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**UNITED STATES**

**SECURITIES 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 the SecuritiesExchange Act of 1934**

 

**For the quarterly period ended September 30,2009**

 

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

 

**For the transition period from                              to**

 

**CommissionFile Number: 000-19889**

 

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**South Hertfordshire United KingdomFund, Ltd.**

(Exact name of registrant asspecified in its charter)

 

| **Colorado**  (State or other jurisdiction of incorporation or organization)                                                   | ** ** | **84-1145140**  (I.R.S. employer identification no.)                             |
|--------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|
| ** **                                                                                                                     | ** ** | ** **                                                                       |
| **Media House, Bartley Wood Business Park, Hook,  Hampshire,  RG27 9UP, England**(Address of principal executive offices) | ** ** | **+ 44 1256 75 2000**  (Registrant’s telephone number, including area code) |

 

Indicate by check mark whether the registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorterperiod 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 has submittedelectronically and posted on its corporate Web site, if any, every InteractiveData File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (orfor such shorter period that the registrant was required to submit and postsuch files).    Yes o No o

 

Indicate by check mark whether the registrant is a large acceleratedfiler, an accelerated filer, a non-accelerated filer, or a smaller reportingcompany.  See the definitions of “largeaccelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2of the Exchange Act.  (Check one):

 

| Large accelerated filer o              |   | Accelerated filer o         |
|---------------------------------------------|--------|----------------------------------|
|                                        |   |                             |
| Non-accelerated filer x                |   | Smaller reporting company o |
| (Do not check if smaller reporting company) |   |                             |

 

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

 

The number of limited partnership units of the registrant outstandingas of November 6, 2009 was 56,935.

 

 

 

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** **

**TABLE OFCONTENTS**

** **
| ** **    | ** **                                                                                                            | **Page  Number** |
|---------------|-----------------------------------------------------------------------------------------------------------------------|------------------|
|          | **PART I.   FINANCIAL INFORMATION**                                                                              | 5                |
| Item 1.  | Financial Statements                                                                                                  | 5                |
|          | Condensed  Consolidated Balance Sheets as of September 30, 2009 and  December 31, 2008                      | 5                |
|          | Condensed Consolidated Statements of Operations for  the Three and Nine Months Ended September 30, 2009 and 2008 | 6                |
|          | Condensed Consolidated Statements of Cash Flows for  the Nine Months Ended September 30, 2009 and 2008           | 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                                                           | 20               |
| Item 4.  | Controls and  Procedures                                                                                              | 20               |
|          | **PART II.  OTHER INFORMATION**                                                                                  | 21               |
| Item 1.  | Legal Proceedings                                                                                                     | 21               |
| Item 1A. | Risk Factors                                                                                                          | 21               |
| Item 2.  | Unregistered  Sales of Equity Securities and Use of Proceeds                                                          | 21               |
| Item 3.  | Defaults  Upon Senior Securities                                                                                      | 22               |
| Item 4.  | Submission  of Matters to a Vote of Security Holders                                                                  | 22               |
| Item 5.  | Other Information                                                                                                     | 22               |
| Item 6.  | Exhibits                                                                                                              | 22               |
| SIGNATURES    |                                                                                                                  | 23               |

 

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In this quarterly report, unless the context otherwise requires, theterms “we”, “us”, “our” and similar terms refer to South Hertfordshire United KingdomFund, Ltd. and its subsidiaries, and “Virgin Media” refers to theconsolidated business of Virgin Media Inc. and its subsidiaries, asfurther described herein.

 

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

 

Various statements contained in this document constitute “forward-lookingstatements” as that term is defined under the Private Securities LitigationReform Act of 1995.  Words like “believe”,“anticipate”, “should”, “intend”, “plan”, “will”, “expect”, “estimate”, “project”,“positioned”, “strategy” and similar expressions identify these forward-lookingstatements, which involve known and unknown risks, uncertainties and otherfactors that may cause our actual results, performance or achievements orindustry results to be materially different from those contemplated, projected,forecasted, estimated or budgeted, whether expressed or implied, by theseforward-looking statements.  Thesefactors, among others, include:

 

·                       our reliance onthe continued support of Virgin Media Inc., the ultimate parent company of ourgeneral partner;

 

·                       the lack of anestablished trading market for our partnership interests;

 

·                       conflicts ofinterest between us and Virgin Media and its affiliates;

 

·                       our reliance ona limited franchise area;

 

·                       the risks to Virgin Media’sbusiness set forth below, which are risks that we share as a result of ourreliance on, and integration with, Virgin Media;

 

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

 

·                       Virgin Media’s ability tomanage customer churn;

 

·                       Virgin Media’s ability tomaintain and upgrade its networks in a cost-effective and timely manner;

 

·                       Virgin Media’s ability toimplement its restructuring plan successfully and realize the anticipatedbenefits;

 

·                       the general deterioration ineconomic conditions;

 

·                       Virgin Media’s continuedright to use the Virgin name and logo;

 

·                       possible losses in VirginMedia’s revenues due to systems failures;

 

·                       Virgin Media’s ability toprovide attractive programming at a reasonable cost;

 

·                       Virgin Media’s ability tocontrol unauthorized access to its network;

 

·                       the effect of technologicalchanges on Virgin Media’s businesses;

 

·                       Virgin Media’s reliance onsingle-source suppliers for some equipment, software and services and thirdparty distributors of its mobile services;

 

·                       currency and interest ratefluctuations;

 

·                       Virgin Media’s ability tofund debt service obligations through operating cash flow and refinance itsdebt obligations;

 

·                       Virgin Media’s ability toobtain additional financing in the future;

 

·                       Virgin Media’s ability tocomply with restrictive covenants in its indebtedness agreements; and

 

·                       the extent towhich Virgin Media’s future cash flow will be sufficient to cover its fixedcharges.

 

These and other factors are discussed in more detail under “RiskFactors” and elsewhere herein and in our annual report on Form 10-K forthe year ended December 31, 2008, as filed with the Securities andExchange Commission, or SEC, on March 16, 2009.  We assume no obligation to update ourforward-looking statements to reflect actual results, changes in assumptions orchanges in factors affecting these statements.

 

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**Exchange Rates**

 

The following table sets forth, for the periods indicated, the high,low, period average and period end noon buying rate in the City of New York forcable transfers as certified for customs purposes by the Federal Reserve Bankof New York expressed as U.S. dollars per £1.00.  The noon buying rate of the pound sterling onSeptember 30, 2009 was $1.6004 per £1.00.

 
| ** **                                    | ** ** | **U.S. dollars per £1.00** | ** ** |
|-----------------------------------------------|------------|------------------------------------------------|------------|
| **Nine months ended September 30,** | ** ** | **Period End**                            | ** ** | **Average (1)** | ** ** | **High** | ** ** | **Low** | ** ** |
| 2008                                          |       | $                                              | 1.7804     |   | $ | 1.9440 |   | $ | 2.0311 |   | $ | 1.7497 |   |
| 2009                                          |       | 1.6004                                         |       | 1.5489 |   | 1.6977 |   | 1.3658 |   |
|                                               |            |                                                |            |  |  |  |  |  |  |  |  |  |  |

 

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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 ratesused in the preparation of the condensed consolidated financial statements andother financial information appearing in this quarterly report.  Our inclusion of these exchange rates is notmeant to suggest that the pound sterling amounts actually represent these U.S.dollar amounts or that these amounts could have been converted into U.S.dollars at any particular rate, if at all.

 

Unless we otherwise indicate, all U.K. pound sterling amounts as of September 30,2009 are translated to U.S. dollars at an exchange rate of $1.6004 to £1.00,all amounts disclosed for the nine months ended September 30, 2009 arebased on an average exchange rate of $1.5423 to £1.00, and all amountsdisclosed for the nine months ended September 30, 2008 are based on anaverage exchange rate of $1.9469 to £1.00. All amounts disclosed as of December 31, 2008 are based on anexchange rate of $1.4619 to £1.00.  U.S.dollar amounts for the three months ended September 30, 2009 and 2008 aredetermined by subtracting the U.S. dollar converted financial result for thesix months ended June 30, 2009 and 2008 from the U.S. dollar convertedfinancial result for the nine months ended September 30, 2009 and 2008,respectively. All rates are based on the noon buying rate in the City ofNew York for cable transfers as certified for customs purposes by theFederal Reserve Bank of New York. The variation among the exchange rates for 2009 and 2008 has affectedthe U.S. dollar comparisons significantly.

