**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**Form 10-Q**

**(Mark One)**

**x**                              Quarterly report pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934

**For the quarterly period ended June 30, 2007**

**o**                                 Transition report pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934

**For the transition periodfrom             to             **

**Commission File Number: 000-19889**

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**South Hertfordshire United Kingdom Fund, Ltd.**

Exact name ofregistrant as specified in charter

| **Colorado**           |   | **84-1145140**         |
|------------------------|--------|------------------------|
| State  of organization |   | I.R.S.  employer I.D.# |

 

**Media House,Bartley Wood Business Park, Hook, Hampshire, RG27 9UP, England**

Address ofprincipal executive office

**011 44 1256752000**

Registrant’stelephone number

Indicate by check mark whether theregistrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for thepast 90 days. Yes x  No o

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated filer. See definition of “acceleratedfiler and large accelerated filer” in Rule 12b-2 of the Exchange Act.(Check one):
| Large accelerated filer o | Accelerated  filer o | Non-accelerated  filer x |
|--------------------------------|---------------------------|-------------------------------|

 

Indicate by check mark whether theregistrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o  No x

The number of limited partnership units ofthe registrant outstanding as of August 6, 2007 was 56,935.

 

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**TABLEOF CONTENTS**
|               | ** **   | ** **             | ** ** | ** **                                                                                                            | ** ** | **Page  Number** |
|---------------|--------------|------------------------|------------|-----------------------------------------------------------------------------------------------------------------------|------------|------------------|
| PART I.  |         | FINANCIAL  INFORMATION | ** ** | ** **                                                                                                            | ** ** |
|          |         | Item 1.                |       | Financial  Statements                                                                                                 |       |             |   |
|          |         |                   |       | Condensed  Consolidated Balance Sheets as of June 30, 2007 and December 31,  2006                           |       | 5                |   |
|          |         |                   |       | Condensed  Consolidated Statements of Operations for the Three and Six Months Ended  June 30, 2007 and 2006 |       | 6                |   |
|          |         |                   |       | Condensed  Consolidated Statements of Cash Flows for the Six Months Ended  June 30, 2007 and 2006           |       | 7                |   |
|          |         |                   |       | Notes  to Condensed Consolidated Financial Statements                                                                 |       | 8                |   |
|          |         | Item  2.               |       | Management’s  Discussion and Analysis of Financial Condition and Results of Operations                           |       | 11               |   |
|          |         | Item  3.               |       | Quantitative  and Qualitative Disclosures About Market Risk                                                           |       | 18               |   |
|          |         | Item  4.               |       | Controls  and Procedures                                                                                              |       | 18               |   |
| PART II. |         | OTHER INFORMATION      |       |                                                                                                                  |       |
|          | ** **   | Item 1.                |       | Legal  Proceedings                                                                                                    | ** ** | 19               | ** ** |
| ** **    | *** *** | ***Item 1A.***         |       | Risk Factors                                                                                                          | ** ** | 19               | ** ** |
| ** **    | *** *** | ***Item  2.***         |       | Unregistered  Sales of Equity Securities and Use of Proceeds                                                          | ** ** | 19               | ** ** |
| ** **    | *** *** | ***Item  3.***         |       | Defaults  Upon Senior Securities                                                                                      | ** ** | 19               | ** ** |
| ** **    |         | Item  4.               |       | Submission  of Matters to a Vote of Security Holders                                                                  |       | 19               |   |
|          |         | Item 5.                |       | Other  Information                                                                                                    |       | 19               |   |
|          |         | Item 6.                |       | Exhibits                                                                                                              |       | 19               |   |
|          |         | SIGNATURES             |       | 20                                                                                                                    |       |

 

2

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**“Safe Harbor”Statement under the Private Securities Litigation Reform Act of 1995:**

Various statementscontained in this document constitute “forward-looking statements” asthat term is defined under the Private Securities Litigation Reform Act of1995. Words like “believe”, “anticipate”, “should”, “intend”, “plan”, “will”, “expects”,“estimates”, “projects”, “positioned”, “strategy” and similar expressionsidentify these forward-looking statements, which involve known andunknown risks, uncertainties and other factors that may cause our actualresults, performance or achievements or industry results to be materiallydifferent from those contemplated, projected, forecasted, estimated orbudgeted, whether expressed or implied, by these forward-looking statements.These factors among others, include:

·       ourreliance on the continued support of Virgin Media;

·       thelack of an established trading market for our partnership interests;

·       conflictsof interest between us and Virgin Media and its affiliates;

·       ourreliance on a limited franchise area;

·       therisks to Virgin Media’s business set forth below, which are risks that we shareas a result of our reliance on, and integration with, Virgin Media;

·       VirginMedia’s ability to compete with a range of other communications and contentproviders;

·       VirginMedia’s ability to manage customer churn;

·       theeffect of technological changes on Virgin Media’s businesses;

·       VirginMedia’s continued right to use the Virgin name and logo;

·       VirginMedia’s ability to maintain and upgrade its networks in a cost-effective andtimely manner;

·       possiblelosses in Virgin Media’s revenues due to systems failures;

·       VirginMedia’s ability to provide attractive programming at a reasonable cost;

·       VirginMedia’s reliance on single-source suppliers for some equipment, softwareand services and third party distributors of its mobile services;

·       the  functionality or market acceptance of newproducts that Virgin Media may introduce;

·       VirginMedia’s ability to obtain and retain expected synergies from the merger oflegacy NTL and Telewest businesses and the acquisition of Virgin Mobile;

·       VirginMedia’s ability to achieve business plans for the combined company;

·       VirginMedia’s ability to fund debt service obligations through operating cash flow;

·       VirginMedia’s ability to obtain additional financing in the future and react tocompetitive and technological changes;

·       VirginMedia’s ability to comply with restrictive covenants in its indebtednessagreements; and

·       theextent to which Virgin Media’s future earnings will be sufficient to cover itsfixed charges.

These and other factorsare discussed in more detail under “Risk Factors” and elsewhere in our Form 10-Kthat was filed with the SEC on March 29, 2007. We assume no obligation toupdate the forward-looking statements to reflect actual results, changes inassumptions or changes in factors affecting these statements.

3

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**Note ConcerningVirgin Media Inc.**

On March 3, 2006, NTL Incorporated, or NTL,merged with a subsidiary of Telewest Global, Inc., or Telewest, whichchanged its name to NTL Incorporated. NTL changed its name to NTL Holdings Inc.

Virgin Media entered into a license agreement withVirgin Enterprises Limited under which it is licensed to use certain Virgintrademarks within the United Kingdom and the Republic of Ireland. As a result,in February 2007, Virgin Media rebranded its consumer and a large part ofits content businesses to “Virgin Media”. It also changed the name of itscorporate parent from NTL Incorporated to Virgin Media Inc. and the name of oneof its principal operating subsidiaries from NTL Group Limited to Virgin MediaLimited.

In this quarterly report,unless the context otherwise requires, the term “we”, “us”, “our” and similarterms refers to South Hertfordshire United Kingdom Fund, Ltd, and itssubsidiaries.

