857957--3/29/2007--SOUTH_HERTFORDSHIRE_UNITED_KINGDOM_FUND

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{capital, credit, financial}

{debt, indebtedness, cash}

{product, market, service}

{system, service, information}

{control, financial, internal}

{tax, income, asset}

{investment, property, distribution}

{acquisition, growth, future}

{personnel, key, retain}

{stock, price, operating}

{regulation, government, change}

{stock, price, share}

{competitive, industry, competition}

Risks Relating to Our Business We rely on the continued support of Virgin Media. There is no established public trading market for our limited partnership interests and disposition thereof is restricted. There are conflicts of interests arising out of transactions entered into with our General Partner and its affiliates. We have incurred losses in the past and may not be profitable in the future. We operate in a limited franchise area. The IRS could treat us as a corporation for tax purposes, which would negatively affect our limited partners Our limited partners may be required to pay taxes on income from us even if they do not receive any cash distributions from us. Risks Relating to Virgin Media s Business and Industry Virgin Media is subject to significant competition and expects that competition will intensify. Failure to control customer churn may adversely affect Virgin Media s financial performance. The sectors in which Virgin Media competes are subject to rapid and significant changes in technology, and the effect of technological changes on Virgin Media s businesses cannot be predicted. Virgin Media is licensed to use the Virgin name and logo but does not own it. If Virgin Media does not maintain and upgrade its networks in a cost-effective and timely manner, it could lose customers. A failure in Virgin Media s critical systems could significantly disrupt its operations, which could reduce its customer base and result in lost revenues. Virgin Media s inability to obtain popular programming, or to obtain it at a reasonable cost, could potentially materially adversely affect the number of customers or reduce margins. Virgin Media depends on equipment and service suppliers that may discontinue their products or seek to charge prices that are not competitive, either of which may adversely affect Virgin Media s business and profitability. The integration of Virgin Media s billing systems may have an adverse effect on its customer service, customer acquisitions, customer churn rate and operating costs. Regulation of the markets in which Virgin Media provides its services has been changing rapidly; unpredictable changes in U.K. and EU regulations affecting the conduct of its business, including price regulations, may have an adverse impact on its ability to set prices, enter new markets or control its costs. There is no assurance that new products Virgin Media may introduce will achieve full functionality or market acceptance. Virgin Media depends on the ability to attract and retain key personnel without whom it may not be able to manage its business lines effectively. Certain of Virgin Media s significant stockholders could have an influence over its business and affairs. Unauthorized access to Virgin Media s networks could result in a loss of revenue. Virgin Media does not insure the underground portion of its cable network and various pavement-based electronics associated with its cable network. Virgin Media may be unable to successfully integrate operations and realize the full anticipated synergies of its recent acquisitions, which may harm the value of its securities. Risks Relating to Virgin Media s Financial Indebtedness and Structure Virgin Media may not be able to fund its debt service obligations through operating cash flow in the future. Virgin Media s current leverage is substantial, which may have an adverse effect on its available cash flow, its ability to obtain additional financing if necessary in the future, its flexibility in reacting to competitive and technological changes and its operations. Virgin Media has incurred losses in the past and may not be profitable in the future. The restrictive covenants under Virgin Media s debt agreements may limit its ability to operate its business. Virgin Media is a holding company dependent upon cash flow from subsidiaries to meet its obligations. Virgin Media is subject to currency and interest rate risks. Virgin Media may not have sufficient financial resources to repay its debt upon a change of control.

Full 10-K form ▸

857957--3/29/2007--SOUTH_HERTFORDSHIRE_UNITED_KINGDOM_FUND_LTD