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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

[X]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

or

[   ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number:    0-16718   

Northland Cable Properties Seven Limited Partnership

(206) 621-1351

N/A

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

Yes  [X]         No  [   ]

This filing contains 21 pages. Exhibits index appears on page 16.

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PART 1 — FINANCIAL INFORMATION

ITEM 1. Financial Statements

NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
BALANCE SHEETS — (UNAUDITED)

					September 30,				December 31,
					2002				2001
ASSETS
Cash					$	813,323			$	125,060
Accounts receivable						655,870				592,772
Due from affiliates						36,941				17,225
Prepaid expenses						156,857				89,299
Property and equipment, net of accumulated depreciation of $23,386,073 and $20,956,786, respectively						18,069,618				19,074,621
Franchise agreements and acquisition costs, net of accumulated amortization of $10,849,665						10,562,737				10,560,037
Goodwill, net of accumulated amortization of $70,130						152,799				152,799
Loan fees and other intangibles, net of accumulated amortization of $1,618,726 and $1,359,248, respectively						629,851				485,384
Total assets					$	31,077,996			$	31,097,197
LIABILITIES AND PARTNERS’ DEFICIT
Accounts payable and accrued expenses					$	2,389,745			$	1,820,883
Due to managing general partner and affiliates						1,016,865				285,125
Converter deposits						18,325				71,730
Subscriber prepayments						577,561				595,357
Notes payable						40,362,530				41,236,547
Interest rate swap agreements						—				277,449
			Total liabilities			44,365,026				44,287,091
Partners’ deficit:
	General Partners:
		Contributed capital, net				(25,367	)			(25,367	)
		Accumulated deficit				(319,971	)			(319,000	)
						(345,338	)			(344,367	)
	Limited Partners:
		Contributed capital, net				18,735,576				18,735,576
		Accumulated deficit				(31,677,268	)			(31,581,103	)
						(12,941,692	)			(12,845,527	)
			Total partners’ deficit			(13,287,030	)			(13,189,894	)
Total liabilities and partners’ deficit					$	31,077,996			$	31,097,197

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

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NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS — (UNAUDITED)

					For the three months ended September 30,
					2002				2001
Service revenues					$	4,895,042			$	4,691,112
Expenses:
		Cable system operations (including $50,300 and $50,388 to affiliates in 2002 and 2001, respectively), excluding depreciation and amortization shown below				382,288				384,290
		General and administrative (including $452,473 and $427,556 to affiliates in 2002 and 2001, respectively)				1,243,597				1,175,486
		Programming (including $52,967 paid to and $7,038 received from affiliates in 2002 and 2001, respectively)				1,583,202				1,363,973
		Depreciation and amortization				853,890				1,279,902
						4,062,977				4,203,651
Income from operations						832,065				487,461
Other income (expense):
			Interest expense			(675,926	)			(781,734	)
			Loan fees			(403,595	)			(32,496	)
			Interest income and other, net			1,335				(64,922	)
			Unrealized loss on interest rate swap agreements			—				(138,381	)
			Loss on disposal of assets			(20,442	)			(116,711	)
						(1,098,628	)			(1,134,244	)
Net loss					$	(266,563	)		$	(646,783	)
Allocation of net loss:
			General Partners		$	(2,666	)		$	(6,468	)
			Limited Partners		$	(263,897	)		$	(640,315	)
Net loss per limited partnership unit:
	(49,656 units)				$	(5	)		$	(13	)
Net loss per $1,000 investment					$	(11	)		$	(26	)

The accompanying notes are an integral part of these statements.