**Exchange Rates**

Thefollowing table sets forth, for the periods indicated, the high, low, periodaverage and period end noon buying rate in the City of New York for cabletransfers as certified for customs purposes by the Federal Reserve Bank of NewYork expressed as U.S. dollars per £1.00. 

| ** **                                       | ** ** | **U.S. Dollars per £1.00** | ** ** |
|--------------------------------------------------|------------|------------------------------------------------|------------|
| **Six months ended June 30** | ** ** | ** **                                     | ** ** | **Period End** | ** ** | **Average** (1) | ** ** | **High** | ** ** | **Low** | ** ** |
| 2006                                             |       |                                           | 1.85       |   |   |   | 1.80 |   |   | 1.89 |   | 1.73 |   |
| 2007                                             |       |                                           | 2.01       |   |   |   | 1.97 |   |   | 2.01 |   | 1.92 |   |
|                                                  |            |                                                |            |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)          The average rate is theaverage of the noon buying rates on the last day of each month during therelevant period.

The noon buying rate of the pound sterling on June 30,2007 was $2.0063 per £1.00.

The above rates may differ from the actual rates usedin the preparation of the condensed consolidated financial statements and otherfinancial information appearing in this quarterly report. Our inclusion ofthese exchange rates is not meant to suggest that the pound sterling amountsactually represent these U.S. dollar amounts or that these amounts could havebeen converted into U.S. dollars at any particular rate, if at all.

Unless we otherwise indicate, all U.S. dollar amountsas of June 30, 2007 are translated to U.S. dollars at an exchange rate of$2.0063 to £1.00, all amounts disclosed for the six months ended June 30,2007 are based on an average exchange rate of $1.9706 to £1.00, and all amountsdisclosed for the six months ended June 30, 2006 are based on an averageexchange rate of $1.7902 to £1.00. All amounts disclosed as of December 31,2006 are based on an exchange rate of $1.9586 to £1.00. U.S. dollar amounts forthe three months ended June 30, 2007 and 2006 are determined bysubtracting the U.S. dollar converted financial result for the three monthsended March 31, 2007 and 2006 from the U.S. dollar converted financialresult for the six months ended June 30, 2007 and 2006, respectively. Thevariation between the 2007 and 2006 exchange rates has impacted the dollarcomparisons. All rates are based on the noon buying rate in the City of NewYork for cable transfers as certified for customs purposes by the FederalReserve Bank of New York. The variation between the 2007 and 2006 exchangerates has affected the dollar comparisons.

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**PART I. FINANCIAL INFORMATION**

**ITEM 1.**                FINANCIALSTATEMENTS

**SOUTH HERTFORDSHIRE UNITED KINGDOM FUND,LIMITED(A LIMITED PARTNERSHIP)**

**CONDENSEDCONSOLIDATED BALANCE SHEETS**

| ** **                                                                                             | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|--------------------------------------------------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| ** **                                                                                             | ** ** | **(unaudited)**         | ** ** | **(see note)**         | ** ** |
| **Assets**                                                                                             | ** ** | ** **              | ** ** | ** **                  | ** ** |
| Fixed  assets, net                                                                                     |       | $                       | 65,746,951 |                        | $          | 66,079,566 |   |
| **Total assets**                                                                                       |       | $                       | 65,746,951 |                        | $          | 66,079,566 |   |
| **Liabilities and Partners’ Deficit**                                                             | ** ** | ** **              | ** ** | ** **                  | ** ** |
| Current  liabilities                                                                                   |       |                    |       |                        |       |
| Accounts payable to affiliates and related parties                                                     |       | $                       | 71,472,925 |                        | $          | 71,196,561 |   |
| Total  liabilities                                                                                     |       | 71,472,925              |       | 71,196,561                  |       |
| **Partners’ Capital (Deficit)**                                                                   | ** ** | ** **              | ** ** | ** **                  | ** ** |
| General  Partner                                                                                       |       |                    |       |                        |       |
| Contributed capital                                                                                    |       | 1,000                   |       | 1,000                       |       |
| Accumulated deficit                                                                                    |       | (541,465                | )          | (535,751                    | )          |
|                                                                                                   |       | (540,465                | )          | (534,751                    | )          |
| **Limited Partners**                                                                                   | ** ** | ** **              | ** ** | ** **                  | ** ** |
| Contributed  capital, net (56,935 units outstanding at June 30, 2007 and  December 31, 2006) |       | 48,817,997              |       | 48,817,997                  |       |
| Accumulated deficit                                                                                    |       | (53,324,006             | )          | (52,758,352                 | )          |
|                                                                                                   |       | (4,506,009              | )          | (3,940,355                  | )          |
| Accumulated  comprehensive loss                                                                        |       | (679,500                | )          | (641,889                    | )          |
| Total Partners’ deficit                                                                           |       | (5,725,974              | )          | (5,116,995                  | )          |
| **Total Liabilities and Partners’ Deficit**                                                       |       | $                       | 65,746,951 |                        | $          | 66,079,566 |   |

 

**Note: The balance sheet at December 31, 2006 has been derived fromaudited financial statements at that date.**

See accompanying notes.

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**SOUTH HERTFORDSHIREUNITED KINGDOM FUND, LIMITED(A LIMITED PARTNERSHIP)**

**CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

| ** **                                                             | ** ** | **Three months ended  June 30,** | ** ** | **Six months ended  June 30,** | ** ** |
|------------------------------------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                             | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| **Revenues**                                                           |       | $                                               | 9,836,198  |                                          | $          | 9,664,617 |   | $ | 19,940,121 |   | $ | 18,835,580 |   |
| **Costs  and expenses**                                                | ** ** | ** **                                      | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** ** | ** ** |
| Cost of goods  sold (exclusive of depreciation shown separately below) |       | (2,556,179                                      | )          | (2,516,703                                    | )          | (5,084,793 | ) | (4,974,289 | ) |
| Selling, general  and administrative expenses                          |       | (23,704                                         | )          | (25,015                                       | )          | (54,391 | ) | (45,630 | ) |
| Management fees  and allocated overhead from the General Partner       |       | (4,418,403                                      | )          | (4,482,599                                    | )          | (8,994,849 | ) | (8,505,595 | ) |
| Other charges                                                          |       | (27,213                                         | )          | (240,430                                      | )          | (144,846 | ) | (398,137 | ) |
| Depreciation                                                           |       | (1,721,449                                      | )          | (1,770,911                                    | )          | (3,550,107 | ) | (3,490,886 | ) |
| **Operating  income**                                                  |       | 1,089,250                                       |       | 628,959                                       |       | 2,111,135 |   | 1,421,043 |   |
| **Other  expenses**                                                    | ** ** | ** **                                      | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** ** | ** ** |
| Interest payable  to General Partner and  affiliates                   |       | (1,341,267                                      | )          | (1,445,781                                    | )          | (2,625,908 | ) | (2,948,840 | ) |
| Exchange losses                                                        |       | (44,898                                         | )          | (126,099                                      | )          | (56,595 | ) | (149,482 | ) |
| **Loss  before minority interest**                                     |       | (296,915                                        | )          | (942,921                                      | )          | (571,368 | ) | (1,677,279 | ) |
| Minority interest  income                                              |       | —                                          |       | 247,616                                       |       | — |   | 460,882 |   |
| **Net  loss**                                                          |       | $                                               | (296,915   | )                                             | $          | (695,305 | ) | $ | (571,368 | ) | $ | (1,216,397 | ) |
| **Allocation  of net loss**                                            | ** ** | ** **                                      | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** ** | ** ** |
| General Partner                                                        |       | $                                               | (2,969     | )                                             | $          | (6,953 | ) | $ | (5,714 | ) | $ | (12,164 | ) |
| Limited Partners                                                       |       | (293,946                                        | )          | (688,352                                      | )          | (565,654 | ) | (1,204,233 | ) |
| **Net  loss**                                                          |       | $                                               | (296,915   | )                                             | $          | (695,305 | ) | $ | (571,368 | ) | $ | (1,216,397 | ) |
| **Net  loss per limited partnership unit**                             |       | $                                               | (5.16      | )                                             | $          | (12.09 | ) | $ | (9.94 | ) | $ | (21.15 | ) |
| **Average number of limited  partnership units outstanding**           |       | 56,935                                          |       | 56,935                                        |       | 56,935 |   | 56,935 |   |

 

See accompanying notes.