 

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**PART I.  FINANCIALINFORMATION**

 

**ITEM1.  FINANCIAL STATEMENTS**

 

**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.**

**(A LimitedPartnership)**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

 
| ** **                                                                                                  | ** ** | **September 30,** | ** **       | **December 31,** | ** ** |
|-------------------------------------------------------------------------------------------------------------|------------|------------------------|------------------|-----------------------|------------|
| ** **                                                                                                  | ** ** | **2009**               | ** **       | **2008**              | ** ** |
| ** **                                                                                                  | ** ** | **(unaudited)**        | ** **       | **(Adjusted)**        | ** ** |
| **Assets**                                                                                                  |       |                   |             |                  |       |
| Fixed  assets, net                                                                                          |       | $                      |  42,496,135 |                  | $          |  41,405,661 |   |
| **Total assets**                                                                                            |       | 42,496,135             |             | 41,405,661            |       |
|                                                                                                        |       |                   |             |                  |       |
| **Liabilities and Partners’ Deficit**                                                                  |       |                   |             |                  |       |
| Current  liabilities                                                                                        |       |                   |             |                  |       |
| Accounts  payable to affiliates and related parties                                                         |       | $                      |  42,647,222 |                  | $          |  43,807,690 |   |
| Total  liabilities                                                                                          |       | 42,647,222             |             | 43,807,690            |       |
|                                                                                                        |       |                   |             |                  |       |
| **Partners’ Capital (Deficit)**                                                                        |       |                   |             |                  |       |
| General  Partner                                                                                            |       |                   |             |                  |       |
| Contributed  capital                                                                                        |       | 1,000                  |             | 1,000                 |       |
| Accumulated  deficit                                                                                        |       | (499,011               | )                | (511,003              | )          |
|                                                                                                        |       | (498,011               | )                | (510,003              | )          |
| Limited  Partners                                                                                           |       |                   |             |                  |       |
| Contributed  capital, net (56,935 units outstanding at September 30, 2009 and  December 31, 2008) |       | 48,817,997             |             | 48,817,997            |       |
| Accumulated  deficit                                                                                        |       | (49,121,057            | )                | (50,308,283           | )          |
|                                                                                                        |       | (303,060               | )                | (1,490,286            | )          |
|                                                                                                        |       |                   |             |                  |       |
| Partners’  Deficit                                                                                     |       | (801,071               | )                | (2,000,289            | )          |
|                                                                                                        |       |                   |             |                  |       |
| Accumulated  other comprehensive loss                                                                       |       | (766,576               | )                | (927,229              | )          |
| Total  South Hertfordshire United Kingdom Fund, Ltd. Partners’ deficit                                 |       | (1,567,647             | )                | (2,927,518            | )          |
|                                                                                                        |       |                   |             |                  |       |
| Noncontrolling  interest                                                                                    |       | 1,416,560              |             | 525,489               |       |
| Total  Partners’ deficit                                                                               |       | (151,087               | )                | (2,402,029            | )          |
|                                                                                                        |       |                   |             |                  |       |
| **Total Liabilities and Partners’ Deficit**                                                            |       | $                      |  42,496,135 |                  | $          |  41,405,661 |   |

 

See accompanying notes.

 

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**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.**

**(A LimitedPartnership)**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**(unaudited)**

 
| ** **                                                                                                                               | ** ** | **Three  months ended** | ** **      | **Nine  months ended** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------|-----------------|------------------------|------------|
| ** **                                                                                                                               | ** ** | **September 30,**  | ** **      | **September 30,** | ** ** |
| ** **                                                                                                                               | ** ** | **2009**                | ** **      | **2008**               | ** ** | **2009** | ** ** | **2008** | ** ** |
| ** **                                                                                                                               | ** ** | ** **              | ** **      | **(Adjusted)**         | ** ** | ** ** | ** ** | **(Adjusted)** | ** ** |
| **Revenue**                                                                                                                              |       | $                       |  7,198,079 |                   | $          |  8,504,333 |   | $ |  21,028,124 |   | $ |  26,565,038 |   |
|                                                                                                                                     |       |                    |            |                   |       |   |   |   |   |
| **Costs and expenses**                                                                                                                   |       |                    |            |                   |       |   |   |   |   |
| Operating  costs                                                                                                                         |       | (2,474,802              | )               | (3,588,743             | )          | (8,041,809 | ) | (11,482,732 | ) |
| Allocated  overhead                                                                                                                      |       | (2,460,936              | )               | (2,890,500             | )          | (7,409,828 | ) | (8,918,243 | ) |
| Management  fees                                                                                                                         |       | (359,904                | )               | (425,217               | )          | (1,051,406 | ) | (1,328,252 | ) |
| Selling,  general and administrative expenses                                                                                            |       | (32,833                 | )               | (20,227                | )          | (97,010 | ) | (64,451 | ) |
| **Operating income**                                                                                                                     |       | 1,869,604               |            | 1,579,646              |       | 4,428,071 |   | 4,771,360 |   |
| **Other expenses**                                                                                                                       |       |                    |            |                   |       |   |   |   |   |
| Interest  payable to General Partner and affiliates                                                                                      |       | (731,721                | )               | (1,161,084             | )          | (2,243,211 | ) | (3,528,189 | ) |
| Exchange  gains (losses)                                                                                                                 |       | 56,613                  |            | 257,531                |       | (174,895 | ) | 249,870 |   |
| **Net profit**                                                                                                                           |       | 1,194,496               |            | 676,093                |       | 2,009,965 |   | 1,493,041 |   |
| Less:  Profit attributable to noncontrolling interest                                                                                    |       | (407,249                | )               | (167,656               | )          | (810,747 | ) | (394,813 | ) |
| **Net profit attributable to South Hertfordshire United Kingdom  Fund, Ltd.**                                                            |       | $                       |  787,247   |                   | $          |  508,437 |   | $ |  1,199,218 |   | $ |  1,098,228 |   |
|                                                                                                                                     |       |                    |            |                   |       |   |   |   |   |
| **Allocation of net profit attributable to South  Hertfordshire United Kingdom Fund, Ltd.**                                              |       |                    |            |                   |       |   |   |   |   |
| General  Partner                                                                                                                         |       | $                       |  7,872     |                   | $          |  5,084 |   | $ |  11,992 |   | $ |  10,982 |   |
| Limited  Partners                                                                                                                        |       | 779,375                 |            | 503,353                |       | 1,187,226 |   | 1,087,246 |   |
| **Net profit attributable to South Hertfordshire United Kingdom  Fund, Ltd.**                                                            |       | $                       |  787,247   |                   | $          |  508,437 |   | $ |  1,199,218 |   | $ |  1,098,228 |   |
|                                                                                                                                     |       |                    |            |                   |       |   |   |   |   |
| **Net profit attributable to South Hertfordshire United Kingdom  Fund, Ltd. allocated to limited partners per limited partnership unit** |       | $                       |  13.69     |                   | $          |  8.84 |   | $ |  20.85 |   | $ |  19.10 |   |
| **Average number of limited partnership units outstanding**                                                                              |       | 56,935                  |            | 56,935                 |       | 56,935 |   | 56,935 |   |

 

See accompanying notes.

 

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**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.**

**(A LimitedPartnership)**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(unaudited)**

 
| ** **                                                                         | ** ** | **Nine  months ended** | ** **      |
|------------------------------------------------------------------------------------|------------|------------------------|-----------------|
| ** **                                                                         | ** ** | **September 30,** | ** **      |
| ** **                                                                         | ** ** | **2009**               | ** **      | **2008** | ** ** |
| ** **                                                                         | ** ** | ** **             | ** **      | **(Adjusted)** | ** ** |
| **Cash flows from operating activities**                                           |       |                   |            |   |   |
| Net  profit                                                                        |       | $                      |  2,009,965 |   | $ |  1,493,041 |   |
|                                                                               |       |                   |            |   |   |
| Adjustments  to reconcile net profit to net cash provided by operating activities: |       |                   |            |   |   |
| Depreciation                                                                       |       | 3,202,353              |            | 5,008,711 |   |
| Change  in operating assets and liabilities:                                       |       |                   |            |   |   |
| Decrease  in accounts payable to affiliates and related parties                    |       | (4,716,346             | )               | (5,659,197 | ) |
| **Net cash provided by operating activities**                                      |       | 495,972                |            | 842,555 |   |
|                                                                               |       |                   |            |   |   |
| **Cash flows from investing activities**                                           |       |                   |            |   |   |
| Purchase  of fixed assets                                                          |       | (495,972               | )               | (842,555 | ) |
| **Net cash used in investing activities**                                          |       | (495,972               | )               | (842,555 | ) |
| 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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**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.**

**(A LimitedPartnership)**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(unaudited)**

 

**Note 1 — Basis of Presentation**

 

***Formation and Business***

 

South Hertfordshire United Kingdom Fund, Ltd., or the Partnership,a Colorado limited partnership, was formed on December 23, 1991, inconnection with a public offering of its limited partnership interests.  The Partnership was formed to acquire,construct, develop, own and operate cable television/telephone systems in theU.K. NTL Fawnspring Limited, a U.K. corporation and a subsidiary of VirginMedia Inc., or Virgin Media, is the general partner, or the GeneralPartner, of the Partnership.

 

We hold 66.7% of the shares of NTL (South Hertfordshire) Limited, orNTL South Herts, 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 ownership of 66.7% of theshares of NTL South Herts, for accounting purposes, we have consolidated theresults of NTL South Herts with our results. Virgin Media indirectly holds the remaining 33.3% of the shares of NTLSouth Herts.  We are reliant on thesupport of Virgin Media, the ultimate parent company of the General Partner, tocontinue our operations as a going concern.

