##### Table of Contents



FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 34-29354, eff. 7-1-91)
   UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended DECEMBER 31, 2005
 o
    
    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 0-18307
 NORTHLAND CABLE PROPERTIES EIGHT LIMITED PARTNERSHIP
  STATE OF WASHINGTON
    
    91-1423516(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 101 STEWART STREET, SUITE 700SEATTLE, WASHINGTON
    
    98101(Address of principal executive offices)
    
    (Zip Code)
   Title of each reviewed class
    
    Name of each exchange on which registered(NONE)
    
    (NONE)
  UNITS OF LIMITED PARTNERSHIP INTEREST
  Yes o
    
    No þ
  Yes o
    
    No þ
  Yes þ
    
    No o
 þ
  o o þ
  Yes o
    
    No þ




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##### Table of Contents



DOCUMENTS INCORPORATED BY REFERENCE
 (1)
    
    Form S-1 Registration Statement declared effective on March 16, 1989 (No. 33-25892).(2)
    
    Form 10-K Annual Reports for fiscal years ended December 31, 1989, December 31, 1990,
December 31, 1992 and December 31, 1994, respectively.(3)
    
    Form 10-Q Quarterly Report for period ended June 30, 1989 and March 3, 1995.(4)
    
    Form 8-K dated November 11, 1994.(5)
    
    Form 8-K dated June 30, 1995.(6)
    
    Form 8-K date January 5, 1996.




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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERSPART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERSITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESPART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-KSIGNATURESEXHIBIT 31(A)EXHIBIT 31(B)EXHIBIT 32(A)EXHIBIT 32(B)    Table of Contents   
 PART I
 
 ITEM 1. BUSINESS
           3




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##### Table of Contents



Aliceville, AL
 Basic Subscribers
    
    
    2,835Expanded Basic Subscribers
    
    
    1,766Premium Subscribers
    
    
    438Digital Subscribers
    
    
    28Internet Subscribers
    
    
    340Estimated Homes Passed
    
    
    5,703
 Swainsboro, GA
 Basic Subscribers
    
    
    2,673Expanded Basic Subscribers
    
    
    1,908Premium Subscribers
    
    
    844Digital Subscribers
    
    
    325Internet Subscribers
    
    
    221Estimated Homes Passed
    
    
    4,148
    4




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##### Table of Contents



COMPETITION
  Broadcast Television
  Overbuilds
   Direct Broadcast Satellite Service
  5




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Satellite Master Antenna Television
  Multichannel Multipoint Distribution Service Systems
  High-Speed Internet Services
   Telephony Services
  REGULATION AND LEGISLATION
   6




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Cable Rate Regulation
    Must Carry/Retransmission Consent
   Access Channels
  Access to Programming
 7




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##### Table of Contents



Ownership Restrictions
  Internet Service
    Phone Service
  8




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##### Table of Contents



Pole Attachments
  Cable Equipment
    Other Communications Act Provisions and FCC Regulatory Matters
   9




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##### Table of Contents



Copyright
   Franchise Matters
    
 ITEM 1A. RISK FACTORS
 The Partnerships business is subject to extensive governmental legislation and regulation,
which could adversely affect its business.
  
    
    rules governing the provision of cable equipment and compatibility with new digital technologies;
    
    rules and regulations relating to subscriber privacy;
    
    limited rate regulation;
    
    requirements governing when a cable system must carry a particular broadcast station and
when it must first obtain consent to carry a broadcast station;
 10




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
    
    rules for franchise renewals and transfers; and
    
    other requirements covering a variety of operational areas such as equal employment
opportunity, technical standards and customer service requirements.
  The Partnerships cable systems are operated under franchises that are subject to non-renewal or
termination. The failure to renew a franchise in one or more key markets could adversely affect the
Partnerships business.
   The Partnerships cable systems are operated under franchises that are non-exclusive. Accordingly,
local franchising authorities can grant additional franchises and create competition in market
areas where none existed previously, resulting in overbuilds, which could adversely affect results
of operations.
   Further regulation of the cable industry could cause the Partnership to delay or cancel service or
programming enhancements or impair the Partnerships ability to raise rates to cover its increasing
costs, resulting in reductions to net income.
 11




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Actions by pole owners might subject the Partnership to significantly increased pole attachment
costs.
  The Partnership may be required to provide access to its networks to other Internet service
providers, which could significantly increase competition and adversely affect the Partnerships
ability to provide new products and services.
   Changes in channel carriage regulations could impose significant additional costs on the
Partnership.
  Offering voice communications service may subject the Partnership to additional regulatory burdens,
causing it to incur additional costs.
 12




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The Partnerships indebtedness could materially and adversely affect its business
  
    
    increase vulnerability to general adverse economic and industry conditions or a downturn in business;
 
    
    reduce the availability of cash flow to fund working capital, capital expenditures and other general business purposes;
 
    
    limit flexibility in planning for, or reacting to, changes in
the Partnerships industries, making the Partnership more vulnerable to
economic downturns;
 
    
    place the Partnership at a competitive disadvantage compared to competitors that have less debt;
 
    
    limit the Partnerships ability to incur additional indebtedness.
 The Partnership may be unable to complete the sale of its assets on reasonable terms.
  Because
there is no public market for the Partnerships units of limited partnership interest,
limited partners may not be able to sell their units.
  
    
    the liquidity of any trading market that may develop;
    
    the ability of holders to sell their units; or
    
    the price at which the holders would be able to sell their units.
 Northland Communications Corporation, the general partner, is responsible for conducting the
Partnerships business and managing its operations. Affiliates of the general partner may have
conflicts of interest and limited fiduciary duties, which may permit the general partner to favor
its own interests to the Partnerships detriment.
  Unitholders have limited voting rights and limited ability to influence the Partnerships
operations and activities.
 13




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The control of the general partner may be transferred to a third party without unitholder consent.
  The Partnership does not have its own officers and has a limited number of management employees.
The Partnership relies solely on the officers and management employees of the general partner and
its affiliates to manage the Partnerships business and affairs.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
    
 ITEM 3. LEGAL PROCEEDINGS
  14




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ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
  15




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
   Limited Partners:
    
    
    889General Partners:
    
    
    1
  
 ITEM 6. SELECTED FINANCIAL DATA
  Years ended December 31,2005
    
    2004
    
    2003
    
    2002 (1)
    
    2001SUMMARY OF OPERATIONS:Revenue
    
    $
    3,406,867
    
    
    $
    3,393,246
    
    
    $
    3,331,725
    
    
    $
    3,378,058
    
    
    $
    3,331,418Operating income
    
    
    159,992
    
    
    
    134,640
    
    
    
    281,940
    
    
    
    404,119
    
    
    
    153,458Income (loss) from
continuing operations
    
    
    51,346
    
    
    
    24,652
    
    
    
    137,509
    
    
    
    191,165
    
    
    
    (330,619
    )Income (loss) from
discontinued operations
(2)
    
    
    799,736
    
    
    
    96,450
    
    
    
    1,448,414
    
    
    
    (9,063
    )
    
    
    10,650Net income (loss)
    
    $
    851,082
    
    
    $
    121,102
    
    
    $
    1,585,923
    
    
    $
    182,102
    
    
    $
    (319,969
    )Net income (loss) from
continuing operations
per limited partnership
unit
    
    $
    3
    
    
    $
    1
    
    
    $
    7
    
    
    $
    9
    
    
    
    ($17
    )Net income (loss) from
discontinued operations
per limited partnership
unit
    
    $
    41
    
    
    $
    5
    
    
    $
    75
    
    
    
    
    
    
    
    Net income (loss) per
limited partner unit
    
    $
    44
    
    
    $
    6
    
    
    $
    82
    
    
    $
    10
    
    
    
    ($17
    )
 
 (1)
    
    As of December 31, 2001, the Partnership discontinued amortization of its franchise agreements and
goodwill in accordance with SFAS No. 142.(2)
    
    On March 11, 2003 and March 21, 2005, the partnership sold the operating assets and franchise rights of
its La Conner, Washington and Marion and Eutaw, Alabama systems, respectively. The results of operations and
the sale of the La Conner, Marion and Eutaw systems are presented as discontinued operations in this filing
and the accompanying financial statements. 16




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##### Table of Contents



December 31,2005
    
    2004
    
    2003
    
    2002
    
    2001BALANCE SHEET DATA:Total assets
    
    $
    6,381,727
    
    
    $
    6,546,410
    
    
    $
    7,410,618
    
    
    $
    9,641,472
    
    
    $
    10,226,110Term loan
    
    
    2,318,768
    
    
    
    3,487,718
    
    
    
    4,457,696
    
    
    
    8,213,663
    
    
    
    8,828,957Total liabilities
    
    
    3,092,307
    
    
    
    4,103,622
    
    
    
    5,088,932
    
    
    
    8,905,709
    
    
    
    9,672,449General partners deficit
    
    
    (47,280
    )
    
    
    (55,791
    )
    
    
    (57,002
    )
    
    
    (72,861
    )
    
    
    (74,682
    )Limited partners capital
    
    
    3,336,700
    
    
    
    2,498,579
    
    
    
    2,378,688
    
    
    
    808,624
    
    
    
