**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

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**Form 10-Q**

**(Mark One)**

**x**                              Quarterlyreport pursuant to Section 13 or 15 (d) of the Securities ExchangeAct of 1934

**Forthe quarterly period ended March 31, 2006**

**o**                                 Transitionreport pursuant to Section 13 or 15 (d) of the Securities Excange Actof 1934

**For thetransition periodfrom             to             **

**CommissionFile Number: 000-19889**

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

*Exact name of registrant asspecified in charter*

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

 

**ntl House, Bartley WoodBusiness Park, Hook, Hampshire, RG27 9UP, England**

*Address of principal executiveoffice*

**011 44 1256 752000**

*Registrant’s telephone number*

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

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer’’ in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o                     Acceleratedfiler o                     Non-acceleratedfiler x

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

The number of limited partnership units of theregistrant outstanding as of May 1, 2006 was 56,935.

 

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**TABLEOF CONTENTS**

|               | ** ** | ** **             | ** ** | ** **                                                                                               | ** ** | **Page  Number** |
|---------------|------------|------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|------------------|
| PART I.  |       | FINANCIAL  INFORMATION | ** ** | ** **                                                                                               |
|          |       | Item  1.               |       | Financial  Statements                                                                                    |       |  5          |
|          |       |                   |       | Condensed Consolidated Balance Sheets as of  March 31, 2006 and December 31, 2005              |       |  5          |
|          |       |                   |       | Condensed Consolidated Statements of Operations for  the Three Months Ended March 31, 2006 and 2005 |       |  6          |
|          |       |                   |       | Condensed Consolidated Statements of Cash Flows for  the Three Months Ended March 31, 2006 and 2005 |       |  7          |
|          |       |                   |       | Notes  to Condensed Consolidated Financial Statements                                                    |       |  8          |
|          |       | Item 2.                |       | Management’s Discussion and Analysis of Financial  Condition and Results of Operations              |       | 12               |
|          |       | Item 3.                |       | Quantitative and Qualitative Disclosures About Market  Risk                                              |       | 17               |
|          |       | Item  4.               |       | Controls  and Procedures                                                                                 |       | 17               |
| PART II. |       | OTHER  INFORMATION     |       | 18                                                                                                       |
|          |       | Item 5.                |       | Other Information                                                                                        |       | 18               |
|          |       | Item 6.                |       | Exhibits                                                                                                 |       | 18               |
|          |       | SIGNATURES             |       | 19                                                                                                       |

 

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” as that termis defined under the Private Securities Litigation Reform Act of 1995. Wordslike “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expects,” “estimates,”“projects,” “positioned,” “strategy,” and similar expressions identify theseforward-looking statements, which involve known and unknown risks,uncertainties and other factors that may cause our actual results, performanceor achievements or industry results to be materially different from thosecontemplated, projected, forecasted, estimated or budgeted, whether expressedor implied, by these forward-looking statements. These factors include:

·       NTL’sfailure to obtain and retain expected synergies from the merger of the legacyNTL and Telewest businesses and from the proposed transaction with VirginMobile;

·       ratesof success in executing, managing and integrating key acquisitions, includingthe merger with Telewest and the proposed transaction with Virgin Mobile;

·       NTL’sability to achieve business plans for the combined company;

·       NTL’sability to manage and maintain key customer relationships;

·       NTL’sability to fund debt service obligations through operating cash flow;

·       NTL’sability to obtain additional financing in the future and react to competitiveand technological changes;

·       NTL’sability to comply with restrictive covenants in NTL’s indebtedness agreements;

·       NTL’sability to control customer churn;

·       NTL’sability to compete with a range of other communications and content providers;

·       theeffect of technological changes on NTL’s businesses;

·       thefunctionality or market acceptance of new products that NTL may introduce;

·       possiblelosses in revenues due to systems failures;

·       NTL’sability to maintain and upgrade its networks in a cost-effective and timelymanner;

·       NTL’sreliance on single-source suppliers for some equipment and software;

·       NTL’sability to provide attractive programming at a reasonable cost; and

·       theextent to which NTL’s future earnings will be sufficient to cover its fixedcharges.

These and other factorsare discussed in more detail under “Risk Factors” and elsewhere in NTL’s Form 10-Kthat was filed with the SEC on March 1, 2006. We assume no obligation toupdate the forward-looking statements to reflect actual results, changes inassumptions or changes in factors affecting these statements.

**Note Concerning NTL’sReverse Acquisition of Telewest**

On March 3, 2006, NTL Holdings Inc. (formerlyknown as NTL Incorporated) (“legacy NTL”) merged with a subsidiary of NTLIncorporated (formerly known as Telewest Global, Inc.) (“NTL”).