 

***Basis of Presentation***

 

We have prepared the accompanying unaudited condensed consolidatedfinancial statements in accordance with U.S. generally accepted accountingprinciples, or U.S. GAAP, for interim financial information and with the rules andregulations of the SEC.  Accordingly,they do not include all of the information and footnotes required by U.S. GAAPfor complete financial statements.  Inthe opinion of our management, all adjustments (consisting only of normalrecurring adjustments) considered necessary for a fair presentation have beenincluded.  Results of operations for thethree and nine months ended September 30, 2009 are not necessarilyindicative of results to be expected for the full year ending December 31,2009.  For further information, refer tothe consolidated financial statements and footnotes thereto included in ourannual report on Form 10-K for the year ended December 31, 2008, asfiled with the SEC on March 16, 2009.

 

**Note 2 — Comprehensive Profit**

 

Comprehensive profit includes net profit as well asother comprehensive profit.  Our othercomprehensive profit consists of changes in cumulative foreign currencytranslation adjustments.  Comprehensiveprofit comprises:

 
| ** **                               | ** ** | **Three  months ended**                                               | ** **    | **Three  months ended**       | ** ** |
|------------------------------------------|------------|-----------------------------------------------------------------------|---------------|-------------------------------|------------|
| ** **                               | ** ** | **September 30,  2009**                                          | ** **    | **September 30,  2008**  | ** ** |
| ** **                               | ** ** | **Partners  of   South  Hertfordshire   United Kingdom   Fund, Ltd.** | ** **    | **Noncontrolling  interests** | ** ** | **Total** | ** ** | **Total** | ** ** |
|                                     |       |                                                                  |          |                          | ** ** | ** ** | ** ** | **(Adjusted)** | ** ** |
| Net profit                               |       | $                                                                     |  787,247 |                          | $          |  407,249 |   | $ |  1,194,496 |   | $ |  676,093 |   |
| Foreign currency translation adjustments |       |                                                                  |  (53,451 | )                             | (26,727    | ) | (80,178 | ) | (102,273 | ) |
| Comprehensive profit                     |       | $                                                                     |  733,796 |                          | $          |  380,522 |   | $ |  1,114,318 |   | $ |  573,820 |   |

 
| ** **                               | ** ** | **Nine  months ended**                                               | ** **      | **Nine  months ended**        | ** ** |
|------------------------------------------|------------|----------------------------------------------------------------------|-----------------|-------------------------------|------------|
| ** **                               | ** ** | **September 30,  2009**                                         | ** **      | **September 30,  2008**  | ** ** |
| ** **                               | ** ** | **Partners  of   South  Hertfordshire  United Kingdom   Fund, Ltd.** | ** **      | **Noncontrolling  interests** | ** ** | **Total** | ** ** | **Total** | ** ** |
|                                     |       |                                                                 |            |                          | ** ** | ** ** | ** ** | **(Adjusted)** | ** ** |
| Net profit                               |       | $                                                                    |  1,199,218 |                          | $          |  810,747 |   | $ |  2,009,965 |   | $ |  1,493,041 |   |
| Foreign currency translation adjustments |       |                                                                 |  160,653   |                          | 80,324     |   | 240,977 |   | (95,364 | ) |
| Comprehensive profit                     |       | $                                                                    |  1,359,871 |                          | $          |  891,071 |   | $ |  2,250,942 |   | $ |  1,397,677 |   |

 

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**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.**

**(A LimitedPartnership)**

**NOTES TOCONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(unaudited)**

 

**Note 3 — Investment in Subsidiary**

 

NTL South Herts is a U.K. corporation which is principally engaged inthe development, construction, management and operation of broadbandcommunication networks for telephone, cable television and internet services inthe South Hertfordshire franchise area, located adjacent to the northwestperimeter of Greater London, England (the “South Herts System”).   NTL South Herts is owned 66.7% by thePartnership and 33.3% by Virgin Media. Virgin Media also owns the General Partner.  The General Partner provides consultingservices to the Partnership and may delegate some or all of the consultingservices to Virgin Media or to other affiliates.

 

**Note 4 — Transactions with the General Partnerand Affiliated Entities**

 

***Consulting and Management Fees***

 

An affiliate of the General Partner is entitled to be paid a consultingfee by NTL South Herts.  During theconstruction phases of the South Herts System, this consulting fee was 2% ofconstruction costs.  Since completion ofconstruction of each portion of the system, the consulting fee for thecompleted portion has been 5% of the gross revenue, excluding revenue from thesale of cable television/telephone systems. The consulting fee is calculated and payable monthly.  Consulting fees paid or payable by NTL SouthHerts for the three months ended September 30, 2009 and 2008 were $359,904and $425,217, respectively.  Consultingfees paid or payable by NTL South Herts for the nine months ended September 30,2009 and 2008 were $1,051,406 and $1,328,252, respectively. These amounts wereexpensed in the condensed consolidated statement of operations.

 

***Distribution Ratios and Reimbursement***

 

Any Partnership distributions made from cash flows (defined as cashreceipts derived from routine operations, less debt principal and interestpayments and cash expenses) are allocated 99% to the limited partners and 1% tothe General Partner.  Any distributionsother than interest income on limited partner subscriptions earned prior to theacquisition of the Partnership’s first cable television system or from cashflows, 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.

 

The General Partner and its affiliates are entitled to reimbursementfrom NTL South Herts for direct and indirect expenses allocable to theoperation of the South Herts System, and from the Partnership for direct andindirect expenses allocable to the operation of the Partnership which include,but are not limited to, salaries of any full or part-time employees, rent,supplies, telephone, travel, and restructuring and other charges.  The General Partner believes that themethodology used in allocating these expenses is fair and reasonable.  During the three months ended September 30,2009 and 2008, reimbursement made by NTL South Herts and the Partnership to theGeneral Partner or its affiliates for any allocable direct and indirectexpenses totaled $2,460,936 and $2,890,500, respectively.  During the nine months ended September 30,2009 and 2008, reimbursement made by NTL South Herts and the Partnership to theGeneral Partner or its affiliates for any allocable direct and indirectexpenses totaled $7,409,828 and $8,918,243, respectively.

 

The General Partner and its affiliates may make advances to, and defercollection of fees and allocated expenses owed by, the Partnership, although theyare not required to do so.  ThePartnership is charged interest on such advances and deferred amounts at a rateequal to the General Partner’s or certain affiliates’ effective average cost ofdebt financing from unaffiliated entities, which does not differ from theirweighted average cost of debt financing. For the three months ended September 30, 2009 and 2008, affiliatesof the General Partner charged the Partnership aggregated interest, bank feesand finance charges of $697,222 and $1,117,873, respectively, relating tonon-permanent loans, and an affiliate of the General Partner charged thePartnership interest on advances of $34,499 and $43,211 respectively. For thenine months ended September 30, 2009 and 2008, affiliates of the GeneralPartner charged the Partnership aggregated interest, bank fees and financecharges of $2,142,433 and $3,392,287, respectively, relating to non-permanentloans, and an affiliate of the General Partner charged the Partnership intereston advances of $100,778 and $135,902, respectively. The General Partner and itsaffiliates are entitled to recover interest on the full amount of non-permanentloans they provide to the Partnership or NTL South Herts and the portion ofbank fees and deferred financing costs relating to Virgin Media’s senior creditfacility allocable to the Partnership or NTL South Herts.

 

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**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.**

**(A LimitedPartnership)**

**NOTES TOCONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(unaudited)**

 

**Note 5 — Recent Accounting Pronouncements**

 

In June 2009, the Financial Accounting Standards Board, or FASB,issued guidance relating to the FASB Accounting Standards Codification, or ASC,at ASC 105. Effective for interim or annual financial periods ending after September 15,2009, the ASC will become the single official source of authoritativeU.S. GAAP (other than guidance issued by the SEC), superseding existingFASB, American Institute of Certified Public Accountants, Emerging Issues TaskForce (EITF), and related literature. After September 15, 2009, only onelevel of authoritative U.S. GAAP will exist. All other literature will beconsidered non-authoritative. The ASC does not change U.S. GAAP; instead,it introduces a new structure that is organized in an easily accessible, user-friendlyonline research system. We have adopted the disclosure requirements of thisguidance.