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**SOUTH HERTFORDSHIREUNITED KINGDOM FUND, LIMITED(A LIMITED PARTNERSHIP)**

**CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

| ** **                                                                       | ** ** | **Six months ended  June 30,** | ** ** |
|----------------------------------------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                                       | ** ** | **2007**                                      | ** ** | **2006** | ** ** |
| **Cash flows from operating  activities**                                        | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| Net loss                                                                         |       | $                                             | (571,368   | ) | $ | (1,216,397 | ) |
| Adjustments to reconcile  net loss to net cash provided by operating activities: |       |                                          |       |   |   |
| Minority interest  income                                                        |       | —                                        |       | (460,882 | ) |
| Depreciation                                                                     |       | 3,550,107                                     |       | 3,490,886 |   |
| Change in operating  assets and liabilities:                                     |       |                                          |       |   |   |
| Decrease in  accounts payable to affiliates and related parties                  |       | (1,329,365                                    | )          | (968,289 | ) |
| **Net  cash provided by operating activities**                                   |       | 1,649,374                                     |       | 845,318 |   |
| **Cash  flows from investing activities**                                        | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| Purchase of fixed  assets                                                        |       | (1,649,374                                    | )          | (845,318 | ) |
| **Net  cash used in investing activities**                                       |       | (1,649,374                                    | )          | (845,318 | ) |
| Movement in cash                                                                 |       | —                                        |       | — |   |
| Cash and cash  equivalents at beginning of period                                |       | —                                        |       | — |   |
| Cash and cash  equivalents at end of period                                      |       | $                                             | —     |   | $ | — |   |

 

See accompanying notes.

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**SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED (A LIMITED PARTNERSHIP)**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**Note 1.**   Basis of Presentation

**Organizationand Business**

South Hertfordshire United Kingdom Fund,Ltd., or the Partnership, a Colorado limited partnership, was formed on December 23,1991, in connection with a public offering of its limited partnership interests.The Partnership was formed to acquire, construct, develop, own and operatecable television/telephone systems in the U.K. NTL Fawnspring Limited, a U.K.corporation, a subsidiary of Virgin Media Inc., or Virgin Media, is the generalpartner (the “General Partner”) of the Partnership. Upon acquisition of oursystem, our primary investment objective was to obtain capital appreciation inthe value of our investment in the system over the term that such investment isheld by us.

We hold 66.7% of the shares of NTL (SouthHertfordshire) Limited, or NTL South Herts, which is principally engaged in thedevelopment, construction, management and operation of broadband communicationsnetworks for telephone, cable television and internet services in the United Kingdom.As a result of our ownership of 66.7% of the shares of NTL South Herts, foraccounting purposes, we have consolidated the results of NTL South Herts withour results. Virgin Media Inc. (formerly known as NTL Incorporated) indirectlyholds the remaining 33.3% of the shares of NTL South Herts. We are reliant onthe support of Virgin Media, the ultimate parent company of the GeneralPartner, to continue our operations as a going concern.

We, as well asVirgin Media, file annual, quarterly, and current reports with the SEC. You mayread and copy any materials we or Virgin Media files with the SEC at the SEC’sPublic Reference Room at 100 F Street, N.E., Washington D.C. 20549.You may obtain information on the operation of the Public Reference Room bycalling the SEC at 1-800-SEC-0330. You may also accesselectronically the information we file with the SEC via its website, located athttp://www.sec.gov*.*

**Basis ofPresentation**

We haveprepared the accompanying unaudited condensed consolidated financial statementsin accordance with U.S. generally accepted accounting principles, or GAAP, forinterim financial information and with the instructions to Form 10-Qand Rule 10-01 of Regulation S-X. Accordingly, they do not includeall of the information and footnotes required by GAAP for complete financialstatements. In the opinion of our management, all adjustments (consisting onlyof normal recurring adjustments) considered necessary for a fair presentationhave been included. Results of operations for the period ended June 30,2007 are not necessarily indicative of results to be expected for the full yearending December 31, 2007. For further information, refer to theconsolidated financial statements and footnotes thereto included in our AnnualReport on Form 10-K for the year ended December 31, 2006.

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**SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED (A LIMITED PARTNERSHIP)**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note 2.**   Comprehensive Loss

Comprehensive loss includes net loss as well as other comprehensiveloss. Our other comprehensive loss consists of changes in cumulativetranslation adjustment. Comprehensive loss comprises:

| ** **                                | ** ** | **Three months ended  June 30,** | ** ** | **Six months ended  June 30,** | ** ** |
|-------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| ** **                                | ** ** | ** **                                      | ** ** | **(Restated)**                                | ** ** | ** ** | ** ** | **(Restated)** | ** ** |
| Net  loss                                 |       | $                                               | (296,915   | )                                             | $          | (695,305 | ) | $ | (571,368 | ) | $ | (1,216,397 | ) |
| Foreign  currency translation adjustments |       | (29,866                                         | )          | 56,556                                        |       | (37,611 | ) | 76,906 |   |
| Comprehensive  loss                       |       | $                                               | (326,781   | )                                             | $          | (638,749 | ) | $ | (608,979 | ) | $ | (1,139,491 | ) |

 

The prior yearcomparative amounts in the above have been restated to reflect a mathematicalerror in the previously reported note. This restatement has no impact on the previouslyissued balance sheet, statement of operations or statement of cashflows for allperiods presented.

**Note 3.**   Investment in Subsidiary

NTL South Herts is a U.K. corporation whichis principally engaged in the development, construction, management andoperation of broadband communication networks for telephone, cable televisionand internet services in the South Hertfordshire franchise area, locatedadjacent to the northwest perimeter of Greater London, England (the “SouthHerts System”).

NTL South Herts is owned 66.7% by thePartnership and 33.3% by Virgin Media. Virgin Media also owns the GeneralPartner. The General Partner provides consulting services to the Partnershipand may delegate some or all of the consulting services to Virgin Media or to otheraffiliates.

Virgin Media,through its subsidiaries, including its interest in NTL South Herts, providesbroadband internet access, telephone and television services to approximately4.7 million residential on-net cable customers as at June 30, 2007.