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**Exchange Rates**

The following table setsforth, for the periods indicated, the high, low, period average and period endnoon buying rate in the City of New York for cable transfers as certified forcustoms purposes by the Federal Reserve Bank of New York expressed as U.S.dollars per £1.00. The noon buying rate of the pound sterling on March 31,2006 was $1.7393 per £1.00.
|                                                                | ** ** | **U.S. Dollars per £1.00** | ** ** |
|----------------------------------------------------------------|------------|------------------------------------------------|------------|
| **Three Months Ended March 31, 2006** | ** ** | ** **                                     | ** ** | **Period End** | ** ** | **Average(1)** | ** ** | **High** | ** ** | **Low** | ** ** |
| 2005                                                           |       |                                           | 1.89       |   |   |   | 1.90 |   |   | 1.93 |   | 1.86 |   |
| 2006                                                           |       |                                           | 1.74       |   |   |   | 1.76 |   |   | 1.79 |   | 1.73 |   |
|                                                                |            |                                                |            |  |  |  |  |  |  |  |  |  |  |  |  |

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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 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 March 31, 2006 are translated to U.S. dollars at an exchange rate of$1.7393 to £1.00, all amounts disclosed for the three months ended March 31,2006 are based on an average exchange rate of $1.7536 to £1.00, and all amountsdisclosed for the three months ended March 31, 2005 are based on anaverage exchange rate of $1.8904 to £1.00. All amounts disclosed as of December 31,2005 are based on an exchange rate of $1.7188 to £1.00. All rates are based onthe noon buying rate in the City of New York for cable transfers as certifiedfor customs purposes by the Federal Reserve Bank of New York. U.S. Thevariation between the 2006 and 2005 exchange rates has impacted the dollarcomparisons.

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**SOUTH HERTFORDSHIRE UNITEDKINGDOM FUND, LIMITED(A LIMITED PARTNERSHIP)**

**Part I.  Financialinformation**

**Item 1.**                        Financialstatements

**CONDENSEDCONSOLIDATED BALANCE SHEETS**

| ** **                                                                                             | ** ** | **March 31,  2006** | ** ** | **December 31,  2005** | ** ** |
|--------------------------------------------------------------------------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| ** **                                                                                             | ** ** | **(unaudited)**          | ** ** | **(see note)**         | ** ** |
| **Assets**                                                                                             | ** ** | ** **               | ** ** | ** **                  | ** ** |
| Fixed assets, net                                                                                      |       | $                        | 62,540,563 |                        | $          | 63,195,826 |   |
| **Total  assets**                                                                                      |       | $                        | 62,540,563 |                        | $          | 63,195,826 |   |
| **Liabilities  and Partners’ Deficit**                                                            | ** ** | ** **               | ** ** | ** **                  | ** ** |
| Current liabilities                                                                                    |       |                     |       |                        |       |
| Accounts payable to affiliates and related parties                                                     |       | $                        | 64,373,509 |                        | $          | 64,324,939 |   |
| Total liabilities                                                                                      |       | 64,373,509               |       | 64,324,939                  |       |
| **Minority  interest**                                                                                 | ** ** | ** **               | ** ** | ** **                  | ** ** |
| Minority interest                                                                                      |       | 504,167                  |       | 707,259                     |       |
| **Partners’  Capital (Deficit)**                                                                  | ** ** | ** **               | ** ** | ** **                  | ** ** |
| General Partner                                                                                        |       |                     |       |                        |       |
| Contributed capital                                                                                    |       | 1,000                    |       | 1,000                       |       |
| Accumulated deficit                                                                                    |       | (507,794                 | )          | (502,583                    | )          |
|                                                                                                   |       | (506,794                 | )          | (501,583                    | )          |
| Limited Partners                                                                                       |       |                     |       |                        |       |
| Contributed capital, net (56,935 units outstanding  at March 31, 2006 and December 31, 2005) |       | 48,817,997               |       | 48,817,997                  |       |
| Accumulated deficit                                                                                    |       | (49,990,480              | )          | (49,474,599                 | )          |
|                                                                                                   |       | (1,172,483               | )          | (656,602                    | )          |
| Accumulated comprehensive loss                                                                         |       | (657,836                 | )          | (678,187                    | )          |
| Total Partners’ deficit                                                                           |       | (2,337,113               | )          | (1,836,372                  | )          |
| **Total  Liabilities and Partners’ Deficit**                                                      |       | $                        | 62,540,563 |                        | $          | 63,195,826 |   |

 

