|Indefinite-lived intangible assets: |            |                                       |             |                |           |                   |             |             |            |          |            |              |           |          |             |             |           |     |             |             |            |   |            |           
|                                    | Franchises |                                       | $           | 101,664,917    |           |                   | $           | (48,279,931 | )          |          | $          | 53,384,986   |           |          | $           | 101,664,917 |           |     | $           | (48,279,931 | )          |   | $          | 53,384,986 |          
|                                    | Goodwill   |                                       |             | 6,344,433      |           |                   |             | (2,407,104  | )          |          |            | 3,937,329    |           |          |             | 6,344,433   |           |     |             | (2,407,104  | )          |   |            | 3,937,329  |          
|                                    |            |                                       |             |                |           |                   |             |             |            |          |            |              |           |          |             |             |           |     |             |             |            |   |            |           
|                                    |            |                                       | 108,009,350 |                |           |                   | (50,687,035 | )           |            |          | 57,322,315 |              |           |          | 108,009,350 |             |           |     | (50,687,035 | )           |            |   | 57,322,315 |           
|Definite-lived intangible assets:   |            |                                       |             |                |           |                   |             |             |            |          |            |              |           |          |             |             |           |     |             |             |            |   |            |           
|                                    |            | Loan fees and other intangible
assets |             |                | 9,740,603 |                   |             |             | (5,638,714 | )        |            |              | 4,101,889 |          |             |             | 9,734,177 |     |             |             | (5,372,238 | ) |            |            | 4,361,939 | 
|                                    |            |                                       |             |                |           |                   |             |             |            |          |            |              |           |          |             |             |           |     |             |             |            |   |            |            |          
|                                    |            | $                                     | 117,749,953 |                |           | $                 | (56,325,749 | )           |            | $        | 61,424,204 |              |           | $        | 117,743,527 |             |           | $   | (56,059,273 | )           |            | $ | 61,684,254 |           
|                                    |            |                                       |             |                |           |                   |             |             |            |          |            |              |           |          |             |             |           |     |             |             |            |   |            |           

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

|                                                      |  |                    |            |                                  |  |      |            |      |  |   |             |   |  |   |             |  
|----------------------------------------------------- |  | ------------------ | ---------- | -------------------------------- |  | ---- | ---------- | ---- |  | - | ----------- | - |  | - | ----------- | -
|                                                      |  | Three Months Ended |            | Twelve Months Ended December 31,
|                                                      |  | March 31,          |            |                                 
|                                                      |  | 2001               |            | 2001                             |  | 2000 |            | 1999
|                                                      |  |                    |            |                                  |  |      |            |     
|NET LOSS:                                             |  |                    |            |                                  |  |      |            |      |  |   |             |   |  |   |             |  
|Reported
net loss                                     |  | $                  | (4,959,055 | )                                |  | $    | (1,864,718 | )    |  | $ | (14,268,443 | ) |  | $ | (11,776,281 | )
|Add back: amortization of
indefinite-lived franchises |  |                    | 2,570,609  |                                  |  |      | 10,343,687 |      |  |   | 10,351,363  |   |  |   | 10,137,025  |  
|Add back: amortization of goodwill                    |  |                    | 43,277     |                                  |  |      | 171,903    |      |  |   | 173,111     |   |  |   | 173,111     |  
|                                                      |  |                    |            |                                  |  |      |            |      |  |   |             |   |  |   |             |  
|Adjusted
net (loss) income                            |  | $                  | (2,345,169 | )                                |  | $    | 8,650,872  |      |  | $ | (3,743,969  | ) |  | $ | (1,466,145  | )
|                                                      |  |                    |            |                                  |  |      |            |      |  |   |             |   |  |   |             |  





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

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

(3)  NORTHLAND CABLE NEWS:

Northland Cable News, Inc. (NCN), a wholly owned subsidiary of the
Company, developed and distributed 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 March 31, 2002, 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. Management ceased the operations of
NCN on January 1, 2001, and does not believe that this has a material
effect on the Companys financial position, results of operations or
financing agreements. 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 March 31,
|                              |  |                                     
|                              |  | 2002                                 |        | 2001
|                              |  |                                      |        |     
|INCOME STATEMENT INFORMATION: |  |                                      |        |      |  |   |        |  
|Total revenues                |  |                                      |       |      |  |   |       |  
|Operating expenses            |  |                                      | 3,816  |      |  |   |       |  
|Other, net                    |  |                                      |       |      |  |   | 2,552  |  
|Net loss                      |  | $                                    | (3,816 | )    |  | $ | (2,552 | )
|                              |  |                                      |        |      |  |   |        |  

|                               |  |           |            |              |  |   |            |  
|------------------------------ |  | --------- | ---------- | ------------ |  | - | ---------- | -
|                               |  | March 31, |            | December 31,
|                               |  | 2002      |            | 2001        
|                               |  |           |            |             
|BALANCE SHEET INFORMATION:     |  |           |            |              |  |   |            |  
|Current assets                 |  |           | 1,980,037  |              |  |   | 2,229,287  |  
|Less: intercompany elimination |  |           | (1,963,339 | )            |  |   | (2,018,237 | )
|                               |  |           |            |              |  |   |            |  
|Total assets                   |  | $         | 16,698     |              |  | $ | 211,050    |  
|                               |  |           |            |              |  |   |            |  
|Total liabilities              |  | $         |           |              |  | $ | 70,188     |  
|                               |  |           |            |              |  |   |            |  





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(4)  ACQUISITION OF SYSTEMS AND DISPOSITION OF ASSETS

On September 21, 2001, the Company sold its cable system serving the areas
in and around McCormick, South Carolina, which represented approximately
440 basic subscribers, to Quarterlane Farms, LLC. The system was sold at
a purchase price of approximately $218,000.

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

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

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

|                         |  |                    |            |  
|------------------------ |  | ------------------ | ---------- | -
|                         |  | Three Months Ended
|                         |  | March 31, 2001    
|                         |  |                   
|Service revenues         |  | $                  | 14,800,000 |  
|                         |  |                    |            |  
|Net loss                 |  | $                  | (4,800,000 | )
|                         |  |                    |            |  
|Total comprehensive loss |  | $                  | (4,200,000 | )
|                         |  |                    |            |  





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

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002 AND 2001

As of March 31, 2002 the Companys cable systems served approximately
113,040 basic subscribers, 51,174 premium subscribers, 10,520 digital
subscribers and passed an estimated 191,845 homes.

Revenues decreased approximately $200,000 or 1.3% from $15.4 million to
$15.2 million for the three months ended March 31, 2001 and March 31, 2002
respectively. Of these revenues, approximately $10.3 million (68%) was
derived from basic services, $1.1 million (7%) from premium services, $2.0
million (13%) from expanded basic services, $300,000 (2%) from digital
services, $200,000 (1%) from service maintenance contracts, $700,000 (5%)
from advertising and $600,000 (4%) from other sources. Average monthly
revenue per subscriber increased $3.26 or 7.8% from $41.61 to $44.87 for
the three months ended March 31, 2002. The December 2001 disposition of
cable television systems serving approximately 6,450 basic subscribers in
and around Bainbridge Island, Washington (the Bainbridge Systems)
decreased revenues approximately $874,000 or 5.7%. The September 2001
acquisition of a cable system serving approximately 3,200 basic
subscribers in and around Highlands, North Carolina (the Highlands
System) increased revenues approximately $275,000 or 1.8%. On a pro
forma basis, excluding the impact of sale of the Bainbridge and McCormick
Systems and the Highlands System acquisition: (i) revenues would have
increased approximately $461,000 or 3.4%; and (ii) average monthly revenue
per average basic subscriber would have increased $3.48 or 8.4%, from
$41.37 to $44.87 for the three months ended March 31, 2002. This increase
is primarily attributable to rate increases implemented during the first
quarter of 2002 as well as increased revenue from higher penetration of
new product tiers.