**Note 4.**   Transactions with the General Partner and Affiliated Parties

*Consultingand Management Fees*

An affiliate ofthe General Partner is entitled to be paid a consulting fee by NTL South Herts.During the construction phases of the South Herts System, this consulting feewas 2% of construction costs. Since completion of construction of each portionof the system, the consulting fee for the completed portion has been 5% of thegross revenue, excluding revenue from the sale of cable television/telephonesystems. The consulting fee is calculated and payable monthly. Consulting feespaid or payable by NTL South Herts for the three months ended June 30,2007 and 2006 were $491,810 and $483,230 respectively. Consulting fees paid orpayable by NTL South Herts for the six months ended June 30, 2007 and 2006were $997,006 and $941,779, respectively. These amounts are recognized in thestatement of operations as management fees and allocated overhead from theGeneral Partner.

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**SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LIMITED (A LIMITED PARTNERSHIP)**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(Unaudited)**

**Note 4.**   Transactionswith the General Partner and Affiliated Parties(Continued)

*DistributionRatios and Reimbursement*

Any Partnership distributions made fromcash flow (defined as cash receipts derived from routine operations, less debtprincipal and interest payments and cash expenses) are allocated 99% to thelimited partners and 1% to the General Partner. Any distributions other thaninterest income on limited partner subscriptions earned prior to theacquisition of the Partnership’s first cable television system or from cashflow, such as from the sale or refinancing of a system or upon dissolution ofthe Partnership, will be made as follows: 99% to the limited partners and 1% tothe General Partner until any negative balances in the limited partners’capital accounts are reduced to zero; 100% to the General Partner until anynegative balance in its capital account is reduced to zero; 99% to the limitedpartners and 1% to the General Partner until the balance in the limitedpartners’ capital accounts is equal to their adjusted capital contribution plusa 12% return; 100% to the General Partner until the balance in its capitalaccount is equal to its adjusted capital contribution, and any remaining incomeor gain shall be allocated 75% to the limited partners and 25% to the GeneralPartner.

Our General Partner and its affiliates areentitled to reimbursement from NTL South Herts for direct and indirect expensesallocable to the operation of its network and from us for direct and indirectexpenses allocable to our operation which include, but are not limited to,rent, supplies, telephone, travel, and salaries of any full or part-timeemployees. Allocable direct and indirect expenses during the three months endedJune 30, 2007 and 2006 totaled $3,926,593 and $3,999,369, respectively.Allocable direct and indirect expenses during the six months ended June 30,2007 and 2006 totaled $7,997,843 and $7,563,816, respectively. These amountsare recognized in the statement of operations as management fees and allocatedoverhead from the General Partner.

Our General Partner and its affiliates maymake advances to, and defer collection of fees and allocated expenses owed byus, although they are not required to do so. The Partnership is chargedinterest on such advances and deferred amounts. For the three months ended June 30,2007 and 2006, aggregated interest, bank fees and finance charges of $1,297,740and $1,413,353, respectively, relating to non-permanent loans was charged byaffiliates of the General Partner. For the six months ended June 30, 2007and 2006, aggregated interest, bank fees and finance charges of $2,542,105 and$2,882,381, respectively, relating to non-permanent loans was charged byaffiliates of the General Partner. Interest on advances for the three monthsended June 30, 2007 and 2006 of $43,527 and $32,428, respectively, and forthe six months ended June 30, 2007 of $83,803 and $66,459, respectively,was charged by an affiliate of the General Partner at a rate equal to theGeneral Partner’s or certain affiliates’ effective average cost of debtfinancing from unaffiliated entities, which does not differ from their weightedaverage cost of debt financing.

Our General Partner and its affiliates areentitled to recover interest on the full amount of non-permanent loans theyprovide to the Partnership or NTL South Herts and they are also entitled torecover the portion of bank fees and deferred financing costs relating toVirgin Media’s senior credit facilities allocable to the Partnership or NTLSouth Herts.

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**ITEM 2.**                MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

**Overview**

We are a Colorado limited partnership thatwas formed in December 1991 pursuant to the public offering of our limitedpartnership interests for the purpose of acquiring one or more cabletelevision/telephone systems in the U.K. Upon acquisition of our system, ourprimary investment objective was to obtain capital appreciation in the value ofour investment in the system over the term such investment is held by us.

We hold 66.7% of the shares of NTL SouthHerts, which is principally engaged in the development, construction,management and operation of broadband communications networks for telephone,cable television and internet services in the U.K. As a result of our ownershipof 66.7% of the shares of NTL South Herts, for accounting purposes we haveconsolidated the results of NTL South Herts with our results. Virgin Mediaindirectly holds the remaining 33.3% of the shares of NTL South Herts. We arereliant on the support of Virgin Media, the indirect parent company of NTLFawnspring Limited, our General Partner, to continue our operations as a goingconcern.

We derive our revenue principally frommonthly fees and usage charges. Our packaging of services and pricing aredesigned to encourage our customers to use multiple services like dualtelephone and broadband, dual telephone and television or triple telephone,television and internet access.

The principalcomponents of our expenses include payroll and other employee related costs;interconnection costs paid to other carriers related to telephone services;television programming costs; marketing and selling costs; repairs andmaintenance; facility related costs, such as rent, utilities and rates; andallowances for doubtful accounts. Our expenses include certain costs that arecharged by a subsidiary of Virgin Media for the provision of network servicesand support, the use of Virgin Media’s national backbone telephone network forcarriage of our telephone traffic, as well as the provision of technicalinfrastructure and network capacity by Virgin Media for our subscriptioninternet access services and digital television services, the provision ofcorporate services, including finance, legal, human resources and facilityservices, and for the provision of IT services, including our use of therelated IT equipment.

**FactorsAffecting Our Business**

Our residentialcustomers account for the majority of our total revenue. The number ofresidential customers, the number and types of services that each customer usesand the prices we charge for these services drive our revenue. Our net incomeis driven by the relative margins on the types of services we provide to thesecustomers and by the number of services that we provide to them. For example,broadband internet is more profitable than our television services and, onaverage, our “triple-play” customers are more profitable than “double-play” or “single-play”customers. Our packaging of services and our pricing are designed to encourageour customers to use multiple services such as television, telephone andbroadband at a lower price than each stand-alone product on a combined basis.Factors particularly affecting our profitability include customer churn,competition, the success of our integration efforts, capital expenditures,currency movements and seasonality.

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***SelectedOperating Data***

The following table sets forth certain data concerning our franchise atJune 30, 2007 and December 31, 2006:

| ** **                         | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Homes  marketable(1)               |       |                    | 96,663     |                        |       |   | 96,886 |   |   |
| Total  customers                   |       |                    | 35,103     |                        |       |   | 36,863 |   |   |
| Digital cable  subscribers         |       |                    | 23,454     |                        |       |   | 22,971 |   |   |
| Analog cable  subscribers          |       |                    | 698        |                        |       |   | 1,007 |   |   |
| Broadband  internet subscribers    |       |                    | 23,541     |                        |       |   | 22,642 |   |   |
| Telephony  subscribers             |       |                    | 29,117     |                        |       |   | 30,715 |   |   |
| Penetration  (homes marketable)(2) |       |                    | 36.3       | %                           |       |   | 38.0 | % |   |
| Average monthly churn(3)           |       |                    | 2.0        | %                           |       |   | 1.8 | % |   |

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(1)          Homesmarketable refers to the number of homes within our service area that have hadducting buried outside and can potentially be served by our network withminimal connection costs.