Note: The balance sheet at December 31, 2005 hasbeen derived from audited 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  March 31,** | ** ** |
|------------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                             | ** ** | **2006**                                         | ** ** | **2005** | ** ** |
| **Revenues**                                                           |       | $                                                | 9,170,963  |   | $ | 10,247,295 |   |
| **Costs  and expenses**                                                | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| Cost of goods  sold (exclusive of depreciation shown separately below) |       | (2,457,586                                       | )          | (2,791,414 | ) |
| Selling, general  and administrative expenses                          |       | (20,615                                          | )          | (21,394 | ) |
| Management fees  and allocated overhead from the General Partner       |       | (4,022,996                                       | )          | (4,069,032 | ) |
| Other charges                                                          |       | (157,707                                         | )          | (9,756 | ) |
| Depreciation                                                           |       | (1,719,975                                       | )          | (1,886,681 | ) |
| **Operating income**                                                   |       | 792,084                                          |       | 1,469,018 |   |
| **Other  expenses**                                                    | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| Interest payable  to General Partner and affiliates                    |       | (1,503,059                                       | )          | (585,022 | ) |
| Exchange (losses)  gains                                               |       | (23,383                                          | )          | 30,000 |   |
| **(Loss) income before minority interest**                             |       | (734,358                                         | )          | 913,996 |   |
| Minority interest  income (expense)                                    |       | 213,266                                          |       | (319,979 | ) |
| **Net (loss) income**                                                  |       | $                                                | (521,092   | ) | $ | 594,017 |   |
| **Allocation  of net (loss) income**                                   | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| General Partner                                                        |       | $                                                | (5,211     | ) | $ | 5,940 |   |
| Limited Partners                                                       |       | (515,881                                         | )          | 588,077 |   |
| **Net  (loss) income**                                                 |       | $                                                | (521,092   | ) | $ | 594,017 |   |
| **Net (loss) income per Limited Partnership unit**                     |       | $                                                | (9.06      | ) | $ | 10.33 |   |
| **Average  number of Limited Partnership units outstanding**           |       | 56,935                                           |       | 56,935 |   |

 

See accompanying notes.

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**SOUTH HERTFORDSHIRE UNITEDKINGDOM FUND, LIMITED(A LIMITED PARTNERSHIP)**

**CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)**

| ** **                                                                                | ** ** | **Three months ended  March 31,** | ** ** |
|-------------------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                                                | ** ** | **2006**                                         | ** ** | **2005** | ** ** |
| **Cash flows from operating  activities**                                                 | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| Net (loss) income                                                                         |       | $                                                | (521,092   | ) | $ | 594,017 |   |
| Adjustments to reconcile  net (loss) income to net cash provided by operating activities: |       |                                             |       |   |   |
| Minority interest  (income) expense                                                       |       | (213,266                                         | )          | 319,979 |   |
| Depreciation                                                                              |       | 1,719,975                                        |       | 1,886,681 |   |
| Change in operating  assets and liabilities                                               |       |                                             |       |   |   |
| Decrease in  accounts payable to affiliates and related parties                           |       | (681,424                                         | )          | (2,489,722 | ) |
| **Net  cash provided by operating activities**                                            |       | 304,193                                          |       | 310,955 |   |
| **Cash  flows from investing activities**                                                 | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| Purchase of fixed  assets                                                                 |       | (304,193                                         | )          | (310,955 | ) |
| **Net  cash used in investing activities**                                                |       | (304,193                                         | )          | (310,955 | ) |
| 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.   Basisof Presentation**

**Organizationand Business**

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 United Kingdom, or U.K.. Upon acquisitionof our system, our primary investment objective was to obtain capitalappreciation in the value of our investment in the system over the term suchinvestment is held by us.

We hold 66.7% of the shares of NTL (SouthHertfordshire) Limited, or NTL South Herts, which is  principally engaged in the development,construction, management and operation of broadband communications networks fortelephone, cable television and internet services in the United Kingdom, orU.K.. As a result of our ownership of 66.7% of the shares of NTL South Herts,for accounting purposes we have consolidated the results of NTL South Hertswith our results. NTL Holdings Inc. (formerly known as NTL Inc.)indirectly holds the remaining 33.3% of the shares of NTL South Herts. We arereliant on the support of NTL, the ultimate parent company of the GeneralPartner, to continue our operations as a going concern.