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Cable system operation expenses, which include costs related to
programming, technical personnel, repairs and maintenance and advertising
sales, increased approximately $200,000 or 3.6% from $5.5 million to $5.7
million for the three months ended March 31, 2002. On a pro forma basis,
excluding the impact of the sale of the Bainbridge and McCormick Systems
and the Highlands System acquisition operating expenses would have
increased approximately $515,000 or 9.9%. This increase is primarily
attributable to higher 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 $300,000 or 13.0%
from $2.4 million to $2.1 million for the three months ended March 31,
2002. On a pro forma basis, excluding the impact of the sale of the
Bainbridge and McCormick Systems and the Highlands System acquisition
general and administrative expenses would have decreased approximately
$126,000 or 5.6%. The decrease is primarily attributable to reductions in
administrative service expenses and administrative salaries offset by
increases in insurance expense and revenue based expenses such as
franchise fees.

Management fees for the three months ended March 31, 2002 were consistent
with the same period in the previous year. Management fees are calculated
at 5.0% of gross revenues.

Depreciation and amortization expenses decreased approximately $2.5
million or 49.0% from $5.1 million to $2.6 million for the three months
ended March 31, 2002. Such decrease is primarily attributable to the
Companys implementation of SFAS No. 142. As of December 31, 2001, the
Company discontinued amortizing its franchises, goodwill and acquisition
costs in accordance with SFAS No.142 resulting in a decrease of
approximately $2.6 million in amortization expense for the three months
ended March 31, 2002.

Interest expense decreased approximately $200,000 or 4.3%, from $4.6
million to $4.4 million for the three months ended March 31, 2002.
Average outstanding indebtedness decreased $12 million from $183 million
to $171 million for the three months ended March 31, 2001 and 2002,
respectively. Approximately $18.3 million in proceeds from the sale of
the Bainbridge Systems were used to pay down amounts outstanding under
the Companys revised Senior Credit Facility offset by approximately
$3.8 million in borrowings related to the Highlands Acquisition and
approximately $3.0 million in borrowings to replenish working capital.

The Company has elected not to designate its derivatives as hedges under
SFAS No. 133. Accordingly, the Company has recorded a liability equal to
the fair value of its derivatives, $968,000 in income related to the
change in value during the three months ended March 31, 2002 and
amortization of the cumulative effect of change in accounting principle.

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, 2002 are expected to be approximately $15.8 million. The
Company





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anticipates that cash flow from operations will be sufficient to service
its debt through December 31, 2002. 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 $3.8 million for the three
months ended March 31, 2002. Adjustments to the $490,000 net income for
the period to reconcile to net cash provided by operating activities
consisted primarily of $2.8 million of depreciation and amortization,
decreases of approximately $970,000 relating to interest rate
derivatives and increases in operating liabilities of approximately $2.2
million offset by increases in operating assets of $700,000.

Net cash used in investing activities was approximately $1.4 million for
the three months ended March 31, 2002, and substantially consisted of
$1.6 million in capital expenditures offset by $226,000 in post-closing
proceeds from sale of the Bainbridge Systems.

Earnings before charges for interest, taxes, depreciation and
amortization (EBITDA) decreased approximately $200,000 or 2.9%, from
$6.8 million to $6.6 million for the three months ended March 31, 2002.
EBITDA as a percentage of revenues (EBITDA Margin) decreased from
44.0% to 43.2% for the three months ended March 31, 2002. On a pro
forma basis, excluding the impact of the sale of the Bainbridge and
McCormick Systems and the Highlands System acquisition, EBITDA would
have increased approximately $52,000 or 0.8%. The aforementioned
increases in pro forma revenues were offset by higher programming costs
resulting from rate increases by certain programming vendors as well as
the launch of new programming services in various systems. Industry
analysts generally consider EBITDA to be an appropriate measure of the
performance of multi-channel television operations. EBITDA is not
presented in accordance with 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 $3.7 million for the three
months ended March 31, 2001. Adjustments to the $4.9 million net loss
for the period to reconcile to net cash provided by operating activities
consisted primarily of $5.2 million of depreciation and amortization,
$2.1 million related to interest rate swap agreements and increases in
operating liabilities of $1.6 million.

