South Hertfordshire United Kingdom Fund 10-Q 2010 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2010

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

For the transition period from              to              

Commission File Number: 000-19889

South Hertfordshire United Kingdom Fund, Ltd.

(Exact name of registrant as specified 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	+ 44 1256 75 2000
(Address of principal executive offices)	(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of 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 (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x

The number of limited partnership units of the registrant outstanding as of November 5, 2010 was 56,935.

TABLE OF CONTENTS

		Page Number
	PART I. FINANCIAL INFORMATION	5
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009	5
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2010 and 2009	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21
	PART II. OTHER INFORMATION	22
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	(Removed and Reserved)	22
Item 5.	Other Information	22
Item 6.	Exhibits	22
SIGNATURES		23

In this quarterly report, unless the context otherwise requires, the terms “we”, “us”, “our” and similar terms refer to South Hertfordshire United Kingdom Fund, Ltd. and its subsidiaries, and “Virgin Media” refers to the consolidated business of Virgin Media Inc. and its subsidiaries, as further described herein.

2

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

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

·our reliance on the continued support of Virgin Media;

·the lack of an established trading market for our partnership interests;

·conflicts of interest between us and Virgin Media and its affiliates;

·our reliance on a limited franchise area;

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

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

·the effect of technological changes on Virgin Media’s business;

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

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

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

·Virgin Media’s reliance on third-party suppliers and contractors to provide necessary hardware, software or operational support;

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

·Virgin Media’s ability to manage customer churn;

·general economic conditions;

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

·Virgin Media’s ability to implement its restructuring plan successfully and realize the anticipated benefits;

·currency and interest rate fluctuations;

·Virgin Media’s ability to fund debt service obligations and refinance its debt obligations;

·Virgin Media’s ability to obtain additional financing in the future; and

·Virgin Media’s ability to comply with restrictive covenants in its indebtedness agreements.

These and other factors are discussed in more detail under “Risk Factors” and elsewhere in our annual report on Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission, or SEC, on March 17, 2010. We assume no obligation to update our forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting these statements.

3

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 for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York expressed as U.S. dollars per £1.00. The noon buying rate of the pound sterling on September 30, 2010 was $1.5731 per £1.00.

	U.S. dollars per £1.00
Nine months ended September 30,	Period End		Average (1)		High		Low
2009	$	1.6004	$	1.5489	$	1.6977	$	1.3658
2010	1.5731		1.5332		1.6370		1.4344

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

The above rates may differ from the actual rates used in the preparation of the condensed consolidated financial statements and other financial information appearing in this quarterly report. Our inclusion of these exchange rates is not meant 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, 2010 are translated to U.S. dollars at an exchange rate of $1.5731 to £1.00, all amounts disclosed for the nine months ended September 30, 2010 are based on an average exchange rate of $1.5351 to £1.00, and all amounts disclosed for the nine months ended September 30, 2009 are based on an average exchange rate of $1.5423 to £1.00. All amounts disclosed as of December 31, 2009 are based on an exchange rate of $1.6167 to £1.00. U.S. dollar amounts for the three months ended September 30, 2010 and 2009 are determined by subtracting the U.S. dollar converted financial result for the six months ended June 30, 2010 and 2009 from the U.S. dollar converted financial result for the nine months ended September 30, 2010 and 2009, respectively. All rates are based on the noon buying rate in the City of New York for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York. The variation among the exchange rates for 2010 and 2009 has affected the U.S. dollar comparisons significantly.

4

PART I.  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.

(A Limited Partnership)

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2010			2009
	(unaudited)
Assets
Deferred tax asset	$	478,026		$	1,626,861
Fixed assets, net	39,711,964			42,685,169
Total assets	40,189,990			44,312,030
Liabilities and Partners’ Capital
Current liabilities
Accounts payable to affiliates and related parties	$	35,228,604		$	41,618,716
Total liabilities	35,228,604			41,618,716
Partners’ Capital
General Partner
Contributed capital	1,000			1,000
Accumulated deficit	(466,415		)	(481,112		)
	(465,415		)	(480,112		)
Limited Partners
Contributed capital, net (56,935 units outstanding at September 30, 2010 and December 31, 2009)	48,817,997			48,817,997
Accumulated deficit	(45,894,017		)	(47,349,062		)
	2,923,980			1,468,935
Partners’ capital	2,458,565			988,823
Accumulated other comprehensive loss	(783,934		)	(700,000		)
Total South Hertfordshire United Kingdom Fund Ltd. Partners’ capital	1,674,631			288,823
Noncontrolling interest	3,286,755			2,404,491
Total Partners’ capital	4,961,386			2,693,314
Total Liabilities and Partners’ Capital	$	40,189,990		$	44,312,030

See accompanying notes.

5

SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.