We, as well asNTL, file annual, quarterly, and current reports with the SEC. You may read andcopy any materials we or NTL files with the SEC at the SEC’s Public Reference Room at100 F Street, N.E., Washington D.C. 20549. You may obtain information on theoperation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.You may also access electronically the information we file with the SEC via itswebsite, located at http://www.sec.gov*.*

**Basis ofPresentation**

We haveprepared the accompanying unaudited condensed consolidated financial statementsin accordance with accounting principles generally accepted in the UnitedStates, or U.S. GAAP, for interim financial information and with theinstructions to Form 10-Q and Rule 10-01 of RegulationS-X. Accordingly, they do not include all of the information and footnotesrequired by U.S. GAAP for complete financial statements. In the opinion of ourmanagement, all adjustments (consisting only of normal recurring adjustments)considered necessary for a fair presentation have been included. Results ofoperations for the period ended March 31, 2006 are not necessarilyindicative of results to be expected for the full year ending December 31,2006. For further information, refer to the consolidated financial statementsand footnotes thereto included in our Annual Report on Form 10-K forthe year ended December 31, 2005.

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

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

**Note 2.   Comprehensive(Loss) Income**

Comprehensive (loss) income includes net (loss) income as well as othercomprehensive (loss) income. Our other comprehensive (loss) income consists ofchanges in cumulative translation adjustment. Comprehensive (loss) income comprises:

| ** **                                | ** ** | **Three months ended  March 31,** | ** ** |
|-------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                | ** ** | **2006**                                         | ** ** | **2005** | ** ** |
| Net  (loss) income                        |       | $                                                | (521,092   | ) | $ | 594,017 |   |
| Foreign  currency translation adjustments |       | (20,351                                          | )          | 3,359 |   |
| Comprehensive  (loss) income              |       | $                                                | (541,443   | ) | $ | 597,376 |   |

 

**Note 3.   Investmentin Subsidiary**

NTL (South Hertfordshire) Limited (“NTLSouth Herts”) is a U.K. corporation that owns and operates a cabletelevision/telephone system 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 NTL. NTL also owns the General Partner. The GeneralPartner provides consulting services to the Partnership and may delegate someor all of the consulting services to NTL or to other affiliates.

NTL, throughits subsidiaries including its interest in NTL South Herts, provides broadbandinternet access, telephone and television services to over 5.0  millionresidential customers as at March 31, 2006.

**Note 4.   Transactionswith 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 March 31,2006 and 2005 were $458,549 and $512,365 respectively. These amounts wereexpensed in the Consolidated Statements of Operations.

*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 

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

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

**Note 4.**   Transactionswith Affiliated Parties (Continued)

as follows: 99%to the limited partners and 1% to the General Partner until any negativebalances in the limited partners’ capital accounts are reduced to zero; 100% tothe General Partner until any negative balance in its capital account isreduced to zero; 99% to the limited partners and 1% to the General Partneruntil the balance in the limited partners’ capital accounts is equal to theiradjusted capital contribution plus a 12% return; 100% to the General Partneruntil the balance in its capital account is equal to its adjusted capitalcontribution, and any remaining income or gain shall be allocated 75% to thelimited partners and 25% to the General Partner.

The General Partner and its affiliates areentitled to reimbursement from NTL South Herts for direct and indirect expensesallocable to the operation of the South Herts System, and from the Partnershipfor direct and indirect expenses allocable to the operation of the Partnershipwhich include but are not limited to, rent, supplies, telephone, travel, andsalaries of any full or part-time employees. The General Partner believes thatthe methodology used in allocating these expenses is fair and reasonable.During the three months ended March 31, 2006 and 2005, reimbursement madeby NTL South Herts and the Partnership to the General Partner or its affiliatesfor any allocable direct and indirect expenses totaled $3,564,447 and$3,556,667, respectively.

The General Partner and its affiliates maymake advances to, and defer collection of fees and allocated expenses owed by,the Partnership, although they are not required to do so. The Partnership ischarged interest on such advances and deferred amounts 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. For the three months ended March 31, 2006and 2005, aggregated interest, bank fees and finance charges relating tonon-permanent loans of $1,469,028 and $547,010, respectively, was charged byaffiliates of the General Partner, and interest on advances of $34,031 and$38,012, respectively, was charged by an affiliate of the General Partner.

The GeneralPartner and its affiliates are entitled to recover interest on the full amountof non-permanent loans they provide to the Partnership or NTL South Herts andthe portion of bank fees and deferred financing costs relating to NTL’s seniorcredit facilities allocable to the Partnership or NTL South Herts. They electedto recover these amounts commencing in the fourth quarter of 2005. The impactfor the three months ended March 31, 2006, of the change in amount ofnon-permanent loans on which interest is charged was $725,846 and the impact ofthe allocation of bank fees and deferred financing costs was $410,454 for atotal impact of $1,136,300 which is included in the amount of aggregateinterest, bank fees and finance charges above.