    628,343
 Quarters EndedDecember 31,
    
    September 30,
    
    June 30,
    
    March 31,
    
    December 31,
    
    September 30,
    
    June 30,
    
    March 31,2005
    
    2005
    
    2005
    
    2005
    
    2004
    
    2004
    
    2004
    
    2004Revenue
    
    $
    843,417
    
    
    $
    836,765
    
    
    $
    846,075
    
    
    $
    880,610
    
    
    
    850,527
    
    
    $
    846,953
    
    
    $
    854,285
    
    
    $
    841,481Operating income
    
    
    88,610
    
    
    
    42,738
    
    
    
    (99,835
    )
    
    
    128,479
    
    
    
    39,948
    
    
    
    19,910
    
    
    
    40,543
    
    
    
    34,239Income (loss) from
continuing
operations
    
    
    50,089
    
    
    
    8,540
    
    
    
    (132,413
    )
    
    
    125,130
    
    
    
    12,615
    
    
    
    (7,980
    )
    
    
    14,986
    
    
    
    5,031Income from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    799,736
    
    
    
    36,158
    
    
    
    16,484
    
    
    
    21,840
    
    
    
    21,968Net income (loss)
    
    
    50,089
    
    
    
    8,540
    
    
    
    (132,413
    )
    
    
    924,866
    
    
    
    48,773
    
    
    
    8,504
    
    
    
    36,826
    
    
    
    26,999Net income (loss) from
continuing operations per
limited partnership unit
    
    $
    3
    
    
    
    
    
    
    $
    (7
    )
    
    $
    7
    
    
    
    
    
    
    
    
    
    
    $
    1
    
    
    
    Net (loss) income from
discontinued operations
per limited partnership
unit
    
    $
    (1
    )
    
    
    
    
    
    
    
    
    
    $
    42
    
    
    $
    2
    
    
    $
    1
    
    
    $
    1
    
    
    $
    1Net income (loss) per
limited
partnership unit
    
    $
    3
    
    
    
    
    
    
    $
    (7
    )
    
    $
    48
    
    
    $
    3
    
    
    
    
    
    
    $
    2
    
    
    $
    1
 17




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS
 2005 and 2004
   
    
    $2,465,027 (72%) from basic services,
    
    $164,274 (5%) from premium services
    
    $215,956 (7%) from expanded basic services
    
    $30,434 (1%) from digital services
    
    $217,050 (6%) from high speed Internet services
    
    $122,703 (4%) from advertising
    
    $75,609 (2%) from late fees
    
    $115,814 (3%) from other sources.
   2005
    
    2004
    
    2003
    
    2002
    
    2001Basic Rate
    
    $
    36.25
    
    
    $
    34.15
    
    
    $
    32.20
    
    
    $
    30.75
    
    
    $
    28.50Expanded Basic Rate
    
    
    6.50
    
    
    
    7.50
    
    
    
    8.25
    
    
    
    8.50
    
    
    
    8.75HBO Rate
    
    
    11.50
    
    
    
    11.50
    
    
    
    11.00
    
    
    
    10.00
    
    
    
    10.00Cinemax Rate
    
    
    9.00
    
    
    
    9.00
    
    
    
    9.00
    
    
    
    8.50
    
    
    
    8.00Showtime Rate
    
    
    10.25
    
    
    
    10.25
    
    
    
    8.75
    
    
    
    8.75
    
    
    
    8.75Encore Rate
    
    
    3.25
    
    
    
    2.75
    
    
    
    2.50
    
    
    
    2.00
    
    
    
    1.75Starz
    
    
    4.25
    
    
    
    3.50
    
    
    
    3.00
    
    
    
    3.50
    
    
    
    5.50Digital Rate (Incremental)
    
    
    10.00
    
    
    
    14.50
    
    
    
    9.00
    
    
    
    9.00
    
    
    
    8.75Internet Rate
    
    
    37.00
    
    
    
    38.00
    
    
    
    
    
    
    
    
    
    
    
    
   18




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##### Table of Contents



2004 and 2003
   
    
    $2,571,020 (76%) from basic services,
    
    $208,438 (6%) from premium services
    
    $227,095 (7%) from expanded basic services
    
    $25,589 (1%) from digital services
    
    $61,436 (2%) from high speed Internet services
    
    $110,707 (3%) from advertising
    
    $86,947 (3%) from late fees
    
    $102,014 (2%) from other sources.
   19




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
  2005
    Term Loan
  20




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##### Table of Contents



2006
    
    $
    200,0002007
    
    
    2,118,768$
    2,318,768
   Obligations and Commitments
  Payments Due By PeriodLess than 1
    
    
    1 - 3
    
    
    3 - 5
    
    
    More thanTotal
    
    
    year
    
    
    years
    
    
    years
    
    
    5 yearsTerm loan
    
    $
    2,318,768
    
    
    $
    200,000
    
    
    $
    2,118,768
    
    
    
    
    
    
    
    Minimum operating lease payments
    
    
    82,900
    
    
    
    17,800
    
    
    
    23,800
    
    
    
    9,200
    
    
    
    32,100Total
    
    $
    2,401,668
    
    
    $
    217,800
    
    
    $
    2,142,568
    
    
    $
    9,200
    
    
    $
    32,100
 (a)
    
    These contractual obligations do not include accounts payable and accrued liabilities,
which are expected to be paid in 2006.(b)
    
    The Partnership also rents utility poles in its operations. Amounts due under these
agreements are not included in the above minimum operating lease payments amounts as,
generally, pole rentals are cancelable on short notice. The Partnership does however
anticipate that such rentals will recur.(c)
    
    Note that obligations related to the Partnerships term loan exclude interest expense.
 Capital Expenditures
   21




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##### Table of Contents



SYSTEM SALE
   SOLICITATION OF INTEREST FROM POTENTIAL BUYERS
    CRITICAL ACCOUNTING POLICIES
  Revenue Recognition
  Property and Equipment
  22




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##### Table of Contents



Intangible Assets
   Allocation of Interest Expense to Discontinued Operations
  Discontinued operations
  ECONOMIC CONDITIONS
  TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES
 Management Fees
  23




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##### Table of Contents



Reimbursements
     CERTAIN BUSINESS RELATIONSHIPS
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  24




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
   25




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
       26




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Audit Committee and Financial Expert.
  Code of Ethics
  27




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##### Table of Contents



ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 (a)
    
    CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Security ownership of management as of
December 31, 2005 is as follows:
 AMOUNT AND NATURENAME AND ADDRESS
    
    OF BENEFICIAL
    
    PERCENT OFTITLE OF CLASS
    
    OF BENEFICIAL OWNER
    
    OWNERSHIP
    
    CLASSGeneral Partners
Interest
    
    Northland Communications Corporation

101 Stewart Street, Suite 700
Seattle, Washington 98101
    
    (See Note A)
    
    (See Note A)
   
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
     Management Fees
  28




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Reimbursements
         29




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Year Ended December 31,2005
    
    
    2004Audit fees
    
    $
    60,312
    
    
    $
    56,339Audit-related fees
    
    
    
    
    
    
    Total
    
    $
    60,312
    
    
    $
    56,339
  Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
  30




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PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 SEQUENTIALLYNUMBEREDPAGE(a) FINANCIAL STATEMENTS:Report of Independent Registered Public Accounting Firm
    
    
    F-1Balance SheetsDecember 31, 2005 and 2004
    
    
    F-2Statements of Operations for the years ended December 31,
2005, 2004 and 2003
    
    
    F-3Statements of Changes in Partners Capital (Deficit) for
the years ended December 31, 2005, 2004 and 2003
    
    
    F-4Statements of Cash Flows for the years ended
December 31, 2005, 2004 and 2003
    
    
    F-5Notes to Financial StatementsDecember 31, 2005 and
2004
    
    
    F-6
    4.1
    
    Amended and Restated Agreement of Limited Partnership (1)4.2
    
    Amendment to Agreement of Limited Partnership dated December 20, 1990 (4)10.1
    
    Agreement of Purchase and Sale with Santiam Cable Vision, Inc. (1)10.2
    
    Agreement for Sale of Assets between Valley Cable T.V., Inc. and Northland
Telecommunications Corporation (1)10.3
    
    Form of Services and Licensing Agreement with Cable Television Billing, Inc. (1)10.4
    
    Management Agreement with Northland Communications Corporation (1)10.5
    
    First, Second and Third Amendment to Agreement of Purchase and Sale with Santiam Cable Vision, Inc. (1)10.6
    
    Operating Management Agreement with Northland Cable Properties Seven Limited Partnership (1)10.7
    
    Assignment and Transfer Agreement with Northland Telecommunications Corporation for the purchase of the
LaConner System (2)10.8
    
    Gates Franchise (1)
 31




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##### Table of Contents



10.9
    
    Stayton Franchise(1)10.10
    
    Mill City Franchise (1)10.11
    
    Detroit Franchise (1)10.12
    
    Idanha Franchise (1)10.13
    
    Lyons Franchise (1)10.14
    
    Marion County Franchise (1)10.15
    
    Turner Franchise (1)10.19
    
    Amendment dated August 4, 1989 to Revolving Credit and Term Loan Agreement with Security Pacific Bank
of Washington, N.A.(3)10.20
    
    Revolving Credit and Term Loan Agreement with National Westminster Bank USA dated as of December 20,
1990 (4)10.21
    
    Note in the principal amount of up to $7,000,000 to the order of National Westminster Bank USA (4)10.22
    