(2)          Penetrationmeasures the number of subscribers for our services divided by the number ofhomes marketable.

(3)          Customerchurn is calculated by taking the total number of customers disconnecting fromour services during the month and dividing them by the average number ofcustomers during the month. Average monthly churn during the quarter is theaverage of the three monthly churn calculations within the quarter.

***Customer Churn.******  ***Customer churn is ameasure of the number of customers who stop using our services. An increase inour customer churn can lead to increased costs and reduced revenue. We continueto focus on improving our customer service and enhancing and expanding our serviceofferings to existing customers in an effort to manage our customer churn rate.Our ability to reduce our customer churn rate beyond a base level is limited byfactors like customers moving outside our network service area, in particularduring the summer season. Managing our customer churn rate is a significantcomponent of our business plan. Our customer churn rate may increase if ourcustomer service is seen as unsatisfactory, if we are unable to deliver ourservices over our network without interruption, or if we fail to matchofferings by our competitors.

***Competition.******  ***Our ability to acquireand retain customers and increase revenue depends on Virgin Media’s and ourcompetitive strength. There is significant and increasing competition in themarket for our consumer services, including broadband and telephone servicesoffered by British Telecom (“BT”) and resellers or local loop unbundlers, suchas British Sky Broadcasting Group plc (“BSkyB”) and Carphone Warehouse (TalkTalk) alternative internet access services like DSL, satellite televisionservices offered by BSkyB, digital terrestrial television offered throughFreeview, internet protocol television offered by Tiscali S.p.A. (“Tiscali”)and BT. Certain competitors, such as BT and BSkyB, are dominant in markets inwhich Virgin Media and we compete and may use their dominance in those marketsto offer bundled services that include two or more of our product offerings. Ifcompetitive forces prevent us from charging the prices for these services thatwe plan to charge, or if our competition is able to attract our customers orpotential customers we are targeting, our results of operations will beadversely affected.

***Integration.******  ***Virgin Media continues to intergrate its legacy NTL and Telewestcable businesses. This involves the incurrence of substantial operating andcapital expenditures and, in some cases, involves the outsourcing of keyfunctions in an effort to achieve synergies through the integration of the twobusinesses. For example, the principal billing platform used by us has recentlybeen migrated to a new system as part of Virgin Media’s program to consolidateall of its billing platforms. Any issues that may arise in connection with theintegration could have a material negative effect on our financial performance.

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***Capital Expenditures.******  ***Our businessrequires substantial capital expenditures on a continuing basis for variouspurposes, including expanding, maintaining and upgrading our network, investingin new customer acquisitions, and offering new services. If Virgin Media and wedo not continue to invest in the network and in new technologies, our abilityto retain and acquire customers may be hindered. Therefore, Virgin Media’s andour liquidity and the availability of cash to fund capital projects areimportant drivers of our revenue. When Virgin Media’s and our liquidity isrestricted, so is our ability to meet our capital expenditure requirements.

***Currency Movements.******  ***Becausesubstantially all of our revenue and operating costs are earned and paidprimarily in U.K. pounds sterling, but we report our financial results in U.S.dollars, our financial results are affected by currency fluctuations that areunrelated to our underlying results of operations.

***Seasonality.******  ***Some revenuestreams are subject to seasonal factors. For example, telephone usage revenueby customers tends to be slightly lower during summer holiday months. Ourcustomer churn rates include persons who disconnect their service because ofmoves, resulting in a seasonal increase in our churn rates during the summermonths when higher levels of U.K. house moves occur and students leave theiraccommodation between academic years.

**Critical Accounting Policies**

The preparationof our consolidated financial statements requires us to make estimates thataffect the reported amounts of assets, liabilities, revenues and expenses, andrelated disclosure of contingent assets and contingent liabilities. We base ourjudgments on historical experience and on various other assumptions that webelieve are reasonable under the circumstances, the results of which form thebasis for making estimates about the carrying values of assets and liabilitiesthat are not readily apparent from other sources. Actual results may differfrom these estimates under different assumptions or conditions.

For adiscussion of the accounting judgments and estimates that we have identified ascritical in the preparation of our consolidated financial statements, pleaserefer to our Annual Report on Form 10-K for the year ended December 31,2006 as filed with the SEC on March 29, 2007.

**Results ofOperations**

***Three months ended June 30, 2007 and2006***

We presentbelow summarized consolidated financial information, in U.S dollars and U.K.pounds sterling for the three months ended June 30, 2007 and 2006:

| ** **                                   | ** ** | **Three months ended  June 30,** | ** ** | ** ** | ** ** | **Three months ended  June 30,** | ** ** | ** ** | ** ** |
|----------------------------------------------|------------|-------------------------------------------------|------------|------------|------------|-------------------------------------------------|------------|------------|------------|
| ** **                                   | ** ** | **2007**                                        | ** ** | **2006**   | ** ** | **%**                                           | ** ** | **2007**   | ** ** | **2006** | ** ** | **%** | ** ** |
| Revenue                                      |       |                                            | $          | 9,836,198  |       |                                            | $          | 9,664,617  |       | 1.8 |   |   | £ | 4,950,560 |   |   | £ | 5,291,703 |   | (6.5 | ) |
| Cost of goods sold                           |       |                                            | (2,556,179 | )          |       | (2,516,703                                      | )          | (1.6       | )          |   | (1,286,918 | ) |   | (1,377,170 | ) | 6.6 |   |
| Selling, general and adminstrative  expenses |       |                                            | (23,704    | )          |       | (25,015                                         | )          | 5.2        |       |   | (11,904 | ) |   | (13,733 | ) | 13.3 |   |
| Management fees and allocated overhead       |       |                                            | (4,418,403 | )          |       | (4,482,599                                      | )          | 1.4        |       |   | (2, 223,630) |   |   | (2,457,062 | ) | 9.5 |   |
| Other charges                                |       |                                            | (27,213    | )          |       | (240,430                                        | )          | 88.7       |       |   | (13,334 | ) |   | (132,465 | ) | 89.9 |   |
| Depreciation                                 |       |                                            | (1,721,449 | )          |       | (1,770,911                                      | )          | 2.8        |       |   | (866,161 | ) |   | (969,173 | ) | 10.6 |   |
| Operating income                             |       |                                            | 1,089,250  |       |       | 628,959                                         |       | 73.2       |       |   | 548,613 |   |   | 342,100 |   | 60.4 |   |
| Interest expense                             |       |                                            | (1,341,267 | )          |       | (1,445,781                                      | )          | 7.2        |       |   | (675,437 | ) |   | (790,086 | ) | 14.5 |   |
| Exchange losses                              |       |                                            | (44,898    | )          |       | (126,099                                        | )          | 64.4       |       |   | (22,737 | ) |   | (70,166 | ) | 67.6 |   |
| Net loss before minority interests           |       |                                            | (296,915   | )          |       | (942,921                                        | )          | 68.5       |       |   | (149,561 | ) |   | (518,152 | ) | 71.1 |   |
| Minority interests                           |       |                                            | —     |       |       | 247,616                                         |       | —     |       |   | — |   |   | 135,831 |   | — |   |
| Net loss                                     |       |                                            | $          | (296,915   | )          |                                            | $          | (695,305   | )          | 57.3 |   |   | £ | (149,561 | ) |   | £ | (382,321 | ) | 60.9 |   |

 

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*Revenue*

For the threemonths ended June 30, 2007, revenue increased by 1.8% to $9.8 million from$9.7 million for the three months ended June 30, 2006 and revenueexpressed in pounds sterling decreased by 6.5% to £5.0 million for the threemonths ended June 30, 2007 from £5.3 million for the three months ended June 30,2006. The decrease is primarily due to increased competition that has givenrise to reduced revenues through increased discounts partly offset by higherbroadband revenue due to an increase in the numbers of broadband subscribers.