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

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

**Note 5.   FixedAssets**

Fixed assets consist of:

| ** **                                    | ** ** | **Estimated  useful lives** | ** ** | **March 31,  2006** | ** **  | **December 31,  2005** | ** ** |
|-----------------------------------------------|------------|----------------------------------|------------|--------------------------|-------------|-----------------------------|------------|
| Cable  Network and other electrical equipment |       | 5-30  years                      |       | $                        | 177,354,794 |                        | $          | 174,966,272 |   |
| Building  and other equipment                 |       | 3-30  years                      |       | 7,475,716                |        | 7,397,187                   |       |
|                                          |       |                             |       | 184,830,510              |        | 182,363,459                 |       |
| Accumulated  depreciation                     |       |                             |       | (122,289,947             | )           | (119,167,633                | )          |
|                                          |       |                             |       | $                        | 62,540,563  |                        | $          | 63,195,826 |   |

 

**Note 6.   Commitmentsand Contingent Liabilities**

We have no significant contractualobligations and commercial commitments as of March 31, 2006.

We are from time to time subject to legalproceedings and claims that arise in the ordinary course of our business. Inthe opinion of the management, the amount of ultimate liability with respect tothese actions will not materially affect our financial position, results ofoperations or liquidity.

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**Item 2.**                        Management’sDiscussion and Analysis of Financial Condition and Results of Operations

**Overview**

We are a Colorado limited partnership that was formedin 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 South Herts, whichis principally engaged in the development, construction, management andoperation of broadband communications networks for telephone, cable televisionand internet services in the U.K. As a result of our ownership of 66.7% of theshares of NTL South Herts, for accounting purposes we have consolidated theresults of NTL South Herts with our results. NTL indirectly holds the remaining33.3% of the shares of NTL South Herts. We are reliant on the support of NTL,the ultimate parent company of the General Partner, to continue our operationsas a going concern.

We derive our revenue principally from monthly feesand usage charges. Our packaging of services and pricing are designed toencourage our customers to use multiple services like dual telephone andbroadband, dual telephone and television or triple telephone, television andinternet access.

The principal componentsof 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, like rent, utilities and rates; andallowances for doubtful accounts. Our expenses include certain costs that arecharged by a subsidiary of NTL for the provision of network services andsupport, the use of NTL’s national backbone telephone network for carriage ofour telephone traffic, as well as the provision of technical infrastructure andnetwork capacity by NTL for our subscription internet access service anddigital television services, the provision of corporate services, includingfinance, legal, human resources and facility services, and for the provision ofIT services, including our use of the related IT equipment.

**Selected OperatingData**

We setforth in the following table certain data concerning our franchise at March 31,2006 and December 31, 2005:

| ** **                         | ** ** | **March 31,  2006** | ** ** | **December 31,  2005** | ** ** |
|------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| Homes passed(1)                    |       |                     | 94,599     |                        |       |   | 94,350 |   |   |
| Homes  marketable(2)               |       |                     | 94,599     |                        |       |   | 94,350 |   |   |
| Total customers                    |       |                     | 37,155     |                        |       |   | 36,975 |   |   |
| Digital cable  subscribers         |       |                     | 22,038     |                        |       |   | 21,709 |   |   |
| Analog cable  subscribers          |       |                     | 2,018      |                        |       |   | 2,332 |   |   |
| Broadband  internet subscribers    |       |                     | 21,472     |                        |       |   | 20,078 |   |   |
| Telephony  subscribers             |       |                     | 32,066     |                        |       |   | 31,927 |   |   |
| Penetration  (homes marketable)(3) |       |                     | 39.3       | %                           |       |   | 39.0 | % |   |
| Churn(4)                           |       |                     | 1.0        | %                           |       |   | 1.0 | % |   |

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(1)          Homes passed is thenumber of homes that have had ducting buried outside.

(2)          Homes marketable refersto the number of homes within our service area that can potentially be servedby our network with minimal connection costs.

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(3)          Penetration ratemeasures the number of subscribers for our services divided by the number ofmarketable homes that our services pass.

(4)          Customerchurn is calculated by taking the total disconnects during the month anddividing them by the average number of customers during the month. Averagemonthly churn during the quarter is the average of the three monthly churncalculations within the quarter.

***Factors affecting our business***

***Customer Churn.******  ***Customer churn is a measureof the number of customers who stop using our services. An increase in ourcustomer churn can lead to increased costs and reduced revenue. We continue tofocus on improving our customer service and enhancing and expanding our serviceofferings to existing customers in an effort to manage our customer churn rate.Although our ability to reduce our customer churn rate beyond a base level islimited by factors like customers moving outside our network service area, inparticular during the summer season, managing our customer churn rate is asignificant component of our business plan. Our customer churn rate mayincrease if we are unable to deliver our services over our network withoutinterruption or if we fail to match offerings by our competitors.