    Borrower Assignment with National Westminster Bank USA (4)10.23
    
    Borrower Security Agreement with National Westminster Bank USA (4)10.24
    
    Agreement of Purchase and Sale with TCI Cablevision of Nevada, Inc. (4)10.25
    
    First Amendment dated May 28, 1992 to Revolving Credit and Term Loan Agreement with National
Westminster Bank USA (5)10.26
    
    Franchise Agreement with the City of Turner, OR effective March 21, 1991 (5)10.27
    
    Franchise Agreement with the City of Lyons, OR effective April 8, 1991 (5)10.28
    
    Franchise Agreement with the City of Idanha, OR effective November 3, 1992 (5)10.29
    
    Agreement of Purchase with Alabama Television Cable Company (6)10.30
    
    Credit Agreement between Northland Cable Properties Eight Limited Partnership and U.S. Bank of
Washington, National Association and West One Bank, Washington dated November 10, 1994 (6)10.31
    
    Franchise Agreement with City of Aliceville, AL  Assignment and Assumption Agreement dated July 26,
1994 (7)10.32
    
    Franchise Agreement with City of Carrollton, AL  Assignment and Assumption Agreement dated August 16,
1994 (7)10.33
    
    Franchise Agreement with City of Eutaw, AL  Assignment and Assumption Agreement dated July 26, 1994 (7)10.34
    
    Franchise Agreement with City of Gordo, AL  Assignment and Assumption Agreement dated August 1, 1994
(7)10.35
    
    Franchise Agreement with Greene County, AL  Assignment and Assumption Agreement dated November 10,
1994 (7)10.36
    
    Franchise Agreement with Town of Kennedy, AL  Assignment and Assumption Agreement dated August 15,
1994 (7)10.37
    
    Franchise Agreement with Lamar County, AL  Assignment and Assumption Agreement dated August 8, 1994 (7)10.38
    
    Franchise Agreement with City of Marion, AL  Assignment and Assumption Agreement dated August 1, 1994
(7)
 32




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##### Table of Contents



10.39
    
    Franchise Agreement with Town of Millport, AL  Assignment and Assumption Agreement dated August 18,
1994 (7)10.40
    
    Franchise Agreement with Pickens County, AL  Assignment and Assumption Agreement dated July 26, 1994
(7)10.41
    
    Franchise Agreement with Town of Pickensville, AL  Assignment and Assumption Agreement dated August 2,
1994 (7)10.42
    
    Franchise Agreement with City of Reform, AL  Assignment and Assumption Agreement dated August 1, 1994
(7)10.43
    
    Asset Purchase and Sale Agreement between SCS Communications and Security, Inc. and Northland Cable
Properties Eight Limited Partnership dated April 14, 1995 (8)10.44
    
    Asset Purchase Agreement between Northland Cable Properties Eight Limited Partnership and TCI
Cablevision of Georgia, Inc. dated November 17, 1995 (9)10.45
    
    First Amendment to Amended and Restated Credit Agreement between Northland Cable Properties Eight
Limited Partnership and U.S. Bank National Association dated March 30, 1998 (10)10.46
    
    Second Amendment to Amended and Restated Credit Agreement between Northland Cable Properties Eight
Limited Partnership and U.S. Bank National Association dated June 24, 2002 (11)10.47
    
    Purchase and Sale Agreement between Northland Cable Properties Eight Limited Partnership and Wave
Division Networks, LLC dated October 28, 2002 (12)10.48
    
    Third Amendment to Amended and Restated Credit Agreement between Northland Cable Properties Eight
Limited Partnership and U.S. Bank National Association dated February 6, 2003 (13)10.49
    
    Fourth Amendment to Amended and Restated Credit Agreement between Northland Cable Properties Eight
Limited Partnership and U.S. Bank National Association dated August 11, 2003 (13)10.50
    
    Fifth Amendment to Amended and Restated Credit Agreement between Northland Cable Properties Eight
Limited Partnership and U.S. Bank National Association dated December 10, 2004 (14)10.51
    
    Purchase and Sale Agreement between Northland Cable Properties Eight Limited Partnership and Granberry
H. Ward, III, d/b/a Sky Cablevision of Greene County (14)31 (a)
    
    Certification of Chief Executive Officer of Northland Communications Corporation, the General Partner,
dated March 31, 2006 pursuant to section 302 of the Sarbanes-Oxley Act31 (b)
    
    Certification of President (Principal Financial and Accounting Officer) of Northland Communications
Corporation, the General Partner, dated March 31, 2006 pursuant to section 302 of the Sarbanes-Oxley
Act32 (a)
    
    Certification of Chief Executive Officer of Northland Communications Corporation, the General Partner,
dated March 31, 2006 pursuant to section 906 of the Sarbanes-Oxley Act32 (b)
    
    Certification of President (Principal Financial and Accounting Officer) of Northland Communications
Corporation, the General Partner, dated March 31, 2006 pursuant to section 906 of the Sarbanes-Oxley
Act99.1
    
    Letter regarding representation of Arthur Andersen, LLP dated
April 1, 2002 (15)
 
 (1)
    
    Incorporated by reference from the Partnerships Form S-1 Registration Statement declared
effective on March 16, 1989 (No. 33-25892).(2)
    
    Incorporated by reference from the Partnerships Form 10-Q Quarterly Report for the period
ended June 30, 1989.(3)
    
    Incorporated by reference from the Partnerships Form 10-K Annual Report for the year ended
December 31, 1989. 33




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##### Table of Contents



(4)
    
    Incorporated by reference from the Partnerships Form 10-K Annual Report for the year ended
December 31, 1990(5)
    
    Incorporated by reference from the Partnerships Form 10-K Annual Report for the year ended
December 31, 1992.(6)
    
    Incorporated by reference from the Partnerships Form 8-K dated November 11, 1994.(7)
    
    Incorporated by reference from the Partnerships Form 10-K Annual Report for the year ended
December 31, 1994.(8)
    
    Incorporated by reference from the Partnerships Form 10-Q Quarterly Report for the period
ended March 31, 1995.(9)
    
    Incorporated by reference from the Partnerships Form 8-K dated January 5, 1996.(10)
    
    Incorporated by reference from the Partnerships Form 10-K Annual Report for the year ended
December 31, 1998.(11)
    
    Incorporated by reference from the Partnerships Form 10-Q Quarterly Report for the period
ended June 30, 2002(12)
    
    Incorporated by reference from the Partnerships Form 8-K dated March 11, 2003 March 31,
1995.(13)
    
    Incorporated by reference from the Partnerships Form 10-Q Quarterly Report for the period
ended June 30, 2003(14)
    
    Incorporated by reference from the Partnerships Form 10-K Annual Report for the fiscal year
ended December 31, 2004(15)
    
    Incorporated by reference from the Partnerships Form 10-K Annual Report for the fiscal year
ended December 31, 2001 34




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##### Table of Contents



NORTHLAND CABLE
PROPERTIES EIGHT LIMITED PARTNERSHIPBy: NORTHLAND COMMUNICATIONS CORPORATION(General Partner)Date: 3-30-06
    
    By
    
    /S/ JOHN S. WHETZELL

John S. Whetzell, Chief Executive Officer
  SIGNATURES
    
    CAPACITIES
    
    DATE/S/ JOHN S. WHETZELL
    
    Chief executive officer of registrant; chief executive officer and
    
    3-30-06John S. Whetzell
    
    chairman of the board of directors of Northland CommunicationsCorporation/S/ RICHARD I. CLARK
    
    Director of Northland Communications
    
    3-30-06Richard I. Clark
    
    Corporation/S/ JOHN E. IVERSON
    
    Secretary and Director of Northland Communications
    
    3-30-06John E. Iverson
    
    Corporation/S/ GARY S. JONES
    
    President of Northland Communications Corporation
    
    3-30-06Gary S. Jones
 35




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Report of Independent Registered Public Accounting Firm
 
     
 F-1




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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   2005
    
    
    2004AssetsCash
    
    $
    63,349
    
    
    
    221,236Accounts receivable, net
    
    
    51,613
    
    
    
    60,008Insurance reimbursement receivable from fund managed
by related party
    
    
    44,063
    
    
    
    Due from affiliates
    
    
    8,783
    
    
    
    6,673Prepaid expenses
    
    
    35,218
    
    
    
    45,788Investment in cable television properties:Property and equipment
    
    
    10,751,327
    
    
    
    11,718,948Less accumulated depreciation
    
    
    (7,735,370
    )
    
    
    (8,843,351
    )3,015,957
    
    
    
    2,875,597Franchise agreements (net of accumulated amortization of
$1,907,136 in 2005 and 2004)
    
    
    3,152,204
    
    
    
    3,321,069Total investment in cable television properties
    
    
    6,168,161
    
    
    
    6,196,666Loan fees (net of accumulated amortization of $75,690
and $70,191 in 2005 and 2004, respectively)
    
    
    10,540
    
    
    
    16,039Total assets
    
    $
    6,381,727
    
    
    
    6,546,410Liabilities and Partners Capital (Deficit)Liabilities:Accounts payable and accrued expenses
    
    $
    465,406
    
    
    
    409,954Due to General Partner and affiliates
    
    
    87,918
    
    
    
    67,803Deposits
    
    
    4,800
    
    
    