 

InDecember 2007, the FASB issued new accounting guidance aroundnoncontrolling Interests at ASC 810. This guidance establishes requirements for ownership interests insubsidiaries held by parties other than ourselves (sometimes called ‘‘minorityinterests’’) to be clearly identified, presented, and disclosed in theconsolidated statement of financial position within equity, but separate fromthe parent’s equity. All changes in the parent’s ownership interests arerequired to be accounted for consistently as equity transactions and anynoncontrolling equity investments in unconsolidated subsidiaries must bemeasured initially at fair value. Additionally, the guidance requires that netincome or loss and comprehensive income or loss be attributed to the parententity and the noncontrolling interest. Before the adoption of this guidance,the portion of operations relating to the noncontrolling interest was reflectedin the statement of operations as an income or expense item in the calculationof net income or loss.  The guidance iseffective, on a prospective basis, for fiscal years beginning after December 15,2008; however, presentation and disclosure requirements must be retrospectivelyapplied to comparative financial statements. We adopted this guidance effectiveJanuary 1, 2009 and have classified noncontrolling interest (previouslyminority interest) as a component of equity for all periods presented.   We also made the required adjustments toreflect the net profit or loss and comprehensive profit or loss as beingattributable to the Partnership for all periods presented.  Such adjustments had the following impact onour previously reported condensed consolidated statements of operations for thethree and nine months ended September 30, 2008.

 
| ** **                                     | ** ** | **As Reported** | ** ** | **Adjustments** | ** ** | **As Adjusted** | ** ** |
|------------------------------------------------|------------|-----------------|------------|-----------------|------------|-----------------|------------|
|                                           |       |            |       |            |       |            |       |
| **Three months ended September 30, 2008** |       |            |       |            |       |            |       |
| Net  profit                                    |       | $               | 508,437    |            | $          | 167,656         |       | $ | 676,093 |   |
|                                           |       |            |       |            |       |            |       |
| **Nine months ended September 30, 2008**  |       |            |       |            |       |            |       |
| Net  profit                                    |       | $               | 1,098,228  |            | $          | 394,813         |       | $ | 1,493,041 |   |

 

Thefollowing table presents a reconciliation of the beginning and the endingcarrying amounts of total equity attributable to the Partnership and equityattributable to the noncontrolling interests.

 
| ** **                       | ** ** | ** ** | ** ** | **Accumulated**   | ** ** | ** **           | ** ** | ** **            | ** ** | ** **      | ** ** | ** **      | ** ** | ** **      | ** ** |
|----------------------------------|------------|------------|------------|-------------------|------------|----------------------|------------|-----------------------|------------|-----------------|------------|-----------------|------------|-----------------|------------|
| ** **                       | ** ** | ** ** | ** ** | **other**         | ** ** | **General  Partner** | ** ** | **Limited  Partners** | ** ** | **Non-**        | ** ** |
| ** **                       | ** ** | ** ** | ** ** | **comprehensive** | ** ** | **Contributed**      | ** ** | **Accumulated**       | ** ** | **Contributed** | ** ** | **Accumulated** | ** ** | **controlling** | ** ** |
| ** **                       | ** ** | **Total**  | ** ** | **income**        | ** ** | **capital**          | ** ** | **deficit**           | ** ** | **capital**     | ** ** | **deficit**     | ** ** | **interest**    | ** ** |
|                             |       |       |       |              |       |                 |       |                  |       |            |       |            |       |            |       |
| December 31, 2008           |       | $          | (2,402,029 | )                 | $          | (927,229             | )          | $                     | 1,000      |            | $          | (511,003        | )          | $               | 48,817,997 |   | $ | (50,308,283 | ) | $ | 525,489 |   |
|                             |       |       |       |              |       |                 |       |                  |       |            |       |            |       |            |       |
| Net profit                       |       | 2,009,965  |       | —            |       | —               |       | 11,992                |       | —          |       | 1,187,226       |       | 810,747         |       |
| Currency  translation adjustment |       | 240,977    |       | 160,653           |       | —               |       | —                |       | —          |       | —          |       | 80,324          |       |
| September 30, 2009          |       | $          | (151,087   | )                 | $          | (766,576             | )          | $                     | 1,000      |            | $          | (499,011        | )          | $               | 48,817,997 |   | $ | (49,121,057 | ) | $ | 1,416,560 |   |

 

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**SOUTHHERTFORDSHIRE UNITED KINGDOM FUND, LTD.**

**(A LimitedPartnership)**

**NOTES TOCONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**(unaudited)**

 

**Note 5 — Recent Accounting PronouncementsContinued**

 

InMay 2009, the FASB issued new accounting guidance for the disclosure ofsubsequent events at ASC 855, effective for financial statements issued for allperiods ending after June 15, 2009. The guidance establishes generalstandards of accounting for, and requires disclosure of, events that occurafter the balance sheet date but before financial statements are issued or areavailable to be issued. We adopted this guidance during the second quarter of2009. In accordancewith the guidance, we have evaluated subsequent events through the date andtime the financial statements were issued on November 12, 2009.

 

In September 2009, the FASB ratified new accounting guidance forexisting multiple-element revenue arrangements at ASC 605.25. The revisedmultiple-element revenue arrangements guidance will be effective for the firstannual reporting period beginning on or after June 15, 2010 and may beapplied retrospectively for all periods presented or prospectively toarrangements entered into or materially modified after the adoption date. Earlyadoption is permitted provided that the revised guidance is retroactivelyapplied to the beginning of the year of adoption. We have not yet adopted theprovisions of this guidance and are evaluating the impact on our consolidatedfinancial statements.

 

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**Item 2. Management’s Discussion and Analysis of Financial Condition andResults****of Operations**

 

**Overview**

 

We are a Colorado limited partnership that was formed in December 1991pursuant to the public offering of our limited partnership interests for thepurpose of acquiring one or more cable television/telephone systems in theU.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 that the investment is held by us.

 

We hold 66.7% of the shares of NTL South Herts, which is principallyengaged in the development, construction, management and operation of broadbandcommunications networks for telephone, cable television and internet servicesin 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 Media indirectly holds the remaining33.3% of the shares of NTL South Herts. We are reliant on the support of Virgin Media, the ultimate parentcompany of the General Partner, to continue our operations as a going concern.

 

We derive our revenue principally from monthly fees and usagecharges.  Our packaging of services andpricing are designed to encourage our residential customers to use multipleservices like “double-play” telephone and broadband, “double-play” telephoneand television or “triple-play” telephone, television and broadband.

 

Our expenses include certain costs that are charged to us by asubsidiary of Virgin Media for the provision of network services and support,the use of Virgin Media’s national backbone telephone network for carriage ofour telephone traffic, as well as the provision of technical infrastructure andnetwork capacity by Virgin Media for our subscription internet access serviceand digital 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 systems and equipment.  The principal components of Virgin Media’sexpenses include payroll and other employee-related costs; televisionprogramming costs; interconnect costs paid to other carriers relating to calltermination; facility-related costs, such as rent, utilities and rates;marketing and selling costs; repairs and maintenance costs; and allowances fordoubtful accounts.

 

In the secondquarter, the General Partner agreed to the transfer of customer and suppliercontracts relating to NTL South Herts’ premium TV services, resulting in atransfer of revenue and costs to Future Entertainment Sarl, a wholly ownedsubsidiary of Virgin Media, which as of June 1, 2009 carried substantiallyall Virgin Media’s premium TV channels and associated revenue and costs.  This is not expected to be detrimental to theresults of operations or financial position of NTL South Herts.

 

**Factors Affecting Our Business**

 

Our residential customers account for the majority of our totalrevenue.  The number of residentialcustomers, the number and types of services that each customer uses and theprices we charge for these services drive our revenue.  Our profit is driven by the relative marginson the types of services we provide to these customers and by the number ofservices that we provide to them.  Forexample, broadband internet is more profitable than our television servicesand, on average, our “triple-play” customers are more profitable than “double-play”or “single-play” customers. Our packaging of services and our pricing aredesigned to encourage our customers to use multiple services such as television,telephone and broadband at a lower price than each stand-alone product on acombined basis.  Factors particularlyaffecting our business include general macroeconomic factors, currencymovements, integration and restructuring activities, churn, average revenue peruser, competition, capital expenditures and seasonality.

 

***General Macroeconomic Factors. ***General macroeconomicfactors in the U.K. have an impact on our business.  For example, during an economic slowdown,potential and existing customers may be less willing, or able, to purchase ourproducts or upgrade their services.  Wemay also experience increased churn and higher bad debt expense.

 

***Currency Movements. ***Because substantially all ofour revenue and operating costs are earned and paid in U.K. pounds sterling,but we report our financial results in U.S. dollars, our financial results areimpacted by currency fluctuations which are unrelated to our underlying resultsof operations.

 

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***Integration and RestructuringActivities. ***In the fourth quarter of 2008, VirginMedia commenced the implementation of a restructuring plan aimed at drivingfurther improvements in Virgin Media’s and our operational performance andeliminating inefficiencies in order to create a fully-integrated,customer-focused organization.  WhileVirgin Media anticipates significant cost savings from the plan and that theannual savings from and after 2010 will exceed the annual costs, it expectsthat 2009 costs will be at a similar level to 2009 savings.  These costs will include purchases of fixedassets, lease and contract exit costs, employee termination costs, and otherrestructuring and restructuring-related expenses, some of which will beclassified as restructuring costs.  Intotal, Virgin Media expects to incur operating expenditures of between£120 million to £140 million and capital expenditures of between£50 million to £60 million in connection with this plan over athree-year period.  Virgin Media’s andour financial performance may be negatively affected if Virgin Media is unableto implement its restructuring plan successfully and realize the anticipatedbenefits.