***Competition.******  ***Our ability to acquire andretain customers and increase revenue depends on our competitive strength.There is significant competition in our markets, including through otherbroadband service providers, telephone services offered by BT, alternativeinternet access services like DSL, which is offered by BT, digital satelliteservices offered by BSkyB and digital terrestrial television offered byFreeview. If competitive forces prevent us from charging the prices for theseservices that we plan to charge, or if our competition is able to attract ourcustomers or potential customers we are targeting, our results of operationswill be adversely affected.

***CapitalExpenditures.******  ***Ourbusiness requires substantial capital expenditures on a continuing basis forvarious purposes, including expanding, maintaining and upgrading our network,investing in new customer acquisitions, and offering new services. If we do notcontinue to invest in our network, our ability to retain and acquire customersmay be hindered. Therefore, our liquidity and the availability of cash to fundcapital projects are important drivers of our revenue. When our liquidity isrestricted, so is our ability to meet our capital expenditure requirements. Webelieve that our cash from operations and cash from NTL will be sufficient forour cash requirements through March 31, 2007.

***Currency Movements.******  ***Because revenue and expensesfrom our principal operations are denominated primarily in pounds sterling butwe report our financial results in U.S. dollars, our financial results areimpacted by currency fluctuations, which are unrelated to our underlyingresults of operations.

***Seasonality.******  ***Some revenue streams aresubject to seasonal factors. For example, telephone usage revenue by customersand businesses tends to be slightly lower during summer holiday months. Ourcustomer churn rates include persons who disconnect service because of moves,resulting in a seasonal increase in our churn rates during the summer monthswhen higher levels of U.K. house moves occur and students leave their accommodationsbetween school years.

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***Three months ended March 31, 2006 and 2005***

Wepresent below summarized consolidated financial information for the threemonths ended March 31, 2006 and 2005:

| ** **                                   | ** ** | **Three months ended  March 31,** | ** ** | ** ** | ** ** | **Three months ended  March 31,** | ** ** | ** ** | ** ** |
|----------------------------------------------|------------|--------------------------------------------------|------------|------------|------------|--------------------------------------------------|------------|------------|------------|
| ** **                                   | ** ** | **2006**                                         | ** ** | **2005**   | ** ** | **%**                                            | ** ** | **2006**   | ** ** | **2005** | ** ** | **%** | ** ** |
| Revenue                                      |       | $                                                | 9,170,963  |       | $          | 10,247,295                                       |       | (10.5      | )          | £ | 5,229,792 |   | £ | 5,420,702 |   | (3.5 | ) |
| Cost of goods  sold                          |       | (2,457,586                                       | )          | (2,791,414 | )          | 12.0                                             |       | (1,401,452 | )          | (1,476,626 | ) | (5.1 | ) |
| Selling, general  and adminstrative expenses |       | (20,615                                          | )          | (21,394    | )          | (3.6                                             | )          | (11,756    | )          | (11,317 | ) | 3.9 |   |
| Management fees  and allocated overhead      |       | (4,022,996                                       | )          | (4,069,032 | )          | (1.1                                             | )          | (2,294,136 | )          | (2,152,471 | ) | 6.6 |   |
| Other charges                                |       | (157,707                                         | )          | (9,756     | )          |                                             |       | (89,933    | )          | (5,161 | ) |   |   |
| Depreciation                                 |       | (1,719,975                                       | )          | (1,886,681 | )          | (8.8                                             | )          | (980,825   | )          | (998,033 | ) | (1.7 | ) |
| Operating income                             |       | 792,084                                          |       | 1,469,018  |       | (46.1                                            | )          | 451,690    |       | 777,094 |   | (41.9 | ) |
| Interest expense                             |       | (1,503,059                                       | )          | (585,022   | )          | 156.9                                            |       | (857,127   | )          | (309,470 | ) | 177.0 |   |
| Exchange gains  (losses)                     |       | (23,383                                          | )          | 30,000     |       | (177.9                                           | )          | (13,334    | )          | 15,870 |   | (184.0 | ) |
| Net (loss) income  before minority interests |       | (734,358                                         | )          | 913,996    |       | (180.3                                           | )          | (418,771   | )          | 483,494 |   | (186.6) |   |
| Minority  interests                          |       | 213,266                                          |       | (319,979   | )          | 166.6                                            |       | 121,616    |       | (169,265 | ) | 171.8 |   |
| Net (loss) income                            |       | $                                                | (521,092   | )          | $          | 594,017                                          |       | (187.7     | )          | £ | (297,155 | ) | £ | 314,229 |   | (194.6) |   |

 

*Revenue*

For the three months endedMarch 31, 2006, revenue decreased by 10.5% to $9.2 million from $10.2million in 2005 and revenue expressed in pounds sterling decreased by 3.5% to£5.2 million in 2006 from £5.4 million in 2005. The decrease is primarily dueto increased competition that has given rise to reduced revenues throughincreased discounts partly offset by higher broadband revenue due to anincrease in the numbers of broadband subscribers served by the South Hertssystem to 21,472 at March 31, 2006 compared with 16,234 at March 31, 2005.