    5,150Subscriber prepayments
    
    
    215,415
    
    
    
    132,997Term loan
    
    
    2,318,768
    
    
    
    3,487,718Total liabilities
    
    
    3,092,307
    
    
    
    4,103,622Commitments and contingenciesPartners capital (deficit):General Partner:Contributed capital
    
    
    1,000
    
    
    
    1,000Accumulated deficit
    
    
    (48,280
    )
    
    
    (56,791
    )(47,280
    )
    
    
    (55,791
    )Limited partners:Contributed capital, net (19,087 units)
    
    
    8,116,370
    
    
    
    8,120,820Accumulated deficit
    
    
    (4,779,670
    )
    
    
    (5,622,241
    )3,336,700
    
    
    
    2,498,579Total liabilities and partners capital (deficit)
    
    $
    6,381,727
    
    
    
    6,546,410
  F-2




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##### Table of Contents



NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   2005
    
    
    2004
    
    
    2003Revenue
    
    $
    3,406,867
    
    
    
    3,393,246
    
    
    
    3,331,725Expenses:Operating (including $73,224, $71,491,
and $69,303, net, paid to affiliates
in 2005, 2004, and 2003, respectively),
excluding depreciation and amortization
expense recorded below
    
    
    428,017
    
    
    
    384,621
    
    
    
    381,204General and administrative (including
$404,138, $426,381, and $391,186, net, paid
to affiliates in 2005, 2004, and 2003, respectively)
    
    
    1,080,212
    
    
    
    931,234
    
    
    
    793,672Programming (including $545, net, received from and
$51,993, and $36,988, net, paid to affiliates in
2005, 2004, and 2003, respectively)
    
    
    1,116,463
    
    
    
    1,059,169
    
    
    
    965,496Depreciation and amortization expense
    
    
    621,324
    
    
    
    882,064
    
    
    
    899,413Loss on disposal of assets
    
    
    859
    
    
    
    1,518
    
    
    
    10,0003,246,875
    
    
    
    3,258,606
    
    
    
    3,049,785Operating income
    
    
    159,992
    
    
    
    134,640
    
    
    
    281,940Other income (expense):Interest expense and amortization of loan fees
    
    
    (135,779
    )
    
    
    (112,774
    )
    
    
    (142,204
    )Interest income and other, net
    
    
    27,133
    
    
    
    2,786
    
    
    
    (2,227
    )Income from continuing operations
    
    
    51,346
    
    
    
    24,652
    
    
    
    137,509Discontinued operations (note 11)Income from operations of La Conner, Marion
and Eutaw systems, net (including gain on sale of
systems of $756,130 in 2005 and $1,368,887
in 2003)
    
    
    799,736
    
    
    
    96,450
    
    
    
    1,448,414Net income
    
    $
    851,082
    
    
    
    121,102
    
    
    
    1,585,923Allocation of net income:General Partner
    
    $
    8,511
    
    
    
    1,211
    
    
    
    15,859Limited partners
    
    
    842,571
    
    
    
    119,891
    
    
    
    1,570,064Net income per limited partnership unit
    
    
    44
    
    
    
    6
    
    
    
    82Net income from continuing operations per
limited partnership unit
    
    
    3
    
    
    
    1
    
    
    
    7Net income from discontinued operations per
limited partnership unit
    
    
    41
    
    
    
    5
    
    
    
    75
  F-3




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##### Table of Contents



NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   General
    
    
    LimitedPartner
    
    
    partners
    
    
    TotalBalance, December 31, 2002
    
    $
    (72,861
    )
    
    
    808,624
    
    
    
    735,763Net income
    
    
    15,859
    
    
    
    1,570,064
    
    
    
    1,585,923Balance, December 31, 2003
    
    
    (57,002
    )
    
    
    2,378,688
    
    
    
    2,321,686Net income
    
    
    1,211
    
    
    
    119,891
    
    
    
    121,102Balance, December 31, 2004
    
    
    (55,791
    )
    
    
    2,498,579
    
    
    
    2,442,788Net income
    
    
    8,511
    
    
    
    842,571
    
    
    
    851,082Distribution declared to Limited Partners
for income taxes
    
    
    
    
    
    
    (4,450
    )
    
    
    (4,450
    )Balance, December 31, 2005
    
    $
    (47,280
    )
    
    
    3,336,700
    
    
    
    3,289,420
  F-4




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##### Table of Contents



NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   2005
    
    
    2004
    
    
    2003Cash flows from operating activities:Net income
    
    $
    851,082
    
    
    
    121,102
    
    
    
    1,585,923Adjustments to reconcile net income to
net cash provided by operating activities:Depreciation and amortization expense
    
    
    623,009
    
    
    
    1,029,889
    
    
    
    1,105,514Amortization of loan fees
    
    
    5,499
    
    
    
    5,550
    
    
    
    7,247(Gain) loss on disposal of assets
    
    
    (755,271
    )
    
    
    1,518
    
    
    
    (1,358,887
    )Changes in certain assets and liabilities:Accounts receivable
    
    
    (46,911
    )
    
    
    23,881
    
    
    
    122,355Due from affiliates
    
    
    (2,110
    )
    
    
    (6,673
    )
    
    
    27,563Prepaid expenses
    
    
    4,873
    
    
    
    (10,239
    )
    
    
    (11,001
    )Accounts payable and accrued expenses
    
    
    54,379
    
    
    
    13,191
    
    
    
    (98,907
    )Due to General Partner and affiliates
    
    
    20,115
    
    
    
    (10,900
    )
    
    
    11,517Deposits
    
    
    (350
    )
    
    
    150
    
    
    
    1,051Subscriber prepayments
    
    
    99,637
    
    
    
    (33,384
    )
    
    
    (27,242
    )Net cash provided by operating
activities
    
    
    853,952
    
    
    
    1,134,085
    
    
    
    1,365,133Cash flows from investing activities:Purchase of property and equipment
    
    
    (831,341
    )
    
    
    (631,211
    )
    
    
    (529,543
    )Proceeds from sale of system
    
    
    978,950
    
    
    
    194,871
    
    
    
    3,064,021Proceeds from sale of assets
    
    
    9,502
    
    
    
    
    
    
    
    Net cash provided by (used in)
investing activities
    
    
    157,111
    
    
    
    (436,340
    )
    
    
    2,534,478Cash flows from financing activities:Principal payments on term loan
    
    
    (1,168,950
    )
    
    
    (969,978
    )
    
    
    (3,755,967
    )Loan fees
    
    
    
    
    
    
    
    
    
    
    (24,287
    )Net cash used in financing activities
    
    
    (1,168,950
    )
    
    
    (969,978
    )
    
    
    (3,780,254
    )(Decrease) increase in cash
    
    
    (157,887
    )
    
    
    (272,233
    )
    
    
    119,357Cash, beginning of year
    
    
    221,236
    
    
    
    493,469
    
    
    
    374,112Cash, end of year
    
    $
    63,349
    
    
    
    221,236
    
    
    
    493,469Supplemental disclosure of cash flow information:Cash paid during the year for interest
    
    $
    117,866
    
    
    
    129,130
    
    
    
    209,359Distribution declared to Limited Partners
for income taxes
    
    
    (4,450
    )
    
    
    
    
    
    
    
  F-5




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##### Table of Contents



NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   (1)
    
    Organization and Partners Interests
 (a)
    
    Formation and BusinessNorthland Cable Properties Eight Limited Partnership (the Partnership), a Washington
limited partnership, was formed on September 21, 1988, and began operations on March 8,
1989. The Partnership was formed to acquire, develop and operate cable television
systems. Currently, the Partnership owns systems serving the cities of Aliceville,
Alabama and certain surrounding areas, and Swainsboro, Georgia and certain surrounding
areas. The Partnership has 11 nonexclusive franchises to operate these cable systems for
periods, which will expire at various dates through 2019.On March 11, 2003, the Partnership sold the operating assets and franchise rights of its
cable system in and around La Conner, Washington. On March 21, 2005, the Partnership sold
the operating assets and franchise rights of its cable systems in and around Marion and
Eutaw, Alabama, which served approximately 1,500 subscribers. The accompanying financial
statements present the results of operations and sale of the La Conner, Marion and Eutaw
systems as discontinued operations.Northland Communications Corporation (the General Partner or Northland) is the General
Partner of the Partnership. Certain affiliates of the Partnership also own and operate
other cable television systems. In addition, Northland manages cable television systems
for another limited partnership and an LLC for which it serves as general partner and
managing member, respectively.During 2005, the Partnership was out of compliance with its Cash Flow Coverage Ratio and
Funded Debt to Cash Flow Ratio, however appropriate waivers were obtained. Management
believes it is probable that the Partnership will be in compliance throughout 2006.
During 2005, cash generated from monthly billings was sufficient to meet the
Partnerships needs for working capital, capital expenditures and debt service, and
management expects the cash generated from these monthly billings will be sufficient to
meet the Partnerships 2006 obligations.The Partnership is subject to certain risks as a cable television operator. These include
competition from alternative technologies (i.e., satellite), requirements to renew its
franchise agreements, availability of capital and compliance with term loan covenants.(b)
    