 

***Churn***.  Churn is a measure of the number of customerswho stop subscribing to any of our services. An increase in our churn can lead to increased costs and reducedrevenue.  We continue to focus onimproving our customer service and enhancing and expanding our serviceofferings to existing customers in order to manage our churn rate.  Our ability to reduce our churn rate beyond abase level is limited by factors such as competition, the economy and customersmoving outside our network service area, in particular during the summerseason.  Managing our churn rate is asignificant component of our business plan. Our churn rate may increase if our customer service is seen asunsatisfactory, if we are unable to deliver our services without interruption,if we fail to match offerings by our competitors, if we increase our prices, if there is an improvementin the U.K. housing market or if there is a prolonged economic downturn.

 

***ARPU***.  Average revenue per user, or ARPU, is ameasure Virgin Media uses to evaluate how effectively it is realizing potentialrevenue from its residential cable customers on its network.  Virgin Media believes that its “triple-play”cable offering of television, broadband and fixed line telephone services isattractive to its existing customer base and generally allows Virgin Media toincrease its ARPU by facilitating the sale of multiple services to eachcustomer.

 

***Competition****.*  Our ability to acquire and retain customersand increase revenue depends on our competitive strength.  There is significant and increasingcompetition in the market for our consumer services, including broadband andtelephone services offered by British Telecom, or BT; resellers or local loopunbundlers, such as British Sky Broadcasting Group plc, or BSkyB, and CarphoneWarehouse (Talk Talk); alternative internet access services like DSL; satellitetelevision services offered by BSkyB and by BBC and ITV through Freesat;free-to-air digital terrestrial television offered through Freeview; andinternet protocol television offered by BT. Our business services also face a range of competitors, includingservices offered by BT and Cable & Wireless plc.  In addition, certain competitors, such as BTand BSkyB, are dominant in markets in which we compete and may use theirdominance in those markets to offer bundled services that compete with ourproduct offerings.  As a result ofincreased competition, we have had to, and may be required to continue to,adjust our pricing and offer discounts to new and existing customers in orderto attract and retain customers.

 

***Capital Expenditures***.  Our business requires substantial capitalexpenditures on a continuing basis for various purposes, including expanding,maintaining and upgrading our network, investing in new customer acquisitions,and offering new services.  If VirginMedia and we do not continue to invest in our network and in new technologies,our ability to retain and acquire customers may be hindered.  Therefore, Virgin Media’s and our liquidityand the availability of cash to fund capital projects are important drivers ofour revenue.  When Virgin Media’s and ourliquidity is restricted, so is our ability to meet our capital expenditurerequirements.

 

***Seasonality****.*  Some revenue streams are subject to seasonalfactors.  For example, telephone usagerevenue by residential customers and businesses tends to be slightly lowerduring summer holiday months.  Our churnrate includes persons who disconnect their service because of moves, resultingin a seasonal increase in our churn rate during the summer months when higherlevels of U.K. house moves occur and students leave their accommodation betweenacademic years.

 

# **CriticalAccounting Policies**

#  

Thepreparation of our consolidated financial statements requires us to makeestimates that affect the reported amounts of assets, liabilities, revenues andexpenses, and related disclosure of contingent assets and contingentliabilities. We base our judgments on historical experience and on variousother assumptions that we believe are reasonable under the circumstances, theresults of which form the basis for making estimates about the carrying valuesof assets and liabilities that are not readily apparent from other sources.Actual results may differ from these estimates under different assumptions orconditions.

 

For a discussion of the accounting judgments and estimates that we haveidentified as critical in the preparation of our consolidated financialstatements, please refer to our annual report on Form 10-K for the yearended December 31, 2008, as filed with the SEC on March 16, 2009.

 

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** **

**Consolidated Results of Operations**

 

***Three Months Ended September 30,2009 and 2008***

 

We present below summarized consolidated financial information in U.S.dollars and U.K. pounds sterling for the three months ended September 30,2009 and 2008:

 
| ** **                                                                | ** ** | **Three  months ended** | ** ** | ** **     | ** ** | **Three  months ended** | ** ** | ** ** | ** ** |
|---------------------------------------------------------------------------|------------|-------------------------|------------|----------------|------------|-------------------------|------------|------------|------------|
| ** **                                                                | ** ** | **September 30,**  | ** ** | **%**          | ** ** | **September 30,**  | ** ** | **%**      | ** ** |
| ** **                                                                | ** ** | **2009**                | ** ** | **2008**       | ** ** | **Change**              | ** ** | **2009**   | ** ** | **2008** | ** ** | **Change** | ** ** |
| ** **                                                                | ** ** | **(Adjusted)**          | ** ** | **(Adjusted)** | ** ** |
| Revenue                                                                   |       | $                       | 7,198,079  |           | $          | 8,504,333               |       | (15.4      | )          | £ | 4,370,384 |   | £ | 4,499,664 |   | (2.9 | ) |
| Operating  costs                                                          |       | (2,474,802              | )          | (3,588,743     | )          | (31.0                   | )          | (1,485,178 | )          | (1,900,798 | ) | (21.9 | ) |
| Allocated  overhead                                                       |       | (2,460,936              | )          | (2,890,500     | )          | (14.9                   | )          | (1,489,449 | )          | (1,528,564 | ) | (2.6 | ) |
| Management  fees                                                          |       | (359,904                | )          | (425,217       | )          | (15.4                   | )          | (218,519   | )          | (224,983 | ) | (2.9 | ) |
| Selling,  general and administrative expenses                             |       | (32,833                 | )          | (20,227        | )          | 62.3                    |       | (19,912    | )          | (10,711 | ) | 85.9 |   |
| Operating  income                                                         |       | 1,869,604               |       | 1,579,646      |       | 18.4                    |       | 1,157,326  |       | 834,608 |   | 38.7 |   |
| Interest  expense                                                         |       | (731,721                | )          | (1,161,084     | )          | (37.0                   | )          | (442,006   | )          | (613,614 | ) | (28.0 | ) |
| Exchange  gains                                                           |       | 56,613                  |       | 257,531        |       |                    |       | 41,674     |       | 132,221 |   |   |   |
|                                                                      |       |                    |       |           |       |                    |       |       |       |   |   |   |   |
| Net  profit                                                               |       | 1,194,496               |       | 676,093        |       | 76.7                    |       | 756,994    |       | 353,215 |   | 114.3 |   |
| Noncontrolling  interest                                                  |       | (407,249                | )          | (167,656       | )          | 142.9                   |       | (255,396   | )          | (87,769 | ) | 191.0 |   |
| Net  profit attributable to South Hertfordshire United Kingdom Fund, Ltd. |       | $                       | 787,247    |           | $          | 508,437                 |       | 54.8       |       | £ | 501,598 |   | £ | 265,446 |   | 89.0 |   |

 

*Revenue*

 

For the three months ended September 30, 2009, revenue decreasedby 15.4% to $7.2 million from $8.5 million for the three months ended September 30,2008, and revenue expressed in pounds sterling decreased by 2.9% to £4.4million for the three months ended September 30, 2009 from£4.5 million for the three months ended September 30, 2008.  The decrease was primarily driven by a fullquarter’s impact on revenue of the transfer of customer and supplier contractsrelating to the NTL South Herts’ premium TV services to Future EntertainmentSarl, a wholly owned subsidiary of Virgin Media, partially offset by the impactof selective price increases and continued growth in triple-play customers.

 

*Expenses*

 

*Operatingcosts*

 

Operatingcosts include cost of goods sold and depreciation of fixed assets related tothe network. For the three months ended September 30, 2009, operatingcosts decreased by 31.0% to $2.5 million from $3.6 million for thethree months ended September 30, 2008, and operating costs expressed inpounds sterling decreased by 21.9% to £1.5 million for the three monthsended September 30, 2009 from £1.9 million for the three months endedSeptember 30, 2008.  The reductionin operating costs was primarily driven by a full quarter’s impact on cost ofgoods sold of the transfer of customer and supplier contracts relating to NTLSouth Herts’ premium TV services to Future Entertainment Sarl, a wholly ownedsubsidiary of Virgin Media. For the three months ended September 30, 2009and 2008, depreciation expense included in operating costs was $1,124,374, or£684,441, and $1,567,503, or £830,188, respectively.

 

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*Allocatedoverhead*

 

Forthe three months ended September 30, 2009, allocated overhead decreased by14.9% to $2.5 million from $2.9 million for the three months ended September 30,2008. For the three months ended September 30, 2009, allocated overheadexpressed in pounds sterling decreased by 2.6% to £1,489,449 from £1,528,564for the three months ended September 30, 2008. The business of NTL SouthHerts is managed as an integral part of Virgin Media. The combined costs ofmanaging the larger group are allocated to each entity within the Virgin Mediagroup, including NTL South Herts, on a consistent and proportional basisaccording to the level of trading in that entity. Allocated overhead expressedin pounds sterling decreased due to a reduction in selling, general and administrativeexpenses incurred by Virgin Media Inc.