*Expenses*

*Cost of goodssold.**  *For the three months ended June 30, 2007, cost of goodsincreased by 1.6% to $2.6 million from $2.5 million for the three months ended June 30,2006 and cost of goods sold expressed in pounds sterling decreased by 6.6% to£1.3 million for the three months ended June 30, 2007 from £1.4 millionfor the three months ended June 30, 2006. The reduction in cost of salesin pounds sterling is primarily a reflection of reduced revenue. Cost of goodssold as a percentage of revenue remained constant at 26.0% for the three monthsended June 30, 2007, and 2006.

*Selling,general and administrative expenses.**  *For the threemonths ended June 30, 2007, selling, general and administrative expensesdecreased slightly to $23,704 or £11,904 from $25,015 or £13,733 for the threemonths ended June 30, 2006.

*Management feesand allocated overhead.**  *For the three months ended June 30, 2007, management fees andallocated overhead decreased by 1.4% to $4.4 million from $4.5 million for thethree months ended June 30, 2006, and management fees and allocatedoverhead expressed in pounds sterling decreased by 9.5% to £2.2 million for thethree months ended June 30, 2007 from £2.5 million for the three monthsended June 30, 2006. The business of NTL South Herts is managed as anintegral part of Virgin Media. The combined costs of managing the larger groupare allocated to each entity within the Virgin Media group, including NTL SouthHerts, on a consistent and proportional basis according to the level of tradingin that entity.

*Other charges.**  *For the threemonths ended June 30, 2007, other charges decreased to $27,213 from $240,430for the three months ended June 30, 2006. Other charges for the threemonths ended June 30, 2007 and 2006 included restructuring costs allocatedto us by a subsidiary of Virgin Media in respect of lease exit costs inconnection with properties that have been vacated and redundancy costsfollowing the merger of the legacy NTL and Telewest business by Virgin Media.Charges allocated to us by a subsidiary of Virgin Media are made on the basisof an allocation formula appropriate to each category of charge based on areasonable methodology given the facts and circumstances.

*Depreciationexpense*

For the threemonths ended June 30, 2007, depreciation expense decreased to $1.7 millionfrom $1.8 million for the three months ended June 30, 2006.Depreciation expressed in pounds sterling decreased to £0.9 million from £1.0million in the same period. The decrease is due to the cessation ofdepreciation on assets that have become fully depreciated during the period.

*Interestexpense*

For the threemonths ended June 30, 2007, interest expense decreased to $1,341,267 from$1,445,781 for the three months ended June 30,2006 and interest expressedin pounds sterling decreased to £675,437 for the three months ended June 30,2007 from £790,086 for the three months ended June 30, 2006. This decreaseis due to the lower bank fees and deferred financing costs allocated to us forthe three months ended June 30, 2007 than for the three months ended June 30,2006 by a subsidiary of Virgin Media following Virgin Media’s refinancing inconnection with its reverse acquisition of Telewest.

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We paid no cashinterest for the three months ended June 30, 2007 and 2006.

*Exchange losses*

For the three months ended June 30,2007, foreign currency exchange losses were $44,898 as compared with losses of$126,099 for the three months ended June 30, 2006. The change in exchangelosses are primarily attributable to fluctuations in the valuation of the U.S.dollar on certain of our assets and transactions, which are denominated inpounds sterling. The U.S. dollar weakened by approximately nine percent againstthe pound from June 30, 2006 to June 30, 2007. Our results ofoperations will continue to be affected by foreign exchange rate fluctuations.

*MinorityInterest*

During thethree months ended June 30, 2007, South Herts continued to incur lossesand as at the period end its liabilities exceeded its assets and therefore nominority interest was recognized. For the three months ended June 30, 2006we recognized a minority interest credit of $247,616 which represented therelease of the minority interest built up in profitable periods.

*Net loss*

For the threemonths ended June 30, 2007, net loss improved to $296,915 as compared withnet loss of $695,305 for the three months ended June 30, 2006 primarilydue to the reasons described above.

***Sixmonths ended June 30, 2007 and 2006***

We present below summarized consolidated financial information in U.S.dollars and U.K. pounds sterling for the six months ended June 30, 2007and 2006:

| ** **                                    | ** ** | **Six months ended  June 30,** | ** ** | ** ** | ** ** | **Six months ended  June 30,** | ** ** | ** ** | ** ** |
|-----------------------------------------------|------------|-----------------------------------------------|------------|------------|------------|-----------------------------------------------|------------|------------|------------|
| ** **                                    | ** ** | **2007**                                      | ** ** | **2006**   | ** ** | **%**                                         | ** ** | **2007**   | ** ** | **2006** | ** ** | **%** | ** ** |
| Revenue                                       |       | $                                             | 19,940,121 |       | $          | 18,835,580                                    |       | 5.9        |       | £ | 10,118,807 |   | £ | 10,521,495 |   | (3.8 | ) |
| Cost  of goods sold                           |       | (5,084,793                                    | )          | (4,974,289 | )          | (2.2                                          | )          | (2,580,327 | )          | (2,778,622 | ) | 7.1 |   |
| Selling,  general and administrative expenses |       | (54,391                                       | )          | (45,630    | )          | (19.2                                         | )          | (27,601    | )          | (25,489 | ) | (8.3 | ) |
| Management  fees and allocated overhead       |       | (8,994,849                                    | )          | (8,505,595 | )          | (5.8                                          | )          | (4,564,523 | )          | (4,751,198 | ) | 3.9 |   |
| Other  charges                                |       | (144,846                                      | )          | (398,137   | )          | 63.6                                          |       | (73,504    | )          | (222,398 | ) | 66.9 |   |
| Depreciation                                  |       | (3,550,107                                    | )          | (3,490,886 | )          | (1.7                                          | )          | (1,801,536 | )          | (1,949,998 | ) | 7.6 |   |
| Operating  income                             |       | 2,111,135                                     |       | 1,421,043  |       | 48.6                                          |       | 1,071,316  |       | 793,790 |   | 35.0 |   |
| Interest  expense                             |       | (2,625,908                                    | )          | (2,948,840 | )          | 11.0                                          |       | (1,332,542 | )          | (1,647,213 | ) | 19.1 |   |
| Exchange  losses                              |       | (56,595                                       | )          | (149,482   | )          | 62.1                                          |       | (28,720    | )          | (83,500 | ) | 65.6 |   |
| Net  loss before minority interests           |       | (571,368                                      | )          | (1,677,279 | )          | 65.9                                          |       | (289,946   | )          | (936,923 | ) | 69.1 |   |
| Minority  interests                           |       | —                                        |       | 460,882    |       | —                                        |       | —     |       | 257,447 |   | — |   |
| Net loss                                      |       | $                                             | (571,368   | )          | $          | (1,216,397                                    | )          | 53.0       |       | £ | (289,946 | ) | £ | (679,476 | ) | 57.3 |   |

 

*Revenue*

For the sixmonths ended June 30, 2007, revenue increased by 5.9% to $19.9 millionfrom $18.8 million for the six months ended June 30, 2006 and revenueexpressed in pounds sterling decreased by 3.8% to £10.1 million from £10.5million in respect of the same periods in 2007 and 2006, respectively. Thedecrease is primarily due to lower telephony usage together with increasedcompetition that has given rise to reduced revenues through increased discountspartly offset by higher broadband revenue due to an increase in the numbers ofbroadband subscribers.