*Expenses*

*Costsof goods sold.**  *For thethree months ended March 31, 2006, costs of goods sold decreased by 12.0%to $2.5 million from $2.8 million in 2005 and cost of goods sold expressed inpounds sterling decreased by 5.1% to £1.4 million in 2006 from £1.5 million in2005. The reduction in cost of sales is primarily due to reduced customerdemand and activity. Costs of goods sold as a percentage of revenue declined to26.8% for the three months ended March 31, 2006, from 27.2% for 2005 dueto the increased number of broadband subscribers.

*Selling,general and administrative expenses.**  *For the three months ended March 31, 2006,selling, general and administrative expenses decreased slightly to $20,615 from$21,394 in 2005 due to the increased number of broadband subscribers.

*Managementfees and allocated overhead.**  *Forthe three months ended March 31, 2006, management fees and allocatedoverhead decreased by 1.1% to $4.0 million from $4.1 million in 2005 butmanagement fees and allocated overhead expressed in pounds sterling increasedby 6.6% to £2.3 million in 2006 from £2.2 million in 2005. The business of NTLSouth Herts is managed as an integral part of NTL. The combined costs ofmanaging the larger group are allocated to each entity within the NTL group,including NTL South Herts, on a consistent and proportional basis according tothe level of trading in that entity. 

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The General Partnerconsiders this to be a fair and reasonable method as management as an integralpart of a larger group to reap benefits of synergy maximizes returns.

*Other charges.**  *For the three months ended March 31, 2006, othercharges increased to $157,707 from $9,756 in 2005. Other charges in the threemonths ended March 31, 2006 included restructuring costs allocated to usby a subsidiary of NTL in respect of lease exit costs in connection with propertiesthat have been vacated and redundancy costs following NTL’s reverse acquisitionof Telewest. For the three months ended March 31, 2005 other chargescomprised employee severance and related costs in connection with the callcenter consolidation program. Charges allocated to us by a subsidiary of NTLare made on the basis of an allocation formula appropriate to each category of chargebased on a reasonable methodology given the facts and circumstances.

*Depreciationexpense*

For the three months endedMarch 31, 2006, depreciation expense decreased to $1.7 million from $1.9million in 2005 mainly due to foreign exchange movement.

*Interest expense*

For the three months ended March 31, 2006,interest expense increased to $1,503,059 from $585,022 in 2005.

We paid no cash interest for the three months ended March 31,2006 and 2005.

Two changes to the interestexpense charging policies were implemented, as permitted by the PartnershipAgreement, in the fourth quarter of 2005. Since October 1, 2005, interesthas been charged on the full amount of non-permanent loans provided to us byour affiliates, rather than just the proportion thereof relating to unpaidmanagement fees paid on our behalf by an affiliate of the General Partner. Alsofrom October 1, 2005, we have been charged our allocation of the bank feesand deferred financing costs relating to NTL’s senior credit facilities.

*Exchange (losses)gains*

For the three months endedMarch 31, 2006, foreign currency exchange losses were $23,383 as comparedwith gains of $30,000 for 2005. The change in exchange gains/(losses) isprimarily attributable to fluctuations in the valuation of the U.S. dollar oncertain of our assets and transactions, which are denominated in poundssterling. Our results of operations will continue to be affected by foreignexchange rate fluctuations.

*Minority Interest*

As of March 31, 2006,NTL South Herts’ assets exceeded its liabilities and we have thereforerecognized a minority interest credit of $213,266 representing a 33.3% share ofNTL South Herts’ net loss for the three months ended March 31, 2006. Forthe three months ended March 31, 2005 we recognized a minority interestcharge of $319,979.

*Net (loss) income*

For the three months ended March 31, 2006, netloss was $521,092 as compared with net income of $594,017 in 2005 primarily dueto the increase in interest expense and reduction in revenue described above.

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**CondensedConsolidated Statement of Cash Flows**

In the threemonths ended March 31, 2006, we generated $304,193 from our operatingactivities compared with $310,955 in the three months ended March 31,2005, and used it to purchase fixed assets including customers installations. Ourcash provided by operating activities has decreased primarily due to repaymentof amounts due to affiliates.