* *

*Management fees*

 

For the three monthsended September 30, 2009, management fees decreased by 15.4% to $359,904from $425,217 for the three months ended September 30, 2008, andmanagement fees expressed in pounds sterling decreased by 2.9% to £218,519 forthe three months ended September 30, 2009 from £224,983 for the threemonths ended September 30, 2008. Management fees are charged as a percentage of revenue and changes inmanagement fees are therefore a direct reflection of changes in revenue.

 

*Selling, general and administrativeexpenses*

 

For the threemonths ended September 30, 2009, selling, general and administrativeexpenses increased to $32,833, or £19,912, from $20,227, or £10,711, for thethree months ended September 30, 2008. The increase was primarily due to higher audit fees.

 

*Interestexpense*

 

For the threemonths ended September 30, 2009, interest expense decreased by 37.0% to$0.7 million from $1.2 million for the three months ended September 30,2008, and interest expense expressed in pounds sterling decreased by 28.0% to£0.4 million for the three months ended September 30, 2009 from£0.6 million for the three months ended September 30, 2008.  This decrease was primarily due to a lower accountspayable to affiliates and related parties balance, arising from increasedprofitability, together with lower interest rates.

 

We paid no cashinterest for the three months ended September 30, 2009 and 2008.

 

*Exchangegains*

 

For the threemonths ended September 30, 2009, foreign currency exchange gains were$56,613, or £41,674, as compared with gains of $257,531, or £132,221, for thethree months ended September 30, 2008. The change in foreign currency exchange gains was primarily attributableto fluctuations in the value of the U.S. dollar on certain of our liabilitiesand transactions.  The value of the U.S.dollar strengthened by approximately 3% against the pound sterling from June30, 2009 to September 30, 2009.  Ourresults of operations will continue to be affected by foreign exchange ratefluctuations.

 

*Noncontrollinginterest*

 

During the threemonths ended September 30, 2009, the profit attributable to thenoncontrolling interest was $407,249, or £255,396, compared with $167,656, or£87,769, for the three months ended September 30, 2008.

 

*Netprofit attributable to South Hertfordshire United Kingdom Fund, Ltd.*

 

For the threemonths ended September 30, 2009, net profit attributable to SouthHertfordshire United Kingdom Fund, Ltd. was $787,247, or £501,598 as comparedwith $508,437, or £265,446, for the three months ended September 30, 2008,primarily due to the reasons described above.

 

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*** ***

***Nine Months Ended September 30, 2009 and 2008***

 

We present below summarized consolidated financialinformation in U.S. dollars and U.K. pounds sterling for the nine months endedSeptember 30, 2009 and 2008:

 

 
| ** **                                                                | ** ** | **Nine  months ended** | ** ** | ** **     | ** ** | **Nine  months ended** | ** ** | ** ** | ** ** |
|---------------------------------------------------------------------------|------------|------------------------|------------|----------------|------------|------------------------|------------|------------|------------|
| ** **                                                                | ** ** | **September  30,**     | ** ** | **%**          | ** ** | **September  30,**     | ** ** | **%**      | ** ** |
| ** **                                                                | ** ** | **2009**               | ** ** | **2008**       | ** ** | **Change**             | ** ** | **2009**   | ** ** | **2008** | ** ** | **Change** | ** ** |
| ** **                                                                | ** ** | **(Adjusted)**         | ** ** | **(Adjusted)** | ** ** |
| Revenue                                                                   |       | $                      | 21,028,124 |           | $          | 26,565,038             |       | (20.8      | )          | £ | 13,634,263 |   | £ | 13,644,788 |   | (0.1 | ) |
| Operating costs                                                           |       | (8,041,809             | )          | (11,482,732    | )          | (30.0                  | )          | (5,214,167 | )          | (5,897,957 | ) | (11.6 | ) |
| Allocated  overhead                                                       |       | (7,409,828             | )          | (8,918,243     | )          | (16.9                  | )          | (4,804,401 | )          | (4,580,741 | ) | 4.9 |   |
| Management fees                                                           |       | (1,051,406             | )          | (1,328,252     | )          | (20.8                  | )          | (681,713   | )          | (682,239 | ) | (0.1 | ) |
| Selling, general  and administrative expenses                             |       | (97,010                | )          | (64,451        | )          | 50.5                   |       | (62,900    | )          | (33,104 | ) | 90.0 |   |
| Operating income                                                          |       | 4,428,071              |       | 4,771,360      |       | (7.2                   | )          | 2,871,082  |       | 2,450,747 |   | 17.2 |   |
| Interest expense                                                          |       | (2,243,211             | )          | (3,528,189     | )          | (36.4                  | )          | (1,454,458 | )          | (1,812,209 | ) | (19.7 | ) |
| Exchange (losses)  gains                                                  |       | (174,895               | )          | 249,870        |       |                   |       | (113,399   | )          | 128,342 |   |   |   |
|                                                                      |       |                   |       |           |       |                   |       |       |       |   |   |   |   |
| Net profit                                                                |       | 2,009,965              |       | 1,493,041      |       | 34.6                   |       | 1,303,225  |       | 766,880 |   | 69.9 |   |
| Noncontrolling  interest                                                  |       | (810,747               | )          | (394,813       | )          | 105.3                  |       | (525,674   | )          | (202,791 | ) | 159.2 |   |
| Net profit  attributable to South Hertfordshire United Kingdom Fund, Ltd. |       | $                      | 1,199,218  |           | $          | 1,098,228              |       | 9.2        |       | £ | 777,551 |   | £ | 564,089 |   | 37.8 |   |
|                                                                           |            |                        |            |                |            |                        |            |            |            |  |  |  |  |  |  |  |  |  |

 

*Revenue*

 

For the ninemonths ended September 30, 2009, revenue decreased by 20.8% to $21.0million from $26.6 million for the nine months ended September 30,2008, and revenue expressed in pounds sterling remained relatively unchanged at£13.6 million for the nine months ended September 30, 2009 and 2008. Revenuewas relatively unchanged as the decline in revenue from the transfer of premiumTV services, as discussed above, was offset by the impact of selective priceincreases and continued growth in triple-play customers.

 

*Expenses*

 

*Operating costs*

 

Operating costs includecost of goods sold and depreciation of fixed assets related to the network. Forthe nine months ended September 30, 2009, operating costs decreased by30.0% to $8.0 million from $11.5 million for the nine months endedSeptember 30, 2008, and operating costs expressed in pounds sterlingdecreased by 11.6% to £5.2 million for the nine months ended September 30,2009 from £5.9 million for the nine months ended September 30,2008.  The reduction in operating costswas primarily a reflection of lower depreciation, as a result of fixed assetsbecoming fully depreciated, together with a reduction in cost of goods soldrelating to the transfer of premium TV services, as discussed above.  For the nine months ended September 30,2009 and 2008, depreciation expense included in operating costs was $3,202,353,or £2,076,349, and $5,008,711, or £2,572,660, respectively.

 

*Allocated overhead*

 

For the nine months endedSeptember 30, 2009, allocated overhead decreased by 16.9% to $7.4 millionfrom $8.9 million for the nine months ended September 30, 2008. For thenine months ended September 30, 2009, allocated overhead expressed inpounds sterling increased by 4.9% to £4.8 million from £4.6 million for thenine months ended September 30, 2008. 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. Allocated overhead expressed in poundssterling increased in line with Virgin Media’s overall cost base as a result ofhigher network and other operating costs incurred by Virgin Media and also as aresult of higher restructuring and other charges in connection with VirginMedia’s restructuring program initiated in the fourth quarter of 2008.

 

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*Managementfees*

 

Forthe nine months ended September 30, 2009, management fees decreased by20.8% to $1,051,406 from $1,328,252 for the nine months ended September 30,2008, and management fees expressed in pounds sterling decreased by 0.1% to£681,713 for the nine months ended September 30, 2009 from £682,239million for the nine months ended September 30, 2008.  Management fees are charged as a percentageof revenue and changes in management fees are therefore a direct reflection ofchanges in revenue.

 

*Selling,general and administrative expenses*

 

For the nine months ended September 30, 2009,selling, general and administrative expenses increased to $97,010, or £62,900,from $64,451, or £33,104, for the nine months ended September 30,2008.  The increase was primarily due tohigher audit fees.

 

*Interest expense*

 

For the nine months ended September 30, 2009,interest expense decreased by 36.4% to $2.2 million from $3.5 millionfor the nine months ended September 30, 2008, and interest expenseexpressed in pounds sterling decreased by 19.7% to £1.5 million for the ninemonths ended September 30, 2009 from £1.8 million for the nine monthsended September 30, 2008.  Thisdecrease was primarily due to a lower accounts payable to affiliates andrelated parties balance, arising from increased profitability, together withlower interest rates.

 

We paid no cash interest for the nine months ended September 30,2009 and 2008.