(A Limited Partnership)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2010			2009			2010			2009
Revenue	$	7,280,843		$	7,198,079		$	21,164,074		$	21,028,124
Costs and expenses
Operating costs	(2,206,108		)	(2,474,802		)	(6,729,490		)	(8,041,809		)
Allocated overhead	(2,586,964		)	(2,460,936		)	(7,566,986		)	(7,409,828		)
Management fees	(364,042		)	(359,904		)	(1,058,204		)	(1,051,406		)
Selling, general and administrative expenses	(45,580		)	(32,833		)	(183,330		)	(97,010		)
Operating income	2,078,149			1,869,604			5,626,064			4,428,071
Other expenses
Interest payable to General Partner and affiliates	(750,732		)	(731,721		)	(2,262,624		)	(2,243,211		)
Exchange (losses) gains	(236,181		)	56,613			108,803			(174,895		)
Net profit before taxes	1,091,236			1,194,496			3,472,243			2,009,965
Income tax expense	(414,340		)	—			(1,078,269		)	—
Net profit	676,896			1,194,496			2,393,974			2,009,965
Less: Profit attributable to noncontrolling interest	(355,151		)	(407,249		)	(924,232		)	(810,747		)
Net profit attributable to South Hertfordshire United Kingdom Fund, Ltd.	$	321,745		$	787,247		$	1,469,742		$	1,199,218
Allocation of net profit attributable to South Hertfordshire United Kingdom Fund, Ltd.
General Partner	$	3,217		$	7,872		$	14,697		$	11,992
Limited Partners	318,528			779,375			1,455,045			1,187,226
Net profit attributable to South Hertfordshire United Kingdom Fund, Ltd.	$	321,745		$	787,247		$	1,469,742		$	1,199,218
Net profit attributable to South Hertfordshire United Kingdom Fund, Ltd. allocated to limited partners per limited partnership unit	$	5.59		$	13.69		$	25.56		$	20.85
Average number of limited partnership units outstanding	56,935			56,935			56,935			56,935

See accompanying notes.

6

SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.

(A Limited Partnership)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine months ended
	September 30,
	2010			2009
Cash flows from operating activities
Net profit	$	2,393,974		$	2,009,965
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation	2,967,958			3,202,353
Deferred income taxes	1,078,269			—
Change in operating assets and liabilities:
Decrease in accounts payable to affiliates and related parties	(5,256,917		)	(4,716,346		)
Net cash provided by operating activities	1,183,284			495,972
Cash flows from investing activities
Purchase of fixed assets	(1,183,284		)	(495,972		)
Net cash used in investing activities	(1,183,284		)	(495,972		)
Increase (decrease) in cash and cash equivalents	—			—
Cash and cash equivalents at beginning of period	—			—
Cash and cash equivalents at end of period	$	—		$	—

See accompanying notes.

7

SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.

(A Limited Partnership)

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, in connection 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 the U.K. NTL Fawnspring Limited, a U.K. corporation and an indirect wholly owned subsidiary of Virgin Media Inc., is the general partner, or the General Partner, of the Partnership.

We hold 66.7% of the shares of NTL (South Hertfordshire) Limited, or NTL 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 the shares of NTL South Herts, for accounting purposes, we have consolidated the results of NTL South Herts with our results.  Virgin Media Inc. indirectly holds the remaining 33.3% of the shares of NTL South Herts.  We are reliant on the support of Virgin Media Inc., the ultimate parent company of the General Partner, to continue our operations as a going concern.

Basis of Presentation

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, for interim financial information and with the rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.  Results of operations for the three and nine months ended September 30, 2010 are not necessarily indicative of results to be expected for the full year ending December 31, 2010. For further information, refer to the consolidated financial statements and footnotes thereto included in our annual report on Form 10-K for the year ended December 31, 2009, as filed with the SEC, on March 17, 2010.

Note 2 — Comprehensive Profit

Comprehensive profit includes net profit as well as other comprehensive profit.  Our other comprehensive profit consists of changes in cumulative foreign currency translation adjustments.  Comprehensive profit comprises:

	Three months ended
	September 30, 2010
	Partners of South Hertfordshire United Kingdom Fund, Ltd.		Noncontrolling interests		Total
Net profit	$	321,745	$	355,151	$	676,896
Foreign currency translation adjustments	302,893		151,445		454,338
Comprehensive profit	$	624,638	$	506,596	$	1,131,234

	Nine months ended
	September 30, 2010
	Partners of South Hertfordshire United Kingdom Fund, Ltd.			Noncontrolling interests			Total
Net profit	$	1,469,742		$	924,232		$	2,393,974
Foreign currency translation adjustments	(83,934		)	(41,968		)	(125,902		)
Comprehensive profit	$	1,385,808		$	882,264		$	2,268,072

8

SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.

(A Limited Partnership)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 2 — Comprehensive Profit (Continued)

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

	Nine months ended
	September 30, 2009
	Partners of South Hertfordshire United Kingdom Fund, Ltd.		Noncontrolling interests		Total
Net profit	$	1,199,218	$	810,747	$	2,009,965
Foreign currency translation adjustments	160,653		80,324		240,977
Comprehensive profit	$	1,359,871	$	891,071	$	2,250,942

Note 3 — Transactions with the General Partner and Affiliated Entities

Consulting and Management Fees

An affiliate of the General Partner is entitled to be paid a consulting fee by NTL South Herts.  During the construction phases of the South Herts System, this consulting fee was 2% of construction costs.  Since completion of construction of each portion of the system, the consulting fee for the completed portion has been 5% of the gross revenue, excluding revenue from the sale of cable television/telephone systems. The consulting fee is calculated and payable monthly. Consulting fees paid or payable by NTL South Herts for the three months ended September 30, 2010 and 2009 were $364,042 and $359,904, respectively. Consulting fees paid or payable by NTL South Herts for the nine months ended September 30, 2010 and 2009 were $1,058,204 and $1,051,406, respectively. These amounts were expensed in the condensed consolidated statements of operations.