    Contributed Capital, Commissions, and Offering CostsThe capitalization of the Partnership is set forth in the accompanying statements of
changes in partners capital (deficit). No limited partner is obligated to make any
additional contribution.Northland contributed $1,000 to acquire its 1% interest in the Partnership.Pursuant to the Partnership Agreement, brokerage fees of $1,004,693 paid to an affiliate
of the General Partner and other offering costs of $156,451 paid to the General Partner
were recorded as a reduction of limited partners capital upon formation of the
Partnership.
 F-6




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##### Table of Contents



NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   
 (2)
    
    Basis of PresentationCertain prior period amounts have been reclassified to conform to the current period
presentation.The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those
estimates.(3)
    
    Summary of Significant Accounting Policies
 (a)
    
    Acquisition of Cable Television SystemsCable television system acquisitions are accounted for as purchase transactions and their
cost is allocated to the estimated fair market value of net tangible assets acquired and
identifiable intangible assets, including franchise agreements. Any excess is allocated
to goodwill.(b)
    
    Accounts ReceivableAccounts receivable consist primarily of amounts due from customers for cable television
or advertising services provided by the Partnership, and are net of an allowance for
doubtful accounts of $4,200 at December 31, 2005 and $7,200 at December 31, 2004.(c)
    
    Property and EquipmentProperty and equipment are recorded at cost. Costs of additions and substantial
improvements, which include materials, labor and indirect costs associated with the
construction of cable transmission and distribution facilities, are capitalized. Indirect
costs include employee salaries and benefits, travel, and other costs. These costs are
estimated based on historical information and analysis. The Partnership periodically
performs evaluations of these estimates as warranted by events or changes in
circumstances.In accordance with Statement of Financial Accounting Standards (SFAS) No. 51, Financial
Reporting by Cable Television Companies, the Partnership also capitalizes costs
associated with initial customer installations. The costs of disconnecting service or
reconnecting service to previously installed locations are charged to operating expense
in the period incurred. Costs for repairs and maintenance are also charged to operating
expense, while equipment replacements, including the replacement of drops, are
capitalized.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 included in the statements of operations.
 F-7




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##### Table of Contents



NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   Depreciation of property and equipment is calculated using the straight-line method over
the following estimated service lives:
 Buildings
    
    20 yearsDistribution plant
    
    10 yearsOther equipment
    
    5-20 years
 The Partnership periodically evaluates the depreciation periods of property and equipment
to determine whether events or circumstances warrant revised estimates of useful lives.The Partnership recorded depreciation expense within continuing operations of $621,324,
$882,064, and $899,413 in 2005, 2004, and 2003, respectively, and depreciation expense
within discontinued operations of $1,685, $147,825 and $206,101 in 2005, 2004 and 2003,
respectively.SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets, provides a
single accounting model for long-lived assets to be disposed of. SFAS No. 144 also
changes the criteria for classifying an asset as held for sale; and broadens the scope of
businesses to be disposed of that qualify for reporting as discontinued operations and
changes the timing of recognizing losses on such operations. The Partnership adopted SFAS
No. 144 on January 1, 2002.In accordance with SFAS No. 144, long-lived assets, such as property and equipment, and
purchased intangibles subject to amortization, are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to estimated undiscounted future cash flows expected
to be generated by the asset. If the carrying amount of an asset exceeds its estimated
future cash flows, an impairment charge is recognized by the amount by which the carrying
amount of the asset exceeds the fair value of the asset. Assets to be disposed of would
be separately presented in the balance sheet and reported at the lower of the carrying
amount or fair value less costs to sell, and no longer depreciated. The assets and
liabilities of a disposed group classified as held for sale would be presented separately
in the appropriate asset and liability sections of the balance sheets.(d)
    
    Intangible AssetsEffective January 1, 2002, the Partnership adopted SFAS No. 142, Goodwill and Other
Intangible Assets. SFAS No. 142 required that the Partnership cease amortization of
goodwill and any other intangible assets determined to have indefinite lives, and
established 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 value of intangible
assets with indefinite lives falls below their carrying value. The Partnership determined
that its franchise agreements met the definition of indefinite lived assets due to the
history of obtaining franchise renewals, among other considerations. Accordingly,
amortization of these assets also ceased on December 31, 2001. The Partnership tested
these intangibles for impairment during the fourth quarter of 2005 and determined that
the fair value of the assets exceeded their carrying value. The Partnership determined
that there are not conditions such as
 F-8




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##### Table of Contents



NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   obsolescence, regulatory changes, changes in demand, competition, or other factors that
would change their indefinite life determination. The Partnership will continue to test
these assets for impairment annually, or more frequently as warranted by events or
changes in circumstances.
 (e)
    
    Loan FeesLoan fees are being amortized using the straight-line method over periods of one to five
years (current weighted average remaining useful life of 2.00 years). The Partnership
recorded amortization expense attributable to continuing operations of $5,117, $4,215,
and $6,001 in 2005, 2004, and 2003, respectively. Amortization expense attributable to
discontinued operations was $382, $1,335 and $1,246 in 2005, 2004 and 2003, respectively.
Future amortization of loan fees is expected to be as follows:
 2006
    
    $
    5,2702007
    
    
    5,270$
    10,540
 (f)
    
    Self InsuranceThe Partnership began self-insuring for aerial and underground plant in 1996. Beginning
in 1997, the Partnership began making quarterly contributions into an insurance fund
maintained by an affiliate which covers all Northland entities and would defray a portion
of any loss should the Partnership be faced with a significant uninsured loss. To the
extent the Partnerships losses exceed the funds balance, the Partnership would absorb
any such loss. If the Partnership were to sustain a material uninsured loss, such
reserves could be insufficient to fully fund such a loss. The capital cost of replacing
such equipment and physical plant could have a material adverse effect on the
Partnership, its financial condition, prospects and debt service ability.Amounts paid to the affiliate, which maintains the fund for the Partnership and its
affiliates, are expensed as incurred and are included in the statements of operations. To
the extent a loss has been incurred related to risks that are self-insured, the
Partnership records an operating loss, net of any amounts to be drawn from the fund.
Management suspended contributions throughout 2002 based on its assessment that the
current balance would be sufficient to meet potential claims. In 2005 and 2004, the
Partnership was required to make contributions and was charged $2,826 and $930,
respectively, by the fund. As of December 31, 2005, the fund (related to all Northland
entities) had a balance of $202,270, which management believes sufficient to pay the
$44,063 owed by the fund to the Partnership after considering all other outstanding
claims.(g)
    
    Revenue RecognitionCable television service revenue, including service and maintenance, is recognized in the
month service is provided to customers. 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. Local spot advertising revenues earned in continuing operations were
$122,703, $110,707, and $140,838 in 2005, 2004, and
 F-9




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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   2003, respectively. Local spot advertising revenues earned in discontinued operations
were $0, $0 and $19,649 in 2005, 2004 and 2003, respectively.
 (h)
    
    Advertising CostsThe Partnership expenses advertising costs as they are incurred. Advertising costs
attributable to continuing operations were $41,085, $35,329, and $69,428 in 2005, 2004,
and 2003, respectively. Advertising costs attributable to discontinued operations were
$0, $0 and $11,511 in 2005, 2004 and 2003, respectively.(i)
    
    Segment InformationThe Partnership follows SFAS No. 131, Disclosures About Segments of an Enterprise and
Related Information. The Partnership manages its business and makes operating decisions
at the operating segment level. Following the operating segment aggregation criteria in
SFAS No. 131, the Partnership reports business activities under a single reporting
segment, telecommunications services. Additionally, all of its activities take place in
the United States of America.(j)
    
    Concentration of Credit RiskThe Partnership is subject to concentrations of credit risk from cash investments on
deposit at various financial institutions that at times exceed insured limits by the
Federal Deposit Insurance Corporation. This exposes the Partnership to potential risk of
loss in the event the institution becomes insolvent.(k)
    
    Fair Value of Financial InstrumentsFinancial instruments consist of cash and a term loan. The fair value of cash
approximates its carrying value. The fair value of the term loan approximates its
carrying value because of its variable interest rate nature (note 8).(l)
    
    Recently Issued Accounting PronouncementsIn November 2004, the EITF ratified its consensus on Issue No. 03-13, Applying the
Conditions in paragraph 42 of FASB Statement No. 144 in Determining Whether to Report
Discontinued Operations (EITF 03-13). EITF 03-13 relates to components of an
enterprise that are either disposed of or classified as held for sale. EITF 03-13 allows
significant events or circumstances that occur after the balance sheet date but before
the issuance of financial statements to be taken into consideration in the evaluation of
whether a component should be presented as discontinued or continuing operations, and
modifies the assessment period guidance to allow for an assessment period of greater than
one year. The implementation of EITF 03-13 did not have a material impact on the
Partnerships financial statements.(4)
    
    Income AllocationAs defined in the limited partnership agreement, the General Partner is allocated 1% and the
limited partners are allocated 99% of partnership net income, net losses, deductions and
credits until such time as the limited partners receive aggregate cash distributions equal to
their aggregate capital contributions, plus
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   the limited partners preferred return. Thereafter, the General Partner will be allocated 20%
and the limited partners will be allocated 80% of partnership net income, net losses,
deductions, and credits. Cash distributions will be allocated in accordance with the net
income and net loss percentages then in effect. Prior to the General Partner receiving cash
distributions for any year, the limited partners must receive cash distributions in an amount
equal to the lesser of (i) 50% of the limited partners allocable share of net income for such
year or (ii) the federal income tax payable on the limited partners allocable share of net
income on the then highest marginal federal income tax rate applicable to such net income.The limited partners total initial contributions to capital were $9,568,500 ($500 per limited
partnership unit), offset by $1,435,180 in offering costs. As of December 31, 2005, the
Partnership has repurchased $12,500 of limited partnership units (50 units at $250 per unit).
 (5)
    