 

*Exchange (losses) gains*

 

For the nine months ended September 30, 2009,foreign currency exchange losses were $174,895, or £113,399, as compared withgains of $249,870, or £128,342, for the nine months ended September 30,2008.  The change in foreign currencyexchange losses and gains was primarily attributable to fluctuations in thevalue of the U.S. dollar on certain of our liabilities and transactions.  The value of the U.S. dollar weakened byapproximately 9% against the pound sterling from December 31, 2008 to September 30,2009.  Our results of operations willcontinue to be affected by foreign exchange rate fluctuations.

 

*Noncontrolling interest*

 

During the nine months ended September 30,2009, the profit attributable to the noncontrolling interest was $810,747, or£525,674, compared with $394,813, or £202,791, for the nine months ended September 30,2008.

 

*Net profit attributable to South Hertfordshire UnitedKingdom Fund, Ltd.*

 

For the nine months ended September 30, 2009,net profit attributable to South Hertfordshire United Kingdom Fund, Ltd. was$1,199,218, or £777,551, as compared with $1,098,228, or £564,089, for the ninemonths ended September 30, 2008, primarily due to the reasons describedabove.

 

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***SelectedOperating Data***

 

The following table sets forth certain dataconcerning our residential cable customers for the last five quarters:

 
| ** **                      | ** ** | **September 30,** | ** ** | **June 30,** | ** ** | **March 31,** | ** ** | **December 31,** | ** ** | **September 30,** | ** ** |
|---------------------------------|------------|------------------------|------------|-------------------|------------|--------------------|------------|-----------------------|------------|------------------------|------------|
| ** **                      | ** ** | **2009**               | ** ** | **2009**          | ** ** | **2009**           | ** ** | **2008**              | ** ** | **2008**               | ** ** |
| Total  customers                |       | 33,476                 |       | 33,399            |       | 33,457             |       | 33,495                |       | 33,742                 |       |
| Digital  television subscribers |       | 26,602                 |       | 26,217            |       | 26,048             |       | 25,809                |       | 25,057                 |       |
| Analog  television subscribers  |       | —                 |       | —            |       | 5                  |       | 6                     |       | 350                    |       |
| Broadband  internet subscribers |       | 27,090                 |       | 26,785            |       | 26,613             |       | 26,355                |       | 26,026                 |       |
| Telephony  subscribers          |       | 29,424                 |       | 29,284            |       | 29,245             |       | 29,232                |       | 29,082                 |       |
| Average  monthly churn (1)      |       | 1.5                    | %          | 1.3               | %          | 1.2                | %          | 1.3                   | %          | 1.8                    | %          |

 

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(1)   Churn iscalculated by taking the total number of customers disconnecting from ourservices during the month and dividing them by the average number of customersduring the month. Average monthly churn during the quarter is the average ofthe three monthly churn calculations within the quarter.

 

**Condensed Consolidated Statement of Cash Flows**

 

In the nine months ended September 30, 2009, wegenerated $0.5 million from our operating activities compared with$0.8 million in the nine months ended September 30, 2008, which wasused to purchase fixed assets including equipment for customerinstallations.  Our cash provided byoperating activities decreased primarily due to a reduction in accounts payableto affiliates and related parties.

 

**Liquidity and Capital Resources**

 

We have no financing independent of VirginMedia.  We are reliant upon the supportof Virgin Media to continue our operations. As of September 30, 2009, we had consolidated current liabilitiesof $42.6 million due to Virgin Media group companies compared with $43.8million as of December 31, 2008 and $54.5 million as of September 30,2008.

 

Historically, our source of cash has been the netproceeds of our offerings of limited partnership interests along with fundingfrom Virgin Media and our principal uses of cash have been capital contributionsto NTL South Herts in order to fund our proportionate share of the constructioncosts of the South Herts System and ongoing operations.

 

Until such time as NTL South Herts begins to paydividends on its ordinary shares (which is not expected in the foreseeablefuture) we will be required to fund our administrative expenses from borrowingsor, theoretically, additional issuances of limited partnership interests.  It is unlikely that we will be able to selldebt or equity securities in the public markets, at least in the short term, orto obtain financing from commercial banks. Accordingly, we are dependent on Virgin Media for funds to coveroperating expenses, and will continue to be dependent upon Virgin Media to meetour liquidity requirements for the foreseeable future.  We expect that cash from our operations in2009 will be utilized fully for the purchase of fixed assets includingconnecting new customers to our networks.

 

VirginMedia had £5,972.0 million of debt outstanding as of September 30,2009, compared to £6,170.1 million as of December 31, 2008 and£6,082.6 million as of September 30, 2008, and £351.6 million ofcash and cash equivalents as of September 30, 2009, compared to £181.6million as of December 31, 2008 and £521.4 million as of September 30,2008.  The decrease in debt since September 30,2008 is primarily attributable to the voluntary prepayment of £300 million ofsenior bank debt in December 2008 partially offset by movements inexchange rates.  The decrease in debtfrom December 31, 2008 is primarily due to movements in exchange rates.

 

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On June 3, 2009, Virgin Media issued $750million aggregate principal amount of 9.50% senior notes due 2016 and €180million aggregate principal amount of 9.50% senior notes due 2016.  On July 21, 2009, Virgin Media issued anadditional $600 million aggregate principal amount of 9.50% senior notes due 2016under the same terms as the notes issued on June 3, 2009.  Virgin Media used the net proceeds from the June 2009note issuance and the July 2009 note issuance, together with additionalcash reserves, to repay £608.5 million and £403.6 million, respectively, ofobligations under its senior credit facility that were originally scheduled tobe paid in 2010 and 2012. On November 9, 2009, Virgin Media issued afurther $600 million aggregate principal amount of 8.375% senior notes due 2019and £350 million aggregate principal amount of 8.875% senior notes due2019.  Virgin Media intends to use thenet proceeds from the senior notes due 2019 to redeem a portion of theoutstanding senior notes due 2014 of Virgin Media Finance PLC.

 

Virgin Media’s businessis capital intensive and it is highly leveraged. Virgin Media has significantcash requirements for operating costs, capital expenditures and interestexpense.  Virgin Media also hassignificant principal payments under its senior credit facility due from 2011 to2013, as described below. The levels of Virgin Media’s capital expenditures andoperating expenditures are affected by the significant amounts of capitalrequired to connect customers to its network, expand and upgrade its networkand offer new services.  Virgin Mediaexpects that its cash on hand, together with cash from operations and amountsundrawn on its revolving credit facility, will be sufficient for its cashrequirements through September 30, 2010. However, Virgin Media’s cash requirements after September 30, 2010may exceed these sources of cash.

 

Significantprincipal payments under Virgin Media’s senior credit facility were due in 2010and 2011.  However, following theamendment of the terms of Virgin Media’s senior credit facility in November 2008,and subsequent satisfaction of the applicable prepayment conditions in June 2009,a significant portion of these payments was deferred to 2012.  Virgin Media expects to be able to addressthe remaining scheduled principal payments due in 2010 and 2011 through cashflow from operations.  However, if VirginMedia were unable to service these obligations through cash flow fromoperations, then it would need to secure additional funding such as raisingadditional debt or equity, refinancing its existing facility, selling assets orusing other means.  Virgin Media may notbe able to obtain financing or sell assets, at all or on favorable terms, ormay be contractually prevented by the terms of its senior notes or its seniorcredit facility from incurring additional indebtedness or selling assets. Virgin Mediaalso has significant principal payments due in 2012 under its senior creditfacility that it can address only by a comprehensive refinancing of its seniordebt and possibly other debt instruments. Virgin Media’s ability to implementsuch a refinancing successfully is significantly dependent on sustainedimprovements in the debt capital markets.

 

Virgin Media’s long term debt was issued by VirginMedia Inc. and certain of its subsidiaries that have no independentoperations or significant assets other than investments in their respectivesubsidiaries. As a result, Virgin Media will depend upon the receipt ofsufficient funds from their respective subsidiaries to meet their obligations.In addition, the terms of Virgin Media’s existing and future indebtedness andthe laws of the jurisdictions under which its subsidiaries are organized limitthe payment of dividends, loan repayments and other distributions from themunder many circumstances.

 

Virgin Media’s debtagreements contain restrictions on its ability to transfer cash between groupsof its subsidiaries or to us.  As aresult of these restrictions, although its overall liquidity may be sufficientto satisfy its obligations, it may be limited by covenants in some of its debtagreements from transferring cash to other subsidiaries that might requirefunds.  In addition, cross defaultprovisions in its other indebtedness may be triggered if it defaults on any ofthese debt agreements.

 

For further information concerning Virgin Media’sliquidity and capital resources and the terms of its various debt facilities,see the annual report on Form 10-K of Virgin Media Inc. for the year endedDecember 31, 2008, as filed with the SEC on February 26, 2009, andrevised by the current report on Form 8-K filed with the SEC on May 27,2009, and its quarterly report on Form 10-Q for the three and nine monthsended September 30, 2009, as filed with the SEC on October 29, 2009.