Distribution Ratios and Reimbursement

Any Partnership distributions made from cash flows (defined as cash receipts derived from routine operations, less debt principal and interest payments and cash expenses) are allocated 99% to the limited partners and 1% to the General Partner.  Any distributions other than interest income on limited partner subscriptions earned prior to the acquisition of the Partnership’s first cable television system or from cash flows, such as from the sale or refinancing of a system or upon dissolution of the Partnership, will be made as follows: 99% to the limited partners and 1% to the General Partner until any negative balances in the limited partners’ capital accounts are reduced to zero; 100% to the General Partner until any negative balance in its capital account is reduced to zero; 99% to the limited partners and 1% to the General Partner until the balance in the limited partners’ capital accounts is equal to their adjusted capital contribution plus a 12% return; 100% to the General Partner until the balance in its capital account is equal to its adjusted capital contribution, and any remaining income or gain shall be allocated 75% to the limited partners and 25% to the General Partner.

9

SOUTH HERTFORDSHIRE UNITED KINGDOM FUND, LTD.

(A Limited Partnership)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 3 — Transactions with the General Partner and Affiliated Entities (Continued)

The General Partner and its affiliates are entitled to reimbursement from NTL South Herts for direct and indirect expenses allocable to the operation of the South Herts System, and from the Partnership for direct and indirect 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 the methodology used in allocating these expenses is fair and reasonable. During the three months ended September 30, 2010 and 2009, reimbursement made by NTL South Herts and the Partnership to the General Partner or its affiliates for any allocable direct and indirect expenses totaled $2,586,964 and $2,460,936, respectively. During the nine months ended September 30, 2010 and 2009, reimbursement made by NTL South Herts and the Partnership to the General Partner or its affiliates for any allocable direct and indirect expenses totaled $7,566,986 and $7,409,828, respectively.

The General Partner and its affiliates may make advances to, and defer collection of fees and allocated expenses owed by, the Partnership, although they are not required to do so. The Partnership is charged interest on such advances and deferred amounts at a rate equal to the General Partner’s or certain affiliates’ effective average cost of debt financing from unaffiliated entities, which does not differ from their weighted average cost of debt financing. For the three months ended September 30, 2010 and 2009, affiliates of the General Partner charged the Partnership aggregated interest, bank fees and finance charges of $660,470 and $697,222, respectively, relating to non-permanent loans, and an affiliate of the General Partner charged the Partnership interest on advances of $90,262 and $34,499, respectively. For the nine months ended September 30, 2010 and 2009, affiliates of the General Partner charged the Partnership aggregated interest, bank fees and finance charges of $2,008,026 and $2,142,433, respectively, relating to non-permanent loans, and an affiliate of the General Partner charged the Partnership interest on advances of $254,598 and $100,778, respectively. The General Partner and its affiliates are entitled to recover interest on the full amount of non-permanent loans they provide to the Partnership or NTL South Herts and the portion of bank fees and deferred financing costs relating to Virgin Media’s senior credit facility allocable to the Partnership or NTL South Herts.

Note 4 — Recent Accounting Pronouncements

In September 2009, the Financial Accounting Standards Board, or FASB, ratified new accounting guidance for existing multiple-element revenue arrangements. The revised multiple-element revenue arrangements guidance will be effective for the first annual reporting period beginning on or after June 15, 2010 and may be applied retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the adoption date. We will prospectively apply the new requirements beginning on January 1, 2011 and are currently evaluating the impact on our consolidated financial statements.

Note 5 — Income taxes

For the three and nine months ended September 30, 2010, income tax expense was $414,340 and $1,078,269, respectively. The income tax expense relates to the partial utilization of the deferred tax asset in respect of carried forward tax losses and tax depreciation of NTL South Herts recognized as at December 31, 2009. There was no income tax expense for the three and nine months ended September 30, 2009.

10

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

Overview

We are a Colorado limited partnership that was formed in December 1991 pursuant to the public offering of our limited partnership interests for the purpose of acquiring one or more cable television/telephone systems in the U.K. Upon acquisition of our system, our primary investment objective was to obtain capital appreciation in the value of our 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 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 the shares of NTL South Herts, for accounting purposes we have consolidated the results of NTL South Herts with our results. Virgin Media Inc. indirectly holds the remaining 33.3% of the shares of NTL South Herts. We are reliant on the support of Virgin Media Inc., the ultimate parent company of the General Partner, to continue our operations as a going concern.