**Liquidityand Capital Resources**

We have no financing independent of NTL. Weare reliant upon the support of NTL to continue our operations. As of March 31,2006, we had consolidated current liabilities of $64.4 million due to NTL groupcompanies compared with $64.3 million as of December 31, 2005.

Historically, our principle source of cash wasthe net 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 by additional issuances of limited partnershipinterests or from borrowings. It is unlikely that we will be able to sell debtor equity securities in the public markets at least in the short term or toobtain financing from commercial banks. Accordingly, we are dependent on NTLfor funds to cover operating expenses, and will continue to be dependent uponNTL to meet our liquidity requirements for the foreseeable future. We expectthat cash from our operations in 2006 will be utilized fully for the purchaseof fixed assets including connecting new customers to our networks.

**Off-BalanceSheet Transactions**

As of March 31, 2006, we had nooff-balance sheet transactions.

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**Item 3.**                        Quantitative and Qualitative Disclosures About Market Risk

The functional currency of NTL South Herts is poundssterling and all revenue and substantially all costs are incurred in poundssterling. 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 a hypotheticalone-percent fall in the pound sterling / U.S. dollar exchange rate isapproximately $6,000 for the three months ended March 31, 2006.

We have no debtother than amounts due to affiliates. As of March 31, 2006, we hadapproximately $64.4 million in amounts due to NTL. Interest on amounts due toaffiliates is at a variable rate based on the average rate incurred by NTL.Therefore we are exposed to changes in NTL’s borrowing rate. The aggregatepotential loss from a hypothetical one-percentage point increase in theinterest rate is approximately $154,000 for the three months ended March 31,2006.

**Item 4.**                        Controls and Procedures

(a)*   Disclosure Controls and Procedures.*   Ourmanagement, with the participation of the Chief Executive Officer and ChiefFinancial Officer of NTL*, has evaluated theeffectiveness of our disclosure controls and procedures (as such term isdefined in Rules 13a-15(e) and 15d-15(e) under theSecurities Exchange Act of 1934, as amended, or the Exchange Act) as of the endof the period covered by this report. Based on such evaluation, NTL’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 NTL’schief executive officer and chief financial officer, as appropriate to allowtimely decisions regarding required disclosure.

(b)*   Changes in Internal Control OverFinancial Reporting.  **On March 3, 2006, legacy NTL completed thereverse acquisition of Telewest. As a consequence of the integration of thelegacy NTL and legacy Telewest businesses, NTL expects to makematerial changes to its internal control over financial reporting and we willdisclose all material changes resulting from this transaction in our futurequarterly and annual reports. Other than as stated above, there were no changesin our internal control over financial reporting (as such term is defined inRules 13a-15(f) and 15d-15(f) under the Exchange Act) during thefiscal quarter to which this report relates that have materially affected, orare reasonably likely to materially affect, our internal control over financialreporting.*

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

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**Part II.  Other Information**

**Item 5.**                        OtherInformation

None.

**Item6.**                        Exhibits
| 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 CEO and CFO* 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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*                    ThePartnership has no Chief Executive Officer or Chief Financial Officer. RobertMackenzie and Robert Gale are Directors of ntl Directors Limited, which is acorporate director of NTL Fawnspring Limited, the general partner of thePartnership.

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**SIGNATURES**

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly 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 ntl Directors Limited  Corporate director of NTL Fawnspring Limited,  the General Partner of South Hertfordshire  United Kingdom Fund, Ltd. |

 

Dated:  May 12,2006

Pursuantto the requirements of the Securities Exchange Act of 1934, this report hasbeen signed below by the following persons on behalf of the registrant and inthe capacities and on the dates indicated.
|                       | **Name** | ** **                                                                                                  | ** ** |                     | **Title** | ** ** | ** ** |  | **Date** | ** ** |
|-----------------------|----------|-------------------------------------------------------------------------------------------------------------|------------|---------------------|-----------|------------|------------|--|----------|------------|
| /s/ ROBERT  MACKENZIE |     | Director of ntl  Directors Limited, Corporate                                                               |       | May  12,  2006 |
| Robert  Mackenzie     |     | director of NTL  Fawnspring Limited, the General Partner of South Hertfordshire United Kingdom  Fund, Ltd.* |       |                |
| /s/ ROBERT  GALE      |     | Director of ntl  Directors Limited, Corporate                                                               |       | May  12,  2006 |
| Robert Gale           |     | director of NTL Fawnspring Limited, the General  Partner of South Hertfordshire United Kingdom Fund, Ltd.*  |       |                |

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*                    ThePartnership has no Chief Executive Officer or Chief Financial Officer. RobertMackenzie and Robert Gale are Directors of ntl Directors Limited, which is acorporate director of NTL Fawnspring Limited, the general partner of thePartnership.

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