    Transactions with the General Partner and Affiliates
 (a)
    
    Management FeesThe General Partner receives a fee for managing the Partnership equal to 5% of the gross
revenues of the Partnership, excluding revenues from the sale of cable television systems
or franchises. Management fees charged to continuing operations by the General Partner
were $170,343, $169,678, and $166,037 for 2005, 2004, and 2003, respectively. Management
fees charged to discontinued operations by the General Partner were $7,333, $34,622 and
$45,591 for 2005, 2004 and 2003, respectively. Management fees are included as a
component of general and administrative expenses in the accompanying statements of
operations.(b)
    
    ReimbursementsThe General Partner provides or causes to be provided certain centralized services to the
Partnership and other affiliated entities. The General Partner is entitled to
reimbursement from the Partnership for various expenses incurred by it or its affiliates
on behalf of the Partnership allocable to its management of the Partnership, including
travel expenses, pole and site rental, lease payments, legal expenses, billing expenses,
insurance, governmental fees and licenses, headquarters supplies and expenses, pay
television expenses, equipment and vehicle charges, operating salaries and expenses,
administrative salaries and expenses, postage, and office maintenance.The amounts billed to the Partnership are based on costs incurred by the General Partner
in rendering the services. The costs of certain services are charged directly to the
Partnership, based upon the personnel time spent by the employees rendering the service.
The cost of other services is allocated to the Partnership and affiliates based upon
relative size and revenue. Management believes that the methods used to allocate services
to the Partnership are reasonable. Amounts charged to continuing operations for these
services were $200,140, $217,247, and $223,336 for 2005, 2004, and 2003, respectively.
Amounts charged to discontinued operations for these services were $0, $0 and $14,947 in
2005, 2004 and 2003, respectively.The Partnership has entered into operating management agreements with certain affiliates
managed by the General Partner. Under the terms of these agreements, the Partnership or
an affiliate serves as the managing agent for certain cable television systems and is
reimbursed for certain operating and
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   administrative expenses. The Partnerships continuing operations include $91,635,
$110,947, and $96,209, net of payments received, under the terms of these agreements
during 2005, 2004, and 2003, respectively. The Partnerships discontinued operations
include $8,664, $42,068 and $43,809, net of payments received under the terms of these
agreements during 2005, 2004 and 2003, respectively.
 Northland Cable Service Corporation (NCSC), an affiliate of the General Partner, was
formed to provide billing system support to cable systems owned and managed by the
General Partner. In addition NCSC provides technical support associated with the build
out and upgrade of Northland affiliated cable systems. Cable Ad Concepts, a subsidiary of
NCSC, assists in the development of local advertising as well as billing for video
commercial advertisements to be cablecast on Northland affiliated cable systems. In 2005,
2004, and 2003, the Partnerships continuing operations include $52,529, $92,236, and
$47,039, respectively, for these services. Of this amount, $37,830 and $40,243 were
capitalized in 2005 and 2004, respectively, related to the build out and upgrade of cable
systems. The Partnerships discontinued operations include $689, $0 and $3,128 in 2005,
2004 and 2003, respectively, for these services. None of these amounts were capitalized.(c)
    
    Due from AffiliatesThe receivable from affiliates as of December 31, 2005 and 2004 consists of $8,783 and
$6,673, respectively, in reimbursable operating costs.(d)
    
    Due to General Partner and AffiliatesThe payable to the General Partner and affiliates consists of the following:
 December 312005
    
    
    2004Management fees
    
    $
    15,086
    
    
    
    14,829Reimbursable operating costs
    
    
    75,059
    
    
    
    54,046Other amounts due from General Partner and affiliates, net
    
    
    (2,227
    )
    
    
    (1,072
    )$
    87,918
    
    
    
    67,803
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   (6)
    
    Property and EquipmentProperty and equipment consists of the following:
 December 312005
    
    
    2004Land and buildings
    
    $
    84,015
    
    
    
    110,552Distribution plant
    
    
    10,093,245
    
    
    
    11,056,906Other equipment
    
    
    491,348
    
    
    
    422,520Construction in progress
    
    
    82,719
    
    
    
    128,970$
    10,751,327
    
    
    
    11,718,948Accumulated depreciation
    
    
    (7,735,370
    )
    
    
    (8,843,351
    )Property and equipment, net of accumulated depreciation
    
    
    3,015,957
    
    
    
    2,875,597
 (7)
    
    Accounts Payable and Accrued ExpensesAccounts payable and accrued expenses consists of the following:
 December 312005
    
    
    2004Accounts payable
    
    $
    37,183
    
    
    
    42,632Program license fees
    
    
    184,542
    
    
    
    131,999Pole rental
    
    
    100,551
    
    
    
    128,154Franchise fees
    
    
    30,619
    
    
    
    41,429Copyright fees
    
    
    13,514
    
    
    
    20,489Interest
    
    
    37,415
    
    
    
    13,790Other
    
    
    61,582
    
    
    
    31,461$
    465,406
    
    
    
    409,954
 (8)
    
    Term LoanIn December 2004, the Partnership agreed to certain terms and conditions with its existing
lender and amended its credit agreement. The terms of the amendment modify the principal
repayment schedule and the Funded Debt to Cash Flow Ratio (described below). The term loan is
collateralized by a first lien position on all present and future assets of the Partnership.
Interest rates are based on LIBOR and include a margin paid to the lender based on overall
leverage, and may increase or decrease as the Partnerships leverage fluctuates. The interest
rate was 6.25% as of December 31, 2005. Principal payment plus interest are due quarterly
until maturity on December 31, 2007. In connection with the credit amendment, the Partnership
is amortizing the remaining loan fees over the term of the new agreement. As of December 31,
2005 and 2004, the balance of the term loan agreement was $2,318,768 and $3,487,718,
respectively.
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   Annual maturities of the term loan after December 31, 2005 are as follows:
 2006
    
    $
    200,0002007
    
    
    2,118,768$
    2,318,768
 Under the terms of the amended loan agreement, the Partnership has agreed to restrictive
covenants which require the maintenance of certain ratios, including a Funded Debt to Cash
Flow Ratio of no more than 3.75 to 1 decreasing over time to 3.00 to 1, a Cash Flow Coverage
Ratio of no less than 1.10 to 1, and a
limitation on the maximum amount of annual capital expenditures of $1,200,000, among other
restrictions. The General Partner submits quarterly debt compliance reports to the
Partnerships creditor under this agreement. As of December 31, 2005, the Partnership was out
of compliance with the Cash Flow Coverage Ratio, however, a waiver has been obtained.(9)
    
    Income TaxesIncome taxes payable have not been recorded in the accompanying financial statements because
they are obligations of the partners. The federal and state income tax returns of the
Partnership are prepared and filed by the General Partner.The tax returns, the qualification of the Partnership as such for tax purposes, and the amount
of distributable partnership income or loss are subject to examination by federal and state
taxing authorities. If such examinations result in changes with respect to the Partnerships
qualification or in changes with respect to the income or loss, the tax liability of the
partners would likely be changed accordingly.As a result of the sale of the Marion and Eutaw systems, the Limited Partners were allocated
taxable income in 2005. State income taxes to be paid by the Partnership on behalf of the
Limited Partners have been recorded as a reduction of Limited Partners capital. There was no
taxable income allocated to the limited partners in 2004 or 2003. Generally, subject to the
allocation procedures discussed in the following paragraph, taxable income allocated to the
limited partners is different from that reported in the statements of operations principally
due to differences in depreciation and amortization expense allowed for tax purposes and the
amount recognizable under accounting principles generally accepted in the United States of
America. Traditionally, there are no other significant differences between taxable income and
net income (loss) reported in the statements of operations.The Partnership agreement provides that tax losses may not be allocated to the Limited
Partners if such loss allocation would create a deficit in the Limited Partners Capital
Account. Such excess losses are reallocated to the General Partner (Reallocated Limited
Partner Losses). In subsequent years, 100% of the Partnerships net income is allocated to the
General Partner until the General Partner has been allocated net income in amounts equal to
the Reallocated Limited Partner Losses.Under current federal income tax laws, a partners allocated share of tax losses from a
partnership is allowed as a deduction on their individual income tax return only to the extent
of the partners adjusted basis in their partnership interest at the end of the tax year. No
losses will be allocated to limited partners with negative basis.
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   
 In addition, current tax law does not allow a taxpayer to use losses from a business activity
in which they do not materially participate (a passive activity, e.g., a limited partner in a
limited partnership) to offset other income such as salary, active business income, dividends,
interest, royalties, and capital gains. However, such losses can be used to offset income from
other passive activities. In addition, disallowed losses can be carried forward indefinitely
to offset future income from passive activities. Disallowed losses can be used in full when
the taxpayer recognizes gain or loss upon the disposition of their entire interest in the
passive activity.(10)
    
    Commitments and Contingencies
 (a)
    