 

**Off-Balance Sheet Transactions**

 

As of September 30, 2009 and 2008, we had nooff-balance sheet arrangements as defined in Item 303(a)(4) ofRegulation S-K under the Securities Exchange Act of 1934, as amended.

 

**Contractual Obligations and Commercial Commitments**

 

There have been no material changes in the ninemonths ended September 30, 2009 to the information required under thisItem from what was disclosed in our annual report on Form 10-K for theyear ended December 31, 2008, as filed with the SEC on March 16,2009.

 

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**Item3. ****Quantitativeand 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 andare therefore, exposed to fluctuations in the pound sterling to U.S. dollarexchange rate.

 

The aggregate potential loss from a hypotheticalone-percent decrease in the pound sterling/U.S. dollar exchange rate isapproximately $4,000 for the nine months ended September 30, 2009.

 

We have no debt other than amounts due toaffiliates.  As of September 30,2009 and 2008, we had approximately $42.6 million and $54.5 million,respectively, in amounts due to Virgin Media group companies.  Interest on amounts due to affiliates is at avariable rate based on the average rate incurred by Virgin Media.  Therefore we are exposed to changes in VirginMedia’s borrowing rate.  The aggregatepotential loss from a hypothetical one-percentage point increase in theinterest rate is approximately $300,000 for the nine months ended September 30,2009.

 

**Item4.  Controls and Procedures**

 

*(a) DisclosureControls and Procedures. *Our management,with the participation of the chief executive officer and principal financialofficer of Virgin Media*, has evaluated the effectiveness of our disclosurecontrols and procedures (as such term is defined in Rules 13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934, as amended, which werefer to as the Exchange Act) as of the end of the period covered by thisreport. Based on this evaluation, Virgin Media’s chief executive officer andprincipal financial officer have concluded that, as of the end of such period,these controls and procedures are effective to ensure that information requiredto be disclosed by us in the reports we file or submit under the Exchange Actis recorded, processed, summarized, and reported within the time periods specifiedin the Securities and Exchange Commission’s rules and forms. Thesedisclosure controls and procedures include, without limitation, controls andprocedures designed to ensure that information required to be disclosed by usin the reports that we file or submit is accumulated and communicated to ourmanagement, including Virgin Media’s chief executive officer and principalfinancial officer, as appropriate to allow timely decisions regarding requireddisclosure.

 

(b) *Changes in Internal Control Over FinancialReporting.*There were no changes in our internal control overfinancial reporting (as such term is defined in Rules 13a-15(f) and15d-15(f) under the Exchange Act) during the fiscal quarter to which thisreport relates that have materially affected, or are reasonably likely tomaterially affect, our internal control over financial reporting.

 

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*                                         The Partnership has noprincipal executive officer or principal financial officer. Robert Mackenzieand Robert Gale are Directors of Virgin Media Directors Limited, which is aCorporate Director of NTL Fawnspring Limited, the General Partner of thePartnership.

 

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**PART II. OTHER INFORMATION**

 

**Item1.  Legal Proceedings**

 

We are involved in various disputes and litigationarising in the ordinary course of our business. While we do not believe any of these litigation matters alone or in theaggregate will have a material adverse effect on our financial position orresults of operation, any adverse outcome in one or more of these matters couldbe material to our consolidated financial statements for any one period.

 

**Item1A.  Risk Factors**

 

Except for the following, there have been nomaterial changes in the risk factors discussed under “Risk Factors” andelsewhere in our annual report on Form 10-K for the year ended December 31,2008, as filed with the SEC on March 16, 2009:

 

***The sectors in which Virgin Media competes are subject to rapid andsignificant changes in technology, and the effect of technological changes onits businesses cannot be predicted.***

 

The broadband internet, television, fixed linetelephone and mobile telephone services sectors are characterized by rapid andsignificant changes in technology. Advances in current technologies, such asVoIP (over fixed and mobile technologies), mobile instant messaging, wirelessfidelity, or WiFi, the extension of local WiFi networks across greaterdistances, or WiMax, enhancements to existing mobile network technologies thatincrease capacity and speed such as Long Term Evolution, or LTE, internetprotocol television, or future technological breakthroughs, may result in ourcore offerings becoming less competitive or render Virgin Media’s existingproducts and services obsolete. Virgin Media may not be able to develop newproducts and services at the same rate as its competitors or keep up withtrends in the technology market as well as its competitors. The cost of implementingemerging and future technologies could be significant, and Virgin Media’sability to fund that implementation may depend on its ability to obtainadditional financing. Similarly, the deployment of new services, such as LTEservices, in the spectrum frequencies in which Virgin Media operates could havean impact on the existing services offered by Virgin Media, with consequentialimpact on its and our business.

 

***Virgin Media continues to face amortization pressures under its seniorcredit facility, and Virgin Media may not be able to refinance its debtobligations or may be able to refinance only on terms that will increase itscost of borrowing.***

 

As of September 30, 2009, Virgin Media hadamortization payments of £0.2 million and £285.7 million due in 2010 and 2011,respectively. Virgin Media expects to be able to address those payments throughcash flow from operations and, if required, amounts then undrawn on itsrevolving credit facility. However, if Virgin Media should need to secureadditional funding, it may not be able to obtain financing or sell assets, atall or on favorable terms, or Virgin Media may be contractually prevented bythe terms of its senior notes or its senior credit facility from incurringadditional indebtedness or selling assets.

 

As of September 30, 2009, Virgin Media alsohad amortization payments of £2,540.9 million due in 2012. Virgin Media doesnot expect to generate sufficient cash flow from operations to satisfy all ofthe 2012 payments. Virgin Media expects to address this shortfall in advancethereof through a comprehensive refinancing of its senior secured debt, whichmay take place at any time before the amortization payments are due. VirginMedia’s ability to implement such a refinancing successfully is significantly dependenton sustained improvements in the debt markets. Even if the debt marketsimprove, the size of the amounts outstanding under Virgin Media’s senior creditfacility may be too large to be refinanced with senior bank debt and VirginMedia may need to raise additional capital by doing one or more of thefollowing:

 

·raising additional debt otherthan senior bank debt, such as secured or unsecured high yield debt, on termsthat may increase its cost of borrowing or result in more onerous terms;

 

·selling or disposing of someof its assets, possibly on unfavorable terms; or

 

·issuing equity orequity-related instruments that will dilute the equity ownership interest ofexisting stockholders.

 

Virgin Media cannot be sure that any of, or anycombination of, the above actions would be available or sufficient to fund itsdebt obligations or that it will be able to refinance its debt obligations onfavorable terms or at all.

 

**Item2.  Unregistered Sales of EquitySecurities and use of Proceeds**

 

None.

 

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**Item3.  Defaults Upon Senior Securities**

 

None.

 

**Item4.  Submission of Matters to a Vote ofSecurity Holders**

 

No matters were submitted to a vote of our securityholders in the quarter ended September 30, 2009.

 

**Item5.  Other Information**

 

None.

 

**Item6.  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 Person Performing Function Similar to the Functions of Principal Executive  Officer,* pursuant to Rule 13a-14(a) under the Securities Exchange  Act of 1934, as amended.                                                                                                                         |
| 31.2** |   | Certification  of Person Performing Function Similar to the Functions of Principal Financial  Officer,* pursuant to Rule 13a-14(a) under the Securities Exchange  Act of 1934, as amended.                                                                                                                         |
| 32.1** |   | Certifications  of Persons Performing Function Similar to the Functions of Principal  Executive Officer and Principal Financial Officer, respectively,* pursuant to  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.                                                |
|   |   |                                                                                                                                                                                                                                                                                                                         |
|        |
| *      |   | The  Partnership has no principal executive officer or principal financial  officer. Robert Mackenzie and Robert Gale are Directors of Virgin Media  Directors Limited, which is a Corporate Director of NTL Fawnspring Limited,  the General Partner of the Partnership.                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                         |
| **     |   | Filed  herewith.                                                                                                                                                                                                                                                                                                             |

 

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**SIGNATURES**

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned 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.* |

 

Date:November 12, 2009

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, this report has been signed below by the followingpersons on behalf of the registrant and in the capacities and on the dates indicated.

 
|                          | 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.** |
|                          |   |                                                                                                                                                                                                 |
| Date:  November 12, 2009 |   |                                                                                                                                                                                                 |
|                          |   |                                                                                                                                                                                                 |
|                          | By:    | /s/  ROBERT GALE                                                                                                                                                                                     |
|                          |   | Robert  Gale *Director of Virgin Media Directors  Limited,   Corporate Director of NTL Fawnspring Limited,   the General Partner of South Hertfordshire   United Kingdom Fund, Ltd.**      |

 

Date:November 12, 2009

 

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*                                         The Partnership has no principalexecutive officer or principal financial officer. Robert Mackenzie and RobertGale are Directors of Virgin Media Directors Limited, which is a CorporateDirector of NTL Fawnspring Limited, the General Partner of the Partnership.

 

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