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NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS — (UNAUDITED)

					For the nine months ended September 30,
					2002				2001
Service revenues					$	14,477,921			$	13,970,216
Expenses:
		Cable system operations (including $153,241 and $168,253 to affiliates in 2002 and 2001, respectively), excluding depreciation and amortization shown below				1,109,227				1,153,877
		General and administrative (including $1,334,950 and $1,303,842 to affiliates in 2002 and 2001, respectively)				3,562,807				3,405,409
		Programming (including $145,789 and $51,210 to affiliates in 2002 and 2001, respectively)				4,659,178				3,995,042
		Depreciation and amortization				2,548,884				3,794,670
						11,880,096				12,348,998
Income from operations						2,597,825				1,621,218
Other income (expense):
			Interest expense			(2,137,953	)			(2,444,350	)
			Loan fees			(815,486	)			(91,453	)
			Interest income and other, net			2,004				(38,662	)
			Unrealized gain (loss) on interest rate swap agreements			277,449				(412,630	)
			Loss on disposal of assets			(20,975	)			(171,216	)
						(2,694,961	)			(3,158,311	)
Net loss					$	(97,136	)		$	(1,537,093	)
Allocation of net loss:
			General Partners		$	(971	)		$	(15,371	)
			Limited Partners		$	(96,165	)		$	(1,521,722	)
Net loss per limited partnership unit:
	(49,656 units)				$	(2	)		$	(31	)
Net loss per $1,000 investment					$	(4	)		$	(61	)

The accompanying notes are an integral part of these statements.

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NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS — (UNAUDITED)

				For the nine months ended September 30,
				2002				2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss				$	(97,136	)		$	(1,537,093	)
Adjustments to reconcile net loss to cash provided by operating activities:
	Depreciation and amortization				2,548,884				3,794,670
	Unrealized (gain) loss on interest rate swap agreements				(277,449	)			412,630
	Non-cash interest expense				173,835				—
	Loan fees				215,486				91,453
	Loss on sale of assets				20,975				171,216
	(Increase) decrease in operating assets:
		Accounts receivable			(63,098	)			31,811
		Due from affiliates			(19,716	)			(45,772	)
		Prepaid expenses			(67,558	)			(46,211	)
	Increase (decrease) in operating liabilities
		Accounts payable and accrued expenses			395,027				(798,790	)
		Due to Managing General Partner and affiliates			731,740				(55,873	)
		Converter deposits			(53,405	)			10,490
		Subscriber prepayments			(17,796	)			(108,078	)
Net cash provided by operating activities					3,489,789				1,920,453
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net					(1,524,064	)			(3,884,871	)
Proceeds from sale of assets					500				—
Increase in intangibles									—(124,577	)
Net cash used in investing activities					(1,523,564	)			(4,009,448	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on borrowings					(874,017	)			(2,459,598	)
Proceeds from borrowings					—				4,500,000
Loan fees					(403,945	)			—
Net cash (used in) provided by financing activities					(1,277,962	)			2,040,402
INCREASE (DECREASE) IN CASH					688,263				(48,593	)
CASH, beginning of period					125,060				492,858
CASH, end of period				$	813,323			$	444,265
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Cash paid during the period for interest			$	2,404,097			$	2,444,370

The accompanying notes are an integral part of these statements.

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NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP
NOTES TO UNAUDITED FINANCIAL STATEMENTS

(1) Basis of Presentation

These unaudited financial statements are being filed in conformity with Rule 10-01 of Regulation S-X regarding interim financial statement disclosure and do not contain all of the necessary footnote disclosures required for a fair presentation of the balance sheets, statements of operations and statements of cash flows in conformity with accounting principles generally accepted in the United States of America. However, in the opinion of management, this data includes all adjustments, consisting only of normal recurring accruals, necessary to present fairly the Partnership’s financial position at September 30, 2002, its statements of operations for the nine and three months ended September 30, 2002 and 2001, and its statements of cash flows for the nine months ended September 30, 2002 and 2001. Results of operations for these periods are not necessarily indicative of results to be expected for the full year. These financial statements and notes should be read in conjunction with the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2001.

(2) Intangible Assets — Adoption of Statement of Financial Accounting Standards (SFAS) No. 142

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

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

		Nine Months Ended				Three Months Ended				Twelve Months Ended December 31,
		September 30, 2001				September 30, 2001				2001				2000				1999
NET LOSS:
Reported net loss		$	(1,537,093	)		$	(646,783	)		$