    Lease ArrangementsThe Partnership leases certain office facilities and other sites under leases accounted
for as operating leases. Rental expense attributable to continuing operations, related to
these leases was $13,050, $12,350, and $11,700 in 2005, 2004, and 2003, respectively.
There was no rental expense attributable to discontinued operations, related to these
leases in 2005, 2004 or 2003. Minimum lease payments through the end of the lease terms
are as follows:
 2006
    
    $
    17,8002007
    
    
    16,4002008
    
    
    7,4002009
    
    
    4,6002010
    
    
    4,600Thereafter
    
    
    32,100$
    82,900
 The Partnership also rents utility poles in its operations. Generally, pole rentals are
cancelable on short notice, but the Partnership anticipates that such rentals will recur.
Rent expense incurred for pole rentals attributable to continuing operations for the
years ended December 31, 2005, 2004, and 2003 was $87,467, $95,590, and $84,580. Rent
expense incurred for pole rentals attributable to discontinued operations for the years
ended December 31, 2005, 2004 and 2003 was $4,017, $17,041 and $24,906, respectively.(b)
    
    Effects of RegulationThe operation of a cable system is extensively regulated at the federal, local, and, in
some instances, state levels. The Cable Communications Policy Act of 1984, as amended,
the Cable Television Consumer Protection and Competition Act of 1992 (the 1992 Cable
Act), and the 1996 Telecommunications Act (the 1996 Telecom Act, and, collectively, the
Cable Act) establish a national policy to guide the development and regulation of cable
television systems. The Federal Communications Commission (FCC) has principal
responsibility for implementing the policies of the Cable Act. Many aspects of such
regulation are currently the subject of judicial proceedings and administrative or
legislative proposals. Legislation and regulations continue to change.
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   Cable Rate Regulation Although the FCC established the rate regulatory scheme pursuant
to the 1992 Cable Act, local municipalities, commonly referred to as local franchising
authorities, are primarily responsible for administering the regulation of the lowest
level of cable service called the basic service tier. The basic service tier typically
contains local broadcast stations, public, educational, and government access channels
and various entertainment and home shopping channels. Before a local franchising
authority begins basic service rate regulation, it must certify to the FCC that it will
follow applicable federal rules. Many local franchising authorities have voluntarily
declined to exercise their authority to regulate basic service rates. In a particular
effort to ease the regulatory burden on small cable systems, the FCC created special rate
rules applicable for systems with fewer than 15,000 subscribers owned by an operator with fewer than 400,000
subscribers. The special rate rules allow for a simplified cost-of-service showing for
basic service tier programming. All of Northlands systems are eligible for these
simplified cost-of-service rules, and have calculated rates in accordance with those
rules.Cable Entry into Internet The U.S. Supreme Court recently ruled that cable television
systems may deliver high-speed Internet access and remain within the protections of
Section 703 of the Telecommunications Act of 1996 (the Pole Attachment Act). National
Cable & Telecommunications Assoc. v. Gulf Power Co., Nos. 00-832 and 00-843, 534 U.S.
(January 16, 2002). The Court reversed the Eleventh Circuits decision to the contrary
and sustained the FCC decision that applied the Pole Attachment Acts rate formula and
other regulatory protections to cable television systems attachments over which
commingled cable television and cable modem services are provided. The data services
business, including Internet access, is largely unregulated at this time apart from
federal, state and local laws and regulations applicable to businesses in general. Some
federal, state, local and foreign governmental organizations are considering a number of
legislative and regulatory proposals with respect to Internet user privacy, infringement,
pricing, quality of products and services and intellectual property ownership. It is
uncertain how existing laws will be applied to the Internet in areas such as property
ownership, copyright, trademark, trade secret, obscenity and defamation. Additionally,
some jurisdictions have sought to impose taxes and other burdens on providers of data
services, and to regulate content provided via the Internet and other information
services. Northland expects that proposals of this nature will continue to be debated in
Congress and state legislatures in the future. Additionally, the FCC is now considering a
proposal to impose obligations on some or all providers of Internet access services to
contribute to the cost of federal universal service programs, which could increase the
cost of Internet access. Currently, Federal court rulings and FCC order provide that
cable modem revenue be excluded from gross revenues for purposes of franchise fee
calculations. Cable Modem Services have been classified as an interstate information
service, which has historically meant that no regulations apply to the provision of this
service. However, there is likely to be continuing uncertainty about the classification
and regulation of cable modem servicesElectric Utility Entry into Telecommunications and Cable
Television The 1996 Telecom
Act provides that registered utility holding companies and subsidiaries may provide
telecommunications services, including cable television, notwithstanding the Public
Utility Holding Company Act. Electric utilities must establish separate subsidiaries,
known as exempt telecommunications companies and must apply to the FCC for operating
authority. Like telephone companies, electric
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   utilities have substantial resources at
their disposal, and could be formidable competitors to traditional cable systems. Several
of these utilities have been granted broad authority to engage in activities that could
include the provision of video programming.Must Carry and Retransmission Consent The 1992 Cable Act contains broadcast signal
carriage requirements. Broadcast signal carriage is the transmission of broadcast
television signals over a cable system to cable customers. These requirements, among
other things, allow local commercial television broadcast stations to elect once every
three years between must carry status or retransmission consent status. Less popular
stations typically elect must carry, which is the broadcast signal carriage rule that
allows local commercial television broadcast stations to require a cable system to carry the station. Must carry requests can dilute the appeal of a cable
systems programming offerings because a cable system with limited channel capacity may
be required to forego carriage of popular channels in favor of less popular broadcast
stations electing must carry. More popular stations, such as those affiliated with a
national network, typically elect retransmission consent, which is the broadcast signal
carriage rule that allows local commercial television broadcast stations to negotiate
terms (such as mandating carriage of an affiliated cable network or a digital broadcast
signal) for granting permission to the cable operator to carry the stations.
Retransmission consent demands may require substantial payments or other concessions.
The FCC has an on-going administrative proceeding in which it has evaluated various
proposals for mandatory carriage of digital television signals. In its initial decision
the FCC, in part, (i) declined to order the carriage of both the analog and digital
signals of television stations; (ii) determined that a television broadcast station
licensee that is operating only on its authorized digital channel and/or that has
surrendered its analog broadcast channel has mandatory cable carriage rights within the
broadcasters local service area for only the primary video programming stream of the
broadcasters digital broadcast channel and does not have the right to require the cable
operator to carry multiple digital programming streams, commonly called multicasting.
In February 2005, the FCC reaffirmed its earlier decision not to impose (i) a dual
carriage regulation, and (ii) denial of any multicast requirement. The broadcast
industry trade association and several broadcasters have announced that they will
challenge the FCCs ruling and will lobby Congress for favorable legislation. The FCC may
evaluate additional modifications to its digital broadcast signal carriage requirements
in the future. Northland cannot predict the ultimate outcome of this proceeding, or the
impact any new carriage requirements may have on the operation of its cable systems. The
President has signed into law legislation establishing February 2009 as the deadline to
complete the broadcast transition to digital spectrum and to reclaim analog spectrum.
Cable operators may need to take additional operational steps at that time to ensure that
customers not otherwise equipped to receive digital programming, retain access to
broadcast programming.Access Channels Local franchising authorities can include franchise provisions
requiring cable operators to set aside certain channels for public, educational and
governmental access programming. Federal law also requires cable systems to designate a
portion of their channel capacity, up to 15% in some cases, for commercial leased access
by unaffiliated third parties. The FCC has adopted rules regulating the terms,
conditions, and maximum rates a cable operator may charge for commercial leased access
use.
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   Access to Programming The Communications Act and the FCCs program access rules
generally prevent satellite video programmers affiliated with cable operators from
favoring cable operators over competing multichannel video distributors, such as DBS, and
limit the ability of such programmers to offer exclusive programming arrangements to
cable operators. The FCC has extended the exclusivity restrictions through October 2007.
Given the heightened competition and media consolidation, it is possible that we will
find it increasingly difficult to gain access to popular programming at favorable terms.
Such difficulty could adversely impact our business.Copyright Cable systems are subject to federal copyright licensing covering
carriage of television and radio broadcast signals. The possible modification or
elimination of this compulsory copyright license is the subject of continuing legislative
review and could adversely affect our ability to obtain
desired broadcast programming. Moreover, the Copyright Office has not yet provided any
guidance as to the how the compulsory copyright license should apply to newly offered
digital broadcast signals. Copyright clearances for non-broadcast programming services
are arranged through private negotiations. Cable operators also must obtain music rights
for locally originated programming and advertising from the major music performing rights
organizations. These licensing fees have been the source of litigation in the past, and
we cannot predict with certainty whether license fee disputes may arise in the future.State and Local Regulation Cable television systems generally are operated pursuant to
nonexclusive franchises granted by a municipality or other state or local government
entity in order to cross public rights-of-way. Federal law now prohibits local
franchising authorities from granting exclusive franchises or from unreasonably refusing
to award additional or renew existing franchises.Cable franchises generally are granted for fixed terms and in many cases include monetary
penalties for noncompliance and may be terminable if the franchisee fails to comply with
material provisions. The specific terms and conditions of franchises vary materially
among jurisdictions. Each franchise generally contains provisions governing cable
operations, service rates, franchising fees, system construction and maintenance
obligations, system channel capacity, design and technical performance, customer service
standards, and indemnification protections. One of the state in which Northland conducts
business has centralized the jurisdiction over franchising with a state governmental
agencies, rather than with municipalities. These new regulations are similar to those
that govern a public utility. Several other states are also considering regulating cable
franchises at the state governmental level. The effect of such legislation is to simplify
and expedite entrance of new competitive providers of video, data and voice services into
the market. Northland anticipate that this trend towards simplified entrance into the
market will continue. Although state and local franchising authorities have considerable
discretion in establishing franchise terms, there are certain federal limitations. For
example, local franchising authorities cannot insist on franchise fees exceeding 5% of
the systems gross cable-related revenues, cannot dictate the particular technology used
by the system, and cannot specify video programming other than identifying broad
categories of programming.Federal law contains renewal procedures designed to protect incumbent franchisees against
arbitrary denials of renewal. Even if a franchise is renewed, the local franchising
authority may seek to impose new and more onerous requirements, such as significant
upgrades in facilities and service or
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   increased franchise fees as a condition of renewal.
Historically, most franchises have been renewed and transfer consents granted to cable
operators that have provided satisfactory services and have complied with the terms of
their franchise.Phone Service The 1996 Telecom Act, which amended the Communications Act, created a
more favorable regulatory environment for us to provide telecommunications services. In
particular, it limited the regulatory role of local franchising authorities and
established requirements ensuring that we could interconnect with other telephone
companies to provide a viable service. Many implementation details remain unresolved, and
there are substantial regulatory changes being considered that could impact, in both
positive and negative ways, our primary telecommunications competitors and our own entry
into the field of phone service. The FCC and state regulatory
authorities are considering, for example, whether common carrier regulation traditionally
applied to incumbent local exchange carriers should be modified. The FCC has concluded
that alternative voice technologies, like certain types of VOIP, should be regulated only
at the federal level, rather than by individual states. A legal challenge to that FCC
decision is pending. While the FCCs decision appears to be a positive development for
VoIP offerings, it is unclear whether and how the FCC will apply certain types of common
carrier regulations, such as intercarrier compensation and universal service obligations
to alternative voice technology. The FCC has already determined that providers of phone
services using Internet Protocol technology must comply with traditional 911 emergency
service obligations (E911) and it has extended requirements for accommodating law
enforcement wiretaps to such providers. It is unclear how these regulatory matters
ultimately will be resolved and how they will affect our potential expansion into phone
service.The foregoing summary does not purport to describe all present and proposed federal,
state and local regulations and legislation affecting the cable or telephony industries.
Other existing federal regulations, copyright licensing and, in many jurisdictions, state
and local franchise requirements currently are the subject of a variety of judicial
proceedings, legislative hearings, and administrative and legislative proposals that
could alter, in varying degrees, the manner in which cable or information service systems
operate. Northland cannot predict at this time the outcome of these proceedings or their
impact upon the industry or upon Northlands business and operations.
 (11)
    