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*Expenses*

*Cost of goods sold.*   For the six months ended June 30, 2007, cost of goods soldincreased by 2.2% to $5.1 million from $5.0 million from the six months ended June 30,2006 and cost of goods sold expressed in pounds sterling decreased by 7.1% to£2.6 million from £2.8 million in respect of the same periods in 2007 and 2006,respectively. The reduction in cost of sales in pounds sterling is primarily areflection of reduced revenue.

*Selling, general and administrative expenses.**  *For the sixmonths ended June 30, 2007, selling, general and administrative expensesincreased slightly to $54,391, or £27,601, from $45,630, or £25,489, in the sixmonths ended June 30, 2006.

*Management fees and allocated overhead.**  *For the sixmonths ended June 30, 2007, management fees and allocated overheadincreased by 5.8% to $9.0 million from $8.5 million for the six months ended June 30,2006 but management fees and allocated overhead expressed in pounds sterlingdecreased by 3.9% to £4.6 million from £4.8 million in respect of the sameperiods in 2007 and 2006, respectively. The business of NTL South Herts ismanaged as an integral part of Virgin Media. The combined costs of managing thelarger group are allocated to each entity within the Virgin Media group,including NTL South Herts, on a consistent and proportional basis according tothe level of trading in that entity.

*Other charges.**  *For the sixmonths ended June 30, 2007, other charges decreased to $144,846 from$398,137 for the six months ended June 30, 2006. Other charges in the sixmonths ended June 30, 2007 included restructuring costs allocated to us bya subsidiary of Virgin Media in respect of lease exit costs in connection withproperties that have been vacated and redundancy costs following the merger ofthe legacy NTL and Telewest business by Virgin Media. Charges allocated to usby a subsidiary of Virgin Media are made on the basis of an allocation formulaappropriate to each category of charge based on a reasonable methodology giventhe facts and circumstances.

*Depreciation expense*

For the sixmonths ended June 30, 2007, depreciation expense increased by 1.7% to $3.6million from $3.5 million for the six months ended June 30, 2006. Thedepreciation expressed in pounds sterling decreased to £1.8 million in the sixmonths ended June 30, 2007 from £1.9 million in the six months ended June 30,2006. The decrease in pounds sterling is due to the cessation ofdepreciation on assets that have become fully depreciated during the period.

*Interest expense*

For the six months ended June 30,2007, interest expense decreased to $2.6 million from $2.9 million for the sixmonths ended June 30, 2006, and interest expense expressed in poundssterling decreased to £1.3 million for the six months ended June 30, 2007from £1.6 million for the six months ended June 30, 2006. This decrease isdue to the lower bank fees and deferred financing costs allocated to us for thesix months ended June 30, 2007 than for the six months ended June 30,2006 by a subsidiary of Virgin Media following Virgin Media’s refinancing inconnection with its reverse acquisition of Telewest.

We paid no cashinterest for the six months ended June 30, 2007 and 2006.

*Exchange losses*

For the sixmonths ended June 30, 2007, foreign currency exchange losses were $56,595as compared with losses of $149,482 for the six months ended June 30,2006. The change in exchange losses are primarily attributable to fluctuationsin the valuation of the U.S. dollar on certain of our assets and transactions,which are denominated in pounds sterling. The U.S. dollar weakenedapproximately nine 

16

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percentagainst the pound from June 30, 2006 to June 30, 2007. Our results ofoperations will continue to be affected by foreign exchange rate fluctuations.

*Minority Interest*

During the sixmonths ended June 30, 2007, South Herts continued to incur losses and asat the period end its liabilities exceeded its assets and therefore no minorityinterest was recognized. For the six months ended June 30, 2006 werecognized a minority interest credit of $460,882 which represented the releaseof the minority interest built up in profitable periods.

*Net loss*

For the sixmonths ended June 30, 2007, net loss was $571,368 as compared with netloss of $1,216,397 for the six months ended June 30, 2006 primarily due tothe reasons described above.

**CondensedConsolidated Statement of Cash Flows**

In the sixmonths ended June 30, 2007, we generated $1,649,374 from our operatingactivities compared with $845,318 in the six months ended June 30, 2006,and used it to purchase fixed assets including equipment for customersinstallations. Our cash provided by operating activities increased due to areduction in net loss offset partially by a decrease in amounts payable toaffiliates and related parties.

**Liquidityand Capital Resources**

We have no financing independent of VirginMedia. We are reliant upon the support of Virgin Media to continue ouroperations. As of June 30, 2007, we had consolidated current liabilitiesof $71.5 million due to Virgin Media group companies compared with $71.2million as of December 31, 2006.

Historically, our source of cash was thenet proceeds of our offerings of limited partnership interests and ourprincipal uses of cash have been capital contributions to NTL South Herts inorder to fund our proportionate share of the construction costs of the SouthHerts System.

Accordingly,until such time as NTL South Herts begins to pay dividends on its ordinaryshares (which is not expected in the foreseeable future) we will be required tofund our administrative expenses from borrowings or, theoretically, additionalissuances of limited partnership interests. It is unlikely that we will be ableto sell debt or equity securities in the public markets, at least in the shortterm, or to obtain financing from commercial banks. Accordingly, we aredependent on Virgin Media for funds to cover operating expenses, and willcontinue to be dependent upon Virgin Media to meet our liquidity requirementsfor the foreseeable future. We expect that cash from our operations in 2007will be utilized fully for the purchase of fixed assets including customerinstallations.

**Off-BalanceSheet Transactions**

As of June 30,2007, we had no off-balance sheet transactions.

**ContractualObligations and Commercial Commitments**

There have beenno material changes in the six months ended June 30, 2007 to theinformation required under this Item from what was disclosed in our AnnualReport on Form 10-K for the year ended December 31, 2006 as filedwith the SEC on March 29, 2007.

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**ITEM 3.**                QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The functional currency of NTL South Hertsis pounds sterling and all revenue and substantially all costs are incurred inpounds sterling. We report in U.S. dollars. Therefore, we are exposed to fluctuationsin the pound sterling to U.S. dollar exchange rate.

The aggregate potential loss from ahypothetical one-percent fall in the pound sterling/U.S. dollar exchange rateis approximately $3,000 for the six months ended June 30, 2007.