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

Our expenses include certain costs that are charged to us by a subsidiary of Virgin Media Inc. for the provision of network services and support, the use of Virgin Media’s national backbone telephone network for carriage of our telephone traffic, as well as the provision of technical infrastructure and network capacity by Virgin Media for our subscription internet access service and digital television services, the provision of corporate services, including finance, legal, human resources and facility services, and for the provision of IT services, including our use of the related IT systems and equipment. The principal components of Virgin Media’s expenses include payroll and other employee-related costs; television programming costs; interconnect costs paid to other carriers relating to call termination; facility-related costs, such as rent, utilities and rates; marketing and selling costs; repairs and maintenance costs; and allowances for doubtful accounts.

In the second quarter of 2009, the General Partner agreed to the transfer of customer and supplier contracts relating to NTL South Herts’ premium TV services, resulting in a transfer of revenue and costs to Future Entertainment Sarl, a wholly owned subsidiary of Virgin Media, which with effect from September 1, 2009, carries substantially all Virgin Media’s premium TV channels and associated revenue and costs. This has resulted in a decline in revenues earned by NTL South Herts along with a decline in the costs incurred, but as these services were loss making, it has not been detrimental to the results of operations or financial position of NTL South Herts.

Factors Affecting Our Business

Our residential customers account for the majority of our total revenue. The number of residential customers, the number and types of services that each customer uses and the prices we charge for these services drive our revenue. Our profit is driven by the relative margins on the types of services we provide to these customers and by the number of services that we provide to them. For example, broadband internet is more profitable than our television services and, on average, our “triple-play” customers are more profitable than “double-play” or “single-play” customers. Our packaging of services and our pricing are designed to encourage our customers to use multiple services such as television, telephone and broadband at a lower price than each stand-alone product on a combined basis. Factors particularly affecting our business include general macroeconomic factors, currency movements, integration and restructuring activities, churn, average revenue per user, competition, capital expenditures and seasonality.

General Macroeconomic Factors. General macroeconomic factors 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 our products or upgrade their services. We may also experience increased churn and higher bad debt expense.

Currency Movements. Because substantially all of our 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 are impacted by currency fluctuations which are unrelated to our underlying results of operations.

11

Integration and Restructuring Activities. In the fourth quarter of 2008, Virgin Media commenced the implementation of a restructuring plan aimed at driving further improvements in Virgin Media’s and our operational performance and eliminating inefficiencies in order to create a fully-integrated, customer-focused organization. Virgin Media anticipates significant cost savings from the plan and that the annual savings from and after 2010 will exceed the annual costs incurred in connection with the plan. These costs will include purchases of fixed assets, lease and contract exit costs, employee termination costs and other restructuring and restructuring-related expenses, some of which will be classified as restructuring costs. During the second quarter, Virgin Media identified further savings through the expansion of the program and revised the estimated total costs and extended the completion date through the end of 2012. In total, Virgin Media expects to incur operating expenditures of between £150 million to £170 million and capital expenditures of between £50 million to £60 million in connection with this plan over a three-year period. Virgin Media’s and our financial performance may be negatively affected if Virgin Media is unable to implement its restructuring plan successfully and realize the anticipated benefits.

Capital Expenditures. Our business requires substantial capital expenditures on a continuing basis for various purposes, including expanding, maintaining and upgrading our cable network, investing in new customer acquisitions, and offering new services. If Virgin Media 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 liquidity and the availability of cash to fund capital projects are important drivers of our revenue. When Virgin Media’s and our liquidity is restricted, so is our ability to meet our capital expenditure requirements.

Churn. Churn is the proportion of customers who stop subscribing to any of our services. An increase in our churn can lead to increased costs and reduced revenue. We continue to focus on improving our customer service and enhancing and expanding our service offerings to existing customers in order to manage our churn rates. Our ability to reduce our churn rates beyond a base level is limited by factors such as competition, the economy and customers moving outside our network service area, in particular during the summer season. Managing our churn rates is a significant component of our business plan. Our churn rates may increase if our customer service is seen as unsatisfactory, if we are unable to deliver a service without interruption, if we fail to match offerings by our competitors, if we increase our prices, if there is an improvement in the U.K. housing market or if there is a prolonged economic downturn.

ARPU. Average revenue per user, or ARPU, is a measure Virgin Media uses to evaluate how effectively it is realizing potential revenue 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 is attractive to its existing customer base and generally allows Virgin Media to increase its ARPU by facilitating the sale of multiple services to each customer.

Competition. Our ability to acquire and retain customers and increase revenue depends on our competitive strength. There is significant and increasing competition in the market for our consumer services, including broadband and telephone services offered by BT Group plc, or BT; resellers or local loop unbundlers, such as British Sky Broadcasting Group plc, or BSkyB, and Talk Talk Telecom Group PLC; alternative internet access services like DSL; satellite television services offered by BSkyB and by BBC and ITV through Freesat; free-to-air digital terrestrial television offered through Freeview; and internet protocol television offered by BT. In addition, certain competitors, such as BT and BSkyB, are dominant in markets in which we compete and may use their dominance in those markets to offer bundled services that compete with our product offerings. As a result of increased competition, we have had to, and may be required to continue to, adjust our pricing and offer discounts to new and existing customers in order to attract and retain customers.

Seasonality. Some revenue streams are subject to seasonal factors. For example, telephone usage revenue by residential customers tends to be slightly lower during summer holiday months. Our churn rates include persons who disconnect their service because of moves, resulting in a seasonal increase in our churn rate during the summer months when higher levels of U.K. house moves occur and students leave their accommodation between academic years.