    System SalesOn March 11, 2003, the Partnership sold the operating assets and franchise rights of its cable
system in and around the community of La Conner, Washington (the La Conner System). The La
Conner System served approximately 1,600 subscribers, and was sold at a price of approximately
$3,200,000 of which the Partnership received approximately $3,000,000 at closing.
Substantially all of the proceeds were used to pay down amounts outstanding under the
Partnerships term loan agreement. The sales price was adjusted at closing for the proration
of certain revenues and expenses, and approximately $200,000 was held in escrow and released
to the Partnership in March of 2004. These proceeds were also used to pay down amounts
outstanding under the Partnerships term loan agreement.The sale was made pursuant to an offer by Wave Division Networks, LLC, which was formalized in
a purchase and sale agreement dated October 28, 2002. Based on the offer made by Wave Division
Networks, LLC, management determined that acceptance would be in the best economic interest of
the
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   Partnership, and that the sale was not a result of declining or deteriorating operations
nor was it necessary to create liquidity or reduce outstanding debt. It is the opinion of
management that the Partnership could have continued existing operations and met all
obligations as they became due.On March 21, 2005, the Partnership sold the operating assets and franchise rights of its cable
systems in and around the communities of Marion and Eutaw, Alabama. The Marion and Eutaw
systems served approximately 1,500 subscribers, and were sold at a price of $978,950, net of
working capital adjustments, all of which the Partnership received at closing. The sales price
was adjusted at closing for the proration of certain revenues and expenses and substantially
all of the proceeds were used to pay down amounts outstanding under the Partnerships term
loan agreement.The sale was made pursuant to an offer by Sky Cablevision of Greene County, which was
formalized in a Purchase and Sale Agreement dated March 10, 2005. Based on the offer made by
Sky Cablevision of Greene County, management determined that acceptance would be in the best
economic interest of the Partnership, and that the sale was not a result of declining or
deteriorating operations nor was it necessary to create liquidity or reduce outstanding debt.
It is the opinion of management that the Partnership could have continued existing operations
and met all obligations as they became due.The assets and liabilities attributable to the Marion and Eutaw systems as of December 31,
2004 consisted of the following:
 2004Cash
    
    $
    1,996Accounts receivable
    
    
    20,990Prepaid expenses
    
    
    6,202Property and equipment
    
    
    1,785,479Accumulated depreciation
    
    
    (1,729,304
    )56,175Francise agreements (net of accumulated
amortization of $140,523
    
    
    168,865Total assets
    
    $
    254,228Accounts payable and accrued expenses
    
    $
    39,599Subscriber payments
    
    
    15,993Total liabilities
    
    $
    55,592
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
    2005
    
    
    2004
    
    
    2003Service revenues
    
    $
    146,662
    
    
    
    692,208
    
    
    
    901,302Expenses:Operating (including $0, $9,553 and
$13,372 paid to affiliates in 2005,
2004 and 2003, respectively)
    
    
    8,535
    
    
    
    49,788
    
    
    
    59,969General and administrative (including
$16,153 , $67,137, and $82,642 paid
to affiliates in 2005, 2004, and 2003,
respectively)
    
    
    34,045
    
    
    
    162,715
    
    
    
    219,247Programming
(including $0, $0 and $11,461 paid to affiliates in 2003)
    
    
    47,580
    
    
    
    199,735
    
    
    
    262,056Depreciation and amortization
    
    
    1,685
    
    
    
    147,825
    
    
    
    206,101Income from operations
    
    
    54,817
    
    
    
    132,145
    
    
    
    153,929Other income (expense):Interest expense and amortization of
loan fees
    
    
    (11,211
    )
    
    
    (35,695
    )
    
    
    (74,402
    )Gain on sale of systems
    
    
    756,130
    
    
    
    
    
    
    
    1,368,887Income from operations of
La Conner, Marion and
Eutaw systems, net
    
    $
    799,736
    
    
    
    96,450
    
    
    
    1,448,414
 In accordance with EITF 87-24, Allocation of Interest to Discontinued Operations, the
Partnership allocated interest expense to discontinued operations using the historic weighted
average interest rate applicable to the Partnerships term loan and approximately $2,956,000
in principal payments related to the sale of the La Conner system and $970,000 in principal
payments related to the sale of the Marion and Eutaw systems, which were applied to the term
loan as a result of the respective system sales.(12)
    
    Solicitation of Interest from Potential BuyersThe General Partner has been working with a nationally recognized brokerage firm to solicit
offers from potential purchasers for the sale of the Partnerships assets for fair value.Despite ongoing efforts, the General Partner has been unable to secure any offers for the sale
of the Partnerships assets at this time. Management does not feel that the lack of viable
purchase offers for the Partnerships remaining cable systems reflect a lack of value in those
systems or a concern over the operational capabilities of those systems. Instead, based on
experience, many factors affect the market for cable television systems over time, including
whether the various companies participating in the cable television industry are generally in
an acquisition mode, the availability of financing through lenders or
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NORTHLAND CABLE PROPERTIES
EIGHT LIMITED PARTNERSHIP
   investors and the number
of other systems that are either on the market or forecasted to soon be offered for sale.It is Managements experience, after many years in the cable television industry, that it is
difficult to forecast the likelihood of receiving a solid purchase offer from a financially
viable purchaser at any specific time. Notwithstanding, the General Partner will continue its
efforts to solicit offers from potential purchasers from time to time with the goal of
securing more than one viable offer for the partnerships cable systems, however, Management
is unable at this time to forecast the ultimate outcome of these activities.(13)
    
    LitigationIn March 2005, Northland filed a compliant against one of its programming networks seeking a
declaration that a December 2004 contract between Northland and the programmer was an
enforceable contract related to rates Northland would pay for its programming and damages for
breach of that contract. The programmer counter-claimed, alleging copyright infringement and breach of contract. Northland
is currently in discovery and a trial date is set for September 11, 2006. At this time Management
cannot reasonably estimate the probability of a favorable or unfavorable outcome of this case
nor can it reasonably estimate the amount of any potential recovery or damages that could
result from any such outcome.In August of 2005, the Partnership settled a legal claim made by a former employee. Under the
settlement, the Partnership paid the employee $75,000 in damages, fees and costs. In addition,
the Partnership incurred approximately $110,000 in legal fees associated with the defense of
this claim. The Partnership has recorded both the settlement to the employee and the
associated legal fees as general and administrative expenses of continuing operations in the
accompanying financial statements.
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