We have no debtother than amounts due to affiliates and related parties. As of June 30,2007, we had approximately $71.5 million in amounts due to Virgin Media groupcompanies. Interest on amounts due to affiliates is at a variable rate based onthe average rate incurred by Virgin Media. Therefore we are exposed to changesin Virgin Media’s borrowing rate. The aggregate potential loss from ahypothetical one-percentage point increase in the interest rate is $326,286 forthe six months ended June 30, 2007.

**ITEM 4.**                CONTROLSAND PROCEDURES

(a)   *DisclosureControls and Procedures.*   Our management, with theparticipation of the Chief Executive Officer and Chief Financial Officer ofVirgin Media*, has evaluated theeffectiveness of our disclosure controls and procedures (as such term isdefined in Rules 13a-15(e) and 15d-15(e) under the SecuritiesExchange Act of 1934, as amended, or the Exchange Act) as of the end of theperiod covered by this report. Based on such evaluation, Virgin Media’s ChiefExecutive Officer and Chief Financial Officer have concluded that, as of theend of such period, these controls and procedures are effective to ensure thatinformation required to be disclosed by the registrant in the reports theregistrant files or submits under the Exchange Act is recorded, processed,summarized, and reported within the time periods specified in the SEC’s rules andforms. These disclosure controls and procedures include, without limitation,controls and procedures designed to ensure that information required to bedisclosed by the registrant in the reports that it files or submits isaccumulated and communicated to the registrant’s management, including VirginMedia’s Chief Executive Officer and Chief Financial Officer, as appropriate toallow timely decisions regarding required disclosure.

(b)   *Changes in Internal Control Over FinancialReporting.  **On March 3, 2006, Virgin Mediacompleted the reverse acquisition of Telewest and on July 4, 2006,Virgin Media completed the acquisition of Virgin Mobile. As a consequence ofVirgin Media’s integration of these acquisitions, Virgin Media has made andexpects to make further material changes to its internal control over financialreporting. Other than as stated above, there were no changes in our internalcontrol over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) underthe Exchange Act) during the fiscal quarter to which this report relates that havematerially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.*

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*                    The Partnership has no Chief Executive Officer or Chief FinancialOfficer. Robert Mackenzie and Robert Gale are Directors of Virgin MediaDirectors Limited, which is a corporate director of NTL Fawnspring Limited, thegeneral partner of the Partnership.

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**PART II.OTHER INFORMATION**

**ITEM 1.**                LEGALPROCEEDINGS

We are involvedin disputes and litigation arising in the ordinary course of our business. Wehave no material legal proceeding outside of the ordinary course of business.

**ITEM 1A:**       RISKFACTORS

There have beenno material changes in the six months ended June 30, 2007 in the riskfactors discussed under “Risk Factors” and elsewhere in our Form 10-K forthe year ended December 31, 2006 as filed with the SEC on March 29,2007.

**ITEM 2.**                UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

**ITEM 3.**                DEFAULTSUPON SENIOR SECURITIES

None.

**ITEM 4.**                SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters weresubmitted to a vote of our security holders in the quarter ended June 30,2007.

**ITEM 5.**                OtherInformation

None.

**ITEM 6.**                Exhibits
| 3.1  |   | Certificate of Limited Partnership dated  December 31, 1991 (Incorporated by reference to Exhibit 3.1 to the  Registrant’s Form 10-K for the year ended December 31, 1994, filed  with the Securities and Exchange Commission on March 31, 1995, File  No. 000-19889).                    |
|------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2  |   | Amendment to  the Certificate of Limited Partnership dated January 31, 1995  (Incorporated by reference to Exhibit 3.2 to the Registrant’s  Form 10-K for the year ended December 31, 1994, filed with the  Securities and Exchange Commission on March 31, 1995, File  No. 000-19889).   |
| 4.1  |   | Limited  Partnership Agreement dated December 31, 1991 (Incorporated by reference  to the Registrant’s Post-Effective Amendment No. 2 to Form S-1,  filed with the Securities and Exchange Commission on May 6, 1993, File  No. 33-48400).                                                     |
| 4.2  |   | Amendment  No. 1 to Limited Partnership Agreement dated October 20, 1992  (Incorporated by reference to Exhibit 4.2 to the Registrant’s  Form 10-K for the year ended December 31, 1994, filed with the  Securities and Exchange Commission on March 31, 1995, File  No. 000-19889). |
| 31.1 |   | Certification  of Chief Executive Officer,* pursuant to Rule 13(a)-14(a) and  Rule 15d-14(a) of the Exchange Act.                                                                                                                                                                                        |
| 31.2 |   | Certification  of Chief Financial Officer,* pursuant to Rule 13(a)-14(a) and  Rule 15d-14(a) of the Exchange Act.                                                                                                                                                                                        |
| 32.1 |   | Certifications  of Chief Executive Officer,* and Chief Financial Officer,* pursuant to 18  U.S.C. Section 1350, as adopted pursuant to Section 906 of the  Sarbanes Oxley Act of 2002.                                                                                                                             |

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*                    The Partnership has no Chief Executive Officer or Chief FinancialOfficer. Robert Mackenzie and Robert Gale are Directors of Virgin MediaDirectors Limited, which is a Corporate Director of NTL Fawnspring Limited, theGeneral Partner of the Partnership.

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.
|                              | SOUTH HERTFORDSHIRE  UNITED KINGDOM FUND, LTD. |
|------------------------------|-----------------------------------------------------|
|                         |                                                | a Colorado limited partnership |
|                         | By:                                                 | NTL FAWNSPRING LIMITED,  its General Partner |
|                         | By:                                                 | /s/ ROBERT MACKENZIE |
|                         |                                                | Robert Mackenzie |
|                         |                                                | *Director of Virgin Media Directors  Limited,  Corporate Director of NTL Fawnspring Limited,  the General Partner of South Hertfordshire  United Kingdom Fund, Ltd.* |
| Dated:  August 10, 2007 |                                                |   |

 

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the registrant and in thecapacities and on the dates indicated.
|                       | **Name** | ** **                                                                                                            | ** ** | ** **           | **Title** | ** ** | ** ** | ** ** | **Date** | ** ** |
|-----------------------|----------|-----------------------------------------------------------------------------------------------------------------------|------------|----------------------|-----------|------------|------------|------------|----------|------------|
| /s/ ROBERT  MACKENZIE |     | Director  of Virgin Media Directors Limited,                                                                          |       | August 10, 2007 |
| Robert Mackenzie      |     | Corporate  Director of NTL Fawnspring Limited, the General Partner of South  Hertfordshire United Kingdom Fund, Ltd.* |       |                 |
| /s/ ROBERT  GALE      |     | Director  of Virgin Media Directors Limited,                                                                          |       | August 10, 2007 |
| Robert  Gale          |     | Corporate Director of NTL Fawnspring  Limited, the General Partner of South Hertfordshire United Kingdom Fund,  Ltd.* |       |                 |

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*                    The Partnership has no Chief Executive Officer or Chief FinancialOfficer. Robert Mackenzie and Robert Gale are Directors of Virgin MediaDirectors Limited, which is a Corporate Director of NTL FawnspringLimited, the General Partner of the Partnership.

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