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Critical Accounting Policies

The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and contingent liabilities. We base our judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

For a discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our consolidated financial statements, please refer to our annual report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on March 17, 2010.

Consolidated Results of Operations

Three Months Ended September 30, 2010 and 2009

We present below summarized consolidated financial information in U.S. dollars and U.K. pounds sterling for the three months ended September 30, 2010 and 2009:

	Three months ended								Three months ended
	September 30,						%		September 30,						%
	2010			2009			Change		2010			2009			Change
Revenue	$	7,280,843		$	7,198,079		1.1		£	4,693,747		£	4,370,384		7.4
Operating costs	(2,206,108		)	(2,474,802		)	(10.9	)	(1,421,092		)	(1,485,178		)	(4.3	)
Allocated overhead	(2,586,964		)	(2,460,936		)	5.1		(1,667,573		)	(1,489,449		)	12.0
Management fees	(364,042		)	(359,904		)	1.1		(234,687		)	(218,519		)	7.4
Selling, general and administrative expenses	(45,580		)	(32,833		)	38.8		(29,204		)	(19,912		)	46.7
Operating income	2,078,149			1,869,604			11.2		1,341,191			1,157,326			15.9
Interest expense	(750,732		)	(731,721		)	2.6		(483,690		)	(442,006		)	9.4
Exchange (losses) gains	(236,181		)	56,613					(155,075		)	41,674
Net profit before taxes	1,091,236			1,194,496			(8.6	)	702,426			756,994			(7.2	)
Income tax expense	(414,340		)	—					(267,560		)	—
Net profit	676,896			1,194,496			(43.3	)	434,866			756,994			(42.6	)
Noncontrolling interest	(355,151		)	(407,249		)	(12.8	)	(229,338		)	(255,396		)	(10.2	)
Net profit attributable to South Herts	$	321,745		$	787,247				£	205,528		£	501,598

Revenue

For the three months ended September 30, 2010, revenue increased by 1.1% to $7.3 million from $7.2 million for the three months ended September 30, 2009, and revenue expressed in pounds sterling increased by 7.4% to £4.7 million for the three months ended September 30, 2010, from £4.4 million for the three months ended September 30, 2009. Revenue expressed in pounds sterling increased due to selective price increases as well as additional customers subscribing to our services, partially offset by continued decline in fixed line telephony usage and higher price discounting to stimulate customer activity and retention in light of competitive factors in the marketplace.

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Expenses

Operating costs

Operating costs include cost of goods sold and depreciation of fixed assets related to the network. For the three months ended September 30, 2010, operating costs decreased by 10.9% to $2.2 million from $2.5 million for the three months ended September 30, 2009, and operating costs expressed in pounds sterling decreased by 4.3% to £1.4 million for the three months ended September 30, 2010 from £1.5 million for the three months ended September 30, 2009. The reduction in operating costs was primarily driven by a reduction in depreciation as a result of fixed assets becoming fully depreciated. For the three months ended September 30, 2010 and 2009, depreciation expense included in operating costs was $942,031, or £606,486, and $1,124,374, or £684,441, respectively.

Allocated overhead

For the three months ended September 30, 2010, allocated overhead increased by 5.1% to $2.6 million from $2.5 million for the three months ended September 30, 2009, and allocated overhead expressed in pounds sterling increased by 12.0% to £1.7 million for the three months ended September 30, 2010 from £1.5 million for the three months ended September 30, 2009. The business of NTL South Herts is managed as an integral part of Virgin Media. The combined costs of managing the larger group are allocated to each entity within the Virgin Media group, including NTL South Herts, on a consistent and proportional basis according to the level of trading in that entity. Allocated overhead expressed in pounds sterling increased due to higher network and other operating costs, employee and outsource costs and marketing costs incurred by Virgin Media.

Management fees

For the three months ended September 30, 2010, management fees increased by 1.1% to $364,042 from $359,904 for the three months ended September 30, 2009, and management fees expressed in pounds sterling increased by 7.4% to £234,687 for the three months ended September 30, 2010 from £218,519 for the three months ended September 30, 2009. Management fees are charged as a percentage of revenue and changes in management fees are therefore a direct reflection of changes in revenue.

Selling, general and administrative expenses

For the three months ended September 30, 2010, selling, general and administrative expenses increased to $45,580, or £29,204, from $32,833, or £19,912, for the three months ended September 30, 2009. The increase was primarily due to higher audit fees.

Interest expense

For the three months ended September 30, 2010, interest expense increased by 2.6% to $750,732, from $731,721 for the three months ended September 30, 2009, and interest expense expressed in pounds sterling increased by 9.4% to £483,690 for the three months ended September 30, 2010 from £442,006 for the three months ended September 30, 2009. The increase in interest expense resulted from higher interest rates in the period partially offset by a decrease in interest due to lower balances outstanding on which interest is charged.

We paid no cash interest for the three months ended September 30, 2010 and 2009.