Net cash used in investing activities was $4.2 million for the three
months ended March 31, 2001 and consisted of $4.2 million in capital
expenditures and additions of intangible assets.

Net cash provided by financing activities was approximately $1.0 million
for the three months ended March 31, 2001. The Company had $1.0 million
in borrowings of long term debt to finance planned capital expenditures.

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,





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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
9.164% (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 March 31, 2002, $5,660,000 was available to
borrow by the Company under the revolving credit facility.

Under the revolving credit and term loan agreement, the Company has agreed
to restrictive covenants which require the maintenance of certain ratios,
including a Pro Forma Debt Service ratio not less than 1.25 to 1.0 and a
Leverage Ratio of no greater than 6.50 to 1.0, among other restrictions.
The Company submits quarterly debt compliance reports to its creditor
under this arrangement. As of March 31, 2002, the Company was in
compliance with the terms of the loan agreements.

At March 31, 2002, the outstanding balance under the Senior Credit
Facility was $71 million. As of the date of this filing, interest rates on
the Senior Credit Facility were as follows: $20 million fixed at 9.29%
under the terms of an interest rate swap agreement with the Companys
lender expiring August 20, 2002; $27 million fixed at 5.668% under the
terms of an interest rate swap agreement with the Companys lender
expiring February 20, 2003; $5.9 million fixed at 9.37% under the terms of
an interest rate swap agreement with the Companys lender expiring August
17, 2002; $17 million fixed at LIBOR based rate of 4.41% expiring May 20,
2002; $711,000 fixed at a LIBOR based rate of 4.41% expiring June 19,
2002; $400,000 fixed at a LIBOR based rate of 4.40% expiring June 19,
2002; $81,000 fixed at a LIBOR based rate of 4.36% expiring May 20, 2002.
The above rates include a margin paid to the lender based on overall
leverage and may increase or decrease as the Companys overall leverage
fluctuates.

CAPITAL EXPENDITURES

For the three months ended March 31, 2002, the Company incurred capital
expenditures of approximately $1.6 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 $8.1 million in capital
expenditures for the remainder of 2002. This represents anticipated
expenditures for upgrading and rebuilding certain distribution facilities,
continued deployment of new product digital services, extensions of
distribution facilities to add new subscribers and general maintenance.

RECENTLY ISSUED ACCOUNTING STANDARDS

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





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

CRITICAL ACCOUNTING POLICIES

This discussion and analysis of our financial condition and results of
operations is based on the Companys financial statements, which have been
prepared in accordance with accounting principles generally accepted in
the United States of America. The preparation of these financial
statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The following
critical accounting policies, which have been chosen among alternatives,
require a more significant amount of management judgment than other
accounting policies the Company employs.

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

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

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

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





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On January 1, 2002, the Company adopted SFAS No. 142 Goodwill and Other
Intangibles. Under this statement, goodwill and franchises are no longer
being amortized, but are tested for impairment annually, or more
frequently as warranted by events or changes in circumstances. As of
March 31, 2002, there was no indication of such impairment.





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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 May 15,
2002, the Company had entered into three interest rate swap agreements
for $20,000,000, $20,000,000, and $27,000,000 of these borrowings, to
partially mitigate interest rate exposure. Interest rate swaps have the
effect of converting the applicable variable rate obligations to fixed
or other variable rate obligations. The potential loss over one year
that would result from a hypothetical, instantaneous and unfavorable
change of 100 basis points in the interest rate of all of the Companys
variable rate obligations would be approximately $855,000, of which
$670,000 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)  Reports on Form 8-K



| | (i) |  | Form 8-K dated December 21, 2001, was filed
January 4, 2002 reporting the disposition of the Bainbridge
Island, Kingston and Hansville, Washington systems.
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------





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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. Clark

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





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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)