Exchange gains or losses

For the three months ended September 30, 2010, foreign currency exchange losses were $236,181, or £155,075, as compared with gains of $56,613, or £41,674, for the three months ended September 30, 2009. The change in foreign currency exchange gains was primarily attributable to fluctuations in the value of the U.S. dollar on certain of our liabilities and transactions. The value of the U.S. dollar strengthened by approximately 3% against the pound sterling from December 31, 2009 to September 30, 2010. Our results of operations will continue to be affected by foreign exchange rate fluctuations.

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Income tax expense

For the three months ended September 30, 2010, income tax expense was $414,340 or £267,560. The income tax expense relates to the partial utilization of the deferred tax asset in respect of carried forward tax losses and tax depreciation of NTL South Herts recognized as at December 31, 2009. There was no income tax expense for the three months ended September 30, 2009.

Noncontrolling interest

During the three months ended September 30, 2010, the profit attributable to the noncontrolling interest was $676,896, or £434,866, as compared with $407,249, or £255,396, for the three months ended September 30, 2009. This was due to the increased profitability of the operating entity.

Net profit attributable to South Hertfordshire United Kingdom Fund, Ltd.

For the three months ended September 30, 2010, net profit attributable to South Hertfordshire United Kingdom Fund, Ltd. was $321,745, or £205,528, as compared with $787,247, or £501,598, for the three months ended September 30, 2009, primarily due to the reasons described above.

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Nine Months Ended September 30, 2010 and 2009

We present below summarized consolidated financial information in U.S. dollars and U.K. pounds sterling for the nine months ended September 30, 2010 and 2009:

	Nine months ended								Nine months ended
	September 30,						%		September 30,						%
	2010			2009			Change		2010			2009			Change
Revenue	$	21,164,074		$	21,028,124		0.6		£	13,786,772		£	13,634,263		1.1
Operating costs	(6,729,490		)	(8,041,809		)	(16.3	)	(4,383,747		)	(5,214,167		)	(15.9	)
Allocated overhead	(7,566,986		)	(7,409,828		)	2.1		(4,929,311		)	(4,804,401		)	2.6
Management fees	(1,058,204		)	(1,051,406		)	0.6		(689,339		)	(681,713		)	1.1
Selling, general and administrative expenses	(183,330		)	(97,010		)	89.0		(119,425		)	(62,900		)	89.9
Operating income	5,626,064			4,428,071			27.1		3,664,950			2,871,082			27.7
Interest expense	(2,262,624		)	(2,243,211		)	0.9		(1,473,926		)	(1,454,458		)	1.3
Exchange gains (losses)	108,803			(174,895		)			70,877			(113,399		)
Net profit before taxes	3,472,243			2,009,965					2,261,901			1,303,225
Income tax expense	(1,078,269		)	—					(702,410		)	—
Net profit	2,393,974			2,009,965			19.1		1,559,491			1,303,225			19.7
Noncontrolling interest	(924,232		)	(810,747		)	14.0		(602,066		)	(525,674		)	14.5
Net profit attributable to South Herts	$	1,469,742		$	1,199,218		22.6		£	957,425		£	777,551		23.1

Revenue

For the nine months ended September 30, 2010, revenue increased by 0.6% to $21.2 million from $21.0 million for the nine months ended September 30, 2009, and revenue expressed in pounds sterling increased by 1.1% to £13.8 million for the nine months ended September 30, 2010 from £13.6 million for the nine months ended September 30, 2009. The increase in revenue expressed in pounds sterling was primarily due to selective price increases as well as additional customers subscribing to our service, partially offset by the impact on revenue of the transfer, in the second quarter of 2009, of customer and supplier contracts relating to the NTL South Herts’ premium TV services to Future Entertainment Sarl, a wholly owned subsidiary of Virgin Media Inc., together with continued decline in fixed line telephony usage and higher price discounting to stimulate customer activity and retention in light of competitive factors in the marketplace.

Expenses

Operating costs

Operating costs include cost of goods sold and depreciation of fixed assets related to the network. For the nine months ended September 30, 2010, operating costs decreased by 16.3% to $6.7 million from $8.0 million for the nine months ended September 30, 2009, and operating costs expressed in pounds sterling decreased by 15.9% to £4.4 million for the nine months ended September 30, 2010 from £5.2 million for the nine months ended September 30, 2009. The reduction in operating costs was primarily driven by the impact on cost of goods sold of the transfer, in the second quarter of 2009, of customer and supplier contracts relating to NTL South Herts’ premium TV services. For the nine months ended September 30, 2010 and 2009, depreciation expense included in operating costs was $2,967,958, or £1,933,397, and $3,202,353, or £2,076,349, respectively.

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Allocated overhead

For the nine months ended September 30, 2010, allocated overhead increased by 2.1% to $7.6 million from $7.4 million for the nine months ended September 30, 2009. For the nine months ended September 30, 2010, allocated overhead expressed in pounds sterling increased by 2.6% to £4.9 million from £4.8 million for the nine months ended September 30, 2009. The business of NTL South Herts is managed as an integral part of Virgin Media. The combined costs of managing the larger group are allocated to each entity within the Virgin Media group, including NTL South Herts, on a consistent and proportional basis according to the level of trading in that entity. Allocated overhead expressed in pounds sterling increased in line with Virgin Media’s overall cost base.

Management fees

For the nine months ended September 30, 2010, management fees increased by 0.6% to $1,058,204 from $1,051,406 for the nine months ended September 30, 2009, and management fees expressed in pounds sterling increased by 1.1% to £689,339 for the nine months ended September 30, 2010 from £681,713 for the nine months ended September 30, 2009. Management fees are charged as a percentage of revenue and changes in management fees are therefore a direct reflection of changes in revenue.

Selling, general and administrative expenses

For the nine months ended September 30, 2010, selling, general and administrative expenses increased to $183,330, or £119,425, from $97,010, or £62,900, for the nine months ended September 30, 2009. The increase was primarily due to higher audit fees.

Interest expense

For the nine months ended September 30, 2010, interest expense increased by 0.9% to $2.3 million from $2.2 million for the nine months ended September 30, 2009, and interest expense expressed in pounds sterling increased by 1.3% to £1,473,926 for the nine months ended September 30, 2010 from £1,454,458 for the nine months ended September 30, 2009. The increase in interest expense resulted from higher interest rates in the period largely offset by a decrease in interest due to lower balances outstanding on which interest is charged.

We paid no cash interest for the nine months ended September 30, 2010 and 2009.

Exchange gains or losses

For the nine months ended September 30, 2010, foreign currency exchange gains were $108,803, or £70,877, as compared with losses of $174,895, or £113,399, for the nine months ended September 30, 2009. The change in foreign currency exchange losses was primarily attributable to fluctuations in the value of the U.S. dollar on certain of our liabilities and transactions. The value of the U.S. dollar strengthened by approximately 3% against the pound sterling from December 31, 2009 to September 30, 2010. Our results of operations will continue to be affected by foreign exchange rate fluctuations.

Income tax expense

For the nine months ended September 30, 2010, income tax expense was $1,078,269, or £702,410. The income tax expense relates to the partial utilization of the deferred tax asset in respect of carried forward tax losses and tax depreciation of NTL South Herts recognized as at December 31, 2009. There was no income tax expense for the nine months ended September 30, 2009.

Noncontrolling interest

During the nine months ended September 30, 2010, the profit attributable to the noncontrolling interest was $924,232, or £602,066, as compared with $810,747, or £525,674, for the nine months ended September 30, 2009.

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Net profit attributable to South Hertfordshire United Kingdom Fund, Ltd.

For the nine months ended September 30, 2010, net profit attributable to South Hertfordshire United Kingdom Fund, Ltd. was $1,469,742, or £957,425, as compared with $1,199,218, or £777,551, for the nine months ended September 30, 2009, primarily due to the reasons described above.

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Selected Operating Data

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

	September 30,		June 30,		March 31,		December 31,		September 30,
	2010		2010		2010		2009		2009
Total customers	34,829		34,530		34,160		33,668		33,476
Digital television subscribers	28,103		27,088		27,418		26,911		26,602
Broadband internet subscribers	29,163		28,733		28,235		27,511		27,090
Telephony subscribers	30,539		30,319		30,059		29,646		29,424
Average monthly churn (1)	1.5	%	1.2	%	1.1	%	1.4	%	1.5	%

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

Condensed Consolidated Statement of Cash Flows

In the nine months ended September 30, 2010, we generated $1.2 million from our operating activities compared with $0.5 million in the nine months ended September 30, 2009, which was used to purchase fixed assets including equipment for customer installations. Our cash provided by operating activities increased primarily due to an improved operating result.

Liquidity and Capital Resources

Outstanding Indebtedness

We have no financing independent of Virgin Media. We are reliant upon the support of Virgin Media to continue our operations. As of September 30, 2010, we had consolidated current liabilities of $35.2 million due to Virgin Media group companies compared with $41.6 million as of December 31, 2009 and $42.6 million as of September 30, 2009.

Historically, our source of cash has been the net proceeds of our offerings of limited partnership interests along with funding from Virgin Media and our principal uses of cash have been capital contributions to NTL South Herts in order to fund our proportionate share of the construction costs of the South Herts System and ongoing operations.

Accordingly, until such time as NTL South Herts begins to pay dividends on its ordinary shares (which is not expected in the foreseeable future) we will be required to fund our administrative expenses from borrowings or, theoretically, additional issuances of limited partnership interests. It is unlikely that we will be able to sell debt or equity securities in the public markets, at least in the short term, or to obtain financing from commercial banks. Accordingly, we are dependent on Virgin Media for funds to cover operating expenses, and will continue to be dependent upon Virgin Media to meet our liquidity requirements for the foreseeable future. We expect that cash from our operations in 2010 will be utilized fully for the purchase of fixed assets including connecting new customers to our networks.

Virgin Media’s business is capital intensive and it is highly leveraged. Virgin Media has significant cash requirements for operating costs, capital expenditures and interest expense. Virgin Media believes that it will be able to meet its current and medium-term liquidity and capital requirements, including fixed charges, through cash on hand, cash from operations, available borrowing under its revolving credit facility, and its ability to obtain future external financing.

Virgin Media had £5,983.3 million of debt outstanding as of September 30, 2010, compared to £5,974.7 million as of December 31, 2009 and £5,972.0 million as of September 30, 2009, and £609.8 million of cash and cash equivalents, compared to £430.5 million as of December 31, 2009 and £351.6 million as of September 30, 2009. The increase in debt since September 30, 2009 is due to adverse movements in exchange rates and, to a lesser extent, an increase in net borrowing. The increase in debt from December 31, 2009 is also due to adverse movements in exchange rates and, to a lesser extent, an increase in net borrowing.

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Virgin Media’s long term debt was issued by Virgin Media Inc. and certain of its subsidiaries that have no independent operations or significant assets other than investments in their respective subsidiaries and receivables under intercompany loans. As a result, they depend upon the receipt of sufficient funds from their respective subsidiaries or payments under intercompany loans to meet their obligations. In addition, the terms of Virgin Media’s existing and future indebtedness and the laws of the jurisdictions under which its subsidiaries are organized limit the payment of dividends, loan repayments and other distributions from them under many circumstances.

Virgin Media’s debt agreements contain restrictions on its ability to transfer cash between groups of its subsidiaries or to us. As a result of these restrictions, although Virgin Media’s overall liquidity may be sufficient to satisfy its obligations, it may be limited by covenants in some of its debt agreements from transferring cash to other subsidiaries that might require funds. In addition, cross default provisions in its other indebtedness may be triggered if it defaults on any of these debt agreements.

For further information concerning Virgin Media’s liquidity and capital resources and the terms of its various debt facilities, including the new senior credit facility, see its annual report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on February 26, 2010, and its quarterly report on Form 10-Q for the three and nine months ended September 30, 2010, as filed with the SEC on November 8, 2010.

Off-Balance Sheet Transactions

As of September 30, 2010 and 2009, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K under the Securities Exchange Act of 1934, as amended.

Contractual Obligations and Commercial Commitments

There have been no material changes in the nine months ended September 30, 2010 to the information required under this Item from what was disclosed in our annual report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on March 17, 2010.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

The functional currency of NTL South Herts is pounds sterling and all revenue and substantially all costs are incurred in pounds sterling. We report in U.S. dollars and are therefore exposed to fluctuations in the pound sterling to U.S. dollar exchange rate.

The aggregate potential gain from a hypothetical one-percent decrease in the pound sterling/U.S. dollar exchange rate is approximately $20,000 for the nine months ended September 30, 2010.

We have no debt other than amounts due to affiliates. As of September 30, 2010 and 2009, we had approximately $35.2 million and $42.6 million, respectively, in amounts due to Virgin Media group companies. Interest on amounts due to affiliates is at a variable rate based on the average rate incurred by Virgin Media. Therefore we are exposed to changes in Virgin Media’s borrowing rate. The aggregate potential loss from a hypothetical one-percentage point increase in the interest rate is approximately $289,000 for the nine months ended September 30, 2010.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures.  Our management, with the participation of the chief executive officer and chief financial officer of Virgin Media*, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, Virgin Media’s chief executive officer and chief financial officer have concluded that, as of the end of such period, these controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit is accumulated and communicated to our management, including Virgin Media’s chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

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

*The Partnership has no principal executive officer or principal financial officer. Robert Mackenzie and Robert Gale are Directors of NTL Fawnspring Limited, the General Partner of the Partnership.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes in the risk factors discussed under “Risk Factors” and elsewhere in our annual report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on March 17, 2010.

Item 2.  Unregistered Sales of Equity Securities and use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  (Removed and Reserved)

Item 5.  Other Information

None.

Item 6. Exhibits

3.1	Certificate of Limited Partnership dated December 31, 1991 (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-K for the year ended December 31, 1994, filed with the Securities and Exchange Commission on March 31, 1995, File No. 000-19889).
3.2	Amendment to the Certificate of Limited Partnership dated January 31, 1995 (Incorporated by reference to Exhibit 3.2 to the Registrant’s Form 10-K for the year ended December 31, 1994, filed with the Securities and Exchange Commission on March 31, 1995, File No. 000-19889).
4.1	Limited Partnership Agreement dated December 31, 1991 (Incorporated by reference to the Registrant’s Post-Effective Amendment No. 2 to Form S-1, filed with the Securities and Exchange Commission on May 6, 1993, File No. 33-48400).
4.2	Amendment No. 1 to Limited Partnership Agreement dated October 20, 1992 (Incorporated by reference to Exhibit 4.2 to the Registrant’s Form 10-K for the year ended December 31, 1994, filed with the Securities and Exchange Commission on March 31, 1995, File No. 000-19889).
31.1**	Certification of 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 Chief 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 NTL Fawnspring Limited, the General Partner of the Partnership.

**Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by 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 NTL Fawnspring Limited, the General Partner of South Hertfordshire United Kingdom Fund, Ltd.

Date: November 10, 2010

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

	By:	/s/ ROBERT MACKENZIE
		Robert Mackenzie Director of NTL Fawnspring Limited, the General Partner of South Hertfordshire United Kingdom Fund, Ltd.*
Date: November 10, 2010
	By:	/s/ ROBERT GALE
		Robert Gale Director of NTL Fawnspring Limited, the General Partner of South Hertfordshire United Kingdom Fund, Ltd.*

Date: November 10, 2010

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